Common use of Funds Withheld Clause in Contracts

Funds Withheld. Subject to the terms herein, the Reinsured shall retain the Reinsurance Premium due hereunder on a funds withheld basis, provided however that the Reinsurer's Margin shall be paid in cash to the Reinsurer and shall not be affected by the terms of this "Funds Withheld" article. The amount of such withheld Reinsurance Premium, net of Reinsurer's Margin, shall be called "FUNDS WITHHELD". In consideration of the Reinsurer agreeing to the Funds Withheld, the Reinsured agrees (i) to calculate a notional Funds Withheld account from the Effective Date of this Agreement until there is a complete and final release of all of the Reinsurer's obligations to the Reinsured under this Agreement and (ii) that the Funds Withheld Balance may be set off by the Reinsurer against liability of any nature whatsoever (whether then contingent, due and payable, or in the future becoming due) that the Reinsurer may then have, or in the future may have under this Agreement and (iii) that such setoff shall occur as a condition precedent to any payments by the Reinsurer hereunder. The balance of the Funds Withheld account (the "FUNDS WITHHELD BALANCE") as of any December 31 shall be defined as: (1) 100% of the Reinsurance Premium due hereunder, less (2) the Reinsurer's Margin paid to the Reinsurer, less (3) 100% of Ultimate Net Loss paid (or offset) by the Reinsurer, plus

Funds Withheld. Subject to the terms herein, the Reinsured shall retain the Reinsurance Premium and Additional Premium, if any, due hereunder on a funds withheld basis, provided however however, that the Reinsurer's Margin shall be paid in cash to the Reinsurer and shall not be affected by the terms of this "Funds Withheld" article. The amount of such withheld Reinsurance Premium, net of Reinsurer's Margin, and Additional Premium, if any, shall be called "FUNDS WITHHELD". In consideration of the Reinsurer agreeing to the Funds Withheld, the Reinsured agrees (i) to calculate a notional Funds Withheld account from the Effective Date of this Agreement until there is a complete and final release of all of the Reinsurer's obligations to the Reinsured under this Agreement and (ii) that the Funds Withheld Balance may be set off by the Reinsurer against liability of any nature whatsoever (whether then contingent, due and payable, or in the future becoming due) that the Reinsurer may then have, or in the future may have under this Agreement and (iii) that such setoff shall occur as a condition precedent to any payments by the Reinsurer hereunder. The balance of the Funds Withheld account (the "FUNDS WITHHELD BALANCE") as of any December 31 shall be defined as: (1) 100% of the Cumulative Reinsurance Premium plus Additional Premium, if any, due hereunder, less (2) the Cumulative Reinsurer's Margin paid to the Reinsurer, less (3) 100% of Cumulative Ultimate Net Loss paid (or offset) by the Reinsurer, plus (4) the Cumulative Funds Withheld Investment Credit. The Reinsurance Premium, and Additional Premium, if any, shall be credited to the Funds Withheld Balance on the date such monies are payable. The Ultimate Net Loss due from the Reinsurer shall be charged against the Funds Withheld Balance on the date such monies are due and further subject to article entitled "REPORTS AND REMITTANCES". 12 For the purpose of calculating the balance of the Funds Withheld account, the Reinsurer's Margin shall be deemed to be deducted in proportion to and at the same time as the crediting to the Funds Withheld account of the Reinsurance Premium. The Funds Withheld investment credit (the "FUNDS WITHHELD INVESTMENT CREDIT") for each calendar year shall equal the average daily balance of the Funds Withheld account for that calendar year (or portion thereof), determined as if the Reinsurance Premium and Additional Premium, if any, as finally computed was paid on January 1, 1999, multiplied by 9% (or the pro-rata portion thereof). The cumulative Funds Withheld Investment Credit (the "CUMULATIVE FUNDS WITHHELD INVESTMENT CREDIT") shall be equal to sum of the Funds Withheld Investment Credits for each calendar year, or portion thereof, since the Effective Date of this Agreement. At the Reinsurer's option, the Reinsured shall pay to the Reinsurer the Funds Withheld Balance immediately upon request or upon the happening of any of the following events : 1) commutation of this Agreement, 2) an Event of Default, 3) a downgrade of the Reinsured by AM Best to A- or lower, or 4) December 31, 2014. If the Reinsured pays the Reinsurer the Funds Withheld Balance the Reinsured will no longer be required to credit the Funds Withheld Balance with investment income and the Experience Account Investment Credit, as defined in Article 8 - Experience Account, shall, from the time of payment of the Funds Withheld Balance, equal the One-Year Treasury Note rate as posted in the Wall Street Journal on the first business day following such payment. Such rate shall be reset each 12 months to equal the One-Year Treasury Note prevailing at that time. The Reinsured shall not have the right to prepay all or a part of the Funds Withheld Balance without the Reinsurer's express written consent.

Funds Withheld. Subject to the terms herein, the Reinsured shall retain the Reinsurance Premium and Additional Premium, if any, due hereunder on a funds withheld basis, provided however however, that the Reinsurer's Margin shall be paid in cash to the Reinsurer and shall not be affected by the terms of this "Funds Withheld" article. The amount of such withheld Reinsurance Premium, net of Reinsurer's Margin, and Additional Premium, if any, shall be called "FUNDS WITHHELD". Funds Withheld." In consideration of the Reinsurer agreeing to the Funds Withheld, the Reinsured agrees (i) to calculate a notional Funds Withheld account from the Effective Date of this Agreement until there is a complete and final release of all of the Reinsurer's obligations to the Reinsured under this Agreement and (ii) that the Funds Withheld Balance may be set off by the Reinsurer against liability of any nature whatsoever (whether then contingent, due and payable, or in the future becoming due) that the Reinsurer may then have, or in the future may have under this Agreement and (iii) that such setoff shall occur as a condition precedent to any payments by the Reinsurer hereunder. The balance of the Funds Withheld account (the "FUNDS WITHHELD BALANCEFunds Withheld Balance") as of any December 31 shall be defined as: (1) 100% of the Cumulative Reinsurance Premium plus Additional Premium, if any, due hereunder, less (2) the Cumulative Reinsurer's Margin paid to the Reinsurer, less (3) 100% of Cumulative Ultimate Net Loss paid (or offset) by the Reinsurer, plus (4) the Cumulative Funds Withheld Investment Credit. The Reinsurance Premium, and Additional Premium, if any, shall be credited to the Funds Withheld Balance on the date such monies are payable. The Ultimate Net Loss due from the Reinsurer shall be charged against the Funds Withheld Balance on the date such monies are due and further subject to article entitled "REPORTS AND REMITTANCES." For the purpose of calculating the balance of the Funds Withheld account, the Reinsurer's Margin shall be deemed to be deducted in proportion to and at the same time as the crediting to the Funds Withheld account of the Reinsurance Premium. The Funds Withheld investment credit (the "Funds Withheld Investment Credit") for each calendar year shall equal the average daily balance of the Funds Withheld account for that calendar year (or portion thereof), determined as if the Reinsurance Premium and Additional Premium, if any, as finally computed was paid on January 1, 1999, multiplied by 9% (or the pro-rata portion thereof). The cumulative Funds Withheld Investment Credit (the "Cumulative Funds Withheld Investment Credit") shall be equal to sum of the Funds Withheld Investment Credits for each calendar year, or portion thereof; since the Effective Date of this Agreement. At the Reinsurer's option, the Reinsured shall pay to the Reinsurer the Funds Withheld Balance immediately upon request or upon the happening of any of the following events 1) commutation of this Agreement, 2) an Event of Default, 3) a downgrade of the Reinsured by AM Best to B+ or lower, or 4) December 31, 2014. If the Reinsured pays the Reinsurer the Funds Withheld Balance the Reinsured will no longer be required to credit the Funds Withheld Balance with investment income and the Experience Account Investment Credit, as defined in Article 8 - Experience Account, shall, from the time of payment of the Funds Withheld Balance, equal the One-Year Treasury Note rate as posted in the Wall Street Journal on the first business day following such payment. Such rate shall be reset each 12 months to equal the One-Year Treasury Note prevailing at that time. The Reinsured shall not have the right to prepay all or a part of the Funds Withheld Balance without the Reinsurer's express written consent.

Funds Withheld. Subject to the terms herein, the Reinsured shall retain the Reinsurance Premium due hereunder on a funds withheld basis, provided however that the Reinsurer's Margin shall be paid in cash to the Reinsurer and shall not be affected by the terms of this "Funds Withheld" article. The amount of such withheld Reinsurance Premium, net of Reinsurer's Margin, shall be called "FUNDS WITHHELD". In consideration of the Reinsurer agreeing to the Funds Withheld, the Reinsured agrees (i) to calculate a notional Funds Withheld account from the Effective Date of this Agreement until there is a complete and final release of all of the Reinsurer's obligations to the Reinsured under this Agreement and (ii) that the Funds Withheld Balance may be set off by the Reinsurer against liability of any nature whatsoever (whether then contingent, due and payable, or in the future becoming due) that the Reinsurer may then have, or in the future may have under this Agreement and (iii) that such setoff shall occur as a condition precedent to any payments by the Reinsurer hereunder. The balance of the Funds Withheld account (the "FUNDS WITHHELD BALANCE") as of any December 31 shall be defined as: (1) 100% of the Reinsurance Premium and Additional Premium, if any, due hereunder, less (2) the Reinsurer's Margin paid to the Reinsurer, less (3) 100% of Ultimate Net Loss paid (or offset) by the Reinsurer, plus (4) the Cumulative Funds Withheld Investment Credit. The Reinsurance Premium, and Additional Premium, if any, shall be credited to the Funds Withheld Balance on the date such monies are payable. The Ultimate Net Loss due from the Reinsurer shall be charged against the Funds Withheld Balance on the date such monies are due and further subject to article entitled "REPORTS AND REMITTANCES". For the purpose of calculating the balance of the Funds Withheld account, the Reinsurer's Margin shall be deemed to be deducted in proportion to and at the same time as the crediting to the Funds Withheld account of the Reinsurance Premium. The Funds Withheld investment credit (the "FUNDS WITHHELD INVESTMENT CREDIT") for each calendar year shall equal the average daily balance of the Funds Withheld account for that calendar year (or portion thereof), determined as if the Reinsurance Premium and Additional Premium, if any, as finally computed was paid on January 1, 1997, multiplied by 9% (or the pro-rata portion thereof). The cumulative Funds Withheld Investment Credit (the "CUMULATIVE FUNDS WITHHELD INVESTMENT CREDIT") shall be equal to sum of the Funds Withheld Investment Credits for each calendar year, or portion thereof, since the Effective Date of this Agreement. At the Reinsurer's option, the Reinsured promises to pay to the Reinsurer the Funds Withheld Balance immediately upon the sooner of: 1) commutation of this Agreement, 2) an Event of Default, or 3) December 31, 2011. The Reinsured shall not have the right to prepay all or a part of the Funds Withheld Balance without the Reinsurer's express written consent.

Funds Withheld. Subject to the terms herein, the Reinsured (a) PTNAIC shall retain the Reinsurance Premium due hereunder as security on a funds withheld basis, provided however that the Reinsurer's Margin shall be paid in cash to the Reinsurer and shall not be affected by the terms of this "Funds Withheld" articlebasis from the Initial Premium payable to the Reinsurer the total sum of $56,000,000 of the Initial Premium. The amount Such retained Initial Premium shall be held in a notional funds withheld account ("FWA") on a fiduciary basis as security in accordance with the provisions of such withheld Reinsurance PremiumArticle 41 - Security, net and in satisfaction of Reinsurer's Marginobligations thereunder, shall be called "FUNDS WITHHELD". In consideration of the Reinsurer agreeing subject further to the Funds Withheld, the Reinsured agrees (i) right to calculate a notional Funds Withheld account from the Effective Date of this Agreement until there is a complete and final release of all of the Reinsurer's obligations to the Reinsured under this Agreement and (ii) that the Funds Withheld Balance may be set off by the Reinsurer against liability of any nature whatsoever (whether then contingent, due and payable, or in accordance with Article 37 - Offset. The FWA shall accrue interest calculated in the future becoming duemanner provided for in paragraph (d) that below. PTNAIC must reduce the Reinsurer may then have, or amount retained in the future may have under this Agreement and (iii) that such setoff shall occur as a condition precedent to any payments FWA by the Reinsurer hereunder. The balance of the Funds Withheld account (the "FUNDS WITHHELD BALANCE") as of any December 31 shall be defined as: (1) 100% of the Reinsurance Premium due hereunder, less (2) the Reinsurer's Margin paid remitting to the Reinsurer, lessin cash, within fifteen (15) business days of the dates indicated below, the following portions of the balance in the respective FWA at each date: December 31, 2003 1/6 December 31, 2004 1/5 December 31, 2005 1/4 December 31, 2006 1/3 December 31, 2007 1/2 December 31, 2008 100% Upon providing notification to Reinsurer of the Reinsureds' election to commute this Agreement, pursuant to Article 25 - Commutation, PTNAIC shall pay the balance of the FWA to the Reinsurer. (3b) 100% PTNAIC is entitled to make earlier payments than scheduled in the preceding paragraph (a) at its sole discretion without penalty. (c) Notwithstanding any other provision of this Agreement, the Reinsurer reserves the right at any time and for any reason (or for no reason) to terminate the FWA security arrangement and to demand that PTNAIC remit the then outstanding balance (inclusive of applicable interest calculated as provided for in paragraph (d) below) in the FWA by giving PTNAIC at least fifteen (15) business days prior written notice. In such event, PTNAIC shall immediately release such security and transfer the amount in the FWA to the Reinsurer as directed by the Reinsurer on the fifteenth (15th) business day following delivery of such demand from the Reinsurer. (d) For so long as the FWA is maintained, PTNAIC, upon written request of the Reinsurer, shall offset Ultimate Net Loss paid and Reinsurance Allowance due and payable by the Reinsurer under this Agreement from the positive balance of funds maintained in the FWA. The Reinsurer shall be under no obligation to reimburse either Reinsured, any successor in interest or statutory receiver, liquidator, rehabilitator (or offsetthe like) by for any Ultimate Net Loss or Reinsurance Allowance as long as there is a positive amount in the ReinsurerFWA. (e) The FWA shall accrue interest at a rate calculated as follows: (i) At all times when the FWA is less than or equal to the amount of PTNAIC COLI Investments (hereinafter defined in Article 15), plusthe rate of interest shall be equal to the greater of (x) the actual total rate of return on the PTNAIC COLI Investments or (y) a rate equal to the Experience Account Investment Return. (ii) At all times when the FWA is greater than the amount of PTNAIC COLI Investments, the rate of interest on the amount of FWA equal to the PTNAIC COLI Investment amount shall be as calculated in the immediately preceding paragraph (i), and the rate of interest on the excess of the FWA over the amount of PTNAIC/COLI Investment amount shall be equal to the Experience Account Investment Return.