Exhibit 10.7
[2010 CC2 LLQS]
THIS QUOTA SHARE TREATYdated 30 December 2009 (as amended by endorsement[s] dated [—] and as further amended and restated with effect from [the day on which the sale of the Reinsurer’s parent company’s entire issued share capital is completed] (the “Effective Date”) is made
BETWEEN
(1) | CANOPIUS CAPITAL TWO LIMITED, a company incorporated in England and Wales (no 5234105) whose registered office is at Gallery 9, One Lime Street, London EC3M 7HA (the “Reinsured”); and |
(2) | [CANOPIUS BERMUDA]1 LIMITED, a company incorporated in Bermuda with offices at [Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda] (the “Reinsurer”). |
BACKGROUND
A | TheReinsured and Flectat Limited (“Flectat”) are indirect wholly owned subsidiaries of Canopius Group Limited. |
B | TheReinsuredis an underwriting member ofLloyd’swhich: |
(i) | participated in Syndicate 4444 atLloyd’s(the “Syndicate”) for the 2010 underwriting year of account (with a member’s syndicate premium limit of £469,664,635 out of a total syndicate capacity of £550,000,000); |
(ii) | did not participate in any other syndicate atLloyd’sfor the 2010 underwriting year of account; and |
(iii) | did not underwrite atLloyd’sfor the 2011 underwriting year of account and does not underwrite atLloyd’sfor the 2012 underwriting year of account. |
C | The underwriting of theReinsuredatLloyd’sfor the 2010 underwriting year of account is in part supported by theReinsurer’s FAL described in Article 10. |
D | In addition to this Treaty between theReinsurer(as reinsurer) and theReinsured (as reinsured), theReinsurer is also party as reinsurer to the following contracts of quota share reinsurance with Flectat as reinsured: |
(i) | a contract (the “2011 Flectat LLQS”), originally made on 15 December 2010 but amended and restated with effect from theEffective Date, under which theReinsurer agreed to assume by way of quota share reinsurance 85% (subject to adjustment in specified circumstances) of all rights and obligations of Flectat in respect of its participation as a member of theSyndicate as constituted for the 2011 underwriting year of account; and |
1 | Name of Reinsurer square-bracketed pending confirmation as to the date of the envisaged change of name relative to the expected date of signature of the contract |
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(ii) | a contract (the “2012 Flectat LLQS”), originally made on 1 December 2011 but amended and restated with effect from theEffective Date, under which theReinsurer agreed to assume by way of quota share reinsurance 85% (subject to adjustment in specified circumstances) of all rights and obligations of Flectat in respect of its participation as a member of theSyndicate as constituted for the 2012 underwriting year of account. |
DEFINITIONS AND INTERPRETATION
A | In this Treaty, the following words and expressions have the meanings set out below: |
2010 CBL/OSIL Treaty: the reinsurance treaty made between the Reinsurer (as reinsured) and Omega Specialty Insurance Company Limited (as reinsurer) in respect of certain of the Reinsurer’s rights and obligations pursuant to this Treaty;
2011 Flectat LLQS: the meaning given in Recital D(i);
2012 Flectat LLQS: the meaning given in Recital D(ii);
Additional 2010 Solvency FAL Requirement Notification: the meaning given in paragraph (1) of Article 11;
Business: the meaning given in paragraph (1) of Article 2;
CBL/OSIL Treaties:the reinsurance treaties made between theReinsurer (as reinsured) and Omega Specialty Insurance Company Limited (as reinsurer) in respect of certain of theReinsurer’s rights and obligations pursuant to this Treaty, the2011 Flectat LLQS and the2012 Flectat LLQS;
Effective Date: the meaning given in the title to this Treaty;
Expenses: the meaning given in paragraph (1)(v) of Article 6;
FAL: funds at Lloyd’s in such form as is determined by Lloyd’s in accordance with,inter alia, the Membership and Underwriting Conditions and Requirements (Funds at Lloyd’s) (as amended or replaced from time to time);
FAL Providers’ Deed:the meaning given in Article 8;
Flectat:the meaning given in Recital A;
GNPI: the meaning given in paragraph (1) of Article 6;
Income: the meaning given in paragraph (1)(vi) of Article 6;
Lloyd’s:the society incorporated by Lloyd’s Act 1871 by the name of Lloyd’s;
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Managing Agent: the meaning given in paragraph (2) of Article 1;
Other Additional 2010 Solvency FAL: the meaning given in paragraph (2) of Article 11;
Outgoings: the meaning given in paragraph (1)(vi) of Article 6;
Premium: the meaning given in paragraph (1) of Article 6;
Profit before PC: the meaning given in paragraph (1)(vi) of Article 6;
Reinsurer’s Additional 2010 Solvency FAL: the meaning given in paragraph (1) of Article 11;
Reinsurer’s Additional ECA FAL: the meaning given in the2011 Flectat LLQS and the2012 Flectat LLQS;
Reinsurer’s FAL: the meaning given in paragraph (1) of Article 10;
Relevant Percentage: the meaning given in paragraph (1) of Article 2;
RITC:reinsurance to close (as defined in Lloyd’s Definitions Byelaw, No. 7 of 2005); and
Syndicate:the meaning given in the meaning given in Recital B(i).
B | Theejusdem generis rule of construction shall not apply to this Treaty and accordingly, general words shall not be given a restrictive meaning by reason of their being preceded or followed by words indicating a particular class or examples of acts, matters or things. |
C | References in this Treaty to the parties and to Recitals, Articles and paragraphs are respectively to the parties to and Recitals, Articles and paragraphs of this Treaty. |
Article 1: Warranty and Undertakings
(1) | TheReinsured warrants that the background facts set out in Recitals A and B above are true and accurate. |
(2) | In the event that the managing agent of theSyndicate (the “Managing Agent”) proposes to reinsure to close the 2009 or any prior underwriting year of account of any otherLloyd’s syndicate into the 2010 underwriting year of account of theSyndicate, theReinsured shall use its reasonable endeavours to procure that theManaging Agent consults with theReinsurer in good faith and provides to theReinsurersuch information as it may reasonably request for the purposes of such consultation. |
Article 2: Scope of Reinsurance: Indemnity
(1) | By this Treaty, theReinsured agrees to cede and theReinsurer agrees to assume by way of quota share reinsurance on the terms and conditions set out below 85% (the “Relevant Percentage”) of all rights and obligations of |
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theReinsuredin respect of its participation as a member of theSyndicate for the 2010 underwriting year of account including (i) all business allocated by theManaging Agentto the pure 2010 underwriting year of account of theSyndicate (ii) all business signed by theManaging Agent into the 2010 underwriting year of account of theSyndicate and (iii) all business accepted by theManaging Agent for the 2010 underwriting year of account of theSyndicateby way ofRITC(or if an account is closed into the 2010 underwriting year of account of theSyndicate other than by reinsurance, all business accepted on such closure) in respect of any earlier year of account of theSyndicate and/or of any year of account of any other syndicate atLloyd’s (the “Business”). |
(2) | Accordingly theReinsurer shall, subject to the operation of paragraph (4) of Article 10, indemnify theReinsured for theReinsurer’sRelevant Percentage share of all liabilities, obligations and outgoings of theReinsured as a member of theSyndicate for the 2010 year of account (other than amounts taken into account in the reduction of premium under Article 6) including any amounts payable forRITC of an underwriting year of account or, if the account is closed other than by reinsurance, all provisions made on closure in theSyndicate accounts for all liabilities attributable to that and prior closed underwriting years of account. |
Article 3: Term and Termination
This Treaty shall commence as of 00.01 on 1 January 2010.
Without prejudice to any rights that may have accrued under this Treaty or any of its rights or remedies (i) either party may at any time terminate this Treaty with immediate effect by giving written notice to the other party if the performance of this Treaty is prohibited or rendered impossiblede jure orde facto, in particular as a consequence of any law or regulation which is or shall be in force in any country or territory and (ii) theReinsurer may at any time terminate this Treaty with immediate effect by giving written notice to theReinsured if the2010 CBL/OSIL Treaty is terminated for any reason, PROVIDED that any provisions of this Treaty which are expressly or impliedly intended to survive termination shall continue in force.
Article 4: Original Terms
All business ceded and assumed hereunder shall be subject to all the same terms, clauses and conditions as contained in the original policies including all variations and/or extensions that may be agreed from time to time by theManaging Agent.
The said business and this Treaty shall be subject to all applicable Byelaws and regulations ofLloyd’s.
Article 5: Information
TheReinsured shall take all available steps to obtain from theManaging Agent and deliver promptly to theReinsurer on receipt, until the 2010 underwriting year of account of theSyndicateis closed, copies of all:
(a) | Syndicate business forecasts to the extent they relate to theSyndicate as constituted for the 2010 underwriting year of account; |
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(b) | reports, accounts, forecasts and notices which theManaging Agent submits or is required byLloyd’s to submit to members of theSyndicate as constituted for the 2010 underwriting year of account; |
(c) | theSyndicate’s quarterly returns toLloyd’s(to be delivered within 60 days of the end of each quarter) to the extent they relate to theSyndicate as constituted for the 2010 underwriting year of account; |
(d) | the most recently completed actuarial loss reserve study for theSyndicateto the extent it relates to theSyndicate as constituted for the 2010 underwriting year of account; and |
(e) | such other information in writing concerning theSyndicate as constituted for the 2010 underwriting year of account which theReinsurer may from time to time reasonably require. |
Article 6: Premium
(1) | The premium payable hereunder by theReinsured(“Premium”) shall be an amount equal to that described in paragraph (i) below (“GNPI”) adjusted in accordance with the provisions of paragraphs (ii) to (vii) below: |
(i) | GNPIshall be theRelevant Percentage of theReinsured’s share of the original gross premium of theBusiness(net of commissions, brokerage, policy taxes and similar deductions, and premium repayable on cancellation or as return premium) including premium for theRITC of any prior year of account or, if the liabilities of a closed prior year were brought in other than by reinsurance, the reserves transferred to the 2010 year of account in respect thereof; |
(ii) | fromGNPIshall be deducted theRelevant Percentage of theReinsured’s share of all paid premium and other costs of the reinsurances protecting theBusiness(not including, for the avoidance of any doubt, theRITC of the 2010 underwriting year of account of theSyndicate); |
(iii) | to the resulting sum shall be added theRelevant Percentage of theReinsured’s share of theSyndicate’s profits on exchange in respect of the 2010 underwriting year of account and from the same shall be deducted theRelevant Percentage of theReinsured’s share of theSyndicate’s losses on exchange in respect of the 2010 underwriting year of account; |
(iv) | to the resulting sum shall be added theRelevant Percentage of theReinsured’s share of investment income (net of investment losses and expenses) in respect of the 2010 underwriting year of account of theSyndicateaccounted for by theSyndicateat closure of the 2010 underwriting year of account; |
(v) | from the resulting sum shall be deducted theRelevant Percentage of the amounts (“Expenses”) set out below: |
(a) | theReinsured’s share of syndicate operating expenses including taxes and levies not included in (i) above in respect |
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of the 2010 underwriting year of account of theSyndicateaccounted for by theSyndicateat closure of the 2010 underwriting year of account; |
(b) | theReinsured’s standard personal expenses ofLloyd’s Central Fund Contribution andLloyd’s Subscription as deducted by theManaging Agent; |
(c) | an amount equal to 1.0% of theReinsured’s member’s syndicate premium limit in respect of the 2010 underwriting year of account of theSyndicate(as set out in Recital B above); |
(vi) | from the resulting sum shall be deducted an amount equal to 17.5% of theProfit Before PCas referred to and defined below, calculated as follows: |
“Income”
(a)GNPI less theRelevant Percentage of theReinsured’s share of all paid premium and other costs of the reinsurances protecting theBusiness as defined in (ii) above;
(b) theRelevant Percentageof theReinsured’s share of theSyndicate’s profits (net of losses) on exchange as defined in (iii) above; and
(c) theRelevant Percentageof theReinsured’s share of investment income (net of investment losses and expenses) accounted for by theSyndicate as defined in (iv) above;
“Outgoings”:
(a) theRelevant Percentageof theReinsured’s share of all paid claims and losses and paid claims and loss expenses hereunder in respect of the 2010 underwriting year of account of theSyndicate (for the avoidance of doubt after the benefit of theRelevant Percentage of theReinsured’s share of theSyndicate’s recoveries under protecting reinsurances);
(b) theRelevant Percentageof theReinsured’s share of any amounts payable forRITC of the 2010 underwriting year of account of theSyndicate or, if the account is closed other than by reinsurance, all provisions made in theSyndicate accounts on closure for all liabilities including outstanding claims and claims incurred but not reported attributable to that and prior closed underwriting years of account;
(c) theRelevant Percentageof theReinsured’s share of syndicate operating expenses including taxes and levies as referred to in paragraph (v)(a) above;
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(d) theRelevant Percentageof theReinsured’s standard personal expenses ofLloyd’s Central Fund Contribution andLloyd’s Subscription as referred to in paragraph (v)(b) above; and
(e) theRelevant Percentageof an amount equal to 1.0% of theReinsured’s member’s syndicate premium limit in respect of the 2010 underwriting year of account of theSyndicateas referred to in paragraph (v)(c) above,
the excess, if any, of the sum of allIncome less the sum of allOutgoings being the “Profit Before PC”;
(vii) | from the resulting sum shall be deducted to defray theReinsured’s expenses an overriding commission of GBP50,000 plus theRelevant Percentage of the amounts charged to theReinsured by (a) Canopius Group Limited or any of its subsidiaries or (b) third parties as letter of credit or other fees for providing Funds at Lloyd’s or collateral to support the underwriting of theReinsured as a member of theSyndicate for the 2010 underwriting year of account. |
(2) | Premium in currencies other than £Sterling shall be converted into £Sterling at the rates used in theReinsured’s books of account and shall be payable in £Sterling. |
Article 7: Protecting Reinsurances: Follow the Fortunes
This Treaty is net of and theReinsurer shall be automatically protected by all reinsurance protections of whatever nature of theReinsured as a member of theSyndicatefor the 2010 underwriting year of account and theReinsurer shall in addition have the benefit, subject to the terms of closure of an account, of all rights of salvage or other recoveries of theReinsured so that the gross and net accounts respectively of theReinsurer shall save as to the overriding commission specified in paragraph (vii) in Article 6 follow in all respects those of theReinsured.
Further, theReinsurer shall be automatically protected by all excess of loss reinsurance protections of theReinsured to the extent that claims in respect of theReinsured’s participation are recovered under such excess of loss reinsurances.
This Treaty is to pay (and only to pay) losses in line with those which theReinsured may itself pay, the true intent of this Treaty being that theReinsurer shall, in every case to which this Treaty applies, follow without question all settlements and compromises (including those which are made on a ‘without prejudice’ basis or are of a whollyex gratia nature) of theReinsured.
Article 8: Settlement
Premium and other income of theBusiness shall until closure of the 2010 underwriting year of account be retained within the Premiums Trust Funds and other trust funds of theReinsured as a member of theSyndicateand utilised in accordance with the terms of the applicable trust deeds for the settlement of claims and the other underwriting liabilities of theBusiness so that, except to the extent that (i) calls are made earlier on theReinsured in respect of such liabilities or (ii) early releases to theReinsured from its Premiums Trust Funds on account of underwriting profits as a member of theSyndicatefor the 2010 underwriting year of account are
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permitted byLloyd’s and theReinsured makes a corresponding payment on account to theReinsurer, settlement between the parties (calculated by or on behalf of theReinsured in the manner set out in a ‘Final Declared Result’ statement of account in a form to be agreed between the Reinsurer and the Reinsured, using as appropriate figures contained in the audited accounts of theSyndicate prepared following and reflecting theRITC of theSyndicate for the 2010 underwriting year of account and taking full account of all such amounts which may be payable by the parties under the terms of the FAL Providers’ Deed entered into between,inter alios, Canopius Group Limited, theReinsured and theReinsurerand having effect on theEffective Date(the “FAL Providers’ Deed”)) shall be made, in £Sterling (having converted into £Sterling any amounts in currencies other than £Sterling at the rates used in theReinsured’s books of account), on and follow the closure of the account and releases, if any, from the relevant trust funds.
Article 9: Records
All records of theReinsured insofar as they relate to the business covered by this Treaty shall be open to inspection by theReinsurer at all reasonable times and theReinsured shall on request use all endeavours to obtain for theReinsurer, at theReinsurer’s expense, copies of or access to the records of theSyndicate to the extent permitted by the underwriting agency agreement between theReinsured and theManaging Agent.
Article 10: Security and Limitation of Liability
(1) | TheReinsurer shall (i) provide or procure the provision toLloyd’sof one or more letters of credit, cash deposits and/or investments (in a form acceptable toLloyd’s) having an aggregate value of £[—]2 and (ii) use its reasonable endeavours to procure that Omega Specialty Insurance Company Limited shall provide or procure the provision toLloyd’s of one or more letters of credit, cash deposits and/or investments (in a form acceptable toLloyd’s) having an aggregate value of £[—]3 to form part of theFAL of theReinsuredpursuant to the terms of theCBL/OSIL Treaties(theFAL provided by theReinsurer and theFAL provided by Omega Specialty Insurance Company Limited together, the “Reinsurer’s FAL”), which shall form part of theFALof theReinsuredand be deposited on interavailable terms such that it will support the underwriting ofFlectat for the 2011 and subsequent underwriting years of account as well as theReinsured’s underwriting atLloyd’s for the 2010 underwriting year of account and (subject to the provisions and operation of theFAL Providers’ Deed) stand as security for the performance of theReinsurer’s obligations under this Treaty, the2011 Flectat LLQS and the2012 Flectat LLQS. |
(2) | The cost of provision of theReinsurer’s FAL shall be paid by theReinsurer or others (but not theReinsured). |
(3) | TheReinsurer may, at any time permitted byLloyd’s, substitute for all or any part of theReinsurer’s FAL any other assets of equivalent value acceptable underLloyd’s requirements asFAL. |
2 | Relevant figure representing CBL’s share of FAL to be inserted, to be ascertained |
3 | Relevant figure representing OSIL’s share of FAL to be inserted, to be ascertained |
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(4) | The liability of theReinsurer under this Treaty beyond an amount equal to the premium payable to theReinsurer under Article 6 (subject to the provisions of Article 8 concerning settlement atSyndicate level) shall, when aggregated with all liabilities of theReinsurer under the2011 Flectat LLQS and the2012 Flectat LLQSbeyond an amount equal to the aggregate premium payable to theReinsurer under the2011 Flectat LLQS and the2012 Flectat LLQS(subject to the provisions of the2011 Flectat LLQS and the2012 Flectat LLQS concerning settlement at Syndicate level), be limited to and in no circumstances exceed in aggregate £[—]4plus the aggregate value of anyReinsurer’s Additional ECA FAL provided or procured to be provided from time to time by theReinsurer toLloyd’s pursuant to the terms of the2011 Flectat LLQSor the2012 Flectat LLQS. |
(5) | For the avoidance of any doubt, the aggregate liability of theReinsurer under this Treaty alone shall not exceed an amount equal to the premium payable to theReinsurer under Article 6 (subject to the provisions of Article 8 concerning settlement atSyndicate level)plus £[—]5plus the aggregate value of anyReinsurer’s Additional ECA FAL provided or procured to be provided from time to time by theReinsurer toLloyd’s pursuant to the terms of the2011 Flectat LLQSor the2012 Flectat LLQS. |
Article 11: Additional Funds at Lloyd’s
(1) | If (i) the 2010 underwriting year of account of theSyndicate is not closed as at 31 December 2012 and (ii) at any time after theEffective Date and before the 2010 underwriting year of account of theSyndicate is closed theReinsured is required byLloyd’sto provide additionalFAL in order to meet an increase in theReinsured’s open year solvency deficiency in respect of its underwriting as a member of theSyndicate for the 2010 underwriting year of account theReinsuredwill promptly notify theReinsurerof that fact and of the amount of additionalFALrequired by Lloyd’s (“Additional 2010 Solvency FAL Requirement Notification”) and theReinsurer shall (i) promptly provide or procure the provision toLloyd’s, in a form acceptable toLloyd’s to stand asFAL of theReinsured, to be deposited in theFAL of theReinsured a letter of credit, cash or investments having an aggregate value of 32% of 85% of the amount of the required additionalFAL and (ii) use its reasonable endeavours to procure that Omega Specialty Insurance Company Limited shall provide or procure the provision toLloyd’s, in a form acceptable toLloyd’s to stand asFAL of theReinsured, to be deposited in theFAL of theReinsureda letter of credit, cash or investments having an aggregate value of 68% of 85% of the amount of the required additionalFALpursuant to the terms of the2010 CBL/OSIL Treaty(the additionalFAL provided by theReinsurer and the additionalFAL provided by Omega Specialty Insurance Company Limited together, the “Reinsurer’s Additional 2010 Solvency FAL”). For the avoidance of doubt, theReinsurershall not be liable to make good any failure of Omega Specialty Insurance Company Limited to provideFAL pursuant to the terms of the2010 CBL/OSIL Treaty. |
(2) | If theReinsurer does not, within 21 days of receiving theAdditional 2010 Solvency FAL Requirement Notification, provide or procure the provision of the full amount (or any) of theReinsurer’s Additional 2010 Solvency |
4 | i.e. the aggregate of CBL’s and OSIL’s respective limits of liability |
5 | i.e. the aggregate of CBL’s and OSIL’s respective limits of liability |
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FAL, theReinsured may elect (but shall not be obliged) to provide, or permit there to be provided by another for its benefit, the required additional FAL (“Other Additional 2010 Solvency FAL”). If theReinsured does provide (or permit there to be provided by another for its benefit)Other Additional 2010 Solvency FAL, theReinsurershall pay to theReinsured, promptly following release by Lloyd’s from theReinsured’sFALof all or part of the Other Additional 2010 Solvency FAL, an amount calculated by (i) multiplying the amount of theOther Additional 2010 Solvency FAL released by the percentage corresponding to five hundred basis points plus the LIBOR rate for a 6 month £Sterling deposit as at the date on which theReinsuredprovided (or permitted there to be provided by another for its benefit) theOther Additional 2010 Solvency FAL and (ii) multiplying the result of that calculation (“A”) by x/42 where x is the number of complete calendar months (or part thereof) for which the releasedOther Additional 2010 Solvency FALwas deposited in theReinsured’sFAL PROVIDED that the amount payable by theReinsurer shall not exceedA. |
Article 12: Cash Calls
In the event that theReinsured is required by theManaging Agent to meet a cash call in respect of theSyndicate’s 2010 underwriting year of account, theReinsured is entitled (unless theReinsurer expressly elects and settles otherwise) to a cash settlement from (i) theReinsurer’s FALand/or (as the case may be) (ii) anyReinsurer’s Additional ECA FAL provided or procured to be provided from time to time by theReinsurer toLloyd’s pursuant to the terms of the2011 Flectat LLQSor the2012 Flectat LLQS, equal to 85% of the amount of such cash call.
Amounts recovered under this provision shall be treated as a payment on account of the amount which theReinsurer may be liable (subject always to the operation of paragraph (4) of Article 10) to pay under Article 2.
Article 13: Guarantee
[Article deleted]
Article 14: Errors and Omissions
It is hereby understood and agreed that any inadvertent delays, omissions or errors made in connection with this Treaty shall not be held to relieve any of the parties hereto from any liability which would have attached to them hereunder if such delay, omission or error had not occurred provided that rectification is made upon discovery.
Article 15: Non-Waiver
The failure of theReinsured or theReinsurer to insist on compliance with the contract to exercise any right or remedy hereunder shall not constitute a waiver of any rights or remedy contained herein nor stop either party from thereafter demanding full and complete compliance nor prevent either party from exercising such rights or remedy in the future.
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Article 16: Insolvency
Where an Insolvency Event (as defined below) occurs in relation to theReinsured the following terms shall apply (and, in the event of any inconsistency between these terms and any other terms of this Treaty, the following terms shall prevail):
(1) | Notwithstanding any requirement in this Treaty that theReinsured shall actually make payment in discharge of its liability to its policyholders before becoming entitled to payment from theReinsurer: |
(a) | theReinsurer shall be liable to pay theReinsured even though theReinsured is unable actually to pay, or discharge its liability to, its policyholders, but |
(b) | nothing in this clause shall operate to accelerate the date for payment by theReinsurer of any sum which may be payable to theReinsured, which sum shall only become payable as and when theReinsured would have discharged, by actual payment, its liability for its then current net loss but for theReinsured being the subject of any Insolvency Event. |
(2) | The existence, quantum, valuation and date for payment of any sum which theReinsurer is liable to pay theReinsured under this Treaty shall be those and only those for which theReinsurer would be liable to theReinsured if the liability of theReinsured to its policyholders had been determined without reference to any term in any composition or scheme of arrangement or any similar such arrangement, entered into between theReinsured and its policyholders, unless and until theReinsurer serves written notice to the contrary on theReinsured in relation to any composition or scheme of arrangement. |
(3) | TheReinsurer shall be entitled (but not obliged) to set-off, against any sum which it may be liable to pay theReinsured, any sum for which theReinsured is liable to pay theReinsurer. |
For the purposes of this Article, an “Insolvency Event” shall occur if:
A | (i)(in relation to (1), (2) and (3) above) a winding-up petition is presented in respect of theReinsured or a provisional liquidator is appointed over it or if theReinsured goes into administration, administrative receivership or receivership or if theReinsured has a scheme of arrangement or voluntary arrangement proposed in relation to all or any part of its affairs; or |
(ii)(in relation to (1) above) if theReinsured goes into compulsory or voluntary liquidation,
or, in each case, if theReinsured becomes subject to any other similar insolvency process (whether under the laws of England and Wales or elsewhere); and
B | theReinsured is unable to pay its debts as and when they fall due within the meaning of section 123 of the Insolvency Act 1986 (or any statutory amendment or re-enactment of that section). |
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Article 17: Arbitration
Any dispute arising out of or relating to the interpretation, performance or breach of this Treaty, as well as the formation, validity, binding effect and/or termination thereof and/or any non-contractual claims, shall be referred to arbitration under ARIAS UK Arbitration Rules by a panel of three arbitrators. TheReinsurer or theReinsuredmay request arbitration in writing sent to the other party (the respondent) by certified or registered post, return receipt requested.
One arbitrator shall be chosen by theReinsurer and one by theReinsured, and the two arbitrators shall, before instituting the hearing, choose an impartial third arbitrator who shall preside at the hearing. If theReinsurer fails to appoint its arbitrator within 30 days after being requested to do so by theReinsured, theReinsured may appoint the second arbitrator.
Where the two party-appointed arbitrators have failed to appoint a third arbitrator within 30 days of the arbitration demand, then upon application ARIAS (UK) will appoint an arbitrator to fill the vacancy. At any time prior to the appointment by ARIAS (UK) the party or arbitrators in default may make such appointment.
All arbitrators will be disinterested persons (including those who have retired) having at least 10 years experience of insurance or reinsurance within the industry or as lawyers or other professional advisers serving the industry.
Within 30 days after notice of appointment of all arbitrators the panel will meet and determine timely periods for briefs, discovery procedures and schedules for hearings.
The panel may in its sole discretion make such orders and directions as it considers to be necessary for the final determination of the matters in dispute and shall have the widest discretion permitted under the law governing the arbitral procedure when making such orders or directions. Unless the panel agrees otherwise, arbitration will take place in England, but the venue may be changed when the panel deems such change to be in the best interest of the arbitration proceeding. The decision of any two arbitrators when rendered in writing will be final and binding. The panel is empowered to grant interim relief as it may deem appropriate.
Each party will bear the costs of its own arbitrator and will bear, jointly and equally with the other party, the costs of the third arbitrator. The panel will allocate the remaining costs of the arbitration. The panel may, at its discretion, award such further costs, interest and expenses as it considers appropriate, including without limitation, with respect to legal fees.
The governing law of this Treaty shall be the substantive law of England and Wales.
The provisions of this Article shall survive the expiration or termination of this Treaty.
Article 18: Notices
Any notice or other communication under or in connection with this Treaty shall be delivered personally or sent by first class pre-paid post return receipt required, to the intended recipient.
(a) | in the case of theReinsured: |
Gallery 9,
One Lime Street,
London EC3M 7HA,
United Kingdom.
Attn: The Secretary
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(b) | in the case of theReinsurer: |
[Atlantic House
11 Par-La-Ville Road
Hamilton HM 11
Bermuda]
Attn: The Directors, [Canopius Bermuda] Limited
or such other addresses as the relevant party has specified in writing to the party giving notice.
In the absence of evidence of earlier receipt, any notice or other communication shall be deemed to have been duly given:
(i) | if delivered personally, at the time of delivery but if delivery takes place outside business hours, the commencement of business following delivery or transmission; or |
(ii) | if sent by first class mail to an address in the United Kingdom on the second Business Day after posting in the United Kingdom; |
(iii) | if sent by air mail from or to the United Kingdom, the fifth Business Day after posting. |
In proving service by post it shall be sufficient to prove that the envelope containing the notice was properly addressed, stamped and posted.
Article 19: Counterparts
This Treaty may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument.
This document isEXECUTED AS A DEED and is delivered and takes effect at the date written at the beginning of it.
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Executed as a deed by CANOPIUS | ) | |||||||
CAPITAL TWO LIMITED acting by | ) | |||||||
two directors or a director and its | ) | |||||||
company secretary: | ) | |||||||
Director | ||||||||
Director/Secretary | ||||||||
Signed as a deed on behalf of | ) | |||||||
[CANOPIUS BERMUDA] LIMITED, | ) | |||||||
a company incorporated in Bermuda, | ) | |||||||
as reinsurer for its 100% participation | ) | |||||||
herein | ) | |||||||
by: |
| and |
|
each being persons who, in accordance with the laws of that territory, are acting under the authority of that company
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