Exhibit 10.1
(SWISS LOGO)
CASUALTY EXCESS OF LOSS
REINSURANCE AGREEMENT
NO. POR376426-/376428-/376430
EFFECTIVE: January 1, 2006
between
PHILADELPHIA CONSOLIDATED HOLDING CORPORATION'S
following member Companies:
PHILADELPHIA INDEMNITY INSURANCE COMPANY
PHILADELPHIA INSURANCE COMPANY
both of Bala Cynwyd, Pennsylvania
and
SWISS REINSURANCE AMERICA CORPORATION
Armonk, New York
POR376426-/376428-/376430 Revised 9/15/06
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CASUALTY EXCESS OF LOSS REINSURANCE AGREEMENT
NO. POR376426-/376428-/376430
ARTICLE CONTENTS PAGE
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PREAMBLE 1
I BUSINESS COVERED 1
II EFFECTIVE DATE AND TERMINATION 2
III TERRITORY 2
IV LIMIT AND RETENTION 3
V WARRANTY 4
VI REINSTATEMENT 4
VII ULTIMATE NET LOSS 5
VIII LOSS IN EXCESS OF POLICY LIMITS 6
IX EXTRA CONTRACTUAL OBLIGATIONS 6
X EXCLUSIONS 7
XI SPECIAL ACCEPTANCE 13
XII LOSS OCCURRENCE 13
XIII REINSURANCE PREMIUM 14
XIV REPORTS AND REMITTANCES 15
XV CLAIMS 16
XVI SALVAGE AND SUBROGATION 17
XVII TERRORISM EXCESS RECOVERY 17
XVIII ACCESS TO RECORDS 19
XIX TAXES 19
XX CURRENCY 19
XXI OFFSET 20
XXII ERRORS OR OMISSIONS 20
XXIII DISPUTE RESOLUTION 20
XXIV INSOLVENCY 22
XXV SPECIAL TERMINATION 23
XXVI AMENDMENTS 24
SIGNATURES 25
ATTACHMENTS: POLLUTION LIABILITY EXCLUSION CLAUSE - REINSURANCE
INSOLVENCY FUNDS EXCLUSION CLAUSE
NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY -
REINSURANCE - U.S.A.
NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY -
REINSURANCE - CANADA
NUCLEAR INCIDENT EXCLUSION CLAUSE -
REINSURANCE - NO. 4
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PHARMACEUTICAL / MEDICAL COMPANY EXCLUSION LISTING
POR376426-/376428-/376430 Revised 9/15/06
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CASUALTY EXCESS OF LOSS
REINSURANCE AGREEMENT
NO. POR376426-/376428-/376430
(hereinafter referred to as the "Agreement")
between
PHILADELPHIA CONSOLIDATED HOLDING CORPORATION'S
following member Companies:
PHILADELPHIA INDEMNITY INSURANCE COMPANY
PHILADELPHIA INSURANCE COMPANY
both of Bala Cynwyd, Pennsylvania
(hereinafter referred to as the "Company")
and
SWISS REINSURANCE AMERICA CORPORATION
Armonk, New York
(hereinafter referred to as the "Reinsurer")
ARTICLE I - BUSINESS COVERED
A. The Reinsurer shall indemnify the Company on an excess of loss basis in
respect of the Company's Ultimate Net Loss paid by the Company as a result
of losses occurring during the term of this Agreement, for Policies in
force as of January 1, 2006, and new and renewal Policies becoming
effective on or after said date, subject to the terms and conditions
contained herein.
B. This Agreement is solely between the Company and the Reinsurer, and nothing
contained in this Agreement shall create any obligations or establish any
rights against the Reinsurer in favor of any person or entity not a party
hereto.
C. The performance of obligations by both parties under this Agreement shall
be in accordance with a fiduciary standard of good faith and fair dealing.
D. The term "Policies" shall mean each of the Company's binders, policies and
contracts of insurance on the business covered hereunder.
E. Under this Agreement, the indemnity for reinsured loss applies only to the
following Classes of Insurance, except as excluded under Article X-
Exclusions of this Agreement.
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CLASSES OF INSURANCE
1. Automobile Liability:
Bodily Injury Liability, Property Damage Liability, Medical Payments,
Uninsured Motorists, Underinsured Motorists and No-Fault Coverage.
2. Liability Other Than Automobile:
Bodily Injury Liability, Property Damage Liability, Personal and
Advertising Injury Liability, and Medical Payments Coverage when
written as part of a Commercial or Personal Package Policy or on a
monoline basis. However, Advertising Injury Liability shall only apply
to this Agreement when written as part of a Commercial Package Policy
or a Commercial General Liability Coverage Form.
3. Commercial Umbrella Liability.
4. Professional Liability:
Director's and Officers Liability for For Profit and Not for Profit
risks, Miscellaneous Errors and Omissions Liability, Lawyers
Professional Liability, Accountants Professional Liability, Dentists
Professional Liability, Insurance Agents Professional Liability,
Miscellaneous Professional Liability, Employment Practices Liability.
ARTICLE II - EFFECTIVE DATE AND TERMINATION
A. This Agreement shall apply to losses occurring within the period commencing
12:01 a.m., Eastern Standard Time, January 1, 2006, and ending 12:01 a.m.,
Eastern Standard Time, January 1, 2007.
B. During the running of such notice as stipulated in Paragraph A. above, the
Reinsurer shall participate in business coming within the terms of this
Agreement until the date of termination of this Agreement.
C. Upon termination of this Agreement, the Reinsurer shall be liable for
losses occurring prior to the date of termination; however, the Reinsurer
shall have no liability for losses occurring subsequent to the termination
of this Agreement.
ARTICLE III - TERRITORY
This Agreement applies to Policies issued by the Company within the United
States of America, its territories and possessions, and Canada and shall apply
to losses covered hereunder wherever occurring.
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ARTICLE IV - LIMIT AND RETENTION
A. The limits and retentions provided under this Agreement are set forth in
the following Parts I, II and III:
Part I - First Excess of Loss (Accounting Code No. POR376426)
The Company shall retain the first $2,000,000 of Ultimate Net Loss as
respects any one Loss Occurrence. The Reinsurer shall then be liable for
the amount by which the Company's Ultimate Net Loss exceeds the Company's
retention of $2,000,000, but the liability of the Reinsurer shall never
exceed $3,000,000 with respect to any one Loss Occurrence. However, in no
event shall the liability of the Reinsurer arising out of Act(s) of
Terrorism exceed $3,000,000 during the term of this Agreement.
Part II - Second Excess of Loss (Accounting Code No ▇▇▇▇▇▇▇▇▇)
The Company shall retain the first $5,000,000 of Ultimate Net Loss as
respects any one Loss Occurrence. The Reinsurer shall then be liable for
the amount by which the Company's Ultimate Net Loss exceeds the Company's
retention of $5,000,000, but the liability of the Reinsurer shall never
exceed $5,000,000 with respect to any one Loss Occurrence. However, in no
event shall the liability of the Reinsurer arising out of Act(s) of
Terrorism exceed $5,000,000 during the term of this Agreement.
Part III - Third Excess of Loss (Accounting Code No. POR376430)
The Company shall retain the first $10,000,000 of Ultimate Net Loss as
respects any one Loss Occurrence. The Reinsurer shall then be liable for
the amount by which the Company's Ultimate Net Loss exceeds the Company's
retention of $10,000,000, but the liability of the Reinsurer shall never
exceed $10,000,000 with respect to any one Loss Occurrence. However, in no
event shall the liability of the Reinsurer arising out of Act(s) of
Terrorism exceed $10,000,000 during the term of this Agreement.
B. The Company's retention and the Reinsurer's limit of liability for each
Loss Occurrence, set forth in Parts I, II and III above, shall apply
irrespective of the number of Policies affected or number of hazards in one
Policy and regardless of the number of Classes of Insurance involved.
C. Reinsurance of the Company's retention, set forth above, shall not be
deducted in arriving at the Company's Ultimate Net Loss herein.
D. An "Act of Terrorism" for purposes of this Agreement shall mean:
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1. Any actual or threatened violent act or act harmful to human life,
tangible or intangible property or infrastructure directed towards or
having the effect of (a) influencing or protesting against any de jure
or de facto government or policy thereof, (b) intimidating, coercing
or putting in fear a civilian population or section thereof for the
purpose of establishing or advancing a specific ideological, religious
or political system of thought, perpetrated by a specific individual
or group directly or indirectly through agents acting on behalf of
said individual or group or (c) retaliating against any country for
direct or vicarious support by that country of any other government or
political system.
2. Any act declared pursuant to the Terrorism Risk Insurance Act of 2002,
as amended, shall also be considered an "Act of Terrorism" for
purposes of this Agreement.
ARTICLE V - WARRANTY
A. It is warranted, or so deemed, that Casualty reinsurance is in effect for
all policies issued by or on behalf of the Company with limits greater than
$1,000,000 per occurrence or per claim made. It is also warranted, or so
deemed, that the Company has in effect an Insurance Company Errors and
Omissions policy with a limit of $10,000,000 and a retention /deductible of
$1,000,000. This insurance, or reinsurance, whether collectible or not, and
retention/deductible, shall be maintained until all losses reinsured under
this Agreement are fully discharged and shall inure to the benefit of the
reinsurer.
B. It is further warranted that Policies subject to this Agreement with
inuring coverage as deemed above, shall not exceed a combined limit for
both the Primary Policy and Umbrella Policy of $11,000,000 per occurrence,
or so deemed.
C. The maximum policy period on business covered by this Agreement is one year
plus odd time, not to exceed 120 days.
ARTICLE VI - REINSTATEMENT
A. Each claim hereunder reduces the amount of indemnity from the time of
occurrence of the loss by the sum paid, but any amount so exhausted is
hereby reinstated from the time the Loss Occurrence commences hereon.
B. For each amount so reinstated the Company agrees to pay an additional
premium calculated at pro rata of the annual premium hereon, being pro rata
only as to the fraction of the limit of liability of this Agreement (i.e.,
the fraction of $3,000,000 as respects Part I and $5,000,000 as respects
Part II and $10,000,000 as respects Part III) so reinstated and 100% as to
the term.
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C. Nevertheless, the Reinsurer's liability hereunder shall never exceed
$3,000,000 as respects Part I and $5,000,000 as respects Part II and
$10,000,000 as respects Part III in respect of any one Loss Occurrence and
shall be further limited in all during the term of this Agreement to
$6,000,000 as respects Part I and $10,000,000 as respects Part II and
$20,000,000 as respects Part III.
ARTICLE VII - ULTIMATE NET LOSS
A. The term "Ultimate Net Loss" shall mean the actual sum paid by the Company
in settlement of losses or liability including interest accrued prior to
judgment after making deductions for all recoveries, including subrogation,
salvages, and claims upon other reinsurances, whether collectible or not,
which inure to the benefit of the Reinsurer under this Agreement, and shall
include Loss Adjustment Expenses incurred by the Company; provided,
however, that in the event of the insolvency of the Company, Ultimate Net
Loss shall mean the amount of loss and Loss Adjustment Expenses for which
the Company is liable, and payment by the Reinsurer shall be made to the
liquidator, receiver, conservator or statutory successor of the Company in
accordance with the provisions of Article XXIV- Insolvency of this
Agreement.
B. The term "Ultimate Net Loss" shall include 90% of Loss In Excess of Policy
Limits and 90% of Extra Contractual Obligations, as defined herein, but
only as respects business covered under this Agreement.
C. The term "Loss Adjustment Expenses" shall mean all expenses incurred by the
Company in connection with the investigation, settlement, defense or
litigation, including court costs and post-judgment interest, of any claim
or loss covered by the Policies reinsured under this Agreement, and shall
include Declaratory Judgment Expenses. However, the term "Loss Adjustment
Expenses" shall not include the salaries and expenses of Company employees,
office expenses and other overhead expenses.
D. The term "Declaratory Judgment Expenses" shall mean all legal expenses,
incurred in the representation of the Company in litigation brought to
determine the Company's defense and/or indemnification obligations, that
are allocable to any specific claim or loss applicable to Policies subject
to this Agreement. In addition, the Company shall promptly notify the
Reinsurer of any Declaratory Judgment Expenses subject to this Agreement.
E. All recoveries, salvages or payments recovered or received subsequent to a
loss settlement under this Agreement shall be applied as if recovered or
received prior to the aforesaid settlement and all necessary adjustments to
the loss settlement shall be made by the parties hereto.
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F. Nothing in this Article shall be construed to mean that losses are not
recoverable hereunder until the Ultimate Net Loss of the Company has been
ascertained.
ARTICLE VIII - LOSS IN EXCESS OF POLICY LIMITS
A. "Loss in Excess of Policy Limits" is defined as loss in excess of the limit
of the original Policy, such loss in excess of the limit having been
incurred because of failure by the Company to settle within the Policy
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 in the preparation or
prosecution of an appeal consequent upon such action.
B. However, this Article shall not apply where the loss has been incurred due
to fraud by 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.
C. For the purposes of this Article, the word "loss" shall mean any amounts
which the Company would have been contractually liable to pay had it not
been for the limit of the original Policy.
D. With respect to coverage provided under this Article, recoveries from any
insurance or reinsurance other than this Agreement shall be deducted to
arrive at the amount of the Company's Ultimate Net Loss.
ARTICLE IX - EXTRA CONTRACTUAL OBLIGATIONS
A. "Extra Contractual Obligations" are defined as those liabilities not
covered under any other provision of this Agreement and 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 Policy 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 in the preparation or prosecution of an appeal consequent
upon such action.
B. The date on which an Extra Contractual Obligation is incurred by the
Company shall be deemed, in all circumstances, to be the date of the
original accident, casualty, disaster or loss occurrence.
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C. However, coverage hereunder as respects Extra Contractual Obligations 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.
D. Recoveries, collectibles or retention from any other form of insurance or
reinsurance including deductibles or self-insured retention which protect
the Company against Extra Contractual Obligations shall inure to the
benefit of the Reinsurer and shall be deducted from the total amount of
Extra Contractual Obligations for purposes of determining the loss
hereunder.
E. If any provision of this Article shall be rendered illegal or unenforceable
by the laws, regulations or public policy of the of any state, such
provision shall be considered void in such state, but this shall not affect
the validity or enforceability of any other provision of this Article or
the enforceability of such provision in any other jurisdiction.
ARTICLE X- EXCLUSIONS
THIS AGREEMENT DOES NOT COVER:
A. THE FOLLOWING GENERAL CATEGORIES
1. Ex-gratia payments.
2. Risks subject to a deductible or a self-insured retention excess of
$250,000.
3. Loss or damage caused directly or indirectly by: (a) enemy attack by
armed forces including action taken by military, naval or air forces
in resisting an actual or an immediately impending enemy attack; (b)
invasion; (c) insurrection; (d) rebellion; (e) revolution; (f)
intervention; (g) civil war; and (h) usurped power.
4. Reinsurance assumed by the Company.
5. Business derived from any Pool, Association, including Joint
Underwriting Association, Syndicate, Exchange, Plan, Fund or other
facility directly as a member, subscriber or participant, or
indirectly by way of reinsurance or assessments; provided this
exclusion shall not apply to Automobile or Workers Compensation
assigned risks which may be currently or subsequently covered
hereunder.
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6. Pollution Liability as per the attached Pollution Liability Exclusion
Clause - Reinsurance.
7. Insolvency Funds as per the attached Insolvency Funds Exclusion
Clause.
8. Nuclear Incident Exclusion Clauses which are attached and made part of
this Agreement:
a. Nuclear Incident Exclusion Clause - Liability - Reinsurance -
U.S.A.
b. Nuclear Incident Exclusion Clause - Liability - Reinsurance -
Canada.
c. Nuclear Incident Exclusion Clause - Reinsurance - No. 4.
9. Any actual or alleged liability whatsoever for any claim or claims in
respect of loss or losses, directly or indirectly arising out of,
resulting from, or in consequence of asbestos, in whatever form or
quantity.
10. Any liability, loss, cost or expense of whatsoever nature directly or
indirectly caused by, contributed to by, resulting from, arising out
of or in connection with the use or release, or threat thereof, of any
nuclear weapon or device or chemical or biological agent, regardless
of any other cause or event contributing concurrently or in any other
sequence to the loss.
11. Policies covering the liability of any original insured whose annual
gross revenue, sales or receipts exceed $5,000,000,000.
B. THE FOLLOWING INSURANCE COVERAGES
1. Fiduciary Liability except as respects Non Profits and private For
Profit entities other than financial institutions.
2. Fidelity and Surety except as respects Non Profits and private For
Profit entities other than financial institutions.
3. Credit and Financial Guarantee.
4. Securities and Exchange Liability.
5. Retroactive coverage.
6. Personal Excess or Umbrella Liability.
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7. Medical Malpractice for Doctors, Physicians, Surgeons, Nurses,
Hospitals and Clinics. This does not apply to medical professionals
when written in the Company's Human Services Program or for other non
profit entities when the professionals are not directly employed by
the entity and who maintain an underlying medical professional
liability policy with limits of 1,000,000/3,000,000 which is primary
to the Company's insured policy, or so deemed.
8. Advertisers,' Broadcasters' and Telecasters' Liability as respects
Personal Injury Liability except as provided under Commercial Package
Policies or Commercial General Liability Coverage Forms.
9. Liquor Law Liability when written as such, except Host Liquor Law
Liability.
10. Kidnap, Extortion and ▇▇▇▇▇▇ Liability.
11. Boiler and Machinery Insurance.
12. Protection and Indemnity (Ocean Marine) when written as such.
13. Workers Compensation.
14. Business classified by the Company as Primary Rental Liability,
Supplemental Liability, Residual Value or GAAP Liability.
15. New and Renewal business classified by the Company as Nursing Home or
Assisted Living General Liability or Professional Liability. However,
this exclusion shall not apply if the Company is required by the
applicable regulatory authority(ies) to renew any insured(s) policy.
16. Products recall, Products integrity or Products impairment.
C. THE FOLLOWING RISKS AS RESPECTS AUTOMOBILE LIABILITY
1. Vehicles used in or while in practice or preparation for, a
prearranged racing, speed, exhibition or demolition contest.
2. All vehicles classified as "Public Automobiles" except church buses,
social service agency automobiles, van pools and vehicles used for the
transportation of employees.
3. Fire, police, emergency or municipal vehicles except when written as
part of the Company's Municipality program.
4. Motorcycles except when written as part of the Company's Motorcycle
School program and Municipality program, but not when operated on
public roads.
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5. The rental or leasing of vehicles to others.
6. Logging trucks.
7. Vehicles regularly used to haul property of others and operating
beyond a 200 mile radius.
8. Newspaper delivery trucks.
9. Vehicles engaged in the transportation or distribution of fireworks,
fuses, explosives, ammunitions, natural or artificial fuel, gas, or
liquefied petroleum gases or gasoline.
D. THE FOLLOWING AS RESPECTS LIABILITY OTHER THAN AUTOMOBILE
1. Risks involving known exposure to the following substances:
a. dioxin.
b. polychlorinated biphenols.
c. lead.
d. silica.
2. Liability as respects Products and Completed Operations:
a. The manufacture, labeling or re-labeling, importation or
wholesale distribution of:
(i) Drugs or pharmaceuticals.
(ii) Cosmetics.
(iii) Herbicides, insecticides or pesticides.
(iv) Petrochemical or electrical equipment used for heating,
lighting or cooking.
(v) Industrial or toxic chemicals.
(vi) Valves, gaskets or seals of a hydraulic, petrochemical or
high pressure nature.
(vii) Medical supplies.
(viii) Heavy machinery and equipment.
(ix) Power tools.
(x) Medical equipment used for diagnostic or life sustaining
purposes.
b. The manufacture or importing of motorized or self-propelled
vehicles and equipment.
c. The manufacturing, importing, packing, canning, bottling or
processing of foodstuffs.
d. The blending, mixing, processing or importing of animal feed.
e. The manufacture, sale, distribution, handling, servicing or
maintenance of aircraft, aerospacecraft, missiles, satellites or
any component or components thereof.
f. Exterior installation finishing systems (EIFS) or synthetic
stucco manufacturing, importation, or installation.
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g. Any insured contractors' or developers' operations which are
involved in the new construction of apartments, condominiums,
cooperatives, town houses or single family dwellings in Arizona,
California, Colorado, Hawaii, Nevada, South Carolina, Utah or
Washington.
3. Ownership, operation or use of vessels exceeding 58 feet in length.
4. All railway operations except sidetrack agreements.
5. Amusement parks, carnivals or circuses.
6. Public assembly exposure in excess of 10,000 seating capacity or
admissions per event, per building or stadium; however, this exclusion
does not apply to walk-a-thons, bicycle races or similar events.
7. Public Gas, electric, and water utility companies.
8. Subaqueous operations.
9. Mining.
10. Blasting operations.
11. Demolition of buildings or structures in excess of two stories.
12. Shoring, underpinning or moving of buildings or structures.
13. Manufacture, sale, rental, lease, erection or repair of scaffolds.
14. Construction of bridges, tunnels or dams.
15. a. Manufacturers or importers of fireworks, fuses, or any substance,
as defined and noted below, intended for use as an explosive.
b. Loading of fireworks, fuses, or any explosive substance defined
below into containers for use as explosive objects, propellant
charges or detonation devices and the storage thereof.
c. Manufacturers or importers of any product in which fireworks,
fuses, or any explosive substance defined below is an ingredient.
d. Handling, storage, transportation or use of fireworks, fuses, or
any explosive substance defined below.
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NOTE: An explosive substance is defined as any substance manufactured
for the express purpose of exploding as differentiated from
commodities used industrially and which are only incidentally
explosive.
16. Manufacture, production, refining, storage, wholesale distribution or
transportation of natural or artificial fuel, gas, butane, propane or
liquefied petroleum gases or gasoline.
17. Onshore and offshore gas and oil drilling operations.
18. Ownership, maintenance or use of any airport or aircraft, including
fueling, or any device or machine intended for and/or aiding in the
achievement of atmospheric flight, projection or orbit.
19. Municipalities with populations over 75,000.
20. Liability as respects companies identified in the attached
Pharmaceutical / Medical Company Exclusion Listing, including all
affiliates and subsidiaries thereof.
E. Those exclusions set forth under Items 5. and 16. of Section D. shall not
apply if the exposure is incidental to the regular operations of the
insured covered hereunder. An exposure shall be considered incidental if it
comprises 15% or less of the insured's exposure base.
F. In the event the Company is inadvertently bound on any risk which is
excluded under this Agreement and identified below, the reinsurance
provided under this Agreement shall apply to such risk until discovery by
the Company within its Home Office of the existence of such risk and for 30
days thereafter, and shall then cease unless within the 30 day period, the
Company has received from the Reinsurer written notice of its approval of
such risk:
1. As respects Automobile Liability:
Items 2. through 9. of Section C.
2. As respects Liability Other Than Automobile:
Items 2. through 19. of Section D.
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ARTICLE XI - SPECIAL ACCEPTANCE
Policies which are beyond the terms, conditions or limitations of this Agreement
may be submitted to the Reinsurer for special acceptance hereunder; and such
Policies, if accepted in writing by the Reinsurer, shall be subject to all of
the terms, conditions and limitations of this Agreement, except as modified by
the special acceptance. Premiums and losses derived from any special acceptance
shall be included with other data for rating purposes under this Agreement.
ARTICLE XII - LOSS OCCURRENCE
The provisions under this Article are set forth in the following Parts I, II and
III:
Part I - As respects Policies written on an occurrence basis:
The term "Loss Occurrence" shall mean any accident or occurrence or series of
accidents or occurrences arising out of any one event and happening within the
term and scope of this Agreement. Without limiting the generality of the
foregoing, the term "Loss Occurrence" shall be held to include:
A. As respects Products Bodily Injury and Products Property Damage Liability,
injuries to all persons and all damage to property of others occurring
during a Policy Period and proceeding from or traceable to the same
causative agency shall be deemed to arise out of one Loss Occurrence, and
the date of such Loss Occurrence shall be deemed to be the commencing date
of the Policy Period. For the purpose of this provision, each annual period
of a Policy which continues in force for more than one year shall be deemed
to be a separate Policy Period.
B. As respects Bodily Injury Liability (other than Automobile and Products),
said term shall also be understood to mean, as regards each original
assured, injuries to one or more than one person resulting from infection,
contagion, poisoning, or contamination proceeding from or traceable to the
same causative agency.
C. As respects Property Damage Liability (other than Automobile and Products),
said term shall also, subject to Provisions 1. and 2. below, be understood
to mean loss or losses caused by a series of operations, events, or
occurrences arising out of operations at one specific site and which cannot
be attributed to any single one of such operations, events or occurrences,
but rather to the cumulative effect of the same. In assessing each and
every Loss Occurrence within the foregoing definition, it is understood and
agreed that:
1. the series of operations, events or occurrences shall not extend over
a period longer than 12 consecutive months; and
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2. the Company may elect the date on which the period of not exceeding 12
consecutive months shall be deemed to have commenced.
In the event that the series of operations, events or occurrences extend
over a period longer than 12 consecutive months, then each consecutive
period of 12 months, the first of which commences on the date elected under
2. above, shall form the basis of claim under this Agreement.
Part II - As respects Policies written on a claims made basis:
A. The term "Loss Occurrence" shall mean each claim or series of claims made
to the Company or the insured, during the term of this Agreement arising
out of one casualty or event.
B. As respects a Loss Occurrence involving one or more Policies written on a
claims made basis, the date of Loss Occurrence for purposes of reinsurance,
shall be considered the earliest date when notice of claims is first
received and recorded by the Company or the insured, and any related claims
reported subsequent to such date shall be included in such loss. However,
if notice of claims is first received and recorded by the Company or the
insured, during an Extended Reporting Period, the date of occurrence shall
be deemed to be the last day of the Policy period.
Part III - As respects loss occurrence and claims-made Policies involved in the
same Loss Occurrence:
As respects a Loss Occurrence involving one or more Policies written on an
occurrence basis and one or more Policies written on a claims made basis, it is
understood that the earliest date on which bodily injury or property damage
occurs, and any related claims reported subsequent to such date shall be
included in such loss whether they are covered under occurrence or claims-made
Policies.
ARTICLE XIII - REINSURANCE PREMIUM
A. The Company shall pay to the Reinsurer a premium for the reinsurance
provided under the First, Second and Third Excess of Loss Layers at the
rates set forth in Paragraph B. below. Such rates shall be applied to the
Company's Subject Earned Premium for the term of this Agreement.
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B. A deposit premium for each layer set forth below, shall be payable by the
Company to the Reinsurer in four equal installments each due January 1,
April 1, July 1 and October 1. Within 60 days after the termination of this
Agreement, the Company shall render a statement to the Reinsurer showing
the actual reinsurance premiums due hereunder. If such premium calculations
differ from the deposit previously paid, the debtor party shall pay the
outstanding balance within 60 days after the termination of this Agreement.
However, in no event shall the adjusted premium be less than the minimum
premium for each layer, set forth below.
Deposit Minimum Quarterly
Rate Premium Premium Deposit
---- ---------- -------- ---------
First Excess Layer .06% $ 510,000 $408,000 $127,500
Second Excess Layer .07% $ 595,000 $476,000 $148,750
Third Excess Layer .13% $1,105,000 $884,000 $276,250
C. The term "Subject Earned Premium" as used herein is equal to the sum of the
Net Premiums Written on the business covered hereunder during the period
under consideration, plus the unearned premium reserve as respects premiums
in force at the beginning of such period, less the unearned premium reserve
as respects premiums in force at the end of the period, said unearned
premium is to be calculated on an actual daily basis or in accordance with
the Company's methodology, as agreed.
D. The term "Net Premiums Written" shall mean gross premiums written less
returns, allowances and reinsurances which inure to the benefit of the
Reinsurer.
ARTICLE XIV - REPORTS AND REMITTANCES
A. The Company shall furnish the Reinsurer with all necessary data respecting
premiums and losses for as long as one of the parties hereto has a claim
against the other arising from this Agreement.
B. All checks and supporting documentation shall be sent via wire transfer to
the Reinsurer through one of the options set forth below:
a. WIRE TRANSFER
(i) All wires should be sent to:
The Bank of New York
▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Account Name: Swiss Reinsurance America Corporation
Account Number: 8900489197
ABA Number: ▇▇▇▇▇▇▇▇▇ (SWIFT: ▇▇▇▇▇▇▇▇)
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(ii) All supporting documentation should be sent to:
Swiss Reinsurance America Corporation
Accounting Department
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
b. LOCK BOX
Both checks and supporting documentation shall be sent to:
Swiss Reinsurance America Corporation
▇.▇. ▇▇▇ ▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
C. Payment by the Reinsurer of its portion of loss and Loss Adjustment
Expenses paid by the Company shall be made by the Reinsurer to the Company
within 15 days after proof of payment is received by the Reinsurer.
ARTICLE XV - CLAIMS
A. The Company shall promptly notify the Reinsurer of each claim which may
involve the reinsurance provided hereunder and of all subsequent
developments relating thereto, stating the amount claimed and estimate of
the Company's Ultimate Net Loss and Loss Adjustment Expenses.
Notwithstanding the provisions set forth in any other Article herein,
prompt notification of loss shall be considered a condition precedent to
liability under this Agreement.
B. The Company shall advise the Reinsurer of all claims which:
1. Are reserved by the Company for an amount in excess of 50% of its
retention;
2. Originate from fatal injuries;
3. Originate from the following kinds of bodily injury:
a. Brain injuries resulting in impairment of physical function;
b. Spinal injuries resulting in a partial or total paralysis of
upper or lower extremities;
c. Amputation or permanent loss of use of upper or lower
extremities;
d. Severe burn injuries;
e. Loss of sight in one or both eyes;
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f. All other injuries likely to result in a permanent disability
rate of 50% or more.
4. Any action alleging Extra Contractual Obligations against the Company.
5. Any Declaratory Judgment action brought by or against the Company.
6. Any judgment against an insured for an amount in excess of the
Company's policy limit.
C. The Company shall have the responsibility to investigate, defend or
negotiate settlements of all claims and lawsuits related to Policies
written by the Company and reinsured under this Agreement. The Reinsurer,
at its own expense, may associate with the Company in the defense or
control of any claim, suit or other proceeding which involves or is likely
to involve the reinsurance provided under this Agreement, and the Company
shall cooperate in every respect in the defense of any such claim, suit or
proceeding.
ARTICLE XVI - SALVAGE AND SUBROGATION
A. In the event of the payment of any indemnity by the Reinsurer under this
Agreement, the Reinsurer shall be subrogated, to the extent of such
payment, to all of the rights of the Company against any person or entity
legally responsible for damages of the loss. The Company agrees to enforce
such rights; but, in case the Company refuses or neglects to do so, the
Reinsurer is hereby authorized and empowered to bring any appropriate
action in the name of the Company or their policyholders or otherwise to
enforce such rights.
B. From any amount recovered by subrogation, salvage or other means, there
shall first be deducted the expenses incurred in effecting the recovery.
The balance shall then be used to reimburse the excess carriers in the
inverse order to that in which their respective liabilities attached,
before being used to reimburse the Company for its primary loss.
ARTICLE XVII - TERRORISM EXCESS RECOVERY
A. For purposes of this Article:
1. "Act" shall mean the Terrorism Risk Insurance Act of 2002, any
amendments thereto and any regulations promulgated thereunder.
2. "Affiliate," "Insured Losses," and "Program Year" shall have the
meanings provided in the Act.
3. "Company" shall include the Company and all affiliates.
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B. This reinsurance shall not apply to any fines, civil penalties or
surcharges assessed pursuant to the Act.
C. To the extent that the Company allocates Insured Losses and/or federal
assistance under the Act among affiliates, claims, contracts or otherwise
in any manner which impacts the reinsurance provided hereunder, the Company
shall apply a reasonable allocation method acceptable to the Reinsurer.
D. To the extent that an Insured Loss is otherwise payable hereunder, the
reinsurance provided by this Agreement shall apply only to the portion of
liability, loss, cost and/or expense retained by the Company net of any
federal assistance pursuant to the Act. For each Program Year, the
liability of the Reinsurer for Insured Losses under this Agreement shall be
reduced by the ratio that the financial assistance under the Act allocated
to Policies subject to this Agreement bears to the Company's total Insured
Losses subject to this Agreement. If the Company does not make such
allocation, the liability of the Reinsurer for Insured Losses in any
Program Year under this Agreement shall be reduced by the ratio that the
financial assistance available to the Company under the Act for that
Program Year bears to the Company's total Insured Losses for the same
Program Year.
E. The parties recognize that, for any Program Year, the Reinsurer may without
waiver of the foregoing Paragraphs make payments for Insured Losses which,
together with available financial assistance under the Act and the Company
retentions and/or deductibles hereunder, exceed the Company's Insured
Losses. In such event, the Reinsurer's proportional share of all such
excess recovery (hereafter "Reinsurer's Excess Share") shall inure to the
benefit of the Reinsurer. All excess recovery described in this Paragraph
shall be allocated to the Reinsurer and the Company in proportion to the
respective liability of each for Insured Losses, net of federal assistance
under the Act, salvage, subrogation and other similar recoveries, as
applicable.
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F. In the event of a Reinsurer's Excess Share, the Company shall:
1. Promptly pay the Reinsurer's Excess Share to the Reinsurer; or
2. Upon request of the Reinsurer at any time and at the Reinsurer's sole
discretion, instead assign to the Reinsurer its rights to recover
directly from the federal government any portion of Reinsurer's Excess
Share not already paid to the Reinsurer. The Company shall cooperate
with and assist the Reinsurer, at its own expense, to the extent
reasonably necessary for the Reinsurer to exercise those rights. If
the Reinsurer is unable, for any reason, to exercise any right
assigned to it by the Company pursuant to this Article, the Company
shall pay the Reinsurer's Excess Share to the Reinsurer as if no
assignment had taken place to the extent that the Company has not been
deemed to have forfeited the right to financial assistance under the
Act by virtue of the attempted assignment.
G. In the event of an Insured Loss, the Company shall provide the Reinsurer
with a monthly report detailing claim settlement activities and financial
assistance under the Act. Calculations for each Program Year shall continue
to be made until the settlement of all Insured Losses covered hereunder.
ARTICLE XVIII - ACCESS TO RECORDS
The Reinsurer or its duly authorized representatives shall have the right to
examine, at the offices of the Company at a reasonable time, during the currency
of this Agreement or anytime thereafter, all books and records of the Company
relating to business which is the subject of this Agreement.
ARTICLE XIX - TAXES
The Company shall be liable for all taxes on premiums paid to the Reinsurer
under this Agreement, except income or profit taxes of the Reinsurer, and shall
indemnify and hold the Reinsurer harmless for any such taxes which the Reinsurer
may become obligated to pay to any local, state or federal taxing authority.
ARTICLE XX - CURRENCY
Wherever the word "dollars" or the "$" symbol is used in this Agreement, it
shall mean dollars of the United States of America, excepting in those cases
where the Policy is issued by the Company in Canadian dollars, in which case it
shall mean dollars of Canada. In the event the Company is involved in a loss
requiring payment in United States and Canadian currency, the Company's
retention and the limit of liability of the Reinsurer shall be apportioned
between the two currencies in the
POR376426-/376428-/376430 19 Revised 09/15/06
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same proportion as the amount of net loss in each currency bears to the total
amount of net loss paid by the Company. For the purposes of this Agreement,
where the Company receives premiums or pays losses in currencies other than
United States or Canadian currency, such premiums and losses shall be converted
into United States dollars at the actual rates of exchange at which the premiums
and losses are entered in the Company's books.
ARTICLE XXI - OFFSET
Each party to this Agreement together with their successors or assigns shall
have and may exercise, at any time, the right to offset any balance or balances
due the other (or, if more than one, any other). Such offset may include
balances due under this Agreement and any other agreements heretofore or
hereafter entered into between the parties regardless of whether such balances
arise from premiums, losses or otherwise, and regardless of capacity of any
party, whether as assuming insurer and/or ceding insurer, under the various
agreements involved, provided however, that in the event of insolvency of a
party hereto, offsets shall only be allowed in accordance with the provisions of
Section 7427 of the Insurance Law of the State of New York to the extent such
statute or any other applicable law, statute or regulation governing such offset
shall apply.
ARTICLE XXII - ERRORS OR OMISSIONS
Errors or omissions of an administrative nature on the part of the Company shall
not invalidate the reinsurance under this Agreement, provided such errors or
omissions are corrected promptly after discovery thereof; but the liability of
the Reinsurer under this Agreement or any exhibits, addenda, or endorsements
attached hereto shall in no event exceed the limits specified herein nor be
extended to cover any risks, perils, lines of business or classes of insurance
generally or specifically excluded herein.
ARTICLE XXIII - DISPUTE RESOLUTION
Part I - Choice Of Law And Forum
Any dispute arising under this Agreement shall be resolved in the State of
Pennsylvania, and the laws of the State of Pennsylvania shall govern the
interpretation and application of this Agreement.
Part II - Mediation
If a dispute between the Company and the Reinsurer, arising out of the
provisions of this Agreement or concerning its interpretation or validity and
whether arising before or after termination of this Agreement has not been
settled through negotiation, both parties agree
POR376426-/376428-/376430 20 Revised 09/15/06
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to try in good faith to settle such dispute by nonbinding mediation, before
resorting to arbitration.
Part III - Arbitration
A. Resolution of Disputes - As a condition precedent to any right of action
arising hereunder, any dispute not resolved by mediation between the
Company and the Reinsurer arising out of the provisions of this Agreement
or concerning its interpretation or validity, whether arising before or
after termination of this Agreement, shall be submitted to arbitration in
the manner hereinafter set forth.
B. Composition of Panel - Unless the parties agree upon a single arbitrator
within 15 days after the receipt of a notice of intention to arbitrate, all
disputes shall be submitted to an arbitration panel composed of two
arbitrators and an umpire chosen in accordance with Paragraph C. hereof.
C. Appointment of Arbitrators - The members of the arbitration panel shall be
chosen from persons knowledgeable in the insurance and reinsurance
business. Unless a single arbitrator is agreed upon, the party requesting
arbitration (hereinafter referred to as the "claimant") shall appoint an
arbitrator and give written notice thereof by certified mail, to the other
party (hereinafter referred to as the "respondent") together with its
notice of intention to arbitrate. Within 30 days after receiving such
notice, the respondent shall also appoint an arbitrator and notify the
claimant thereof by certified mail. Before instituting a hearing, the two
arbitrators so appointed shall choose an umpire. If, within 20 days after
the appointment of the arbitrator chosen by the respondent, the two
arbitrators fail to agree upon the appointment of an umpire, each of them
shall nominate three individuals to serve as umpire, of whom the other
shall decline two and the umpire shall be chosen from the remaining two by
drawing lots. The name of the individual first drawn shall be the umpire.
D. Failure of Party to Appoint an Arbitrator - If the respondent fails to
appoint an arbitrator within 30 days after receiving a notice of intention
to arbitrate, the claimant's arbitrator shall appoint an arbitrator on
behalf of the respondent, such arbitrator shall then, together with the
claimant's arbitrator, choose an umpire as provided in Paragraph C. of Part
III of this Article.
E. Submission of Dispute to Panel - Unless otherwise extended by the
arbitration panel or agreed to by the parties, each party shall submit its
case to the panel within 30 days after the selection of the umpire.
F. Procedure Governing Arbitration - All proceedings before the panel shall be
informal and the panel shall not be bound by the formal rules of evidence.
The panel shall have the power to fix all
POR376426-/376428-/376430 21 Revised 09/15/06
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procedural rules relating to the arbitration proceeding. In reaching any
decision, the panel shall give due consideration to the customs and usages
of the insurance and reinsurance business.
G. Arbitration Award - The arbitration panel shall render its decision within
60 days after termination of the proceeding, which decision shall be in
writing, stating the reasons therefor. The decision of the majority of the
panel shall be final and binding on the parties to the proceeding.
H. Cost of Arbitration - Unless otherwise allocated by the panel, each party
shall bear the expense of its own arbitrator and shall jointly and equally
bear with the other parties the expense of the umpire and the arbitration.
ARTICLE XXIV- INSOLVENCY
A. In the event of insolvency of the Company, the reinsurance provided by this
Agreement shall be payable by the Reinsurer on the basis of the liability
of the Company as respects Policies covered hereunder, without diminution
because of such insolvency, directly to the Company or its liquidator,
receiver, conservator or statutory successor except as provided in Sections
4118(a)(1)(A) and 1114(c) of the New York Insurance Law.
B. The Reinsurer shall be given written notice of the pendency of each claim
or loss which may involve the reinsurance provided by this Agreement within
a reasonable time after such claim or loss is filed in the insolvency
proceedings. The Reinsurer shall have the right to investigate each such
claim or loss and interpose, at its own expense, in the proceedings where
the claim or loss is to be adjudicated, any defense which it may deem
available to the Company, its liquidator, receiver, conservator or
statutory successor. The expense thus incurred by the Reinsurer shall be
chargeable, subject to court approval, against the insolvent Company as
part of the expense of liquidation to the extent of a proportionate share
of the benefit which may accrue to the Company solely as a result of the
defense undertaken by the Reinsurer.
C. In addition to the offset provisions set forth in Article XXI- Offset, any
debts or credits, liquidated or unliquidated, in favor of or against either
party on the date of the receivership or liquidation order (except where
the obligation was purchased by or transferred to be used as an offset) are
deemed mutual debts or credits and shall be set off with the balance only
to be allowed or paid. Although such claim on the part of either party
against the other may be unliquidated or undetermined in amount on the date
of the entry of the receivership or liquidation order, such claim will be
regarded as being in existence as of such date and any claims
POR376426-/376428-/376430 22 Revised 09/15/06
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then in existence and held by the other party may be offset against it.
D. Nothing contained in this Article is intended to change the relationship or
status of the parties to this Agreement or to enlarge upon the rights or
obligations of either party hereunder except as provided herein.
ARTICLE XXV - SPECIAL TERMINATION
A. Notwithstanding the termination provisions set forth in Article
II-Effective Date and Termination, this Agreement shall be:
1. Terminated automatically and simultaneously upon the happening of any
of the following events:
a. Entry of an order of liquidation, rehabilitation, receivership or
conservatorship with respect to the Company or the Reinsurer by
any court or regulatory authority;
b. Assignment of this Agreement by either party;
c. General reinsurance of any portion of the Company's business it
retains net for its own account, as determined under the
provisions of this Agreement without prior consent of the
Reinsurer.
2. Terminated by either party giving not less than 30 days prior written
notice to the other party upon the happening of the following event:
Any transfer of control of either party by change in ownership or
otherwise.
3. Terminated by the Reinsurer by giving not less than 30 days prior
written notice to the Company upon the happening of the following
event:
Failure of the Company to remit premiums in accordance with the
provisions set forth in this Agreement.
4. Terminated in accordance with the provisions set forth in this
Paragraph, upon the discovery of the following event:
A reduction of 50% or more of the Company's policyholders surplus
during any calendar year. Such reduction shall be determined by
calculating the difference between the Company's prior year
annual statement and each subsequent quarterly statutory
statement within such current calendar year.
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As respects the event set forth in this Paragraph A.4., the Company
shall be obligated to notify the Reinsurer in writing within 30 days
after the filing of its quarterly statement. Upon receipt of such
notification the Reinsurer shall have the right to terminate this
Agreement, by giving not less than 30 days notice of its intention to
do so.
B. Any notice of termination pursuant to the provisions set forth in
Paragraphs A.2., A.3. and A.4. above shall be sent by certified mail,
return receipt requested. Such notice period shall commence upon the other
party's receipt of the notice of termination.
C. In the event of termination, as provided under the provisions of this
Article, the Reinsurer shall not be liable for losses occurring subsequent
to the date of termination.
ARTICLE XXVI - AMENDMENTS
This Agreement may be amended by mutual consent of the parties expressed in an
addendum; and such addendum, when executed by both parties, shall be deemed to
be an integral part of this Agreement and binding on the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate, by their duly authorized representatives as of the following
dates:
In Bala Cynwyd,Pennsylvania, this 25th day of September, 2006.
ATTEST: PHILADELPHIA CONSOLIDATED HOLDING
CORPORATION'S
following member Companies:
PHILADELPHIA INDEMNITY INSURANCE
COMPANY
PHILADELPHIA INSURANCE COMPANY
/s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------- ----------------------------------------
Name ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ Name ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title Assistant Vice President Title Executive President &
Chief Underwriting Officer
And in Armonk, New York, this 15th day of September, 2006.
ATTEST: SWISS REINSURANCE AMERICA CORPORATION
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------- ----------------------------------------
Name ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Name ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title Vice President Member of Title Senior Vice President Member of
Management Senior Management
25
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SUPPLEMENT TO THE ATTACHMENTS
DEFINITION OF IDENTIFICATION TERMS USED WITHIN THE ATTACHMENTS
A. Wherever the term "Company" or "Reinsured" or "Reassured" or whatever other
term is used to designate the reinsured company or companies within the
various attachments to the reinsurance agreement, the term shall be
understood to mean Company or Reinsured or Reassured or whatever other term
is used in the attached reinsurance agreement to designate the reinsured
company or companies.
B. Wherever the term "Agreement" or "Contract" or "Policy" or whatever other
term is used to designate the attached reinsurance agreement within the
various attachments to the reinsurance agreement, the term shall be
understood to mean Agreement or Contract or Policy or whatever other term
is used to designate the attached reinsurance agreement.
C. Wherever the term "Reinsurer" or "Reinsurers" or "Underwriters" or whatever
other term is used to designate the reinsurer or reinsurers in the various
attachments to the reinsurance agreement, the term shall be understood to
mean Reinsurer or Reinsurers or Underwriters or whatever other term is used
to designate the reinsuring company or companies.
1.
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POLLUTION LIABILITY EXCLUSION CLAUSE - REINSURANCE
This Reinsurance excludes:
(1) Any loss occurrence arising out of the actual, alleged or threatened
discharge, dispersal, release or escape of pollutants:
a) At or from premises owned, rented or occupied by an original
assured; or
b) At or from any site or location used for the handling, storage,
disposal, processing or treatment of waste; or
c) Which are at any time transported, handled, stored, treated,
disposed of, or processed as waste; or
d) At or from any site or location on which any original assured is
performing operations:
(i) If the pollutants are brought on or to the site or location
in connection with such operations; or
(ii) If the operations are to test for, monitor, clean up,
remove, contain, treat, detoxify or neutralize the
pollutants.
(2) Any liability, loss, cost or expense arising out of any governmental
direction or request to test for, monitor, clean up, remove, contain,
treat, detoxify or neutralize pollutants.
"Pollutants" means any solid, liquid, gaseous or thermal irritant or
contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and
waste. Waste includes materials to be recycled, reconditioned or reclaimed.
Subparagraphs a) and d)(i) of paragraph (1) of this exclusion do not apply to
loss occurrences caused by heat, smoke or fumes from a hostile fire. As used
herein, "hostile fire" means one which becomes uncontrollable or breaks out from
where it was intended to be.
"Original assured" as used herein means all insureds as defined in the policy
issued by the Company.
1.
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INSOLVENCY FUNDS EXCLUSION CLAUSE
This Agreement excludes all liability of the Company arising by contract,
operation of law, or otherwise from its participation or membership, whether
voluntary or involuntary, in any insolvency fund or from reimbursement of any
person for any such liability. "Insolvency fund" includes any guaranty fund,
insolvency fund, plan, pool, association, fund or other arrangement, howsoever
denominated, established or governed, which provides for any assessment of or
payment or assumption by any person of part or all of any claim, debt, charge,
fee, or other obligation of an insurer, or its successors or assigns, which has
been declared by any competent authority to be insolvent or which is otherwise
deemed unable to meet any claim, debt, charge, fee or other obligation in whole
or in part.
1.
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NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY - REINSURANCE - U.S.A.
N.M.A. 1590
1. This reinsurance does not cover any loss or liability accruing to the
Reassured as a member of, or subscriber to, any association of insurers or
reinsurers formed for the purpose of covering nuclear energy risks or as a
direct or indirect reinsurer of any such member, subscriber or association.
2. Without in any way restricting the operation of paragraph 1. of this Clause
it is understood and agreed that for all purposes of this reinsurance all
the original policies of the Reassured (new, renewal and replacement) of
the classes specified in Clause II. in this paragraph 2. from the time
specified in Clause III. in this paragraph 2. shall be deemed to include
the following provision (specified as the Limited Exclusion Provision):
LIMITED EXCLUSION PROVISION*
I. It is agreed that the policy does not apply under any liability
coverage, to INJURY, SICKNESS, DISEASE, DEATH OR DESTRUCTION,
bodily injury or property damage with respect to which an insured
under the policy is also an insured under a nuclear energy
liability policy issued by Nuclear Energy Liability Insurance
Association, Mutual Atomic Energy Liability Underwriters or
Nuclear Insurance Association of Canada, or would be an insured
under any such policy but for its termination upon exhaustion of
its limit of liability.
II. Family Automobile Policies (liability only), Special Automobile
Policies (private passenger automobiles, liability only), Farmers
Comprehensive Personal Liabilities Policies (liability only),
Comprehensive Personal Liability Policies (liability only) or
policies of a similar nature; and the liability portion of
combination forms related to the four classes of policies stated
above, such as the Comprehensive Dwelling Policy and the
applicable types of Homeowners Policies.
III. The inception dates and thereafter of all original policies as
described in II. above, whether new, renewal or replacement,
being policies which either
1.
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(a) become effective on or after 1st May, 1960, or
(b) become effective before that date and contain the Limited
Exclusion Provision set out above; provided this paragraph
2. shall not be applicable to Family Automobile Policies,
Special Automobile Policies, or policies or combination
policies of a similar nature, issued by the Reassured on New
York risks, until 90 days following approval of the Limited
Exclusion Provision by the Governmental Authority having
jurisdiction thereof.
3. Except for those classes of policies specified in Clause II. of paragraph
2. and without in any way restricting the operation of paragraph 1. of this
Clause, it is understood and agreed that for all purposes of this
reinsurance the original liability policies of the Reassured (new, renewal
and replacement) affording the following coverages:
Owners, Landlords and Tenants Liability, Contractual Liability, Elevator
Liability, Owners or Contractors (including railroad) Protective Liability,
Manufacturers and Contractors Liability, Product Liability, Professional
and Malpractice Liability, Storekeepers Liability, Garage Liability,
Automobile Liability (including Massachusetts Motor Vehicle or Garage
Liability)
shall be deemed to include with respect to such coverages, from the time
specified in Clause V. of this paragraph 3., the following provision
(specified as the Broad Exclusion Provision):
BROAD EXCLUSION PROVISION*
It is agreed that the policy does not apply:
I. Under any Liability Coverage to INJURY, SICKNESS, DISEASE, DEATH OR
DESTRUCTION, bodily injury or property damage
(a) with respect to which an insured under the policy is also an
insured under nuclear energy liability policy issued by Nuclear
Energy Liability Insurance Association, Mutual Atomic Energy
Liability Underwriters or Nuclear Insurance Association of
Canada, or would be an insured under any such policy but for its
termination upon exhaustion of its limit of liability; or
2.
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(b) resulting from the hazardous properties of nuclear material and
with respect to which (1) any person or organization is required
to maintain financial protection pursuant to the Atomic Energy
Act of 1954, or any law amendatory thereof, or (2) the insured
is, or had this policy not been issued would be, entitled to
indemnity from the United States of America, or any agency
thereof, under any agreement entered into by the United States of
America, or any agency thereof, with any person or organization.
II. Under any Medical Payments Coverage, or under any Supplementary
Payments Provision relating to IMMEDIATE MEDICAL OR SURGICAL RELIEF,
first aid, to expenses incurred with respect to BODILY INJURY,
SICKNESS, DISEASE OR DEATH, bodily injury resulting from the hazardous
properties of nuclear material and arising out of the operation of a
nuclear facility by any person or organization.
III. Under any Liability Coverage, to INJURY, SICKNESS, DISEASE, DEATH OR
DESTRUCTION, bodily injury or property damage resulting from the
hazardous properties of nuclear material, if
(a) the nuclear material (1) is at any nuclear facility owned by, or
operated by or on behalf of, an insured or (2) has been
discharged or dispersed therefrom;
(b) the nuclear material is contained in spent fuel or waste at any
time possessed, handled, used, processed, stored, transported or
disposed of by or on behalf of an insured; or
(c) the INJURY, SICKNESS, DISEASE, DEATH OR DESTRUCTION, bodily
injury or property damage arises out of the furnishing by an
insured of services, materials, parts or equipment in connection
with the planning, construction, maintenance, operation or use of
any nuclear facility, but if such facility is located within the
United States of America, its territories, or possessions or
Canada, this exclusion (c) applies only to INJURY TO OR
DESTRUCTION OF PROPERTY AT SUCH NUCLEAR FACILITY, property damage
to such nuclear facility and any property thereat.
3.
(SWISS LOGO)
IV. As used in this endorsement:
"hazardous properties" include radioactive, toxic or explosive
properties; "nuclear material" means source material, special nuclear
material or byproduct material; "source material," "special nuclear
material," and "byproduct material" have the meanings given them in
the Atomic Energy Act of 1954 or in any law amendatory thereof; "spent
fuel" means any fuel element or fuel component, solid or liquid, which
has been used or exposed to radiation in a nuclear reactor; "waste"
means any waste material (1) containing byproduct material other than
the tailings or wastes produced by the extraction or concentration of
uranium or thorium from any ore processed for its source material
content and (2) resulting from the operation by any person or
organization of any nuclear facility included within the definition of
nuclear facility under paragraph (a) or (b) thereof; "nuclear
facility" means
(a) any nuclear reactor,
(b) any equipment or device designed or used for (1) separating the
isotopes of uranium or plutonium, (2) processing or utilizing
spent fuel, or (3) handling, processing or packaging waste,
(c) any equipment or device used for the processing, fabricating or
alloying of special nuclear material if at any time the total
amount of such material in the custody of the insured at the
premises where such equipment or device is located consists of or
contains more than 25 grams of plutonium or uranium 233 or any
combination thereof, or more than 250 grams of uranium 235,
(d) any structure, basin, excavation, premises or place prepared or
used for the storage or disposal of waste
and includes the site on which any of the foregoing is located, all
operations conducted on such site and all premises used for such
operations; "nuclear reactor" means any apparatus designed or used to
sustain nuclear fission in a self-supporting chain reaction or to
contain a ▇▇▇▇▇▇▇▇ ▇▇▇▇ of fissionable material; WITH RESPECT TO
INJURY TO OR DESTRUCTION OF PROPERTY, THE WORD "INJURY" OR
"DESTRUCTION" INCLUDES ALL FORMS OF RADIOACTIVE CONTAMINATION OF
PROPERTY; "property damage" includes all forms of radioactive
contamination of property.
4.
(SWISS LOGO)
V. The inception dates and thereafter of all original policies affording
coverages specified in this paragraph 3., whether new, renewal or
replacement, being policies which become effective on or after 1st
May, 1960, provided this paragraph 3. shall not be applicable to
(i) Garage and Automobile Policies issued by the Reassured on New
York risks, or
(ii) Statutory liability insurance required under Chapter 90, General
Laws of Massachusetts,
until 90 days following approval of the Broad Exclusion Provision by
the Governmental Authority having jurisdiction thereof.
4. Without in any way restricting the operations of paragraph 1. of this
Clause, it is understood and agreed that paragraphs 2. and 3. above are not
applicable to original liability policies of the Reassured in Canada, and
that with respect to such policies, this Clause shall be deemed to include
the Nuclear Energy Liability Exclusion Provisions adopted by the Canadian
Underwriters' Association or the Independent Insurance Conference of
Canada.
*NOTE: The words printed in BOLD TYPE in the Limited Exclusion Provision and in
the Broad Exclusion Provision shall apply only in relation to original
liability policies which include a Limited Exclusion Provision or a Broad
Exclusion Provision containing those words.
5.
(SWISS LOGO)
NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY - REINSURANCE - CANADA
N.M.A. 1979a
1. This Agreement does not cover any loss or liability accruing to the Company
as a member of, or subscriber to, any association of insurers or reinsurers
formed for the purpose of covering nuclear energy risks or as a direct or
indirect reinsurer of any such member, subscriber or association.
2. Without in any way restricting the operation of Paragraph 1. of this
Clause, it is agreed that for all purposes of this Agreement all the
original liability contracts of the Company, whether new, renewal or
replacement, of the following classes, namely,
Personal Liability
Farmers' Liability
Storekeepers' Liability
which become effective on or after 31st December 1992, shall be deemed to
include, from their inception dates and thereafter, the following
provision:
Limited Exclusion Provision -
This Policy does not apply to bodily injury or property damage with respect
to which the Insured is also insured under a contract of nuclear energy
liability insurance (whether the Insured is unnamed in such contract and
whether or not it is legally enforceable by the Insured) issued by the
Nuclear Insurance Association of Canada or any other group or pool of
insurers or would be an Insured under any such policy but for its
termination upon exhaustion of its limits of liability.
With respect to property, loss of use of such property shall be deemed to
be property damage.
3. Without in any way restricting the operation of Paragraph 1. of this
Clause, it is agreed that for all purposes of this Agreement all the
original liability contracts of the Company, whether new, renewal or
replacement, of any class whatsoever (other than Personal Liability,
Farmers' Liability, Storekeepers' Liability or Automobile Liability
contracts), which become effective on or after 31st December 1992, shall be
deemed to include, from their inception dates and thereafter, the following
provision:
1.
(SWISS LOGO)
Broad Exclusion Provision -
It is agreed that this Policy does not apply:
(a) to liability imposed by or arising from any nuclear liability act, law
or statute or any law amendatory thereof; nor
(b) to bodily injury or property damage with respect to which an Insured
under this Policy is also insured under a contract of nuclear energy
liability insurance (whether the Insured is unnamed in such contract
and whether or not it is legally enforceable by the Insured) issued by
the Nuclear Insurance Association of Canada or any other insurer or
group or pool of insurers or would be an Insured under any such policy
but for its termination upon exhaustion of its limit of liability; nor
(c) to bodily injury or property damage resulting directly or indirectly
from the nuclear energy hazard arising from:
(i) the ownership, maintenance, operation or use of a nuclear
facility by or on behalf of an Insured;
(ii) the furnishing by an Insured of services, materials, parts or
equipment in connection with the planning, construction,
maintenance, operation or use of any nuclear facility; and
(iii) the possession, consumption, use, handling, disposal or
transportation of fissionable substances, or of other radioactive
material (except radioactive isotopes, away from a nuclear
facility, which have reached the final stage of fabrication so as
to be usable for any scientific, medical, agricultural,
commercial or industrial purpose) used, distributed, handled or
sold by an Insured.
As used in this Policy:
(1) The term "nuclear energy hazard" means the radioactive, toxic,
explosive, or other hazardous properties of radioactive material;
(2) The term "radioactive material" means uranium, thorium, plutonium,
neptunium, their respective derivatives and compounds, radioactive
isotopes of other elements and any other substances which may be
designated by or pursuant to any law, act or statute, or law
amendatory thereof as being prescribed substances capable of releasing
atomic energy, or as being requisite for the production, use or
application of atomic energy;
2.
(SWISS LOGO)
(3) The term "nuclear facility" means:
(a) any apparatus designed or used to sustain nuclear fission in a
self-supporting chain reaction or to contain a ▇▇▇▇▇▇▇▇ ▇▇▇▇ of
plutonium, thorium and uranium or any one or more of them;
(b) any equipment or device designed or used for (i) separating the
isotopes of plutonium, thorium and uranium or any one or more of
them, (ii) processing or utilizing spent fuel, or (iii) handling,
processing or packaging waste;
(c) any equipment or device used for the processing, fabricating or
alloying of plutonium, thorium or uranium enriched in the isotope
uranium 233 or in the isotope uranium 235, or any one or more of
them if at any time the total amount of such material in the
custody of the Insured at the premises where such equipment or
device is located consists of or contains more than 25 grams of
plutonium or uranium 233 or any combination thereof, or more than
250 grams of uranium 235;
(d) any structure, basin, excavation, premises or place prepared or
used for the storage or disposal of waste radioactive material;
and includes the site on which any of the foregoing is located,
together with all operations conducted thereon and all premises used
for such operations.
(4) The term "fissionable substance" means any prescribed substance that
is, or from which can be obtained, a substance capable of releasing
atomic energy by nuclear fission.
(5) With respect to property, loss of use of such property shall be deemed
to be property damage.
April 1, 1996
3.
(SWISS LOGO)
NUCLEAR INCIDENT EXCLUSION CLAUSE - REINSURANCE - NO. 4
1. This Reinsurance does not cover any loss or liability accruing to the
Reassured as a member of, or subscriber to, any association of insurers or
reinsurers formed for the purpose of covering nuclear energy risks or as a
direct or indirect reinsurer of any such member, subscriber or association.
2. Without in any way restricting the operations of Nuclear Incident Exclusion
Clauses, - Liability, - Physical Damage, - Boiler and Machinery and
paragraph 1. of this Clause, it is understood and agreed that for all
purposes of the reinsurance assumed by the Reinsurer from the Reinsured,
all original insurance policies or contracts of the Reinsured (new, renewal
and replacement) shall be deemed to include the applicable existing Nuclear
Clause and/or Nuclear Exclusion Clause(s) in effect at the time and any
subsequent revisions thereto as agreed upon and approved by the Insurance
Industry and/or a qualified Advisory or Rating Bureau.
4.
(SWISS LOGO)
PHARMACEUTICAL / MEDICAL COMPANY EXCLUSION LISTING
▇▇▇▇▇▇ LABORATORIES
AKZO NOBEL
ALLERGAN
ALPHARMA
ALTANA AG
AMGEN
ASTRAZENECA
AVENTIS
▇▇▇▇ LABORATORIES
▇▇▇▇▇▇ INTERNATIONAL
BAYER
BEAUFOUR IPSEN
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ AND COMPANY
BIOGEN
BOEHRINGER INGELHEIM KG
BOSTON SCIENTIFIC CORPORATION
▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB
CELLTECH (former MEDEVA)
CHIRON
CHUGAI PHARMACEUTICAL
CSL (including ZLB Behring [former ZLB and Aventis
Behring]
DAIICHI PHARMACEUTICAL
DAINIPPON PHARMACEUTICAL
▇▇▇▇▇▇▇ LIFESCIENCES
EISAI
ELAN
FOREST LABORATORIES
GENENTECH
GLAXOSMITHKLINE
GUIDANT
HOSPIRA
IVAX
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ PHARMACEUTICALS
KYOWA HAKKO KOGYO
LABORATOIRE ▇▇▇▇▇▇▇▇
LABORATOIRE SERVIER
LILLY (▇▇▇)
MEDTRONIC
MERCK & CO
MERCK KGAA
MINNESOTA MINING & MANUFACTURING
MITSUBISHI PHARMACEUTICAL
MYLAN LABORATORIES
NOVARTIS
NOVO NORDISK
OTSUKA PHARMACEUTICAL
PFIZER
▇▇▇▇▇▇ ▇▇▇▇▇
PROCTER & ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ / PRA HOLDING
ROCHE
SANKYO
SANOFI-SYNTHELABO
SCHERING AG
SCHERING-PLOUGH
▇▇▇▇▇▇▇ PHARMA
SERONO
SHIONOGI
SHIRE PHARMACEUTICALS
▇▇▇▇▇ & NEPHEW
SOLVAY
ST. JUDE MEDICAL
STRYKER
SUMITOMO PHARMACEUTICALS / SUMITOMO CHEMICAL
SYNTHES-STRATEC
TAKEDA CHEMICAL INDUSTRIES
TANABE
TAP PHARMACEUTICAL PRODUCTS
TEVA PHARMACEUTICAL
UCB
▇▇▇▇▇▇ PHARMACEUTICAL
WYETH
YAMANOUCHI PHARMACEUTICAL / FUJISAWA PHARMACEUTICAL
▇▇▇▇▇▇
GROUP PM CASUALTY/2004 APRIL 30
(SWISS LOGO)
PHILADELPHIA INDEMNITY COMPANY
CASUALTY EXCESS OF LOSS REINSURANCE AGREEMENT
NO. POR376426-/376428-/376430
Effective January 1, 2006
SUMMARY OF CHANGES
1. Paragraph A. Of Article V - Warranty, is amended to read as follows
A. It is warranted, or so deemed, that Casualty reinsurance is in effect
for all policies issued by or on behalf of the Company with limits
greater than $1,000,000 per occurrence or per claim made. It is also
warranted, or so deemed, that the Company has in effect an Insurance
Company Errors and Omissions policy with a limit of $10,000,000 and a
retention /deductible of $1,000,000. This insurance, or reinsurance,
whether collectible or not, and retention/deductible, shall be
maintained until all losses reinsured under this Agreement are fully
discharged and shall inure to the benefit of the reinsurer.
2. Article IX - Extra Contractual Obligations is amended to include a
"Saving/Severability" provision as follows:
E. If any provision of this Article shall be rendered illegal or
unenforceable by the laws, regulations or public policy of the of any
state, such provision shall be considered void in such state, but this
shall not affect the validity or enforceability of any other provision
of this Article or the enforceability of such provision in any other
jurisdiction.
3. The header of Article X - Exclusions, as well as subparagraph F.1. of the
Article have been amended by deleting previous reference to "Automobile
Collision" as this coverage is not applicable.
4. Article XII - Loss Occurrence is amended to reflect agreed renewal
language.
5. Article XIII - Reinsurance Premium, is amended to reflect renewal rates and
premiums.