Exhibit 10.29
INTERESTS AND LIABILITIES AGREEMENT
attaching to and forming a part of
LMX CATASTROPHE QUOTA SHARE
RETROCESSIONAL AGREEMENT
between
CONTINENTAL CASUALTY COMPANY
an ILLINOIS corporation
(hereinafter called the "Retrocedent")
and
LASALLE RE LIMITED
a BERMUDA corporation
(hereinafter called the "Subscribing Retrocessionaire")
It is hereby mutually understood and agreed by and between the Retrocedent
and the Subscribing Retrocessionaire that effective 12:01 a.m., Standard Time,
January 1, 1997 to 12:01 a.m., Standard Time, January 1, 1998 the Subscribing
Retrocessionaire's share in the interests and liabilities of the
Retrocessionaires on the attached Agreement will be 47.50%.
The share of the Subscribing Retrocessionaire will be separate and apart
from the shares of the other Retrocessionaires and will not be joint with those
of the other Retrocessionaires, and the Subscribing Retrocessionaire will in no
event participate in the interests and liabilities of the other
Retrocessionaires.
If the Subscribing Retrocessionaire wishes to designate an alternate party
to that named in the Service of Suit Article contained in the attached
Agreement, then service of process will be made upon the party hereinafter
named:
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IN WITNESS WHEREOF, the parties hereto have caused this Interests and
Liabilities Agreement to be executed in duplicate by their duly authorized
representatives.
Signed at CHICAGO, ILLINOIS
CONTINENTAL CASUALTY COMPANY
Signature: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇ Title: Executive Vice President
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Attest: /s/ ▇▇▇▇▇▇ ▇▇▇ Date: April 8, 1997
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Signed at ▇▇▇▇▇▇▇▇, BERMUDA
LASALLE RE LIMITED
Signature: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Title: Chief Underwriting Officer & EVP
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Attest: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Date: May 27th, 1997
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LMX CATASTROPHE QUOTA SHARE RETROCESSIONAL AGREEMENT
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ARTICLE PAGE
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COVERAGE I 2
TERM II 3
TERRITORY III 4
EXCLUSIONS IV 4
DEFINITIONS V 4
REINSURANCE PREMIUM AND CEDING COMMISSION VI 5
EXTRA CONTRACTUAL OBLIGATIONS VII 6
REPORTS AND REMITTANCES VIII 6
RESERVES AND LETTERS OF CREDIT IX 7
INTEREST PENALTY X 10
SETTLEMENTS XI 11
OFFSET XII 11
SALVAGE AND SUBROGATION XIII 12
WARRANTY XIV 12
DELAYS, ERRORS, OR OMISSIONS XV 12
AMENDMENTS XVI 13
ACCESS TO RECORDS XVII 13
CONFIDENTIALITY XVIII 14
INSOLVENCY XIX 14
ARBITRATION XX 16
TAXES XXI 18
FEDERAL EXCISE TAX XXII 18
CURRENCY XXIII 18
SERVICE OF SUIT XXIV 19
INTER-COMPANY POOLING ARRANGEMENT XXV 20
INTERMEDIARY XXVI 21
LMX CATASTROPHE QUOTA SHARE RETROCESSIONAL AGREEMENT
----------------------------------------------------
THIS AGREEMENT is made and entered into by and between CONTINENTAL CASUALTY
COMPANY, an Illinois corporation, (hereinafter called the "Retrocedent") of the
one part, and the various Retrocessionaires as identified by the attached
Interests and Liabilities Agreements (hereinafter called the
"Retrocessionaires") of the other part.
WITNESSETH:
That in consideration of the mutual covenants hereinafter contained and
upon the terms and conditions hereinbelow set forth, the parties hereto agree as
follows:
ARTICLE I
---------
COVERAGE
The Retrocedent shall cede to the Retrocessionaires, and the
Retrocessionaires shall accept, a 33.33% of $5,000,000 (i.e., $1,666,500) quota
share participation in respect to all original contracts written or renewed by
the Retrocedent with an effective date during the term of this Agreement and
classified by the Retrocedent as "London Market Catastrophe Excess of Loss
Reinsurance," where 100% of the layer is written by the Retrocedent and coded
Product Type 6308.
The limit of liability to the Retrocessionaires shall not exceed 33.33% of
$5,000,000 (i.e., $1,666,500) any one occurrence, any one original reinsured,
subject to an aggregate limitation of no more than 33.33% of $20,000,000 (i.e.,
$6,666,000) any one occurrence. Should any loss involve this reinsurance, the
obligation of the Retrocessionaires shall be automatically reinstated as to any
subsequent loss for the full
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amount of reinsurance as set forth above. The Retrocedent shall retain a minimum
of 66.67% of $5,000,000 (i.e., $3,333,500) of all cessions to this Agreement
net.
All reinsurance for which the Retrocessionaires shall be obligated by
virtue of this Agreement shall be subject to the same terms, rates, conditions,
interpretations, waivers, modifications, and alterations as to the respective
original contracts of the Retrocedent to which this reinsurance applies. Nothing
herein shall in any manner create any obligations or establish any rights
against the Retrocessionaires in favor of any third parties or any persons not
parties to this Agreement except as provided in the Insolvency Article. The
Retrocedent shall be the sole judge of what constitutes any one occurrence, any
one original reinsured.
ARTICLE II
----------
TERM
This Agreement shall apply to all losses occurring on original contracts
written or renewed with an effective date during the 12-month period commencing
January 1, 1997, 12:01 a.m. Standard Time. The Retrocessionaires shall remain
liable for all losses under original contracts in force until their expiration
or renewal dates, whichever come first, plus an additional 12 month period
should an original contract be renewed at an original reinsured's option. In
addition, the Retrocessionaires shall remain liable as respects any run-off
obligations under the original contracts covered hereunder.
In the event a Retrocessionaire opts not to continue its participation on
the agreement replacing this Agreement, the Retrocessionaire shall remit to the
Retrocedent 90% of the Retrocessionaire's share of the positive balance of
premium received, less
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losses paid, and less ceding and other commissions within 30 days after the
termination of the Agreement. This provision shall not apply in the event this
Agreement is not renewed.
Notwithstanding the cancellation of this Agreement as hereinabove provided,
its provisions shall continue to apply to all unfinished business hereunder to
the end that all obligations and liabilities incurred by each party hereunder
prior to such termination shall be fully performed and discharged.
ARTICLE III
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TERRITORY
This Agreement shall apply to losses wheresoever rising.
ARTICLE IV
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EXCLUSIONS
No indemnity shall be provided hereunder for any liability excluded under
the Retrocedent's original contracts.
ARTICLE V
---------
DEFINITIONS
"Original contracts" as used in this Agreement shall mean reinsurance
treaties, binders, cover notes, slips, policies, contracts, or agreements,
whether written or oral.
"Occurrence" as used in this Agreement is defined as on the original
contracts covered hereunder.
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"Loss" as used in this Agreement shall mean the amount of any settlement,
award, or judgment paid by the Retrocedent or for which the Retrocedent has
become liable to pay after deduction of all recoveries, salvages, subrogations,
and other reinsurances whether recovered or not. Loss shall not include loss
expense, unless the original contracts reinsured hereunder define loss as
including loss expense.
"Loss expense" as used in this Agreement shall mean all expenses incurred
by the Retrocedent in the investigation, appraisal, adjustment, litigation
and/or defense of claims under original contracts reinsured hereunder, including
court costs and interest accrued before and after final judgment, but excluding
internal office expenses, salaries, and other remuneration of regular employees
(other than staff field adjusters) of the original reinsureds or the
Retrocedent. The Retrocessionaires shall bear their pro rata shares of all such
loss expense (unless defined as part of loss in reinsured original contracts)
and shall benefit pro rata in all salvages, subrogations, discounts, and other
recoveries.
ARTICLE VI
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REINSURANCE PREMIUM AND CEDING COMMISSION
The Retrocedent shall cede to the Retrocessionaires their proportionate
share of the original premium on all original contracts written or renewed with
an effective date on or after the inception of this Agreement for the business
described in the Coverage Article, less the ceding commission set forth below.
The Retrocessionaires shall allow the Retrocedent a 3% flat ceding
commission in addition to any commissions being paid under the original
contracts reinsured hereunder.
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ARTICLE VII
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EXTRA CONTRACTUAL OBLIGATIONS
This Agreement shall protect the Retrocedent, within the limits hereof, for
liability incurred in accordance with the provisions of the extra contractual
obligations clauses contained in the original contracts covered hereunder.
ARTICLE VIII
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REPORTS AND REMITTANCES
Within 30 days after the close of each quarter, the Retrocedent shall
furnish the Retrocessionaires with a report summarizing the gross premium,
commission allowed on the gross premium, premium ceded less return premium and
commission, losses paid, loss expenses paid, salvage recovered, and net balance
due either party. The quarterly report also shall contain a statement showing
the total reserves for outstanding losses including loss expenses and a list of
all catastrophe code numbers assigned by the Property Claim Services division of
American Insurance Services Group, Inc. for paid and outstanding catastrophe
losses and loss expense incurred during the quarter. All amendments or
adjustments, including reinstatement premium, shall be accounted for on a year-
of-account basis. Amounts due the Retrocessionaires shall be remitted with said
report. Amounts due the Retrocedent shall be remitted within 30 days following
receipt of the report.
Within 60 days following the expiration of this Agreement, the Retrocedent
shall furnish the Retrocessionaires with a report detailing the unearned
premium, calculated on a monthly pro rata basis, as well as the December 31st
state of losses. The Retrocedent
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shall also furnish the Retrocessionaires with any additional information they
may require to prepare their financial statements.
Should payment due from the Retrocessionaires exceed their share of
$250,000, the Retrocedent may give the Retrocessionaires notice of payment made
or its intention to make payment on a certain date. If the Retrocedent has paid
the loss, payment shall be made by the Retrocessionaires immediately. If the
Retrocedent intends to pay the loss by a certain date and has submitted a proof
of loss or similar document, payment shall be due from the Retrocessionaires 24
hours prior to that date, provided the Retrocessionaires have a period of five
working days after receipt of said notice to dispatch the payment. Cash loss
amounts specifically remitted by the Retrocessionaires as set forth herein shall
be credited to their next quarterly account.
ARTICLE IX
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RESERVES AND LETTERS OF CREDIT
(This Article is only applicable to those Retrocessionaires who cannot
qualify for credit by each governmental authority having jurisdiction over
the Retrocedent's reserves.)
As regards original contracts issued by the Retrocedent coming within the
scope of this Agreement, the Retrocedent agrees that, when it files with the
Insurance Department or sets up on its books reserves for known losses that have
been reported to the Retrocessionaires (including loss and loss expense paid by
the Retrocedent and loss and loss expense reported and outstanding) and/or
reserves for unearned premium, which it is required by law to set up, it shall
forward to the Retrocessionaires a statement showing the proportion of such loss
reserves applicable to them. The Retrocessionaires hereby
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agree that they shall apply for and secure delivery to the Retrocedent of a
clean, irrevocable, and unconditional Letter of Credit, dated on or before
December 31 of the year in which the request is made, and issued by Citibank,
N.A., and containing provisions acceptable to the insurance regulatory
authorities having jurisdiction over the Retrocedent's reserves, in an amount
equal to the Retrocessionaire's proportion of such reserves applicable to them
as shown in the statement prepared by the Retrocedent. Under no circumstances
shall any amount relating to reserves in respect of Incurred But Not Reported
losses be included in the amount of the Letter of Credit.
The Letter of Credit shall be issued for a period of not less than one
year, and shall be automatically extended for one year from its date of
expiration or any future expiration date unless 30 days prior to any expiration
date Citibank N.A. notifies the Retrocedent by registered mail that it elects
not to consider the Letter of Credit extended for any additional period.
Notwithstanding any other provisions of this Agreement, the Retrocedent or
its court-appointed successor in interest may draw upon such credit at any time
without diminution because of the insolvency of the Retrocedent or of any
Retrocessionaire for one or more of the following purposes only:
A. To reimburse the Retrocedent for the Retrocessionaire's share of
unearned premium on original contracts reinsured hereunder or account
of cancellations of such original contracts.
B. To pay the Retrocessionaire's share or to reimburse the Retrocedent
for the Retrocessionaire's share of any loss reinsured by this
Agreement, which has not been otherwise paid.
C. To make refund of any sum in excess of the actual amount required to
pay the Retrocessionaire's share of any liability reinsured by the
Agreement.
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D. In the event of non-extension of the Letter of Credit as provided for
above, to establish deposit of the Retrocessionaire's share for
unearned premium and/or losses, including reserves for incurred but
not reported losses under this Agreement. Such cash deposit shall be
held in an interest bearing account separate from the Retrocedent's
other assets, and interest thereon shall accrue to the benefit of the
Retrocessionaires.
Citibank, N.A. shall have no responsibility whatsoever in connection with
the propriety of withdrawals made by the Retrocedent or the disposition of funds
withdrawn, except to ensure that withdrawals are made only upon the order of
properly authorized representatives of the Retrocedent.
At annual intervals, or more frequently as agreed but never more frequently
than semi-annually, the Retrocedent shall prepare, for the sole purpose of
amending the Letter of Credit, a specific statement of the Retrocessionaires'
share of reserves for losses and/or unearned premium. If the statement shows
that the Retrocessionaires' share of such reserves exceeds the balance of credit
as of the statement date, the Retrocessionaires shall, within 30 days after
receipt of notice of such excess, secure delivery to the Retrocedent of an
amendment of the Letter of Credit, increasing the amount of credit by the amount
of such difference. If, however, the statement shows that the Retrocessionaires'
share of such reserves is less than the balance of credit as of the statement
date, the Retrocedent shall, within 30 days after receipt of written request
from the Retrocessionaires, release such excess credit by agreeing to secure an
amendment to the Letter of Credit, reducing the amount of credit available by
the amount of such excess credit.
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ARTICLE X
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INTEREST PENALTY
The interest amounts provided for in this Article will apply to the
Retrocessionaires or to the Retrocedent in the following circumstances:
A. Loss payments owned by the Retrocessionaires to the Retrocedent shall
have a due date to the Retrocedent of 90 calendar days following the
date of the billing/proof of loss.
B. Payment of any premium shall be due the Retrocessionaires within 90
calendar days of the date specified in this Agreement. Any premium
adjustments will be due by the debtor party within 150 calendar days
of the expiry of this Agreement.
C. Payment on return of premiums, commissions, profit sharing, or any
amounts not provided in paragraphs A. or B. above, shall have the due
date as specified in this Agreement. If no due date is specified, the
due date shall be 90 days following the date of billing.
D. Failure by a Retrocessionaire or the Retrocedent to comply with their
respective payment obligations within the time periods as herein
provided will result in a compound interest penalty payable at a rate
equal to the 90-day Treasury ▇▇▇▇ rate as published in the Money Rate
Section or any successor section of The Wall Street Journal on the
first business day following the date a remittance becomes due, plus
1% per annum, to be compounded and adjusted quarterly. Any interest
which occurs pursuant to this Article shall be calculated by the party
to which it is owed. The accumulation of the number of days that any
payment is past due will stop on the date that the Intermediary, where
applicable, receives payment.
E. The validity of any claim or payment may be contested under the
provisions of this Agreement. If the debtor party prevails in an
arbitration or any other proceeding, there shall be no interest
penalty due. Otherwise, any interest will be calculated and due as
outlined above.
F. If a Retrocessionaire advances payment of any claim it is contesting,
and prevails in the contest, the Retrocedent shall return such payment
plus pay interest on same, calculated as per the provisions of this
Article.
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G. Any interest that occurs pursuant to this Article may be waived by the
party to which it is owed. Further, any interest which is calculated
pursuant to this Article that is $100 or less shall be waived. Waiver
of such interest, however, shall not affect the waiving party's rights
to similar interest for any other failure by the other party to make
payment when due under this Article.
H. Nothing in this Article shall diminish any legal remedies that either
party may have against the other.
ARTICLE XI
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SETTLEMENTS
The Retrocedent shall have the right to settle all claims under its
original contracts. All settlements, provided they are within the terms of this
Agreement, shall be unconditionally binding on the Retrocessionaires in
proportion to their participation in the Agreement, upon provision by the
Retrocedent of the following: identification of loss including date and
documented settlement/loss amounts and expenses received by the Retrocedent
subject to this Agreement.
Inadvertent omission in dispatching the aforementioned documentation will
in no way affect the obligation of the Retrocessionaires under this Agreement,
provided the Retrocedent informs the Retrocessionaires of such omission promptly
upon discovery.
ARTICLE XII
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OFFSET
The Retrocedent or any Retrocessionaire hereunder shall be entitled to
deduct from amounts due the other party under this Agreement any amounts due
itself from the other party under this Agreement; however, in the event of the
insolvency of any party hereto, offset shall be in accordance with applicable
law.
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ARTICLE XIII
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SALVAGE AND SUBROGATION
The Retrocessionaires shall be credited with their share of salvage and/or
subrogation in respect of claims and settlements under this Agreement, less
their share of recovery expense. Unless the Retrocedent and the
Retrocessionaires agree to the contrary, the Retrocedent shall enforce its right
to salvage and/or subrogation and shall prosecute all claims arising out of such
right.
ARTICLE XIV
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WARRANTY
It is hereby warranted that the Retrocedent and the Retrocessionaires
hereon shall retain all business subject to this Agreement net and unreinsured
in any way, subject to the limits expressed in the Coverage Article.
ARTICLE XV
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DELAYS, ERRORS, OR OMISSIONS
Inadvertent delays, errors, or omissions made in connection with this
Agreement shall not relieve either party from any liability which should have
attached to either party had such delay, error, or omission not occurred,
provided always that such error or omission is rectified immediately upon
discovery.
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ARTICLE XVI
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AMENDMENTS
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This Agreement may be altered or amended in any of its terms and conditions
by mutual consent of the Retrocedent and the Retrocessionaires by addenda hereto
which will then constitute a part of this Agreement.
ARTICLE XVII
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ACCESS TO RECORDS
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The Retrocessionaires, or their duly accredited representatives, shall have
access to the books and records of the Retrocedent on matters reasonably
relating to this reinsurance at all reasonable times for the purpose of
obtaining information concerning this Agreement or the subject matter hereof.
Except as provided in the following sentence, access to premium records is
restricted to within four years of the expiration of this Agreement. A
Retrocessionaire shall be permitted access to premium records subsequent to the
aforementioned period only on the condition that either: a) there are no
balances payable hereunder by the Retrocessionaire which are overdue as provided
in the Interest Penalty Article of this Agreement, or b) the Retrocessionaire
has funded all balances due hereunder in an interest-bearing trust fund or with
a Letter of Credit as hereinafter provided.
Should a Retrocessionaire choose option b) of the foregoing paragraph, the
Retrocessionaire agrees to provide the Retrocedent a Trust Agreement established
at ▇▇▇▇▇▇ Guaranty Trust Company of New York, New York, or at a mutually agreed
successor Trustee, or a clean, irrevocable, and evergreen Letter of Credit,
issued by
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▇▇▇▇▇▇ Guaranty Trust Company of New York, New York, or by a mutually agreed
bank, of which the Retrocedent shall be the beneficiary, which shall secure in
full all balances due from the Retrocessionaire to the Retrocedent with respect
to this Agreement. Such Trust Agreement and/or Letter of Credit shall be
established under the laws of the state of New York and shall meet all
requirements of the state regulatory authorities applicable to the Retrocedent.
The Retrocessionaire is responsible for all costs associated with providing such
Trust Agreement and/or Letters of Credit as required under this Article.
ARTICLE XVIII
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CONFIDENTIALITY
It is a condition precedent to any indemnification under this Agreement
that the Retrocedent shall not disclose any details of this Agreement at any
time to any third party without the approval of the Retrocessionaires.
Notwithstanding the foregoing, the Retrocedent may disclose details of this
Agreement to Names and their agents, auditors, accountants, and other third
parties as may be required in order to comply with law or with the bylaws of
Lloyd's, provided that they themselves respect the confidentiality of this
undertaking.
ARTICLE XIX
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INSOLVENCY
In the event of the Retrocedent's insolvency, the reinsurance afforded by
this Agreement shall be payable by the Retrocessionaires on the basis of
Retrocedent's liability under the original contracts reinsured without
diminution because of the Retrocedent's insolvency or because its liquidator,
receiver, conservator, or statutory
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successor has failed to pay all or a portion of any claims, subject however to
the right of the Retrocessionaires to offset against such funds due hereunder,
any sums that may be payable to them by said insolvent Retrocedent in accordance
with the Offset Article. The reinsurance shall be payable by the
Retrocessionaires directly to the Retrocedent, its liquidator, receiver,
conservator, or statutory successor except (a) where this Agreement specifically
provides another payee of such reinsurance in the event of the Retrocedent's
insolvency or (b) where the Retrocessionaires, with the consent of the direct
insured or insureds, have assumed such policy obligations of the Retrocedent as
direct obligations of themselves to the payees under such policies in
substitution for the Retrocedent's obligation to such payees.
The Retrocedent's liquidator, receiver, conservator, or statutory successor
shall give written notice of the pendency of a claim against the Retrocedent
under the original contracts within a reasonable time after such claim is filed
in the insolvency proceeding. During the pendency of such claim, the
Retrocessionaires may investigate said claim and interpose in the proceeding
where the claim is to be adjudicated, at their own expense, any defense that
they may deem available to the Retrocedent, its liquidator, receiver,
conservator, or statutory successor. The expense thus incurred by the
Retrocessionaires shall be chargeable against the Retrocedent, subject to court
approval, as part of the expense of conservation or liquidation to the extent
that such proportionate share of the benefit shall accrue to the Retrocedent
solely as a result of the defense undertaken by the Retrocessionaires. Where two
or more Retrocessionaires are involved in the same claim, and a majority in
interest elect to interpose defense to such claim, the expense shall be
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apportioned in accordance with the terms of this Agreement as though such
expense had been incurred by the Retrocedent.
In the event of insolvency of the Retrocedent, the Retrocessionaires under
this Agreement shall have all rights, as more fully set forth in Section 173 of
Illinois Insurance Code, as amended.
ARTICLE XX
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ARBITRATION
In the event of any arbitration between the Retrocedent and its reinsureds
under the terms of any original contract, the Retrocessionaires agree
unreservedly to abide by the result of such arbitration.
As a condition precedent to any right of action hereunder, any dispute
arising out of this Agreement, whether arising before or after termination,
shall be submitted to the decision of a board of arbitration composed of two
arbitrators and an umpire, meeting in Chicago, Illinois unless otherwise agreed.
The members of the board of arbitration shall be active or retired,
disinterested officials of insurance or reinsurance companies or Underwriters at
Lloyd's, London. Each party shall appoint its arbitrator, and the two
arbitrators shall choose an umpire before instituting the hearing. If the
respondent fails to appoint its arbitrator within four weeks after being
requested to do so by the claimant, the claimant shall also appoint the second
arbitrator. If the two arbitrators fail to agree upon the appointment of an
umpire within four weeks after their nominations, they shall request the
American Arbitration Association to appoint an umpire. Both parties shall be
promptly notified, in writing, of the appointment of the umpire.
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The claimant shall submit its initial brief within 20 days from the
appointment of the umpire. The respondent shall submit its brief within 20 days
thereafter, and the claimant may submit a reply brief within 10 days after
filing of the respondent's brief.
The board shall make its decision with due regard to the custom and usage
of the insurance and reinsurance business. The board shall issue its decision in
writing based upon a hearing in which evidence may be introduced without
following strict rules of evidence but in which cross-examination and rebuttal
shall be allowed. The board shall make its decision within 60 days following the
termination of the hearings unless the parties consent to an extension. The
majority decision of the board shall be final and binding upon all parties to
the proceeding. Judgment may be entered upon the award of the board in any court
having jurisdiction thereof.
If more than one Retrocessionaire is involved in the same dispute, all such
Retrocessionaires shall constitute and act as one party for purposes of this
Article, and communications shall be made by the Retrocedent to each of the
Retrocessionaires constituting the one party, provided that nothing therein
shall impair the rights of the Retrocessionaires to assert several, rather than
joint, defenses or claims, nor be construed as changing the liability of the
Retrocessionaires under the terms of this Agreement from several to joint.
Each party shall bear the expense of its own arbitrator and shall jointly
and equally bear with the other party the expense of the umpire. The remaining
costs of the arbitration proceedings shall be allocated by the board.
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ARTICLE XXI
-----------
TAXES
The Retrocedent shall pay all taxes (except for Federal Excise Tax) on
premiums reported to the Retrocessionaires on this Agreement.
ARTICLE XXII
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FEDERAL EXCISE TAX
(This Article applies to Retrocessionaires domiciled outside the
United States of America, excepting Lloyd's London Underwriters
and other Retrocessionaires exempt from Federal Excise Tax).
The Retrocessionaires shall 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 Service Code) to the extent such
premium is subject to such tax. In the event of any return of premium, the
Retrocessionaires shall deduct the applicable percentage of the return premium
payable hereon and the Retrocedent or its agent shall recover such tax from the
United States government.
ARTICLE XXIII
-------------
CURRENCY
The sign "$" in this Agreement refers to United States of America Dollars
and all payments hereunder shall be made in that currency. All amounts paid or
received by the Retrocedent in any other currency shall be converted into United
States of America Dollars at the rate of exchange on the Retrocedent's books
when such payment is made or received.
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ARTICLE XXIV
------------
SERVICE OF SUIT
---------------
(This Article applies to Retrocessionaires domiciled outside the United
States of America and/or unauthorized in any state, territory, or
district of the United States of America that has jurisdiction over
the Retrocedent and in which a subject suit has been instituted. This
Article is not intended to conflict with or override the parties'
obligation to arbitrate their disputes in accordance with the Arbitration
Article.)
In the event any Retrocessionaire hereon fails to pay any amount or perform
any obligation claimed due hereunder, such Retrocessionaire, at the request of
the Retrocedent, shall submit to the jurisdiction of any court of competent
jurisdiction within the United States and shall comply with all requirements
necessary to give that court jurisdiction. Nothing in this Article constitutes
or should be understood to constitute a waiver of the Retrocessionaire's right
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. Service of process in such suit may
be made upon Mendes and Mount, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-
6829, or another party specifically designated in the applicable Interests and
Liabilities Agreement attached hereto. In any suit instituted against it upon
this Agreement, the Retrocessionaire shall abide by the final decision of such
court or of any appellate court in the event of an appeal.
The above named are authorized and directed to accept service of process on
behalf of the Retrocessionaire in any such suit and/or upon request of the
Retrocedent to give a written undertaking to the Retrocedent that they shall
enter a general appearance on the Retrocessionaire's behalf in the event such a
suit is instituted
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Further, pursuant to any statute of any state, territory, or district of
the United States that makes provisions therefor, the Retrocessionaire hereby
designates 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 Retrocedent or any beneficiary hereunder arising out of this Agreement,
and hereby designates above named as the person to whom said officer is
authorized to mail such process or a true copy thereof.
ARTICLE XXV
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INTER-COMPANY POOLING ARRANGEMENT
It is understood and agreed that the Retrocedent has entered into the CNA
Reinsurance Pooling Agreement whereby it assumes 100% of the liability of the
other participants in the CNA Reinsurance Pooling Agreement. This present
Agreement protects such assumed liability and attaches prior to redistribution,
if any, within the participating companies. Such redistribution shall be
disregarded for all purposes of this present Agreement. For all purposes of this
Agreement, other member companies of the CNA Reinsurance Pooling Agreement are:
National Fire Insurance Company of Hartford, American Casualty Company of
Reading Pennsylvania, Transportation Insurance Company, Transcontinental
Insurance Company, Valley Forge Insurance Company, CNA Casualty of California,
CNA Lloyd's of Texas and Columbia Casualty Company.
It is also understood and agreed that the Retrocedent shall include the
insurance companies of the Continental Corporation which are affiliated with,
controlled by or under the common management of CNA.
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It is further agreed that notice shall be given to the Retrocessionaries
within 45 days of the acquisition of a company, not previously a participant in
either of the above-referenced, having in-force business that the Retrocedent
wishes to have covered by this Agreement. In the event either party hereto
maintains that the inclusion hereunder of some portion of the in force business
of any such new acquisition calls for alteration in the existing terms of this
Agreement, and the parties are unable to negotiate terms that are mutually
acceptable, then that portion of the newly acquired in force business not
considered mutually acceptable shall be covered for an additional period of 45
days from the date the dissenting party gives to the other written notice that
said portion of the newly acquired in force business is unacceptable.
ARTICLE XXVI
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INTERMEDIARY
Aon Re Inc. is hereby recognized as the Intermediary negotiating this
Agreement for all business hereunder. All communications (including but not
limited to notices, statements, premiums, return premiums, commissions, taxes,
losses, loss adjustment expense, salvages, and loss settlements) relating
thereto shall be transmitted to the Retrocedent or the Retrocessionaries through
Aon Re Inc., ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Payments by the
Retrocedent to the Intermediary shall be deemed payment to the
Retrocessionaries. Payments by the Retrocessionaries to the Intermediary shall
be deemed payment to the Retrocedent only to the extent that such payments are
actually received by the Retrocedent.
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