Aggregate Stop Loss
Reinsurance Contract
Effective: January 1, 1999
issued to
Amwest Surety Insurance Company
Far West Insurance Company
and
Condor Insurance Company
all of Omaha, Nebraska
▇. ▇. ▇▇▇▇▇▇ Co.
Reinsurance Services
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Table of Contents
Article Page
I Business Reinsured 3
II Term 3
III Territory 3
IV Retention and Limit 4
V Definitions 5
VI Other Reinsurance 6
VII Loss Notices and Settlements 6
VIII Salvage and Subrogation 6
IX Reinsurance Premium 6
X Late Payments 7
XI Reports and Remittances 9
XII Commutation 9
XIII Offset (BRMA 36C) 9
XIV Access to Records (BRMA 1D) 9
XV Net Retained Lines 9
XVI Errors and Omissions (BRMA 14F) 10
XVII Currency (BRMA 12A) ▇▇
▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇ ▇▇▇) 10
XIX Federal Excise Tax (BRMA 17A) 10
XX Unauthorized Reinsurers 11
XXI Insolvency 12
XXII Arbitration 13
XXIII Service of Suit (BRMA 49C) 14
XXIV Agency Agreement ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇) 15
Schedule A
Aggregate Stop Loss
Reinsurance Contract
Effective: January 1, 1999
issued to
Amwest Surety Insurance Company
Far West Insurance Company
and
Condor Insurance Company
all of Omaha, Nebraska
(hereinafter referred to collectively as the "Company")
by
Underwriters Reinsurance Company (Barbados), Inc.
Barbados, West Indies
(hereinafter referred to as the "Reinsurer")
Article I - Business Reinsured
By this Contract the Reinsurer agrees to reinsure and/or indemnify the Company
for the net excess liability which may accrue to the Company during the term of
this Contract under its bonds, policies, contracts and binders of insurance or
reinsurance (hereinafter called "bonds," as respects surety business, and
"policies," as respects property and casualty business) whether in force or
expired on the effective date hereof, issued or renewed on or after that date
(including bonds or policies with premium anniversary dates on or after that
date), for all surety business and property and casualty business written by the
Company (direct and assumed), subject to the terms, conditions and limitations
hereinafter set forth.
Article II - Term
This Contract shall become effective on January 1, 1999, with respect to losses
occurring on or after that date and shall remain in force until December 31,
1999, both days inclusive.
Article III - Territory
The territorial limits of this Contract shall be identical with those of the
Company's bonds or policies.
Article IV - Retention and Limit
A. Subject to the provisions of paragraphs B and C below, the Company shall
retain and be liable for an amount of ultimate net loss equal to a 26.50%
loss ratio (as hereinafter defined in Article V) for the term of this
Contract. The Reinsurer shall then be liable for any ultimate net loss
which exceeds the Company's retention, but does not exceed a 28.00% loss
ratio for the term of this Contract.
B. In addition to the above and subject to the provisions of paragraph C
below, the Reinsurer shall also be liable for any ultimate net loss which
exceeds a 31.00% loss ratio for the term of this Contract, but does not
exceed a 39.718% loss ratio for the term of this Contract. Any ultimate
net loss in excess of a loss ratio for the term of this Contract which is
greater than 28.00%, but less than 31.00%, shall be retained by the
Company and shall be hereinafter referred to as the "loss retention
corridor." The total liability of the Reinsurer during the term of this
Contract shall not exceed an amount equal to 10.218% of the Company's net
earned premium for the term of this Contract.
C. Notwithstanding the foregoing, in the event that the net earned premium as
respects property and casualty business exceeds 26.22% of the total net
earned premium hereunder, no claim shall be made under this Contract
unless and until the Company shall have first incurred an amount of
ultimate net loss in excess of 26.50% of its net earned premium during the
term of this Contract, plus 35.00% of the difference by which the net
earned premium as respects property and casualty business exceeds 26.22%
of the total net earned premium hereunder. The limit of liability of the
Reinsurer and the Company's loss retention corridor shall be arrived at in
the same manner.
In the event that the net earned premium as respects property and casualty
business is less than 20.22% of the total net earned premium hereunder, no
claim shall be made under this Contract unless and until the Company shall
have first incurred an amount of ultimate net loss in excess of 26.50% of
its net earned premium during the term of this Contract, less 35.00% of
the difference by which the net earned premium as respects property and
casualty business is less than 20.22% of the total net earned premium
hereunder. The limit of liability of the Reinsurer and the Company's loss
retention corridor shall be arrived at in the same manner.
D. The Company shall have the option to purchase an additional reinsurance
limit equal to 10.218% of the Company's net earned premium for the term of
this Contract. This option expires on December 31, 1999 and can only be
exercised if the ultimate net loss ceded under this Contract is less than
5.109% of the net earned premium for the term of this Contract.
Article V - Definitions
A. "Net excess liability" as used herein shall mean those amounts payable by
the Company as defined in the ultimate net loss definition set forth in
paragraph B below.
B. "Ultimate net loss" as used herein is defined as the sum or sums
(including extra contractual obligations and loss in excess of bond or
policy limits, both as hereafter defined) 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. 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.
C. "Loss in excess of bond or policy limits" and "extra contractual
obligations" as used herein shall be defined as follows:
1. "Loss in excess of bond or policy limits" shall mean any amount paid
or payable by the Company in excess of its bond or policy limits,
but otherwise within the terms of its policy, as a result of an
action against it by its insured or its insured's assignee to
recover damages the insured is legally obligated to pay to a third
party claimant because of the Company's alleged or actual negligence
or bad faith in rejecting a settlement within policy limits, or in
discharging its duty to defend or prepare the defense in the trial
of an action against its insured, or in discharging its duty to
prepare or prosecute an appeal consequent upon such an action.
2. "Extra contractual obligations" shall mean any punitive, exemplary,
compensatory or consequential damages, other than loss in excess of
bond or policy limits, paid or payable by the Company as a result of
an action against it by its insured, its insured's assignee or a
third party claimant, which action alleges negligence or bad faith
on the part of the Company in handling a claim under a policy
subject to this Contract.
Any loss in excess of bond or policy limits or extra contractual
obligation shall be deemed to have occurred on the same date as the loss
covered or alleged to be covered under the bond or policy.
Notwithstanding anything stated herein, this Contract shall not apply to
any loss in excess of bond or policy limits or any extra contractual
obligation incurred by the Company as a result of any fraudulent and/or
criminal act by any officer or director 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.
D. "Net earned premium" as used herein is defined as gross earned premium of
the Company for the classes of business reinsured hereunder, less the
earned portion of premiums ceded by the Company for reinsurance which
inures to the benefit of this Contract.
E. "Loss ratio" as used herein shall mean the ratio of the Company's
aggregate ultimate net loss paid during the term of this Contract to the
Company's net earned premium for the term of this Contract.
Article VI - Other Reinsurance
A. Notwithstanding the provisions of Article IV, the Company is permitted,
but not required, to purchase other facultative and/or other treaty
reinsurance on business subject to this Contract. Premiums ceded by the
Company for reinsurance which inures to the benefit of this Contract shall
be deducted in determining subject premium hereunder as provided in
Article IX.
B. The Company's inuring reinsurance agreements, as identified in Schedule A
attached hereto, shall remain in force during the term hereof, or so
deemed.
Article VII - Loss Notices and Settlements
All loss settlements made by the Company, provided they are within the terms of
this Contract, shall be binding upon the Reinsurer, and the Reinsurer agrees to
pay all amounts for which it may be liable upon receipt of reasonable evidence
of the amount paid (or scheduled to be paid) by the Company.
Article VIII - Salvage and Subrogation
The Reinsurer shall be credited with salvage (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 IX - Reinsurance Premium
A. As premium for the reinsurance provided hereunder, the Company shall pay
the Reinsurer 3.5% of its net earned premium as respects surety business
and 1.0% of its net earned premium as respects property and casualty
business for the term of this Contract.
B. The Company shall pay the Reinsurer an annual deposit premium of
$3,609,256 in four installments of $902,314 on January 1, April 1, July 1
and October 1, 1999.
C. If the Company elects to purchase an additional reinsurance limit in
accordance with the provisions of paragraph D of Article IV, the Company
shall pay an additional reinsurance premium to the Reinsurer for such
additional limit equal to 2.35% of its net earned premium as respects
surety business and 0.65% of its net earned premium as respects property
and casualty business for the term of this Contract. The Company shall pay
the Reinsurer a deposit premium of $2,400,000 in equal pro rata amounts on
the first day of each calendar quarter remaining during the term of this
Contract.
D. Within 60 days after the expiration of this Contract, the Company shall
provide a report to the Reinsurer setting forth the premium due hereunder,
computed in accordance with paragraphs A and C and any additional premium
due the Reinsurer or return premium due the Company shall be remitted
promptly.
Article X - Late Payments
A. It is understood and agreed that the provisions of this Article shall not
be implemented unless specifically invoked, in writing, by one of the
parties to this Contract.
B. In the event any premium, loss or other payment due either party is not
received by the intermediary named in Article XXV (hereinafter referred to
as the "Intermediary") by the payment due date, the party to whom payment
is due may, by notifying the Intermediary in writing, require the debtor
party to pay, and the debtor party agrees to pay, an interest penalty on
the amount past due calculated for each such payment on the last business
day of each month as follows:
1. The number of full days which have expired since the due date or the
last monthly calculation, whichever the lesser; times
2. 1/365th of the six month (or nearest thereto) U.S. Treasury ▇▇▇▇
rate, as quoted in the Wall Street Journal on the first business day
of the month for which the calculation is being made; times
3. The amount past due, including accrued interest.
It is agreed that interest shall accumulate until payment of the original
amount due plus interest penalties have been received by the Intermediary.
C. The establishment of the due date shall, for purposes of this Article, be
determined as follows:
1. As respects the payment of routine deposits and premiums due the
Reinsurer, the due date shall be as provided for in the applicable
section of this Contract. In the event a due date is not
specifically stated for a given payment, it shall be deemed due 45
days after the date of transmittal by the Intermediary of the
initial billing for each such payment.
2. As respects any payment, adjustment or return due either party not
otherwise provided for in subparagraph 1 above, the due date shall
be deemed as five business days following receipt of written
notification that the provisions of this Article have been invoked.
For purposes of interest calculations only, amounts due hereunder shall be
deemed paid upon receipt by the Intermediary.
D. Nothing herein shall be construed as limiting or prohibiting 1) the
Reinsurer from contesting the validity of any claim, or from participating
in the defense or control of any claim or suit; or 2) either party from
contesting the validity of any payment, or from initiating any arbitration
or other proceeding in accordance with the provisions of this Contract. If
the debtor party prevails in an arbitration or other proceeding, then any
interest penalties due hereunder on the amount in dispute shall be null and
void. If the debtor party loses in such proceeding, then the interest
penalty on the amount determined to be due hereunder shall be calculated in
accordance with the provisions set forth above unless otherwise determined
by such proceedings. If a debtor party advances payment of any amount it is
contesting, and proves to be correct in its contestation, either in whole
or in part, the other party shall reimburse the debtor party for any such
excess payment made plus interest on the excess amount calculated in
accordance with this Article.
E. As provided under Article VII it is understood and agreed that the Company
shall furnish the Reinsurer with usual and customary claim information and
nothing herein shall be construed as limiting or prohibiting the Reinsurer
from requesting additional information that it may deem necessary.
F. Interest penalties arising out of the application of this Article that are
$100 or less from any party shall be waived unless there is a pattern of
late payments consisting of three or more items over the course of any
12-month period.
Article XI - Reports and Remittances
Within 60 days after the end of each calendar quarter following the expiration
of this Contract, the Company shall report to the Reinsurer its aggregate
ultimate net loss paid for the contract term as of the end of the quarter. If
the aggregate ultimate net loss paid exceeds an amount equal to the Company's
retention hereunder for the contract term based on an estimate of the Company's
net earned premium for the contract term, the Reinsurer shall pay its portion of
such estimated excess (net of any prior payments for the contract term).
However, any such payment by the Reinsurer shall be provisional, subject to
adjustment when the Company's actual ultimate net loss and net earned premium
for the contract term have been determined.
Article XII - Commutation
The Company may commute this Contract with agreement by the Reinsurer.
Article XIII - 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 right of offset may exercise such right any time whether the
balances due are on account of premiums or losses or otherwise.
Article XIV - Access to Records (BRMA 1D)
The Reinsurer or its designated representatives shall have access at any
reasonable time to all records of the Company which pertain in any way to this
reinsurance.
Article XV - Net Retained Lines
A. This Contract applies only to that portion of any bond or policy 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 or policy 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 into the books of the Company.
Article XVIII - Taxes (BRMA 50B)
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 or the District of Columbia.
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 due 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 unearned premium and outstanding loss and
loss adjustment expense reserves (including incurred but not reported loss
reserves) 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. 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 or policy cancellations,
unless paid in cash by the Reinsurer;
2. To reimburse itself for the Reinsurer's share of losses and/or loss
adjustment expense paid under the terms of bonds or policies
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 incurred but not reported
loss reserves) 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 incurred but not reported loss reserves), 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 B(1), B(2) or B(4), or in the
case of B(3), the actual amount determined to be due, the Company shall
promptly return to the Reinsurer the excess amount so drawn.
Article XXI - Insolvency
A. In the event of the insolvency of one or more 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
policy or 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 more of the reinsured companies, the reinsurance under this Contract
shall be payable directly by the Reinsurer to the company or to its
liquidator, receiver 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 or policy obligations
of the company as direct obligations of the Reinsurer to the payees under
such bonds or policies and in substitution for the obligations of the
company to such payees.
Article XXII - Arbitration
A. As a condition precedent to any right of action hereunder, any dispute
arising out of the interpretation, performance or breach of this Contract,
including the formation or validity thereof, shall be submitted for
decision to a panel of three arbitrators. Notice requesting arbitration
will be in writing and sent certified or registered mail, return receipt
requested.
B. One arbitrator shall be chosen by each party and the two arbitrators
shall, before instituting the hearing, choose an impartial third
arbitrator who shall preside at the hearing. If either party fails to
appoint its arbitrator within 30 days after being requested to do so by
the other party, the latter, after 10 days notice by certified or
registered mail of its intention to do so, may appoint the second
arbitrator.
C. If the two arbitrators are unable to agree upon the third arbitrator
within 30 days of their appointment, the two arbitrators will jointly
petition the American Arbitration Association to appoint the third
arbitrator from the AAA's Panel of Reinsurance Arbitrators.
D. All arbitrators shall be disinterested active or former executive officers
of insurance or reinsurance companies, underwriters at Lloyd's of London,
reinsurance intermediaries and attorneys actively or formerly engaged in
practicing law in the areas of insurance or reinsurance.
E. Within 30 days after notice of appointment of all arbitrators, the panel
shall meet and determine timely periods for briefs, discovery procedures
and schedules for hearings.
F. The panel shall be relieved of all judicial formality and shall not be
bound by the strict rules of procedure and evidence. The arbitration shall
take place in Woodland Hills, California or, if unanimously agreed by the
panel, any other mutually acceptable location.
G. 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. However, nothing shall impair the rights of such reinsurers to
assert several rather than joint defenses or claims, nor shall this
provision be construed as changing the liability of the reinsurers under
the terms of this Contract from several to joint.
H. The panel shall make its decision considering custom and practice as
promptly as possible following the termination of hearings. The decision
of any two arbitrators, when rendered in writing shall be final and
binding, and judgment upon the award may be entered in any court
having jurisdiction. The panel is empowered to grant such interim relief
as it may deem appropriate.
I. Each party shall bear the expense of its own arbitrator and shall jointly
and equally with the other party bear the cost of the third arbitrator.
The remaining costs of the arbitration shall be allocated by the panel.
The panel may, at its discretion, award such further costs and expenses as
it considers appropriate, including but not limited to attorney's fees and
interest to the extent permitted by law. Insofar as the arbitration panel
chooses to look to substantive law, it shall consider 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 a 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 - Agency Agreement
Amwest Surety Insurance Company shall be deemed the agent of the other reinsured
companies 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.
Article XXV - 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.
In Witness Whereof, the parties hereto by their duly authorized representatives
have executed this Contract as of the dates undermentioned at:
Calabasas, California, this _______ day of ______________________ 199___.
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Amwest Surety Insurance Company
Far West Insurance Company
Condor Insurance Company
Barbados, West Indies, this _______ day of _______________________ 199___.
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Underwriters Reinsurance Company (Barbados), Inc.
Schedule A
Aggregate Stop Loss
Reinsurance Contract
Effective: January 1, 1999
issued to
Amwest Surety Insurance Company
Far West Insurance Company
and
Condor Insurance Company
all of Omaha, Nebraska
Inuring Reinsurance Contracts:
1. Agreement of Reinsurance No. B415, Effective: May 1, 1992
2. Agreement of Reinsurance No. FFAL09994, Effective: May 1, 1994
3. Casualty Excess of Loss Reinsurance Contract, Effective: July 1, 1996
4. 50% Private Passenger Automobile Quota Share Reinsurance Contract,
Effective: July 1, 1997
5. 75% California Homeowners Multiple Line Quota Share Reinsurance Contract,
Effective: July 1, 1997
6. 75% Florida Multiple Line Quota Share Reinsurance Contract, Effective:
July 1, 1998
7. Contingent Excess of Loss Reinsurance Contract, Effective: July 1, 1998
Addendum No. 1
to the
Aggregate Stop Loss
Reinsurance Contract
Effective: January 1, 1999
issued to
Amwest Surety Insurance Company
Far West Insurance Company
and
Condor Insurance Company
all of Omaha, Nebraska
by
Underwriters Reinsurance Company (Barbados), Inc.
Barbados, West Indies
It Is Hereby Agreed, effective July 1, 1999, that paragraphs A, B and C of
Article IX - Reinsurance Premium shall be deleted and the following substituted
therefor:
"A. As premium for the reinsurance provided hereunder, the Company shall
pay the Reinsurer 3.5% of its net earned premium as respects surety
business for the term of this Contract, 1.0% of its net earned
premium as respects property and casualty business for the period
from January 1, 1999 through June 30, 1999 and 7.5% of its net
earned premium as respects property and casualty business for the
period from July 1, 1999 through December 31, 1999.
B. The Company shall pay the Reinsurer an annual deposit premium of
$4,580,746 in two installments of $902,314 on January 1 and April 1
of 1999 and two installments of $1,388,059 on July 1 and October 1
of 1999.
C. If the Company elects to purchase an additional reinsurance limit in
accordance with the provisions of paragraph D of Article IV, the
Company shall pay an additional reinsurance premium to the Reinsurer
for such additional limit equal to 2.35% of its net earned premium
as respects surety business and 5.00% of its net earned premium as
respects property and casualty business for the term of this
Contract. The Company shall pay the Reinsurer a deposit premium of
$3,000,000 at the time such option is exercised."
It Is Further Agreed, effective July 1, 1999, that this Contract shall be
amended as follows:
1. Article XXV - Intermediary (BRMA 23A) - shall be deleted and the following
substituted therefor:
"Article XXV - Intermediary (BRMA 23A)
▇. ▇. ▇▇▇▇▇▇ Co., Inc. 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., Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. 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."
2. Schedule A attached to and forming part of the Contract shall be deleted
and Schedule A attached to and forming part of this Addendum shall be
substituted therefor.
The provisions of this Contract shall remain otherwise unchanged.
In Witness Whereof, the parties hereto by their respective duly authorized
representatives have executed this Addendum as of the dates undermentioned at:
Calabasas, California, this _______ day of ______________ in the year ___.
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Amwest Surety Insurance Company
Far West Insurance Company
Condor Insurance Company
Barbados, West Indies, this _______ day of ______________ in the year ___.
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Underwriters Reinsurance Company (Barbados), Inc.
(Revised: July 1, 1999)
Schedule A
Aggregate Stop Loss
Reinsurance Contract
Effective: January 1, 1999
issued to
Amwest Surety Insurance Company
Far West Insurance Company
and
Condor Insurance Company
all of Omaha, Nebraska
Inuring Reinsurance Contracts applicable to the period from January 1, 1999 to
June 30, 1999:
1. Agreement of Reinsurance No. B415, Effective: May 1, 1992
2. Agreement of Reinsurance No. FFAL09994, Effective: May 1, 1994
3. Casualty Excess of Loss Reinsurance Contract, Effective: July 1, 1996
4. 50% Private Passenger Automobile Quota Share Reinsurance Contract,
Effective: July 1, 1997
5. 75% California Homeowners Multiple Line Quota Share Reinsurance Contract,
Effective: July 1, 1997
6. 75% Florida Multiple Line Quota Share Reinsurance Contract, Effective:
July 1, 1998
7. Contingent Excess of Loss Reinsurance Contract, Effective: July 1, 1998
Inuring Reinsurance Contracts aplicable to the period from July 1, 1999 to
December 31, 1999:
1. Agreement of Reinsurance No. B415, Effective: May 1, 1992
2. Agreement of Reinsurance No. FFAL09994, Effective: May 1, 1994
3. Excess Catastrophe Reinsurance Contract, Effective: July 1, 1999
4. Excess Per Event Reinsurance Contract, Effective: July 1, 1999