Common use of Funds Withheld Clause in Contracts

Funds Withheld. The Ceding Company and the Reinsurer have entered into the "Accounts Receivable Agreement" attached to this Agreement as Exhibit A. Pursuant to the terms of the Accounts Receivable Agreement, (i) equals the Funds Withheld at the end of the preceding Accounting Period; and (ii) equals any payment by the Ceding Company to the Reinsurer of any amount withheld, as described in item (i) above, during the Accounting Period in accordance with the Accounts Receivable Agreement. With respect, however, to the Accounting Period during which the Effective Date of this Agreement occurs, the reference in (i) above to "the end of the preceding Accounting Period" means 3.2 percent of the Initial Consideration, but not to exceed $15 million, determined in accordance with Paragraph 1 above. In no event will the Funds Withheld at the end of any Accounting Period exceed 50 percent of the Ceding Company's total statutory capital and surplus as of the end of the preceding calendar year.

Funds Withheld. The Ceding Company and the Reinsurer have entered into the "Accounts Receivable Agreement" attached to this Agreement as Exhibit A. Pursuant to the terms of the Accounts Receivable Agreement,as (i) equals the Funds Withheld at the end of the preceding Accounting Period; and (ii) equals any payment by the Ceding Company to the Reinsurer of any amount withheld, as described in item (i) above, during the Accounting Period in accordance with the Accounts Receivable Agreement. With respect, however, to the Accounting Period during which the Effective Date of this Agreement occurs, the reference in (i) above to "the end of the preceding Accounting Period" means 3.2 percent of the Initial Consideration, but not to exceed $15 million, determined in accordance with Paragraph 1 above. In no event will the Funds Withheld at the end of any Accounting Period exceed 50 percent of the Ceding Company's total statutory capital and surplus as of the end of the preceding calendar year.