NATIONAL RE CORPORATION
MULTIPLE LINE EXCESS OF LOSS
AGREEMENT NO. 3973 - 05
between
GUARANTY NATIONAL INSURANCE COMPANY
Englewood, Colorado
LANDMARK AMERICAN INSURANCE COMPANY
Oklahoma City, Oklahoma
COLORADO CASUALTY INSURANCE COMPANY
Englewood, Colorado
SECURITY INSURANCE COMPANY OF HARTFORD
Farmington, Connecticut
STATE AND COUNTY MUTUAL FIRE INSURANCE COMPANY
Waco, Texas
PEAK PROPERTY AND CASUALTY INSURANCE CORPORATION
Englewood, Colorado
GUARANTY NATIONAL INSURANCE COMPANY OF CALIFORNIA
Englewood, Colorado
VIKING INSURANCE COMPANY OF WISCONSIN
Madison, Wisconsin
VIKING COUNTY MUTUAL INSURANCE COMPANY
Austin, Texas
(hereinafter collectively referred to as the "COMPANY")
and
NATIONAL REINSURANCE CORPORATION
Stamford, Connecticut
(hereinafter referred to as the "REINSURER")
MULTIPLE LINE
EXCESS OF LOSS REINSURANCE AGREEMENT
INDEX OF ARTICLES
ARTICLE PAGE #
1 PARTIES TO THE AGREEMENT 1
2 COMMENCEMENT 1
3 BUSINESS COVERED 1
4 SPECIAL ACCEPTANCES 1
5 TERRITORY 2
6 LOSS IN EXCESS OF ORIGINAL POLICY LIMITS 2
7 EXTRA CONTRACTUAL OBLIGATIONS 2
8 WARRANTIES 3
9 CLAIM REPORTS 3
10 LOSS SETTLEMENTS 4
11 OFFSET 4
12 STATISTICS 4
13 ERRORS AND OMISSIONS 4
14 ACCESS TO COMPANY RECORDS 5
15 TAXES 5
16 TERMINATION 5
17 COMMUTATION 6
18 ARBITRATION 6
19 INSOLVENCY 7
20 DEFINITIONS 7
21 RULING LAW 11
22 NOTICE TO REINSURANCE DEPARTMENT 11
23 NON-COLORADO DOMICILED COMPANIES 11
EXHIBIT A
FIRST MULTIPLE LINE
SECTION PAGE #
1 LIABILITY OF THE REINSURER 1
2 REINSURANCE PREMIUM 2
3 COMMISSION 2
4 PREMIUM REPORTS AND REMITTANCES 2
EXHIBIT B
CASUALTY CLASH/PROPERTY CATASTROPHE
SECTION PAGE #
1 LIABILITY OF THE REINSURER 1
2 REINSURANCE PREMIUM 1
3 COMMISSION 2
4 PREMIUM REPORTS AND REMITTANCES 2
5 REINSTATEMENT 2
ATTACHMENTS:
ADDENDUM A - EXCLUSIONS
ADDENDUM B - PROSPECTIVE RATING PLAN AND CONDITIONS
Nuclear Incident Exclusion Clauses - Liability - Reinsurance and
Physical Damage - Reinsurance
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It is understood and agreed between the COMPANY and
the REINSURER that this Agreement replaces and
continues the previous MULTIPLE LINE EXCESS OF LOSS
REINSURANCE AGREEMENT NO. 3973-05 which became
effective on January 1, 1993 and was subsequently
amended by Endorsements Numbered 1 through 14, and
that this Agreement (although it may modify) in no
way interrupts the continuity of such previous
Agreement, especially as regards any premium
adjustment provisions.
ARTICLE 1 - PARTIES TO THE AGREEMENT
This Agreement is solely between the COMPANY and the REINSURER.
When more than one COMPANY is named as a party to this Agreement,
the first COMPANY named shall be the agent of the other companies as
to all matters pertaining to this Agreement. Performance of the
obligations of each party under this Agreement shall be rendered
solely to the other party. In no instance shall any insured of the
COMPANY, any claimant against an insured of the COMPANY, or any
other third party have any rights under this Agreement.
This Agreement constitutes the entire agreement between the parties
with respect to the business being reinsured hereunder and the
obligations of the parties are determined solely by the terms of
this Agreement. Any change or modification to this Agreement shall
be made by written amendment to the Agreement and signed by both
parties hereto.
ARTICLE 2 - COMMENCEMENT
This Agreement shall become effective at 12:01 a.m., Standard Time,
January 1, 1996, as respects in force, new and renewal business of
the COMPANY for losses occurring on or after such time and date and
shall remain in force thereafter, subject to the terms and
conditions for termination stipulated in the article entitled
TERMINATION.
ARTICLE 3 - BUSINESS COVERED
The REINSURER, subject to the terms and conditions hereunder,
inclusive of the EXHIBITS and ADDENDA attached hereto, agrees to
indemnify the COMPANY in respect of the net excess liability
stipulated in this Agreement which may accrue to the COMPANY as a
result of each loss on any one risk as respects Property Business,
and as a result of one or more losses arising out of any occurrences
as respects Casualty Business, which may occur during the currency
of this Agreement under any and all binders, policies, or contracts
of insurance issued by the COMPANY (all hereinafter referred to as
'policies') and classified by the COMPANY as Property Business or
Casualty Business.
ARTICLE 4 - SPECIAL ACCEPTANCES
Business not within the terms and conditions of this Agreement may
be submitted to the REINSURER for special acceptance and, if accepted by the
REINSURER, shall be subject to all of
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the terms and conditions of this Agreement except as modified by the
special acceptance.
ARTICLE 5 - TERRITORY
This Agreement shall follow the territorial limits of the COMPANY'S
original policies but is Limited to policies issued to and covering
insureds domiciled in the United States of America, its territories
and possessions, the Dominion of Canada, and Mexico, only as
respects the COMPANY'S Mexican Automobile Program covering losses
occurring within the United States.
ARTICLE 6 - LOSS IN EXCESS OF ORIGINAL POLICY LIMITS
One Hundred percent (100%) of any loss in excess of the limit of its
original policy may be included in the COMPANY'S net loss, such loss
in excess of the limit of its original policy having been incurred
because of failure by the COMPANY to settle within the policy limits
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.
However, this Article 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.
ARTICLE 7 - EXTRA CONTRACTUAL OBLIGATIONS
One Hundred (100%) percent of any Extra Contractual Obligations,
arising from losses occurring during the currency of this Agreement,
shall be included in the calculation of net loss when the REINSURER
is given written notice of said claim. '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.
The date on which any Extra Contractual Obligation is incurred by
the COMPANY shall be deemed, in all circumstances, to be the date of
the original net loss.
However, this Article 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.
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ARTICLE 8 - WARRANTIES
It is warranted by the COMPANY that in the event it issues a policy
providing limits in excess of the following respective amounts:
a. Primary Automobile and General Liability $5,000,000
b. Umbrella $5,000,000
c. Property $5,000,000
the excess thereof shall be deemed to have been reinsured elsewhere.
ARTICLE 9 - CLAIM REPORTS
The COMPANY shall give written notice to the REINSURER of any claim
or loss which in the judgment of the COMPANY may result in a net
loss to the REINSURER. The COMPANY shall indicate its estimate of
loss and loss adjustment expense and shall provide subsequent
written reports to the REINSURER when such estimates change. In addition,
the COMPANY shall give written notice to the REINSURER of all
casualty claims arising under policies with limits in excess of the
COMPANY'S Retention, involving any of the following:
1. Claims having an indemnity reserve equal to or exceeding 50% of
the COMPANY'S Retention;
2. Brain damage or alleged brain damage;
3. Quadriplegics;
4. Paraplegics;
5. Amputations of one or more Limbs or loss of use of one or more
limbs;
6. Major bums;
7. Severe lacerations or disfigurement involving serious cosmetic
deformity;
8. Extended hospital, wheelchair or walker confinement;
9. Fatalities;
10. Severe injuries with high residual impairment;
11. Serious back injury involving multiple surgeries (including
laminectomies/fusions);
12. Loss of sight or hearing;
13. Child molestation; and,
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14. High wage loss or total loss of economic livelihood.
On open claims, follow up reports shall be submitted every six
months. Important developments (such as major reserve increases or
decreases, settlements, or new information changing the liability
situation or value) shall be reported as they occur.
The COMPANY shall furnish the REINSURER, upon request, paid and
outstanding losses and loss adjustment expenses, subject to this Agreement,
with respect to catastrophe losses.
ARTICLE 10 - LOSS SETTLEMENTS
The COMPANY shall investigate and settle or defend all claims
arising under policies reinsured under this Agreement.
When requested by the REINSURER, the COMPANY shall permit the
REINSURER, at the expense of the REINSURER, to be associated with
the COMPANY in the defense or control of any claim, loss, or legal
proceeding which involves or is likely to involve the REINSURER.
All payments of claims or losses by the COMPANY within the limits,
terms, and conditions of its policies and within the limits, terms,
and conditions of this Agreement shall be binding upon the
REINSURER.
Upon receipt of proof of loss payment, the REINSURER shall Promptly
pay the COMPANY for that share of the net loss and loss adjustment
expense due in accordance with the reinsurance stipulated in this
Agreement. Additionally, as respects EXHIBIT A coverage, the
COMPANY shall first exhaust the funds Held Account, up to the agreed
upon amounts, before seeking recovery hereunder.
ARTICLE 11 - OFFSET
The COMPANY or the REINSURER may offset any balance allowed by
Colorado law, statute or regulation, whether on account of premium,
commission, claims or losses, loss adjustment expenses, recoveries,
salvage, or any other amount due from one party to the other under
this Agreement or any other agreement heretofore or hereafter
entered into between the COMPANY and the REINSURER, whether acting
as assuming reinsurer or ceding company. This right of offset shall
not be affected by the insolvency of either the COMPANY or the
REINSURER.
ARTICLE 12 - STATISTICS
The COMPANY shall furnish such other statistics as may be required
by the REINSURER for the completion of the REINSURER'S statutory
requirements and internal records.
ARTICLE 13 - ERRORS AND OMISSIONS
The REINSURER shall not be relieved of liability because of an error
or accidental omission by the
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COMPANY in reporting any claim, loss, or any business reinsured
under this Agreement, provided that the error or omission is
rectified promptly after discovery and the REINSURER'S rights
hereunder have not been prejudiced. The REINSURER shall be
obligated only for the return of the premium paid for business
reported but not reinsured under this Agreement.
ARTICLE 14 - ACCESS TO COMPANY RECORDS
The COMPANY shall comply with the REINSURER'S request for any
information relating to this Agreement. Additionally, the REINSURER
or its authorized representatives shall have the right to inspect at
any reasonable time at the office of the COMPANY all papers, books,
accounts, documents, claims files and other records of the COMPANY
relating to this Agreement. The REINSURER'S right of inspection
shall continue to exist after the termination of this Agreement.
ARTICLE 15 - TAXES
The COMPANY shall be liable for paying all taxes other than income
or profit taxes levied on the REINSURER for business reinsured under
this Agreement. If the REINSURER is obligated to pay taxes other
than income or profit taxes for business reinsured under this
Agreement the COMPANY shall reimburse the REINSURER, provided that
the COMPANY shall not be required to pay the same tax twice.
ARTICLE 16 - TERMINATION
This Agreement is unlimited as to its duration but may be terminated
at any time after December 31, 1998, by either party giving to the
other party (and to the Insurance Department of the State of
Colorado) hereto not less than 90 days notice of termination in
writing by registered or certified mail.
However, the COMPANY or the REINSURER may also terminate this
Agreement at any time, by giving to the other party (and to the
Insurance Department of the State of Colorado), not less than 90
days notice of termination in writing by registered or certified
mail, in the event of any of the following:
1. If any amount payable under this Agreement becomes more than 30
days overdue. the party due to be paid may terminate this
Agreement;
2. If a state insurance department or other competent authority
has ordered either party to cease writing business, either
party may terminate this Agreement;
3. If either party has become insolvent, or has been put into
liquidation or receivership (whether voluntary or involuntary),
or there have been instituted against it proceedings for the
appointment of a receiver, liquidator, rehabilitator,
conservator, or trustee in bankruptcy or other agent known by
whatever name, to take possession of its assets or control of
its operations, either party may terminate this Agreement;
4. If either party has become merged with, acquired or controlled
by any company, corporation,
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individual or individuals not controlling that party's
operations previously, the other party may terminate this
Agreement;
5. If either party's policyholder's surplus is reduced to 50% or
less of the amount of its policyholder's surplus at either the
inception of this Agreement or at the latest renewal or
anniversary date of this Agreement, the other party may
terminate this Agreement;
6. If either party has lost any part of, or has reduced its paid
up capital, the other party may terminate this Agreement.
In any instance where the COMPANY or the REINSURER terminates this
Agreement, the REINSURER shall not be liable for losses taking place
after the effective time and date of termination.
ARTICLE 17 - COMMUTATION
The COMPANY may, at its option, commute all outstanding liabilities
(known and/or unknown) under this Agreement as of the time and date
of termination or on each of the next two anniversaries of
termination. In consideration of the COMPANY'S reassumption of all
such liabilities the REINSURER shall return to the COMPANY 100% of
all the earned portion of premiums ceded hereunder during the entire
term of this Agreement, less applicable ceding commission, less paid
losses (including debits to the COMPANY'S Funds Held Account), and
less the applicable reinsurance expenses as follows:
- 6.0% of net written premium ceded, if commuted at termination;
- 11.0% of net written premium ceded, if commuted 12 months after
termination; or,
- 16.0% of net written premium ceded, if commuted 24 months after
termination.
ARTICLE 18 - ARBITRATION
All unresolved differences of opinion between the COMPANY and the
REINSURER relating to this Agreement, including its foliation and
validity, shall be submitted to a Board of Arbitration consisting of
one arbitrator chosen by the COMPANY, one arbitrator chosen by the
REINSURER, and a third arbitrator chosen by the first two
arbitrators.
The party demanding arbitration shall communicate its demand for
arbitration to the other party by registered or certified mail,
identifying the nature of the dispute and the name of its
arbitrator, and the other party shall then be bound to name its
arbitrator within thirty days after receipt of the demand.
Failure or refusal of the other party to so name its arbitrator
shall empower the demanding party to name the second arbitrator
within thirty days thereafter. If the first two arbitrators are
unable to agree upon a third arbitrator within thirty days after the
second arbitrator is named, each arbitrator shall name three
candidates within ten days thereafter, two of whom shall be declined
by the other arbitrator within fifteen days after receiving their
names, and within the next five days the choice shall be made
between the two remaining candidates by drawing lots. The
arbitrators shall be impartial and shall be active or retired
officers of property or casualty insurance or reinsurance
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companies authorized to transact business in the United States of
America.
The Board of Arbitration shall have the power to fix all procedural
rules for the holding of the arbitration, including discretionary
power to make orders as to any matters which it may consider proper
in the circumstances of the case with regard to pleadings,
discovery, inspection of documents, examination of witnesses, and
any other matter whatsoever relating to the conduct of the
arbitration. The Board of Arbitration shall have the power to
receive and act upon such evidence, whether oral or written,
strictly admissible or not, as it shall in its discretion think fit.
It is expressly agreed that the jurisdiction of the arbitrators to
make or render any decision or award shall be Limited by the limits
of liability expressly set forth in this Agreement.
The decision of the majority of the arbitrators shall be in writing
and shall be final and binding upon the parties. If either of the
parties fails to comply with this decision, the other party may
apply for its enforcement to a court of competent jurisdiction in
which the party in default is domiciled, or has assets, or carries
on business.
Each party shall bear the cost of its own arbitrator and shall
jointly and equally bear with the other party the expense of the
third arbitrator. In the event both arbitrators are chosen by one
party, the fees of all arbitrators shall be equally divided between
the parties. The remaining costs of the arbitration proceeding
shall be allocated by the Board of Arbitration.
The arbitration shall be held at the times and places agreed upon by
the Board of Arbitration
ARTICLE 19 - INSOLVENCY
In the event of the insolvency of the COMPANY, claims or losses
arising under this Agreement shall be payable by the REINSURER
directly to the COMPANY or its liquidator, receiver or statutory
successor without diminution because of such insolvency, except as
otherwise specified in the statutes of any state having jurisdiction
of the insolvency proceedings or except where this Agreement
specifically provides another payee of such reinsurance in the event
of the insolvency of the COMPANY. The REINSURER shall be given
written notice of the pendency of each claim or loss which may
involve the reinsurance afforded by this Agreement within a
reasonable time after such claim or loss is filed in the insolvency
proceeding.
The REINSURER shall have the right to investigate each such claim or
loss and interpose, at its own expense, in the proceeding where the
claim or loss is to be adjudicated, any defense which it may deem
available to the COMPANY or its liquidator, receiver or statutory
successor. A proportionate share of 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 the benefit accruing to the COMPANY solely as a
result of the defense undertaken by the REINSURER.
ARTICLE 20 - DEFINITIONS
Net Loss
The term "net loss" shall mean the sum actually paid or to be paid
by the COMPANY in settlement of losses for which it is liable,
including prejudgment interest on such losses, after making
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deductions for all inuring reinsurance, whether collectible or not,
and all other recoveries, including salvage and subrogation
recoveries. Net loss shall include liability for loss adjustment expenses.
Net loss shall also include any Loss in Excess of Original Policy Limits
and any Extra Contractual Obligations in accordance with the
provisions of the Articles so entitled.
It is agreed, however, that the existence of underlying reinsurance,
if any, placed with the REINSURER, shall be entirely disregarded in arriving
at the COMPANY'S net loss.
Nothing in this definition shall imply that losses are not recoverable under
this Agreement until the COMPANY'S net loss has been finally ascertained.
Loss Adjustment Expenses
The term "loss adjustment expenses" shall mean court costs,
postjudgment interest, and allocated investigation, adjustment and
legal expenses, but shall not include office expenses and salaries
and expenses of employees and officials of the COMPANY.
Recoveries
The COMPANY shall pay to or credit the REINSURER with the
REINSURER'S portion of any recovery connected with a net loss
obtained from salvage, subrogation, or other insurance. Expenses of
the COMPANY in obtaining any such recovery shall be apportioned
between the COMPANY and the REINSURER in the proportion that the
benefit to each party from such recovery bears to the total amount
of the recovery.
Any such recoveries subsequent to any loss settlement hereunder
shall be applied as if received prior to the aforesaid loss
settlement and all necessary adjustments in such regard shall be
transacted accordingly.
The REINSURER shall be subrogated to the rights of the COMPANY to
the extent of its loss payments to the COMPANY. The COMPANY agrees
to enforce its right of salvage, subrogation, and its rights against
insurers.
Risk
The COMPANY shall establish what constitutes one risk and shall make
such determination based on the peril of fire, provided:
1. A building and its contents, including time element coverages,
shall never be considered more than one risk; and,
2. When two or more buildings and their contents, including time
element coverages, are situated at the same general location, the
COMPANY shall identify on its records at the time of acceptance
by the COMPANY those individual buildings and their contents,
including time element coverages, that are considered to
constitute each risk; if such identification is not made, each
building and its contents, including time element coverages,
shall be considered to be a separate risk.
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Building
The term "building" shall mean each separately roofed structure
enclosed within exterior walls.
Subject Earned Premium
The term "subject earned premium" shall mean the net earned premium
of the COMPANY in respect of business covered under this Agreement.
The term "net earned premium" shall mean the total of the net
written premium during the period under review, plus the pro rata
unearned premium at the close of the preceding period, less the pro
rata unearned premium at the close of the period under review; said
pro rata unearned premium to be calculated on the monthly pro rata
basis.
The term " net written premium" shall mean gross written premium in
respect of business covered under this Agreement, less return
premium, and less written premium ceded for reinsurance, recoveries
under which inure to the benefit of this Agreement.
Subject Written Premium
The term "subject written premium" shall mean the net written
premium of the COMPANY in respect of business covered under this Agreement.
The term "net written premiums" shall mean gross written premium in
respect of business covered under this Agreement, less return
premium, and less written premium ceded for reinsurance, recoveries
under which inure to the benefit of this Agreement.
Occurrence
As respects Casualty Business, the term "occurrence" shall mean each
accident or occurrence (as such terms may be defined in the
policy(ies) of the COMPANY), or series of such accidents or
occurrences arising out of one event, whether or not involving one
or more of the COMPANY'S policies.
The foregoing notwithstanding, Occupational Disease under Workers'
Compensation provisions shall be deemed to be an occurrence within
the meaning of this Agreement, and each case of an employee
contracting any disease by which the COMPANY may be held liable
shall be considered as constituting a separate and distinct
occurrence. A loss as respects each employee affected by the
disease shall be deemed to have been sustained by the COMPANY at the
date that compensable disability of the employee commenced and at no
other date.
Loss Occurrence
The term "loss occurrence" shall mean the sum of all individual
losses directly occasioned by any one disaster, accident or loss or
series of disasters, accidents or losses arising out of one event
which occurs within the area of one state of the United States of
America or province of Canada and states or provinces contiguous
thereto and to one another. However, the duration and extent of any
one loss occurrence shall be limited to all individual losses
sustained by the COMPANY during any 168 consecutive hours arising
out of and directly occasioned by the same event except that the
term loss
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occurrence shall be further defined as follows:
1. As regards windstorm, hail, tornado, hurricane, cyclone,
including ensuing collapse and water damage, all individual
losses sustained by the COMPANY occurring during any period of 72
consecutive hours arising out of and directly occasioned by the
same event. However, the event need not be limited to one state
or province or states or provinces contiguous thereto.
2. As regards riot, riot attending a strike, civil commotion,
vandalism and malicious mischief, all individual losses sustained
by the COMPANY occurring during any period of 72 consecutive
hours within the area of one municipality or county and the
municipalities or counties contiguous thereto. The maximum
duration of 72 consecutive hours may be extended in respect of
individual losses which occur beyond such 72 consecutive hours
during the continued occupation of an insured's premises by
strikers, provided such occupation commenced during the aforesaid
period.
3. As regards flood, all individual losses sustained by the COMPANY
in a territory forming one and the same river basin. The term
'river basin' means the basin of a river, including the basins of
all tributaries of such river, which flows directly into an
ocean, sound, bay or gulf or into one of the Great Lakes of North
America.
4. As regards earthquake (the epicenter of which need not
necessarily be within the territorial
confines referred to in the opening paragraph of this article)
and fire following directly occasioned by the earthquake, only
those individual fire losses which commence during the period of
168 consecutive hours may be included in the COMPANY'S loss
occurrence.
5. As regards freeze, only individual losses directly occasioned by
collapse, breakage of glass and
water damage (caused by bursting of frozen pipes and tanks) may
be included in the COMPANY'S loss occurrence.
Except for those loss occurrences referred to in 1. and 2. above,
the COMPANY may choose the date and time when any such period of
consecutive hours commences, provided that it is not earlier than
the date and time of the occurrence of the first recorded individual
loss sustained by the COMPANY arising out of that disaster, accident
or loss and provided that only one such period of 168 consecutive
hours shall apply with respect to one event.
However, as respects those loss occurrences referred to in 1. and 2.
above, if the disaster, accident or loss occasioned by the event is
of greater duration than 72 consecutive hours, then the COMPANY may
divide that disaster, accident or loss into two or more loss
occurrences provided no two periods overlap and no individual loss
is included in more than one such period and provided that no period
commences earlier than the date and time of the occurrence of the
first recorded individual loss sustained by the COMPANY arising out
of that disaster, accident or loss.
Loss resulting from a combination of two or more of the perils
reinsured under this Agreement at the same time and at the same
general location shall be treated as one loss and not as a separate
loss for each peril.
No individual loss occasioned by an event that would be covered by
72 hours clauses may be included in any loss occurrence claimed
under the 168 hours provision.
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Combination Loss
The term "Combination Loss' shall mean the accumulated COMPANY
retentions resulting from the same event involving a Property Per
Risk and a Casualty loss described in the Schedule of Reinsurance
appearing in EXHIBIT A. It is agreed, however, that not more than
one property risk shall be considered in such accumulation of
COMPANY Retentions.
Agreement Year
The first Agreement Year shall be from 12:01 a.m., Standard Time,
January 1, 1996, to 12:01 a.m., January 1, 1997 and thereafter each
Agreement Year shall consist of 12 months to begin concurrently with
the expiration of the previous Agreement Year.
ARTICLE 21 - RULING LAW
It is understood and agreed between the parties hereto that all the
terms and conditions of this Agreement shall be subject to the laws,
statutes, rules and regulations now or hereinafter in effect in the
State of Colorado. It is specifically understood and agreed that
any arbitration, in the event of the insolvency of the COMPANY,
shall also be subject to such laws. statutes. rules and regulations.
ARTICLE 22 - NOTICE TO REINSURANCE DEPARTMENT OF
EXHAUSTED COVERAGE
As respects any coverage hereunder whereby the total annual
liability of the REINSURER is limited by an "annual aggregate limit
of Liability" provision, the REINSURER, in accordance with Colorado
Regulation 3-3-2 Section VIII, D., shall give immediate notice to
the Colorado Insurance Commissioner when such coverage is no longer
available to the COMPANY, due to the exhaustion of such limit.
ARTICLE 23 - NON-COLORADO DOMICILED COMPANIES
It is understood and agreed between the parties hereto that any
reference(s) made to the State of Colorado, its Statutes or its
Department of Insurance shall be understood to be references to
Wisconsin, its Statutes or its Department of Insurance as respects
Viking Insurance Company of Wisconsin and references to California,
its Statutes or its Department of Insurance as respects Guaranty
National Insurance Company of California.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in Englewood, Colorado, in duplicate this fifth day of
June, 1996.
GUARANTY NATIONAL INSURANCE COMPANY
s/Roger Ware
ATTEST: s/Patricia T. Hemley
And in Stamford, Connecticut, this third day of June, 1996.
NATIONAL REINSURANCE CORPORATION
s/Don Worthley
ATTEST: s/E.H. Vieux
EXHIBIT A
FIRST MULTIPLE LINE EXCESS OF LOSS
REFERENCE NO. 3973-O5A
Attached to and Made a part of the
MULTIPLE LINE EXCESS OF LOSS
REINSURANCE AGREEMENT NO. 3973-05
SECTION I - LIABILITY OF THE REINSURER
The REINSURER shall be liable to the COMPANY for the amount of net
loss sustained by the COMPANY in excess of the COMPANY'S Retention,
but not exceeding the Limit of Liability of the REINSURER as
stipulated in the Schedule of Reinsurance.
SCHEDULE OF REINSURANCE
Class of Business COMPANY Limit of Liability
Retention of the REINSURER
Property $400,000 Each Risk $4,600,000
Each risk, subject to
a maximum of
$9,200,000 in any one
Loss Occurrence.
Casualty $400,000 Each $5,600,000
(including Umbrella) Occurrence Each Occurrence
Combination of above $400,000 Each $400,000 Each
Retentions Combination Loss Combination Loss
Property Catastrophe $500,000 Each $1,500,000 Each
(involving 2 or more Loss Occurrence Loss Occurrence
risks) not to exceed
$3,000,000 any
one Agreement
Year
Except as provided for in the definition of Net Loss or otherwise
agreed to, in writing, by the REINSURER, the COMPANY shall not
reinsure the COMPANY Retention indicated above but shall retain such
net for its own account.
Recoveries under the Property Per Risk coverage above shall inure to
the benefit of the Property Catastrophe Coverage.
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SECTION 2 - REINSURANCE PREMIUM
The COMPANY shall pay to the REINSURER an annual reinsurance
premium, calculated by applying to the subject written premium a
Gross Base Rate of II. 91 %. Thereafter the annual Gross Base Rate
shall be modified in accordance with the provisions of ADDENDUM B -
PROSPECTIVE BASE RATE ADJUSTMENT FORMULA.
As soon as practicable after the effective time and date of this
Agreement the COMPANY shall cede to the REINSURER 0.77 % of the
subject unearned premium with respect to business the subject matter
hereof already in force at the effective time and date hereof.
SECTION 3 - COMMISSION
The REINSURER shall allow the COMPANY a commission of 32.5 % on
premiums ceded under
this Exhibit.
Such commission allowance shall include provision for all
commissions, brokerages, taxes, board, exchange or bureau
assessments, and for all other expenses of whatever nature,
excepting loss adjustment expenses.
SECTION 4 - PREMIUM REPORTS AND REMITTANCES
Within 30 days after the end of each month (each quarter as
applicable) during the currency of this Exhibit, the COMPANY shall
report to the REINSURER the subject written premium (indicating the
subject earned portion thereof) for the month (quarter as
applicable) by line of business.
Within 45 days after the end of each quarter during the currency of
this Exhibit, the COMPANY shall remit to the REINSURER the net
earned portion of the reinsurance premium due for the quarter,
calculated as stipulated in the article entitled REINSURANCE
PREMIUM. The REINSURER shall assume the unearned premium reserve as
a liability on its books.
Notwithstanding the foregoing, the COMPANY shall hold, as Funds
Held, during the initial Agreement year S6,000,000, to be deducted
in two equal installments of S3,000,000, from the first and second
quarter remittances. At the beginning of each year thereafter, the
funds held amount shall be mutually agreed upon by the parties
hereto.
EXHIBIT B
CASUALTY CLASH/PROPERTY CATASTROPHE
EXCESS OF LOSS
REFERENCE NO. 3973-O5B
Attached to and Made a part of the
MULTIPLE LINE EXCESS OF LOSS
REINSURANCE AGREEMENT NO. 3973-05
SECTION I - LIABILITY OF THE REINSURER
The REINSURER shall be liable to the COMPANY for the amount of net
loss sustained by the COMPANY in excess of the COMPANY'S Retention,
but not exceeding the Limit of Liability of the REINSURER as
stipulated in the Schedule of Reinsurance.
SCHEDULE OF REINSURANCE
COMPANY Limit of Liability
Class of Business Retention of the
REINSURER
Casualty $6,000,000 $4,000,000
Each Occurrence Each Occurrence
Property Catastrophe $2,000,000 Each $4,000,000 Each
(involving 2 or more risks) Loss Occurrence Loss Occurrence
The REINSURER'S total annual aggregate Limit of Liability, as
respects the Catastrophe Coverage above shall not exceed $4,000,000
plus the amount of reinstatement the COMPANY may choose to purchase
in accordance with the provisions of the Section entitled
REINSTATEMENT. In no event, however, shall the total aggregate
Limit of Liability, as respects the Catastrophe Coverage, exceed
$8,000,000, unless additional reinstatements are mutually agreed
upon.
Recoveries under the Property Per Risk coverage in Exhibit A shall
inure to the benefit of the Property Catastrophe Coverage.
SECTION 2 - REINSURANCE PREMIUM
The COMPANY shall pay to the REINSURER an annual reinsurance
premium, calculated by applying to the subject written premium for
the annual period a rate of .42%.
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SECTION 3 - COMMISSION
The REINSURER shall allow the COMPANY a commission of 32.5 % on
premiums ceded under
this Exhibit.
Such commission allowance shall include provision for all
commissions, brokerages, taxes, board, exchange or bureau
assessments, and for all other expenses of whatever nature,
excepting loss adjustment expenses.
SECTION 4 - PREMIUM REPORTS AND REMITTANCES
Within 30 days after the end of each month (each quarter as
applicable) during the currency of this Exhibit, the COMPANY shall
report to the REINSURER the subject written premium (indicating the
subject earned portion thereof) for the month (quarter as
applicable) by line of business.
Within 45 days after the end of each quarter during the currency of
this Exhibit, the COMPANY shall remit to the REINSURER the net
earned portion of the reinsurance premium due for the quarter,
calculated as stipulated in the article entitled REINSURANCE
PREMIUM. The REINSURER shall assume the unearned premium reserve as
a Liability on its books.
SECTION 5 - REINSTATEMENT
In the event of any portion of the coverage under this Exhibit being
exhausted by loss, the COMPANY, at its option, shall have the amount
so exhausted reinstated for the balance of the term of this
Agreement. The COMPANY agrees to pay to the REINSURER an additional
premium calculated by applying to 100% of the annual reinsurance
premium (deemed to be $250,000) the fraction that the amount so
reinstated bears to the loss stated occurrence limit of liability
(i.e. $4,000,000). Nevertheless, the REINSURER'S liability
hereunder shall never be more than $4,000,000 as respects any one
loss occurrence, nor more than an aggregate of $8,000,000 for the
entire Agreement Year.
Reinstated limits shall not apply to any loss occurrence taking
place prior to the COMPANY giving
notice to the REINSURER of its decision to purchase such reinstated
amounts.
Further reinstatements may be negotiated at terms and conditions to
be mutually agreed upon.
ADDENDUM A - EXCLUSIONS
This Agreement does not apply to:
1 Reinsurance assumed by the COMPANY, excepting reinsurance of
primary business assumed from affiliated companies;
2. Any loss or damage which is occasioned by war, invasion,
hostilities, acts of foreign enemies, civil war, rebellion,
insurrection, military or usurped power, or martial law, or
confiscation by order of any government or public authority,
but not excluding loss or damage which would be covered under a
standard form of policy containing a standard war exclusion
clause;
3. Policies covering liability of any insurer or reinsurer for
alleged misconduct in the handling of claims or in any of its
dealing with policyholders;
4. Any loss or liability beyond statutory limits accruing to the
COMPANY directly or indirectly from any insurance written by or
through any pool, association, or syndicate, including pools,
associations, or syndicates in which membership by the COMPANY
is required under any statute or regulation, except as provided
in the final paragraph of this Addendum.
5. Any liability of the COMPANY arising from its participation or
membership, whether voluntary or involuntary, in any insolvency
fund.
6. Nuclear Incident as provided in the Nuclear Incident Exclusion
Clauses - Liability Reinsurance and Physical Damage -
Reinsurance, which are attached to and made a part of this
Agreement;
7. Business written on a co-indemnity basis not controlled by the
COMPANY;
8. Fidelity, surety, mortgage impairment, boiler and machinery,
credit and financial guarantee business;
9. Automobile liability insurance including garage liability
relating to the ownership, maintenance, or use of:
a. Vehicles in speed contests or races;
b Vehicles used for the transportation of any explosive
substance (Note: An explosive substance is defined as any
substance manufactured for the express purpose of
exploding as differentiated from other commodities used
industrially which are fortuitously explosive such as
gasoline, celluloid, fuel gases, and dyestuffs);
10. Liability other than automobile insurance relating to risks
involving:
a. Production of motion picture;
b. Tunnel operations;
c. Subway construction or contractors principally engaged in
tunneling over fifty (50) feet;
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d. Marine wrecking;
e. Offshore or subaqueous operations (gas or oil);
f. Airports or flight operations, not including hot air
balloon operations; and aircraft, except for industrial
aid aircraft that have the following minimum primary
limits: fixed wing aircraft - $1,000,000 per seat or
rotary powered aircraft - $5,000,000 per seat;
g. Malpractice or professional liability and/or errors and
omissions insurance for hospitals (except out-patient
clinics), medical doctors, engineers, and real estate
agents;
h. Advertisers, broadcasters and telecasters liability,
except with respect to coverage afforded by a broad form
general liability endorsement attached to a general
liability policy;
i. Products and completed operations as respects the
manufacture, assembly, sale, handling, or distribution of
aircraft, critical aircraft parts, spacecraft or
spacecraft components;
j. Products recall insurance;
11. Workers' Compensation and Employers Liability Business, except
for Employers Liability written as part of a Commercial
Umbrella Policy;
12. The following kinds of insurance and risks classified by the
COMPANY as Property Business:
a. Insurance against flood or earthquake, when written as
such;
b. Insurance on growing or standing crops, but not including
standing timber;
c. Risks having a total insurable value of more than
$50,000,000;
d. Any collection of fine arts with an insurable value of
$5,000,000 or more;
e. All bridges and tunnels;
f. Mobile homes;
g. All offshore property risks;
h. Railroad property;
i. Ocean marine;
j. Aviation;
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k. Inland Marine business with respect to the following:
1. Cargo insurance, when written as such, with respect
to ocean, lake, or inland waterway vessels;
2. Commercial negative film insurance and cast
insurance;
3. Drilling rigs;
4. Mining equipment while underground;
5. Radio and television broadcasting towers;
6. Registered mail and armored car insurance; and,
1. Petrochemical risks;
13. In addition to the above the following business is also
excluded as respects per risk property coverage and per
occurrence casualty coverage:
a. Western Re/North Shore property;
b. Collateral protection business;
c. Warranty business;
d. Facultative;
e. Vikco Automobile Physical Damage Program business;
f. Food Borne Illness Program business;
g. Insurance Network Services Automobile Physical Damage
Program; and,
14. All business identified as Med James Personal Automobile
Program Business.
The exclusions set forth in paragraph 10. above shall not apply when
the exposure subject to such exclusion is only incidental to the
major operation of the risk.
The exclusions set forth in paragraph 9. shall not apply where the
COMPANY is obligated to provide coverage by reason of membership in any
Automobile Insurance Plan or Facility.
ADDENDUM B
PROSPECTIVE RATING PLAN SCHEDULE AND CONDITIONS
a. The rate set forth in SECTION 2 - REINSURANCE PREMIUM appearing
in EXHIBIT A, shall be deemed the BASE RATE.
b. The BASE RATE for each year thereafter shall be determined as
soon as practicable after September 30, 1995, (and each
September 30 thereafter), by applying an Exposure Factor to the
then existing BASE RATE.
c. The Exposure Factor shall represent the change in the Exposure
Rate from the previous year. To arrive at these factors, the
COMPANY and REINSURER shall agree to increased limit factors and
limits profiles to be used.
d. An Experience Factor shall be applied to the above revised BASE
RATE to arrive at the FINAL RATE to be charged for the
subsequent year, subject to a maximum annual increase/decrease
in the BASE RATE of 1.79 (gross) points. It is further agreed
that the BASE RATE increase/decrease for the period from January
1, 1998 through December 31, 1998 shall not exceed 10.0% of the
expiring BASE RATE.
e. The Experience Factor shall be determined from the following
schedules:
As of September 30, 1995, and each year thereafter:
Ultimate Loss Ratio(%) Experience Factor
Less than 77.5 .80
77.5 - 82.4 .85
82.5 - 87.4 .90
87.5 - 92.4 .95
92.5 - 97.4 1.00
97.5 - 102.4 1.05
102.5 - 107.4 1.10
07.5 - 112.4 1.15
Greater than 112.4 1.20
f. The Ultimate Loss Ratio shall be determined as follows:
THE SUM OF:
(1) The actual experience (inclusive of REINSURER'S Factored and
Additional Case Reserves) of the Agreement, consisting of
that portion of loss falling within a range of $700,000
excess of $300,000 each and every occurrence, from the
inception of this Agreement to December 31, 1995, plus that
portion of loss falling within a range of $600,000 excess of
S400,000 each and every occurrence, from January 1, 1996 to
the last day of the year just ended divided by the
appropriate IBNR and development factors, indicated below,
as applicable to each time period.
PLUS,
(2) 106% of the actual experience (inclusive of REINSURER'S
Additional Case
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Reserves), consisting of that portion of loss in excess of
$1,000,000 each and every occurrence, from the inception of
this Agreement to the last day of the year just ended.
DIVIDED BY:
The REINSURER'S total earned premiums for the period from the
inception of this Agreement to the last day of the year just ended.
g. The above developed rates are net and shall be grossed up for a
commission allowance of 32.5%.
h. IBNR and Development Factors in accordance with the following:
IBNR/DEVELOPMENT FACTOR SCHEDULE
Time Lapse from Inception
of Agreement (in months) Factor
21 .38
33 .47
45 .53
57 .63
69 .73
81 .80
93 .83
105 .86
117 .90
NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE
(1) This reinsurance does not cover any loss or liability
accruing to the COMPANY, directly or indirectly, and whether as
Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed
for the purpose of covering Atomic or Nuclear Energy risks.
(2) Without in any way restricting the operation of paragraph
(1) of this Clause, this reinsurance does not cover any loss or
liability accruing to the COMPANY, directly or indirectly and
whether as Insurer or Reinsurer, from any insurance against Physical
Damage (including business interruption or consequential loss
arising out of such Physical Damage) to:
(a) Nuclear reactor power plants including all auxiliary
property on the site, or
(b) Any other nuclear reactor installation, including
laboratories handling radioactive materials in
connection with reactor installation, and "critical
facilities" as such, or
(c) Installation for fabricating complete fuel elements
or for processing substantial quantities of "special
nuclear material", and for reprocessing, salvaging,
chemically separating, storing or disposing of
"spent' nuclear fuel or waste materials, or
(d) Installations other than those listed in paragraph
(2) (c) above using substantial quantities of
radioactive isotopes or other products of nuclear
fission.
(3) Without in any way restricting the operations of
paragraphs (1) and (2) hereof, this reinsurance does not cover any
loss or liability by radioactive contamination accruing to the
COMPANY, directly or indirectly, and whether as Insurer or
Reinsurer, from any insurance on property which is on the same site
as a nuclear reactor power plant or other nuclear installation and
which normally would be insured therewith except that this paragraph
(3) shall not operate
(a) where COMPANY does not have knowledge of such nuclear
reactor power plant or nuclear installation, or
(b) where said insurance contains a provision excluding
coverage for damage to property caused by or
resulting from radioactive contamination, however
caused. However, on and after January 1, 1960 this
subparagraph (b) shall only apply provided the said
radioactive contamination exclusion provision has
been approved by the Governmental Authority having
jurisdiction thereof.
-2-
(4) Without in any way restricting the operations of
paragraphs (1), (2) and (3) hereof, this reinsurance does not cover
any loss or Liability by radioactive contamination accruing to the
COMPANY, directly or indirectly, and whether as Insurer or
Reinsurer, when such radioactive contamination is a named hazard
specifically insured against.
(5) It is understood and agreed that this Clause shall not
extend to risks using radioactive isotopes in any form where the
nuclear exposure is not considered by the COMPANY to be the primary
hazard.
(6) The term "special nuclear material' shall have the meaning
given it in the Atomic Energy Act of 1954, or by any law amendatory
thereof.
(7) COMPANY to be sole judge of what constitutes:
(a) substantial quantities, and
(b) the extent of installation, plant or site.
NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY - REINSURANCE
(1) This reinsurance 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 understood and agreed that for all
purposes of this reinsurance all the original policies of the
COMPANY (new, renewal and replacement) of the classes specified in
Clause II of 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 Liability
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
(a) become effective on or after May 1, 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 COMPANY 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 arty 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 COMPANY (new, renewal and replacement)
affording the following coverages:
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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 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; or
(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 bodily injury
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
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(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.
IV. As used in this endorsement:
"hazardous properties" include radioactive, toxic or
explosive properties; "nuclear material" means source
material, special nuclear material or by-product material;
"source material", "special nuclear material", and "by-
product 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 by-product material other than the
tailings or wastes produced by the extraction or
concentration of uranium or thorium from any ore processed
primarily 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,
-4-
(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
critical mass of fissionable material;
(with respect to injury to or destruction of property. the
(word 'injury' or 'destruction'
("property damage" includes all forms of radioactive
(contamination of property.
(includes all forms of radioactive contamination
(of property.
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 May 1. 1960, provided this
paragraph (3) shall not be applicable to
(a) Garage and Automobile Policies issued by the COMPANY on
New York risks, or
(b) 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 operation 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 COMPANY 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 underlined 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.