EXHIBIT 10.3
ENDORSEMENT NO. 6
Attached to and made a part of
AGREEMENT OF REINSURANCE
NO. 9034
between
PHILADELPHIA INDEMNITY COMPANY
PHILADELPHIA INSURANCE COMPANY
(herein collectively referred to as the "Company")
and
GENERAL REINSURANCE CORPORATION
(herein referred to as the "Reinsurer")
IT IS MUTUALLY AGREED that, effective January 1, 2007, the following ARTICLE XIV
is hereby added to this Agreement:
"ARTICLE XIV - ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement between the parties with respect
to the business reinsured hereunder. Any change or modification to this
Agreement shall be made by written amendment to this Agreement and signed by the
parties hereto."
IT IS FURTHER AGREED that, as respects new and renewal policies of the Company
becoming effective at and after 12:01 A.M., January 1, 2007, and policies of the
Company in force at 12:01 A.M., January 1, 2007, with respect to claims and
losses resulting from Occurrences taking place at and after the aforesaid time
and date, EXHIBIT A to this Agreement is amended as follows:
I - SECTION 3 is amended to read:
"SECTION 3 - LIABILITY OF THE REINSURER
The Reinsurer shall pay to the Company, with respect to each Risk of the
Company, the amount of Net Loss sustained by the Company in excess of the
Company Retention but not exceeding the Limits of Liability of the Reinsurer as
set forth in the Schedule of Reinsurance.
SCHEDULE OF REINSURANCE
Class of Business Company Retention Limits of Liability of the Reinsurer
----------------- ----------------- ------------------------------------
Property Business $2,000,000 FIRST EXCESS COVER: The next
$3,000,000 in excess of the first
$2,000,000
GENERAL REINSURANCE CORPORATION
A BERKSHIRE HATHAWAY COMPANY
SCHEDULE OF REINSURANCE (CONTINUED)
Class of Business Company Retention Limits of Liability of the Reinsurer
----------------- ----------------- ------------------------------------
SECOND EXCESS COVER: The next
$5,000,000 in excess of the first
$5,000,000
THIRD EXCESS COVER: The next
$5,000,000 in excess of the first
$10,000,000
The liability of the Reinsurer shall not exceed:
(a) $6,000,000 under the First Excess Cover nor $10,000,000 under the
Second Excess Cover nor $10,000,000 under the Third Excess Cover with
respect to all Net Loss on all Risks involved in one Occurrence.
(b) $15,000,000 under the Second Excess Cover nor $15,000,000 under the
Third Excess Cover with respect to all Net Loss on all Risks involved
in all Occurrences (including Extra Contractual Obligations) taking
place during each Agreement Year. For purposes of this provision, upon
a run off termination of this Exhibit the last completed Agreement
Year shall be combined with the remaining period that reinsurance is
afforded under this Exhibit to constitute a single Agreement Year.
All insurance written under one or more policies of the Company against the same
peril on the same Risk shall be combined, and the Company Retention and the
Limits of Liability of the Reinsurer shall be determined on the basis of the sum
of all insurance against the same peril and on the same Risk which is in force
at the time of a claim or loss."
II - SECTION 7 is amended to read:
"SECTION 7 - REINSURANCE PREMIUM
The Company shall pay to the Reinsurer:
(a) For the First Excess Cover, 1.90% of the Company's Subject Earned
Premium;
(b) For the Second Excess Cover, 0.88% of the Company's Subject Earned
Premium;
(c) For the Third Excess Cover, 0.29% of the Company's Subject Earned
Premium."
GENERAL REINSURANCE CORPORATION
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III - SECTION 9 is amended to read:
"SECTION 9 - AUTOMATIC REINSTATEMENT
The Limit of Liability of the Reinsurer with respect to each Occurrence shall be
reduced by an amount equal to the amount of liability paid by the Reinsurer, but
that part of the liability of the Reinsurer that is so reduced shall be
automatically reinstated from the date of the Occurrence for which payment is
made; however, the Limits of Liability of the Reinsurer under the Second and
Third Excess Covers with respect to all Occurrences taking place during each
Agreement Year shall not exceed the amounts set forth in the section entitled
LIABILITY OF THE REINSURER. In consideration of this automatic reinstatement:
(a) For each amount so reinstated in the First Excess Cover, there shall
be no additional reinsurance premium;
(b) For first $5,000,000 so reinstated in the Second and Third Excess
Covers, there shall be no additional reinsurance premium;
(c) For the next $5,000,000, so reinstated in the Second Excess Cover, the
Company shall pay to the Reinsurer an additional reinsurance premium
that shall be the product of 100% of the reinsurance premium set forth
in sub-paragraph (b) of the section entitled REINSURANCE PREMIUM for
the Agreement Year multiplied by the amount of the reinstated Limit of
Liability of the Reinsurer divided by $5,000,000;
(d) For the next $5,000,000, so reinstated in the Third Excess Cover, the
Company shall pay to the Reinsurer an additional reinsurance premium
that shall be the product of 100% of the reinsurance premium set forth
in sub-paragraph (c) of the section entitled REINSURANCE PREMIUM for
the Agreement Year multiplied by the amount of the reinstated Limit of
Liability of the Reinsurer divided by $5,000,000.
The reinsurance premium so developed for each amount reinstated shall be in
addition to the reinsurance premium set forth in the section entitled
REINSURANCE PREMIUM."
IT IS FURTHER AGREED that, as respects Terrorism Occurrences taking place at and
after 12:01 A.M., January 1, 2007, EXHIBIT B to this Agreement is hereby renewed
subject to all its terms, conditions and limitations, except as modified below,
for a period of one year. Accordingly:
I - The first paragraph of SECTION 2 - TERM is amended to read:
"This Exhibit shall apply to new and renewal policies of the Company becoming
effective at and after 12:01 A.M., January 1, 2007, and to policies of the
Company in force at 12:01 A.M., January 1, 2007, with respect to claims and
losses resulting from Terrorism Occurrences taking place at and after the
aforesaid time and date, and prior to 12:01 A.M., January 1, 2008."
GENERAL REINSURANCE CORPORATION
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II - SECTION 3 is amended to read:
"SECTION 3 - LIABILITY OF THE REINSURER
The Reinsurer shall pay to the Company, with respect to each Risk of the
Company, the amount of Net Loss sustained by the Company in excess of the
Company Retention but not exceeding the Limits of Liability of the Reinsurer as
set forth in the Schedule of Reinsurance.
SCHEDULE OF REINSURANCE
Limits of Liability
of the Reinsurer
---------------------------
FIRST SECOND
Class of Business Company Retention EXCESS COVER EXCESS COVER
----------------- ----------------- ------------ ------------
Property Business $2,000,000 $8,000,000 $5,000,000
The liability of the Reinsurer shall not exceed $8,000,000 under the First
Excess Cover nor $5,000,000 under the Second Excess Cover with respect to all
Net Loss arising out of all loss or damage directly or indirectly arising out
of, caused by, or resulting from all Terrorism Occurrences taking place during
each Agreement Year, regardless of any other cause or event contributing to such
loss or damage in any way or at any time, or whether such loss or damage is
accidental or intentional.
All insurance written under one or more policies of the Company against the same
peril on the same Risk shall be combined, and the Company Retention and the
Limits of Liability of the Reinsurer shall be determined on the basis of the sum
of all insurance against the same peril and on the same Risk which is in force
at the time of a claim or loss."
II - SECTION 6 is amended to read:
"SECTION 6 - REINSURANCE PREMIUM
The Company shall pay to the Reinsurer:
(a) For the First Excess Cover, a flat reinsurance premium of $640,000 for
the term of this Exhibit;
(b) For the Second Excess Cover, a flat reinsurance premium of $400,000
for the term of this Exhibit."
IN WITNESS WHEREOF, the parties hereto have caused this Endorsement to be
executed
GENERAL REINSURANCE CORPORATION
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in duplicate,
this 7th day of February 2007,
PHILADELPHIA INDEMNITY COMPANY
PHILADELPHIA INSURANCE COMPANY
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Executive VP & CUO
Attest: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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and this 15th day of January, 2007.
GENERAL REINSURANCE CORPORATION
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Vice President
Attest: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Endorsement No. 6
Agreement No. 9034
GENERAL REINSURANCE CORPORATION
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