Excess of Loss
Bond Confirmation Slip
Terms' Effective: October 1, 1996
issued to
Amwest Surety Insurance Company
Woodland Hills, California
(hereinafter referred to collectively as the "Company")
by
Various Reinsurers
(hereinafter referred to as the "Reinsurer")
Reinsurance Confirmation Slip
Article I - Classes of Business Reinsured
By this Contract the Reinsurer agrees to reinsure the excess liability which may
accrue to the Company under Surety Bonds (hereinafter called "bonds") whether in
force or expired at the effective date hereof or issued by the Company on or
after that date (including bonds with premium anniversary dates on or after that
date), and classified by the Company as Contract Bonds, Subdivision Bonds or
Commercial Bonds subject to the terms, conditions and limitations hereinafter
set forth.
Article H - Term
A. This Contract shall become effective on October 1, 1995, with respect to
losses discovered by the Company on or after that date and shall remain in
force until December 31, 1997, both days inclusive.
B. Upon termination of this Contract, the following provisions shall apply:
1. The Reinsurer shall remain liable hereunder with respect to business in
force on the date of termination until:
a. As respects bonds written for an indefinite period and
containing a valid cancellation clause, the date of cancellation
or the date of the next premium anniversary, whichever first
occurs, after the date of termination of this Contract, but in
no event beyond 60 months following the date of termination of
this Contract;
b. As respects all other bonds, the date of expiration or final
settlement of the Company's liability, but in no event beyond 60
months following the date of termination of this Contract;
it being understood that any portion of the Reinsurer's share of
unearned premium in force 60 months following the date of termination
shall be promptly reallocated to the Company.
2. Unless the Company elects to reassume the Reinsurer's portion of the
outstanding losses as of the date of termination of this Contract, and
so notifies the Reinsurer no later than 15 days after the date of
termination, the Reinsurer shall remain liable for its portion of the
Reinsurer's share of outstanding losses until final settlement or
commutation of all such losses.
D. Notwithstanding the provisions of paragraph C above, if the Company elects
to reassume the Reinsurer's portion of the unearned premium in force on the
effective date of termination of this Contract, and so notifies the
Reinsurer no later than 15 days after the date of termination, the
Reinsurer shall have no liability hereunder with respect to losses
discovered after the date of termination.
E. Notwithstanding paragraph A above, it is understood and agreed that should
at any time a subscribing reinsurer lose the whole or part of its paid up
capital, become insolvent, or be placed in conservation, rehabilitation or
liquidation, or be acquired or controlled by any other company or lose its
accreditation by the U.S. Treasury Department, become a non-admitted
reinsurer in the State of California or be downgraded by A.M. Best Company
to "B+" or less, the Company shall have the right to terminate this
Contract by giving such subscribing reinsurer 15 days prior notice by
certified mail.
Article III - Territory
The liability of the Reinsurer shall be limited to losses discovered under bonds
issued to principals domiciled within the territorial limits of the United
States of America, its territories or possessions, Puerto Rico, the District of
Columbia and Canada, inclusive of principals domiciled in the United States of
America which are performing obligations in Mexico; but this limitation shall
not apply to losses if the Company's bonds provide coverage outside the
aforesaid territorial limits.
Article IV - Exclusions
A. This Contract does not apply to and specifically excludes the following:
1. Business accepted by the Company as reinsurance from other insurance
companies or associations, except business originally written or
reunderwritten by the Company.
2. Any loss or liability accruing to the Company directly or indirectly)
from any business written by or through any pool or association, not
including pools or associations under which membership by the Company
is required under statutes or regulations or voluntary membership in
pools and associations that are approved by ▇▇▇▇▇▇ Reinsurance Company,
acting for and on behalf of the Reinsurer.
3. Co-surety bonds not controlled in their entirety by the Company (except
as provided for under Article VII).
4. Reclamation bonds negotiated prior to or during the mining phase of a
parcel of property, except commercial bonds when part of an account.
5. Workers' Compensation self-insurance bonds or any other self-insurance
bonds, except commercial bonds when part of an account.
6. Asbestos Abatement/Removal contracting, except incidental exposures
(i.e., the lesser of 25% of the total! job contract or $500,000 for
that portion of the total job contract).
7. Completion bonds.
8. Hazardous Waste Closure bonds and Post Closure bonds, except commercial
bonds when part of an account.
9. Fidelity and Commercial Crime bonds.
10. Lease bonds, except commercial bonds when part of an account.
11. Financial Guarantee, Credit Insurance or any miscellaneous bond(s)
classified as SAA #580, #581 and #597.
12. ERISA bonds.
13. Mortgage Impairment, Deficiency or Guarantee bonds.
14. Rate Guarantee bonds.
15. Money Market Guarantee or Guarantee of Installment Paper bonds.
16. Bank Depository bonds.
17. Note Guarantee bonds or bonds guaranteeing letters of credit.
18. Casualty insurance or any third party tort liability.
19. All Contract bonds issued by the Company with estimated completion
terms greater than three years in length (not including the time
involved in start-up delays), other than service business contracts.
20. Bonds to principals in claim for amounts greater than $500,000 except
commercial bonds when part of an account and pre-approved by ▇▇▇▇▇▇
Reinsurance Company.
B. However, any reinsurance that is specially accepted from the Company by
▇▇▇▇▇▇ Reinsurance Company and Scor Reinsurance Company, acting for and on
behalf of the Reinsurer, shall be covered under this Contract and subject
to the terms hereof, except to the extent such terms are modified by the
special acceptance.
Article V - Retention and Limit
A. The Company shall retain and be liable for the first $2,000,000 of ultimate
net loss (whether involving any one or any combination of the classes of
business covered hereunder) as respects losses discovered during the
contract year under all bonds issued to any one principal. The Reinsurer
shall then be liable for the amount by which such ultimate net loss exceeds
the Company's retention, but the liability of the Reinsurer shall not
exceed $4,000,000 of ultimate net loss as respects losses discovered during
the contract year under all bonds issued to any one principal, nor shall it
exceed $8,000,000 in the aggregate as respects losses discovered during the
contract year.
B. "Ultimate net loss" as used herein is defined as the sum or sums (including
extra contractual obligations, interest on judgments, litigation expenses
and all other loss adjustment expenses, except office expenses and
salaries of the Company's regular employees) paid or payable by the Company
in settlement of claims and in satisfaction of judgments rendered on
account of such claims, after deduction of all salvage, all recoveries and
all claims on inuring insurance or reinsurance, whether collectible or not
Ultimate net loss shall also be reduced by collateral (as perfected)
associated with bonds subject to this Contract (or a pro rata portion
thereof, where the collateral is also associated with bonds not subject
hereto). As respects co-surety bonds controlled by the Company, only losses
attributable to the Company's participation on such bonds shall be
considered ultimate net loss hereunder. Nothing herein shall be construed
to mean that losses under this Contract are not recoverable until the
Company's ultimate net loss has been ascertained.
It is understood that the Company is not responsible for the reduction in
value or collapse of collateral due to unforeseen events after the original
collateral assessment has been made. Moreover, the value of collateral
shall be subsequently re-evaluated by the Company in the event adjustments
are being made to the collective performance or completion penalty amounts
issued to one principal.
C. "Extra contractual obligations" as used herein shall be defined as 80.0% of
those liabilities not covered under any other provision of this Contract an
which arise from the handling of any claim on business covered hereunder,
such liabilities arising because of, but not limited to, the following:
failure by the Company to settle within the bond limit, or by reason of
alleged or actual negligence, fraud or bad faith in rejecting an offer of
settlement or in the preparation of the defense or in the trial of any
action against its insured or reinsured or in the preparation or
prosecution of any appeal consequent upon such action or unintentional
violation of any Unfair Claim or Trade Practice Act or any similar act or
any related law or statute. This Coverage shall not apply
where the loss has been incurred due to the fraud of a member of the Board
of Directors or a corporate officer of the Company acting individually or
collectively or in collusion with any individual or corporation or any
other organization or party involved in the presentation, defense or
settlement of any claim covered hereunder. Recoveries from any form of
insurance or reinsurance which protects the Company against extra
contractual obligations claims shall inure to the benefit of this Contract.
If any provision set forth in this paragraph is held to be invalid under
the law of any state, that provision shall be deemed to comply with the
minimum requirements of such law, giving due consideration to the original
intentions of the parties. But this shall not affect the validity or
enforceability of the original provisions in any other jurisdiction.
D. "Contract year" as used in this Contract shall mean the period from October
1, 1996 to December 31, 1997, both days inclusive. In the event this
Contract is terminated on a "runoff" basis, the contract year shall be from
the beginning of the contract year through the end of the runoff period.
E. A loss shall be deemed "discovered" on the date when the Company has
incurred an ultimate net loss of $500,000 or more (net of surplus or quota
share reinsurance) for any one principal through the establishment of
reserves, payments, assumption or guarantee of liabilities to prevent a
default, or any combination thereof. The date on which an extra contractual
obligation is discovered by the Company shall be deemed, in all
circumstances, to be the date the original loss is discovered. The
discovery date shall determine the contract year to which such loss is
assigned, and shall not be subject to change regardless of fluctuation in
the amount of the incurred loss.
F. The Company may maintain in force pro rata reinsurance, recoveries under
which shall inure to the benefit of this Contract.
G. The term "principal" as used herein shall mean one or more principals under
the same management and control, or one or more principals for which bonds
were executed in reliance upon the indemnity of the same person, fu-m or
corporation, or in reliance upon the indemnity of a related group of
persons, firm or corporations. However, when the Company receives bonding
opportunities from separate principals that operate under individual
financial statements but may have corporate affiliations and are engaged in
different types of contracting projects, the Company may be able to
classify each principal as a separate entity, when approved by ▇▇▇▇▇▇
Reinsurance Company.
Article VI - Reinstatement
A. In the event all or any portion of the reinsurance provided under this
Contract is exhausted by loss, the amount so exhausted shall be reinstated
immediately from the time the loss is discovered by the Company.
B. Notwithstanding paragraph A above the liability of the Reinsurer for
reinsurance coverage provided shall not exceed either of the following:
1. $4,000,000 as respects loss or losses discovered under any one
principal; nor
2. $8,000,000 in all during the contract year.
Article VII - Co-Surety Bonds
It is agreed that with respect to co-surety bonds, the Company's cession to the
Reinsurer shall be the same percentage of the applicable reinsurance limit that
the amount of the bond controlled by the Company bears to the full amount of the
bond.
Article VIII - Losses
A. Whenever a loss discovered by the Company exceeds the Company's retention
hereunder and/or appears likely (in the Company's opinion) to result in a
claim hereunder, the Company shall notify the Reinsurer, and the Reinsurer
shall have the right to participate in the adjustment of such loss at its
own expense.
B. All loss settlements made by the Company, provided they are within the
terms of this Contract, shall be unconditionally binding upon the
Reinsurer. Except as provided in paragraph C below, the Reinsurer agrees to
pay all amounts for which it may be liable immediately upon receipt of
reasonable evidence of the amount paid (or scheduled to be paid) by the
Company.
C. Within 45 days after the end of each calendar quarter, the Company shall
provide the Reinsurer a loss bordereau which lists all losses by principal
for losses exceeding $500,000 in the aggregate that were reported to the
Company from the inception of this Contract through the calendar quarter
under consideration and will contain the following information, listed by
principal:
1. Name of principal;
2. Bond number;
3. Date of loss;
4. Amount of loss;
5. Obligee;
6. Status update on each loss;
7. Whether any salvage, subrogation or collateral proceedings are in
progress.
Article IX - Salvage and Subrogation
The Reinsurer shall be credited with salvage and subrogation (i.e.,
reimbursement obtained or recovery made by the Company, less the actual cost,
excluding salaries of officials and employees of the Company and sums paid to
attorneys as retainer, of obtaining such reimbursement or making such recovery)
on account of claims and settlements involving reinsurance hereunder. Salvage
thereon shall always be used to reimburse the excess carriers in the reverse
order of their priority according to their participation before being used in
any way to reimburse the Company for its primary loss. The Company hereby agrees
to enforce its rights to salvage or subrogation relating to any loss, a part of
which loss was sustained by the Reinsurer, and to prosecute all claims arising
out of such rights.
Article X - Premium
1. As premium for the reinsurance provided during the contract year, the
Company shall pay the Reinsurer the greater of $1,200,000 or 1.90% of
the Company's earned premium for the contract year. In the event this
contract is terminated on a run off basis, the Company shall pay the
Reinsurer 1.90% of the Company's earned premium during the run off
period.
2. The Company shall pay the Reinsurer a deposit premium of $1,500,000 in
five equal installments of $300,000 payable at October 1, 1996, January
1, April 1, July 1 and October 1, 1997.
3. Within 60 days after the end of the contract year, the Company shall
provide a report to the Reinsurer setting forth the premium due
hereunder for the contract year, computed in accordance with paragraph
1 above, and any additional premium due the Reinsurer or return premium
due the Company shall be remitted promptly.
4. "Earned premium" as used herein shall mean unearned premiums at the
beginning of the contract year, plus written premiums during the
contract year, less unearned premiums at the end of the contract year.
Article XI - Commutation
Not later than 15 days after the close of any one contract year, the Company at
its sole option may require commutation of all claims deemed discovered for said
contract year which have not been finally settled and are likely to result in a
claim under this Contract. The Company shall determine the commuted value of the
Reinsurer's share of outstanding loss and loss adjustment expense as of the date
of any such commutation, based on the known losses as of that date, and payment
thereof by the Reinsurer of its proportion of such amount or amounts shall
constitute a complete and final release of any further liability hereunder on
the part of the Reinsurer as respects all outstanding loss and loss adjustment
expense, whether known or unknown. The Reinsurer shall forego the fight to any
unearned premium and outstanding loss reserves as of the effective date of
commutation.
Article XII - Offset (BRMA 36C)
The Company and the Reinsurer shall have the right to offset any balance or
amounts due from one party to the other under the terms of this Contract. The
party asserting the fight of offset may exercise such fight any time whether the
balances due are on account of premiums or losses or otherwise.
Article XIII - Access to Records (BRMA 1D)
The Reinsurer or its designated representatives shall have the access at any
reasonable time to all records of the Company which pertain in any way to this
reinsurance.
Article XIV - Liability of the Reinsurer
A. The liability of the Reinsurer shall follow that of the Company in every
case, and be subject in all respects to all the general and special
stipulations, clauses, waivers and modifications of the Company's bonds,
and any endorsements thereon. However, in no event shall this be construed
in any way to provide coverage outside the terms and conditions set forth
in this Contract.
B. Nothing herein shall in any manner create any obligations or establish any
fights against the Reinsurer in favor of any third party or any persons not
parties to this Contract.
Article XV - Net Retained Lines (BRMA 32B)
A. This Contract applies only to that portion of any bond which the Company
retains net for its own account, and in calculating the amount of any loss
hereunder and also in computing the amount or amounts in excess of which
this Contract attaches, only loss or losses in respect of that portion of
any bond which the Company retains net for its own account shall be
included.
B. The amount of the Reinsurer's liability hereunder in respect of any loss or
losses shall not be increased by reason of the inability of the Company to
collect from any other reinsurer(s), whether specific or general, any
amounts which may have become due from such reinsurer(s), whether such
inability arises from the insolvency of such other reinsurer(s) or
otherwise.
Article XVI - Errors and Omissions (BRMA 14F)
Inadvertent delays, errors or omissions made in connection with this Contract or
any transaction hereunder shall not relieve either party from any liability
which would have attached had such delay, error or omission not occurred,
provided always that such error or omission is rectified as soon as possible
after discovery.
Article XVII - Currency (BRMA 12A)
A. Whenever the word "Dollars" or the "$" sign appears in this Contract, they
shall be construed to mean United States Dollars and all transactions under
this Contract shall be in United States Dollars.
B. Amounts paid or received by the Company in any other currency shall be
converted to United States Dollars at the rate of exchange at the date such
transaction is entered on the records of the Company.
Article XVIII - Taxes (BRMA 50C)
In consideration of the terms under which this Contract is issued, the Company
will not claim a deduction in respect of the premium hereon when making tax
returns, other than income or profits tax returns, to any state or territory of
the United States of America, the District of Columbia or Canada.
Article XIX - Federal Excise Tax (BRMA 17A)
(Applicable to those reinsurers, excepting Underwriters at Lloyd's London and
other reinsurers exempt from Federal Excise Tax, who are domiciled outside the
United States of America.)
A. The Reinsurer has agreed to allow for the purpose of paying the Federal
Excise Tax the applicable percentage of the premium payable hereon as
imposed under Section 4371 of the Internal Revenue Code to the extent such
premium is subject to the Federal Excise Tax.
B. In the event of any return premium becoming ▇▇▇▇ hereunder the Reinsurer
will deduct the applicable percentage from the return premium payable
hereon and the Company or its agent should take steps to recover the tax
from the United States Government.
Article XX - Unauthorized Reinsurers
A. If the Reinsurer is unauthorized in any state of the United States of
America or the District of Columbia, the Reinsurer agrees to fund its share
of the Company's ceded United States unearned premium and outstanding loss
and loss adjustment expense reserves (including incurred but not reported
loss reserves, hereinafter referred to as "IBNR") by:
1. Clean, irrevocable and unconditional letters of credit issued and
confirmed, if confirmation is required by the insurance regulatory
authorities involved, by a bank or banks meeting the NAIC Securities
Valuation Office credit standards for issuers of letters of credit and
acceptable to said insurance regulatory authorities; and/or
2. Escrow accounts for the benefit of the Company; and/or
3. Cash advances;
if, without such funding, a penalty would accrue to the Company on any
financial statement it is required to file with the insurance regulatory
authorities involved. The Reinsurer, at its sole option, may fund in other
than cash if its method and form of funding are acceptable to the insurance
regulatory authorities involved.
B. If the Reinsurer is unauthorized in any province or jurisdiction of Canada,
the Reinsurer agrees to fund 115% of its share of the Company's ceded
Canadian unearned premium and outstanding loss and loss adjustment expense
reserves (excluding IBNR) by:
1. A clean, irrevocable and unconditional letter of credit issued and
confirmed, if confirmation is required by the insurance regulatory
authorities involved, by a Canadian bank or banks meeting the NAIC
Securities Valuation Office credit standards for issuers of letters of
credit and acceptable to said insurance regulatory authorities, for no
more than 15/115ths of the total funding required; and/or
2. Cash advances for the remaining balance of the funding required;
if, without such funding, a penalty would accrue to the Company on any
financial statement it is required to file with the insurance regulatory
authorities involved.
C. With regard to funding in whole or in part by letters of credit, it is
agreed that each letter of credit will be in a form acceptable to insurance
regulatory authorities involved, will be issued for a term of at least one
year and will include an "evergreen clause," which automatically extends
the term for at least one additional year at each expiration date unless
written notice of non-renewal is given to the Company not less than 30 days
prior to said expiration date. The Company and the Reinsurer further agree,
notwithstanding anything to the contrary in this Contract, that said
letters of credit may be drawn upon by the Company or its successors in
interest at any time, without diminution because of the insolvency of the
Company or the Reinsurer, but only for one or more of the following
purposes:
1. To reimburse itself for the Reinsurer's share of unearned premiums
returned to insureds on account of bond cancellations, unless paid in
cash by the Reinsurer;
2. To reimburse itself for the Reinsurer's share of losses and/or loss
adjustment expenses paid under the terms of bonds reinsured hereunder,
unless paid in cash by the Reinsurer;
3. To reimburse itself for the Reinsurer's share of any other amounts
claimed to be due hereunder, unless paid in cash by the Reinsurer;
4. To fund a cash account in an amount equal to the Reinsurer's share of
any ceded unearned premium and/or outstanding loss and loss adjustment
expense reserves (including IBNR) funded by means of a letter of credit
which is under non-renewal notice, if said letter of credit has not
been renewed or replaced by the Reinsurer 10 days prior to its
expiration date;
5. To refund to the Reinsurer any sum in excess of the actual amount
required to fund the Reinsurer's share of the Company's ceded unearned
premium and/or outstanding loss and loss adjustment expense reserves
(including ▇▇▇▇), if so requested by the Reinsurer.
In the event the amount drawn by the Company on any letter of credit is in
excess of the actual amount required for C(1), C(2) or C(4), or in the case
of C(3), the actual amount determined to be due, the Company shall promptly
return to the Reinsurer the excess amount so drawn.
D. For purposes of determining the amount to be funded under this Article,
IBNR shall be calculated on a per principal basis, and shall not exceed
10.0% of total known subject losses discovered per principal in excess of
the Company's retention hereunder (outstanding loss and loss adjustment
expense reserves only), subject to a maximum of $450,000 per principal.
Article XXI - Insolvency
A. In the event of the insolvency of one or both of the reinsured companies,
this reinsurance shall be payable directly to the company or to its
liquidator, receiver, conservator or statutory successor immediately upon
demand, with reasonable provision for verification, on the basis of the
liability of the company without diminution because of the insolvency of
the company or because the liquidator, receiver, conservator or statutory
successor of the company has failed to pay all or a portion of any claim.
It is agreed, however, that the liquidator, receiver, conservator or
statutory successor of the company shall give written notice to the
Reinsurer of the pendency of a claim against the company indicating the
bond reinsured which claim would involve a possible liability on the part
of the Reinsurer within a reasonable time after such claim is filed in the
conservation or liquidation proceeding or in the receivership, and that
during the pendency of such claim, the Reinsurer may investigate such claim
and interpose, at its own expense, in the proceeding where such claim is to
be adjudicated, any defense or defenses that it may deem available to the
company or its liquidator, receiver, conservator or statutory successor.
The expense thus incurred by the Reinsurer shall be chargeable, subject to
the approval of the Court, against the company as part of the expense of
conservation or liquidation to the extent of a pro rata share of the
benefit which may accrue to the Company solely as a result of the defense
undertaken by the Reinsurer.
B. Where two or more reinsurers are involved in the same claim and a majority
in interest elect to interpose defense to such claim, the expense shall be
apportioned in accordance with the terms of this Contract as though such
expense had been incurred by the company.
C. It is further understood and agreed that, in the event of the insolvency of
one or both of the reinsured companies, the reinsurance under this Contract
shall be payable directly by the Reinsurer to the company or to its
liquidator, receiver, conservator or statutory successor, except as
provided by Section 4118(a) of the New York Insurance Law or except:
1. Where this Contract specifically provides another payee of such
reinsurance in the event of the insolvency of the company; or
2. Where the Reinsurer with the consent of the direct insured or insureds
has assumed such bond obligations of the company as direct obligations
of the Reinsurer to the payees under such bonds and in substitution for
the obligations of the company to such payees. Prior to implementation
of a novation mentioned in this subparagraph, the certificate of
assumption on New York risks shall be approved by the Superintendent of
the State of New York.
Article XXII - Arbitration (BRMA 6J)
A. As a condition precedent to any right of action hereunder, in the event of
any dispute or difference of opinion hereafter arising with respect to this
Contract, it is hereby mutually agreed that such dispute or difference of
opinion shall be submitted to arbitration. One Arbiter shall be chosen by
the Company, the other by the Reinsurer, and an Umpire shall be chosen by
the two Arbiters before they enter upon arbitration, all of whom shall be
active or retired disinterested executive officers of insurance or
reinsurance companies. In the event that either party should fail to choose
an Arbiter within thirty (30) days following a written request by the other
party to do so, the requesting party may choose two Arbiters who shall in
turn choose an Umpire before entering upon arbitration. If the two Arbiters
fail to agree upon the selection of an Umpire within thirty (30) days
following their appointment, each Arbiter shall nominate three candidates
within ten (10) days thereafter, two of whom the other
shall decline, and the decision shall be made by drawing lots.
B. Each party shall present its case to the Arbiters within thirty (30) days
following the date of appointment of the Umpire. The Arbiters shall
consider this Contract as an honorable engagement rather than merely as a
legal obligation and they are relieved of all judicial formalities and may
abstain from following the strict rules of law. The decision of the
Arbiters shall be final and binding on both parties; but failing to agree,
they shall call in the Umpire and the decision of the majority shall be
final and binding upon both parties. Judgment upon the final decision of
the Arbiters may be entered in any court of competent jurisdiction.
C. If more than one reinsurer is involved in the same dispute, all such
reinsurers shall constitute and act as one party for purposes of this
Article and communications shall be made by the Company to each of the
reinsurers constituting one party, provided, however, that nothing herein
shall impair the rights of such reinsurers to assert several, rather than
joint, defenses or claims, nor be construed as changing the liability of
the reinsurers participating under the terms of this Contract from several
to joint.
D. Each party shall bear the expense of its own Arbiter, and shall jointly and
equally bear with the other the expense of the Umpire and of the
arbitration. In the event that the two Arbiters are chosen by one party, as
above provided, the expense of the Arbiters, the Umpire and the arbitration
shall be equally divided between the two parties.
E. Any arbitration proceedings shall take place in Woodland Hills, California,
but notwithstanding the location of the arbitration, all proceedings
pursuant hereto shall be governed by the law of the State of California.
Article XXIII - Service of Suit (BRMA 49C) (Applicable if the Reinsurer is not
domiciled in the United States of America, and/or is not authorized in any
State, Territory or District of the United States where authorization is
required by insurance regulatory authorities)
A. It is agreed that in the event the Reinsurer fails to pay any amount
claimed to be due hereunder, the Reinsurer, at the request of the Company,
will submit to the jurisdiction of any court of competent jurisdiction
within the United States. Nothing in this Article constitutes or should be
understood to constitute a waiver of the Reinsurer's rights to commence an
action in any court of competent jurisdiction in the United States, to
remove an action to a United States District Court, or to seek a transfer
of a case to another court as permitted by the laws of the United States or
of any state in the United States.
B. Further, pursuant to any statute of any state, territory or district of the
United States which makes provision therefor, the Reinsurer hereby
designates the party named in its Interests and Liabilities Agreement, or
if no party is named therein, the Superintendent, Commissioner or Director
of Insurance or other officer specified for that purpose in the statute, or
his successor or successors in office, as its true and lawful attorney upon
whom may be served any lawful process in any action, suit or proceeding
instituted by or on behalf of the Company or any beneficiary hereunder
arising out of this Contract.
Article XXIV - Assignment
The Company may not assign the Contract, or its rights under this Contract,
except with the express written agreement of the Reinsurer.
Article XXV - Agency Agreement
A. Amwest Surety Insurance Company shall be deemed the agent of Far West
Insurance Company for purposes of sending or receiving notices required by
the terms and conditions of this Contract, and for purposes of remitting or
receiving any monies due any party.
B. Notwithstanding the provisions of paragraph A above, each party to this
Contract agrees to honor the terms set forth herein as if this Contract
were a separate agreement between the Reinsurer and each individually named
reinsured company. Balances payable or recoverable by any subscribing
reinsurer or each individual named reinsured company shall not serve to
offset any balances payable or recoverable to or from any other named
reinsured company.
C. Reports and remittances made to the Reinsurer in accordance with the
provisions of this Contract are to be in sufficient detail to identify both
the Reinsurer's loss obligations due each reinsured company and each
reinsured company's premium remittance under the report.
Article XXVI - Intermediary (BRMA 23A)
▇. ▇. ▇▇▇▇▇▇ Co. is hereby recognized as the Intermediary negotiating this
Contract for all business hereunder. All communications (including but not
limited to notices, statements, premium, return premium, commissions, taxes,
losses, loss adjustment expense, salvages and loss settlements) relating thereto
shall be transmitted to the Company or the Reinsurer through ▇. ▇. ▇▇▇▇▇▇ Co.,
Reinsurance Services, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Payments by the Company to the Intermediary shall be deemed to constitute
payment to the Reinsurer. Payments by the Reinsurer to the Intermediary shall
be deemed to constitute payment to the Company only to the extent that such
payments are actually received by the Company.