EXHIBIT 10.4
PHILADELPHIA INSURANCE COMPANY
BALA CYNWYD, PENNSYLVANIA
PHILADELPHIA INDEMNITY INSURANCE COMPANY
BALA CYNWYD, PENNSYLVANIA
PROPERTY FOURTH PER RISK EXCESS OF LOSS
REINSURANCE AGREEMENT
TABLE OF CONTENTS
ARTICLE PAGE
- ------- ----
I BUSINESS COVERED (WBUS5) 1
II TERM 1
III SPECIAL TERMINATION 2
IV DEFINITIONS 4
Building 4
Declaratory Judgment Expense (WDEF305) 4
Extra Contractual Obligations/Loss in Excess of Policy Limits
(WDEF104) 4
Loss Adjustment Expense (WDEF307) 5
Loss Occurrence (NMA 2244/BRMA 27A) 5
Net Earned Premium 6
Policy or Policies 6
Risk 7
Terrorism 7
Ultimate Net Loss 8
V TERRITORY (BRMA 51A) 8
VI EXCLUSIONS 8
VII COVERAGE 10
VIII REINSTATEMENT 11
IX REINSURANCE PREMIUM 11
X NOTICE OF LOSS AND LOSS SETTLEMENTS 12
XI AGENCY AGREEMENT (WAGE1) 12
XII SALVAGE AND SUBROGATION (WSAL1) 13
XIII ERRORS AND OMISSIONS (BRMA 14C) 13
XIV OFFSET 13
XV CURRENCY (BRMA 12A) 13
XVI TAXES (BRMA 50C) 14
XVII FEDERAL EXCISE TAX (BRMA 17A) 14
XVIII UNAUTHORIZED REINSURANCE (BRMA 55C) 14
XIX NET RETAINED LINES (BRMA 32E) 16
XX TRIA INUREMENT 16
XXI SPECIAL ACCEPTANCES 17
XXII MORTGAGEE REINSURANCE ENDORSEMENTS 17
XXIII THIRD PARTY RIGHTS (BRMA 52C MODIFIED) 18
XXIV SEVERABILITY (WSEV1) 18
XXV GOVERNING LAW (BRMA 71A) 18
XXVI ACCESS TO RECORDS (BRMA 1E) 19
XXVII INSOLVENCY 19
XXVIII ARBITRATION (WARB1) 20
XXIX SERVICE OF SUIT (WSOS4) 21
XXX MODE OF EXECUTION (WMOE1) 22
XXXI INTERMEDIARY (WINT8) 23
Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance
- U.S.A.
War Exclusion
PROPERTY FOURTH PER RISK EXCESS OF LOSS
REINSURANCE AGREEMENT
(the "Contract")
between
PHILADELPHIA INSURANCE COMPANY
PHILADELPHIA INDEMNITY INSURANCE COMPANY
BALA CYNWYD, PENNSYLVANIA
And any additional company established or acquired by the Company
(the "Company")
and
THE SUBSCRIBING REINSURER(S) EXECUTING THE
INTERESTS AND LIABILITIES AGREEMENT(S)
ATTACHED HERETO
(the "Reinsurer")
ARTICLE I
BUSINESS COVERED (WBUS5)
By this Contract the Reinsurer agrees to reinsure the excess liability of the
Company under its Policies in force at the effective time and date hereof or
issued or renewed at or after that time and date, and classified by the Company
as Property business which is defined as insurance which is classified in the
NAIC Annual Statement as fire, allied lines, inland marine, commercial multiple
peril (property coverages), automobile physical damage (comprehensive and
collision) when written on a garage or open lot basis, and insurance that is
classified by the Company as crime and fidelity (property coverages) when
written as part of a package policy, subject to the terms, conditions and
limitations hereafter set forth.
ARTICLE II
TERM
A. This Contract shall become effective at 12:01 a.m., Eastern Standard Time,
January 1, 2007 as respects losses occurring at or after that time and
date, and shall continue in effect until 12:01 a.m., Eastern Standard Time,
January 1, 2008.
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B. Upon termination of this Contract, the entire liability of the Reinsurer
for losses occurring subsequent to the date of termination shall cease
concurrently with the date of termination of this Contract.
C. Notwithstanding the above, the Company shall have the option to elect
run-off coverage for Policies in force at the expiration of this Contract.
If the Company chooses to run off liability, the Company will notify the
Reinsurer prior to January 31, 2008. If run-off of liability is chosen, the
Reinsurer shall continue to be liable for Ultimate Net Loss incurred by the
Company under all Policies in force at the time and date of expiration
until each Policy's next anniversary, renewal or expiration, but in no
event shall the Reinsurer's liability continue for more than 12 months
after the expiration date plus odd time, not to exceed a total of 18
months. The premium for the run-off coverage shall be the premium rate
stated in paragraph A of the REINSURANCE PREMIUM ARTICLE times its Net
Earned Premium for the run-off period for the Policies in force as of
December 31, 2007.
D. If this Contract expires while a Loss Occurrence covered hereunder is in
progress, the Reinsurer's liability hereunder shall, subject to the other
terms and conditions of this Contract, be determined as if the entire Loss
Occurrence had occurred prior to the expiration of this Contract, provided
that no part of such Loss Occurrence is claimed against any renewal or
replacement of this Contract.
ARTICLE III
SPECIAL TERMINATION
A. The Company may terminate this Contract at any time by the giving of 10
days' notice in writing to the Reinsurer upon the happening of any one of
the following circumstances:
1. A State Insurance Department or other legal authority orders the
Reinsurer to cease writing business; or
2. The Reinsurer has become insolvent or has been placed into liquidation
or receivership (whether voluntary or involuntary), or there has been
instituted against it proceedings for the appointment of a receiver,
liquidator, rehabilitator, conservator, trustee in bankruptcy or other
agent known by whatever name, to take possession of its assets or
control of its operations; or
3. The Reinsurer's policyholders' surplus has been reduced by whichever
is greater, either 25% of the amount of surplus at the inception of
this Contract or 25% of the amount at the latest anniversary, or has
lost any part of, or has reduced its paid in capital; or
4. The Reinsurer has become merged with, acquired or controlled by any
company, corporation or individual(s) not controlling the party's
operations at the inception of this Contract; or
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5. The Reinsurer has reinsured its entire liability under this Contract
without the terminating party's prior written consent; or
6. The Reinsurer ceases writing new or renewal business.
7. The Reinsurer has been assigned an A.M. Best's rating of less than
"A-" or a Standard & Poor's Insurer Financial Strength Rating of less
than "A-".
B. Notwithstanding any other termination provision of this Contract, if this
Contract is terminated under the provisions of this Article, the Company
shall have the right to terminate liability for losses occurring subsequent
to termination of this Contract. In such event, the Reinsurer shall return
the unearned portion, if any, less any commission allowed thereon, of
premiums paid hereunder and the minimum premium provisions, if any, shall
be waived.
C. Additionally, the Company, at its sole discretion, may elect to commute the
Reinsurer's liabilities for loss and Loss Adjustment Expenses, whether
known and unknown, on Policies covered under this Contract. In the event
the Company and the Reinsurer cannot agree on the capitalized value of the
Reinsurer's liabilities on the Policies covered under this Contract, the
two parties shall mutually appoint an actuary to resolve the matter of
valuation. If the two parties cannot agree on the appointment of an
actuary, a selection process based on the ARBITRATION ARTICLE will be
employed. Payment by the Reinsurer of the amount ascertained will
constitute full and final release of the Reinsurer's liabilities hereunder.
D. The Company may request special funding for any Reinsurer's participation
if this Contract is terminated for reasons set forth in subparagraph A.1-7
above. If the Company elects to exercise its special funding option, said
Reinsurer will, within 30 calendar days of the date of the Company's
request to do so, provide the Company with a cash advance, trust agreement,
escrow account for the benefit of the Company, letter of credit, or a
combination thereof acceptable to the Company to fund the Reinsurer's share
of the reserves hereunder for losses (including loss and loss expense paid
by the Company but not recovered from the Reinsurer, loss and loss expense
reported and outstanding, loss and loss expenses incurred but not reported)
and unearned premium, as if it were an unauthorized Reinsurer and subject
to the UNAUTHORIZED REINSURANCE ARTICLE. This paragraph D shall not apply
to Reinsurers who, at the inception of this Contract, have been assigned an
A.M. Best's Financial Strength Rating of A+ or higher or a Standard &
Poor's rating of A+ or higher or to Underwriting Members of Lloyd's,
London.
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ARTICLE IV
DEFINITIONS
A. Building
"Building" as used herein shall mean such structure enclosed within
exterior walls. Exterior walls are defined as walls constructed on the
perimeter foundation, regardless of the number of additional structures or
roofs placed upon this perimeter foundation.
B. Declaratory Judgment Expense (WDEF305)
"Declaratory Judgment Expense" as used herein shall mean all expenses
incurred by the Company in connection with a declaratory judgment action
brought to determine the Company's defense and/or indemnification
obligations that are allocable to a specific claim subject to this
Contract. Declaratory Judgment Expense shall be deemed to have been
incurred on the date of the original loss (if any) giving rise to the
declaratory judgment action.
C. Extra Contractual Obligations/Loss in Excess of Policy Limits (WDEF104)
1. Extra Contractual Obligations
This Contract shall protect the Company for any "Extra Contractual
Obligations" which as used herein shall mean any punitive, exemplary,
compensatory or consequential damages, other than Loss in Excess of
Policy Limits, paid or payable by the Company as a result of an action
against it by its insured, its insured's assignee or a third party
claimant, by reason of alleged or actual negligence, fraud or bad
faith on the part of the Company in handling a claim under a Policy
subject to this Contract.
An Extra Contractual Obligation shall be deemed to have occurred on
the same date as the loss covered or alleged to be covered under the
Policy.
2. Loss in Excess of Policy Limits
This Contract shall protect the Company for any "Loss in Excess of
Policy Limits" which as used herein shall mean an amount that the
Company would have been contractually liable to pay had it not been
for the limit of the original Policy as a result of an action against
it by its insured or its insured's assignee or a third party claimant.
Such loss in excess of the limit shall have been incurred because of
failure by the Company to settle within the Policy limit, or by reason
of alleged or actual negligence, fraud, or bad faith in rejecting an
offer of settlement or in the preparation of the defense or in the
trial of any action against its insured or in the preparation or
prosecution of an appeal consequent upon such action.
3. This paragraph C shall not apply where an Extra Contractual Obligation
and/or Loss in Excess of Policy Limits has been incurred due to the
fraud committed by a member
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of the Board of Directors or a corporate officer of the Company acting
individually or collectively or in collusion with a member of the
Board of Directors or a corporate officer or a partner of any other
corporation or partnership.
4. Recoveries from any form of insurance or reinsurance which protects
the Company against claims which are the subject matter of this
paragraph C shall inure to the benefit of this Contract.
D. Loss Adjustment Expense (WDEF307)
"Loss Adjustment Expense" as used herein shall mean all costs and expenses
allocable to a specific claim that are incurred by the Company in the
investigation, appraisal, adjustment, settlement, litigation, defense or
appeal of a specific claim, including court costs and costs of supersedeas
and appeal bonds, and including 1) pre-judgment interest, unless included
as part of the award or judgment; 2) post-judgment interest; 3) legal
expenses and costs incurred in connection with coverage questions and legal
actions connected thereto, including Declaratory Judgment Expense; and 4) a
pro rata share of salaries and expenses of Company field employees, and
expenses of other Company employees who have been temporarily diverted from
their normal and customary duties and assigned to the field adjustment of
losses covered by this Contract. Loss Adjustment Expense does not include
unallocated loss adjustment expense. Unallocated loss adjustment expense
includes, but is not limited to, salaries and expenses of employees, other
than (4) above, and office and other overhead expenses.
E. Loss Occurrence (NMA 2244/BRMA 27A)
1. 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 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 occurring
during any period of 168 consecutive hours arising out of and directly
occasioned by the same event except that the term "Loss Occurrence"
shall be further defined as follows:
a. 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.
b. 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 arising out of and
directly occasioned by the same event. The maximum duration of 72
consecutive hours may be extended in respect of individual losses
which
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occur beyond such 72 consecutive hours during the continued
occupation of an assured's premises by strikers, provided such
occupation commenced during the aforesaid period.
c. As regards earthquake (the epicenter of which need not
necessarily be within the territorial confines referred to in the
introductory portion of subparagraph 1) 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."
d. 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."
2. Except for those "Loss Occurrences" referred to in subparagraphs a and
b 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.
3. However, as respects those "Loss Occurrences" referred to in
subparagraphs a and b 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.
4. No individual losses 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.
F. Net Earned Premium
"Net Earned Premium" as used herein is defined as gross earned premium of
the Company during the term of the Contract for the classes of business
reinsured hereunder, less the earned portion of premiums ceded by the
Company for reinsurance which inures to the benefit of this Contract.
G. Policy or Policies
"Policy" or "Policies" as used herein shall mean the Company's binders,
policies and contracts providing insurance and reinsurance on the classes
of business covered under this Contract.
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H. Risk
"Risk" as used herein shall mean what constitutes one Risk as established
by the Company at the time of acceptance, provided:
1. A building and its contents, regardless of the number of insureds or
Policies involved, including time element coverages, shall never be
considered more than one Risk.
2. When two or more Buildings and their contents 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 that are considered to constitute each Risk; if such
identification is not made, all of the Buildings and their contents
situated at the same general location shall be considered one Risk.
3. When there are known and named extensions of coverage involving other
risk locations (including but not limited to suppliers extensions,
customer extensions and interdependencies and whether triggered by
physical loss at the risk location or another location) that are
included and formally recorded on the Company's records at the time of
acceptance of the Risk, all such known and named extensions of
coverage shall be included in calculation of the one Risk.
I. Terrorism
"Terrorism" as used herein shall mean:
1. An activity, including the threat of an activity or any preparation
for an activity, that (a) causes either (i) damage to property or (ii)
injury to persons and (b) appears to be intended to: (i) intimidate or
coerce a civilian population or (ii) disrupt any segment of an economy
or (iii) influence the policy of a government by intimidation or
coercion or (iv) affect the conduct of a government by destruction,
assassination, kidnapping or hostage-taking or (v) advance a
political, religious or ideological cause; provided, however, that an
act of Terrorism for purposes of this definition shall not include any
act or threat as described above perpetrated by an official, employee
or agent of a foreign state acting for or on behalf of such state.
2. Any act authorized by a governmental authority for the purpose of
preventing, terminating, countering or responding to any act or threat
of terrorism or for the purpose of preventing or minimizing the
consequences of any act or threat of Terrorism.
3. An activity that involves the use, release or escape of nuclear
materials, or directly or indirectly results in nuclear reaction or
radiation or radioactive contamination, and it appears that one
purpose of the terrorism was to release such materials.
4. An activity that is carried out by means of the dispersal or
application of pathogenic or poisonous biological or chemical
materials or an activity where pathogenic or poisonous biological or
chemical materials are released, and it appears that one purpose of
the terrorism was to release such materials.
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J. Ultimate Net Loss
The term "Ultimate Net Loss" shall mean the actual loss, including any
pre-judgment interest which is included as part of the award or judgment,
Loss Adjustment Expense, 100% of Loss in Excess of Policy Limits, and 100%
of Extra Contractual Obligations, paid or to be paid by the Company on its
net retained liability after making deductions for all recoveries,
salvages, subrogations and all claims on inuring reinsurance, whether
collectible or not; provided, however, that in the event of the insolvency
of the Company, payment by the Reinsurer shall be made in accordance with
the provisions of the INSOLVENCY ARTICLE. Nothing herein shall be construed
to mean that losses under this Contract are not recoverable until the
Company's Ultimate Net Loss has been ascertained.
ARTICLE V
TERRITORY (BRMA 51A)
The territorial limits of this Contract shall be identical with those of the
Company's Policies.
ARTICLE VI
EXCLUSIONS
This Contract shall not apply to and specifically excludes the following:
A. Reinsurance assumed by the Company other than reinsurance of primary
business assumed from affiliated companies;
B. Nuclear incident per the Nuclear Incident Exclusion Clause - Physical
Damage - Reinsurance attached hereto;
C. Self-insurance or self-insured obligations, howsoever styled, of the
Company, its affiliates or subsidiaries, or any insurance wherein the
Company, its affiliates or subsidiaries are named as the insured party,
either alone or jointly with some other party, notwithstanding that no
legal liability may arise in respect thereof by reason of the fact that the
Company, its affiliates or subsidiaries, may not be obligated by law to pay
a claim to itself, its affiliates or subsidiaries;
D. Any loss or liability accruing to the Company directly or indirectly from
any insurance written by or through any pool or association including pools
or associations in which membership by the Company is required under any
statutes or regulations;
E. Any liability of the Company arising from its participation or membership
in any insolvency fund;
F. War per the attached "War Exclusion" attached hereto;
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G. Risks written on a layered basis, whether primary or excess of loss, or
policies written with a deductible or franchise of more than $500,000;
however, this exclusion shall not apply to policies which provide a
percentage deductible or franchise in connection with windstorm, earthquake
or flood;
H. Pollution to the extent excluded in the Company's policies. Nevertheless,
if the insured elects to purchase any "buy back" or additional coverage
options, such options shall not be covered hereunder; however, this
exclusion shall not apply:
1. When a judicial entity having legal jurisdiction invalidates the
Company's Pollution exclusion, thereby obligating the Company for
liability when such liability for Pollution was intended to be
excluded by the Company's exclusion.
2. In respect of any Policy written in a state whose insurance regulatory
authorities have prohibited the Company from including a Pollution
liability exclusion in its Policies.
I. Insurance against earthquake, except when written in conjunction with fire
and otherwise eligible perils;
J. Insurance on growing crops;
K. Insurance against flood, waves, tidal waves, overflow of any body of water,
or their spray, all whether driven by wind or not, except when written in
conjunction with fire and otherwise eligible perils;
L. Business classified as fidelity, however this exclusion shall not apply to
crime and fidelity with limits no greater than $2,000,000 when written as
part of a package policy;
M. Credit insurance;
N. Business classified as boiler and machinery;
O. Mortgage impairment insurance and similar kinds of insurance, howsoever
styled, providing coverage to an insured with respect to its mortgagee
interest in property or its owner interest in foreclosed property;
P. Difference in conditions insurance and similar kinds of insurance,
howsoever styled;
Q. Any incident that involves the use, release or escape of pathogenic or
poisonous biological or chemical materials or of nuclear materials, or to
any incident that directly or indirectly results in nuclear reaction or
radiation or radioactive contamination. However, this exclusion does not
apply to the Terrorism Annual Aggregate Limit for the excess layer as
stated in paragraph B of the COVERAGE ARTICLE.
R. Losses with respect to overhead transmission and distribution lines and
their supporting structures, other than those on or within 1,000 feet of
the insured premises. However, public utilities extension and/or suppliers'
extension and/or contingent business
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interruption coverage are not subject to this exclusion, provided these are
not part of a transmitters' or distributors' policy.
S. Offshore property Risks;
T. Inland marine business with respect to the following:
1. Cargo insurance when written as such with respect to ocean vessels;
2. Faulty Film, tape, processing and editing insurance and cast
insurance;
3. Drilling rigs for natural fuels;
4. Furriers' customers policies;
5. Insurance on livestock under so-called "mortality policies";
6. Mining equipment while underground;
7. Registered mail and armored car insurance;
U. Loss of, damage to, or failure of, or consequential loss resulting
therewith (including but not limited to earnings and extra expense) of
satellites, spacecraft, and launch vehicles, including cargo and freight
carried therein, in all phases of operation (including but not limited to
pre-launch, launch, and in-orbit).
V. Mobile homes unless written as part of a commercial multiple peril policy.
W. Watercraft, other than watercraft insured under a standard homeowners
policy or when written as part of contents coverage under a commercial
multiple peril policy.
If the Company is bound without knowledge of or contrary to the instructions of
the Company's supervisory underwriting personnel, or any business falling within
the scope of one or more of the exclusions set forth in this section, these
exclusions, except A, B, C, D, E, F, H, J, L, M, O, shall suspend with respect
to such business until 60 days after an underwriting supervisor of the Company
acquires knowledge of such business.
Should any judicial or regulatory entity having jurisdiction invalidate any
exclusion in the Company's Policy that is also the subject of one or more of the
exclusions herein, then a loss for which the Company is liable because of such
invalidation shall not be excluded hereunder.
ARTICLE VII
COVERAGE
A. The Reinsurer shall be liable for the amount of Ultimate Net Loss in excess
of the Company's retention, being $15,000,000 each risk, each loss, subject
to a limit of liability to the Reinsurer of $35,000,000 each risk, each
loss, and further subject to a limit of
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liability to the Reinsurer of $35,000,000 each Loss Occurrence. The
Reinsurer's limit of liability in respect to all risks, all losses shall
not exceed $70,000,000.
B. The Reinsurer's liability in respect to Terrorism losses shall not exceed
$35,000,000.
C. The Company shall maintain in force other reinsurance, recoveries under
which shall inure to the benefit of this Contract.
D. The Company shall be permitted to carry underlying reinsurance, recoveries
under which shall inure solely to the benefit of the Company and be
entirely disregarded in applying all of the provisions of this Contract.
ARTICLE VIII
REINSTATEMENT
A. Should all or any part of the Reinsurer's limit of liability be exhausted
as a result of a loss, the sum so exhausted shall be reinstated from the
date the loss commenced.
B. For each amount so reinstated, the Company agrees to pay an additional
premium at the time of the Reinsurer's payment of the loss calculated in
accordance with the following formula:
1. The amount of limit exhausted for each risk, each loss divided by
$35,000,000.
2. The reinsurance premium paid or payable for the term of this Contract.
The dollar amount resulting from the multiplication of subparagraphs 1 and
2 above shall equal the reinstatement premium. If at the time of the
Reinsurer's payment of a loss hereon, the reinsurance premium as calculated
under this Contract is unknown, the calculation of the reinstatement
premium shall be based upon the deposit premium subject to adjustment when
the reinsurance premium is finally established.
C. Nevertheless, the Reinsurer's liability hereunder shall not exceed
$35,000,000 in respect of each risk, each loss in respect of any one loss,
and shall be further limited to $35,000,000 each Loss Occurrence, and shall
be further limited to $70,000,000 in respect of all risks, all losses
occurring during the term of this Contract.
ARTICLE IX
REINSURANCE PREMIUM
A. As premium for the reinsurance provided hereunder, the Company shall pay
the Reinsurer 0.635% of its Net Earned Premium during the term of this
Contract, subject to a minimum premium of $2,362,500.
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B. The Company shall pay the Reinsurer a deposit premium of $2,625,000 in four
equal installments of $656,250 on April 1; July 1; October 1, 2007; and
January 1, 2008.
C. Within 90 days after the expiration of this Contract, the Company shall
provide a report to the Reinsurer setting forth the premium due hereunder,
computed in accordance with paragraph A, and any additional premium due the
Reinsurer or return premium due the Company shall be remitted promptly.
ARTICLE X
NOTICE OF LOSS AND LOSS SETTLEMENTS
A. The Company shall advise the Reinsurer promptly of all losses which, in the
opinion of the Company, may result in a claim hereunder and of all
subsequent developments thereto which, in the opinion of the Company, may
materially affect the position of the Reinsurer.
B. When so requested in writing, the Company shall afford the Reinsurer or its
representatives an opportunity to be associated with the Company, at the
expense of the Reinsurer, in the defense of any claim, suit or proceeding
involving this reinsurance, and the Company and the Reinsurer shall
cooperate in every respect in the defense of such claim, suit or
proceeding.
C. All loss settlements made by the Company that are within the terms and
conditions of the Policy or by way of compromise, and except as otherwise
provided in this Contract, shall be binding upon the Reinsurer. Upon
receipt of satisfactory proof of loss and within no more than 25 days of
receipt of the proof of loss, the Reinsurer agrees to pay or allow, as the
case may be, its share of each such settlement in accordance with this
Contract.
D. Ex-gratia payments shall be recoverable hereunder only where the Company,
through written communication prior to settlement, counsels with the
Reinsurer and the Reinsurer concurs, in writing, with the settlement
proposed by the Company.
ARTICLE XI
AGENCY AGREEMENT (WAGE1)
If more than one reinsured company is named as a party to this Contract, the
first named company will be deemed the agent of the other reinsured companies
for purposes of sending or receiving notices required by the terms and
conditions of this Contract and for purposes of remitting or receiving any
monies due any party.
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ARTICLE XII
SALVAGE AND SUBROGATION (WSAL1)
The Reinsurer shall be credited with salvage or subrogation recoveries (i.e.,
reimbursement obtained or recovery made by the Company, less Loss Adjustment
Expense incurred in obtaining such reimbursement or making such recovery) on
account of claims and settlements involving reinsurance hereunder. Salvage and
subrogation recoveries thereon shall always be used to reimburse the excess
carriers in the reverse order of their priority according to their participation
before being used in any way to reimburse the Company for its primary loss. The
Company hereby agrees to enforce its rights to salvage or subrogation relating
to any loss, a part of which loss was sustained by the Reinsurer, and to
prosecute all claims arising out of such rights.
ARTICLE XIII
ERRORS AND OMISSIONS (BRMA 14C)
Any inadvertent delay, omission or error shall not be held to relieve either
party hereto from any liability which would attach to it hereunder if such
delay, omission or error had not been made, provided such omission or error is
rectified upon discovery.
ARTICLE XIV
OFFSET
The Company and the Reinsurer may offset any balance, whether on account of
premium, commission, claims or losses, Loss Adjustment Expense, salvage, or
otherwise, due from one party to the other under the terms of this Contract or
under any other agreement heretofore or hereafter entered into between the
Company and the Reinsurer.
ARTICLE XV
CURRENCY (BRMA 12A)
A. Whenever the word "Dollars" or the "$" sign appears in this Contract, they
shall be construed to mean United States Dollars and all transactions under
this Contract shall be in United States Dollars.
B. Amounts paid or received by the Company in any other currency shall be
converted to United States Dollars at the rate of exchange at the date such
transaction is entered on the books of the Company.
Page 13
ARTICLE XVI
TAXES (BRMA 50C)
In consideration of the terms under which this Contract is issued, the Company
will not claim a deduction in respect of the premium hereon when making tax
returns, other than income or profits tax returns, to any state or territory of
the United States of America, the District of Columbia or Canada.
ARTICLE XVII
FEDERAL EXCISE TAX (BRMA 17A)
(Applicable to those subscribing reinsurers, excepting Underwriters at Lloyd's
London and other subscribing reinsurers exempt from Federal Excise Tax, who are
domiciled outside the United States of America.)
A. The subscribing reinsurer has agreed to allow, for the purpose of paying
the Federal Excise Tax, the applicable percentage of the premium payable
hereon (as imposed under Section 4371 of the Internal Revenue Code) to the
extent such premium is subject to the Federal Excise Tax.
B. In the event of any return of premium becoming due hereunder, the
subscribing reinsurer will deduct the applicable percentage from the return
premium payable hereon, and the Company or its agent should take steps to
recover the tax from the United States Government.
ARTICLE XVIII
UNAUTHORIZED REINSURANCE (BRMA 55C)
(Applies only to a subscribing reinsurer who does not qualify for full credit
with any insurance regulatory authority having jurisdiction over the Company's
reserves.)
A. As regards Policies or bonds issued by the Company coming within the scope
of this Contract, the Company agrees that when it shall file with the
insurance regulatory authority or set up on its books reserves for losses
covered hereunder which it shall be required by law to set up, it will
forward to the subscribing reinsurer a statement showing the proportion of
such reserves which is applicable to the subscribing reinsurer. The
subscribing reinsurer hereby agrees to fund such reserves in respect of
known outstanding losses that have been reported to the subscribing
reinsurer and allocated Loss Adjustment Expense relating thereto, losses
and allocated Loss Adjustment Expense paid by the Company but not recovered
from the subscribing reinsurer, plus reserves for losses incurred but not
reported, as shown in the statement prepared by the Company (hereinafter
referred to as "subscribing reinsurer's obligations") by funds withheld,
cash advances or a Letter of Credit. The subscribing reinsurer shall have
the option of determining the method
Page 14
of funding provided it is acceptable to the insurance regulatory
authorities having jurisdiction over the Company's reserves.
B. When funding by a Letter of Credit, the subscribing reinsurer agrees to
apply for and secure timely delivery to the Company of a clean, irrevocable
and unconditional Letter of Credit issued by a bank and containing
provisions acceptable to the insurance regulatory authorities having
jurisdiction over the Company's reserves in an amount equal to the
subscribing reinsurer's proportion of said reserves. Such Letter of Credit
shall be issued for a period of not less than one year, and shall be
automatically extended for one year from its date of expiration or any
future expiration date unless 30 days (60 days where required by insurance
regulatory authorities) prior to any expiration date the issuing bank shall
notify the Company by certified or registered mail that the issuing bank
elects not to consider the Letter of Credit extended for any additional
period.
C. The subscribing reinsurer and Company agree that the Letters of Credit
provided by the subscribing reinsurer pursuant to the provisions of this
Contract may be drawn upon at any time, notwithstanding any other provision
of this Contract, and be utilized by the Company or any successor, by
operation of law, of the Company including, without limitation, any
liquidator, rehabilitator, receiver or conservator of the Company for the
following purposes, unless otherwise provided for in a separate Trust
Agreement:
1. To reimburse the Company for the subscribing reinsurer's obligations,
the payment of which is due under the terms of this Contract and which
has not been otherwise paid;
2. To make refund of any sum which is in excess of the actual amount
required to pay the subscribing reinsurer's obligations under this
Contract;
3. To fund an account with the Company for the subscribing reinsurer's
obligations. Such cash deposit shall be held in an interest bearing
account separate from the Company's other assets, and interest thereon
not in excess of the prime rate shall accrue to the benefit of the
subscribing reinsurer;
4. To pay the subscribing reinsurer's share of any other amounts the
Company claims are due under this Contract.
In the event the amount drawn by the Company on any Letter of Credit is in
excess of the actual amount required for subparagraph 1 or 3, or in the
case of subparagraph 4, the actual amount determined to be due, the Company
shall promptly return to the subscribing reinsurer the excess amount so
drawn. All of the foregoing shall be applied without diminution because of
insolvency on the part of the Company or the subscribing reinsurer.
D. The issuing bank shall have no responsibility whatsoever in connection with
the propriety of withdrawals made by the Company or the disposition of
funds withdrawn, except to ensure that withdrawals are made only upon the
order of properly authorized representatives of the Company.
Page 15
E. At annual intervals, or more frequently as agreed but never more frequently
than quarterly, the Company shall prepare a specific statement of the
subscribing reinsurer's obligations, for the sole purpose of amending the
Letter of Credit, in the following manner:
1. If the statement shows that the subscribing reinsurer's obligations
exceed the balance of credit as of the statement date, the subscribing
reinsurer shall, within 30 days after receipt of notice of such
excess, secure delivery to the Company of an amendment to the Letter
of Credit increasing the amount of credit by the amount of such
difference.
2. If, however, the statement shows that the subscribing reinsurer's
obligations are less than the balance of credit as of the statement
date, the Company shall, within 30 days after receipt of written
request from the subscribing reinsurer, release such excess credit by
agreeing to secure an amendment to the Letter of Credit reducing the
amount of credit available by the amount of such excess credit.
ARTICLE XIX
NET RETAINED LINES (BRMA 32E)
A. This Contract applies only to that portion of any Policy which the Company
retains net for its own account (prior to deduction of any underlying
reinsurance specifically permitted in this Contract), and in calculating
the amount of any loss hereunder and also in computing the amount or
amounts in excess of which this Contract attaches, only loss or losses in
respect of that portion of any Policy which the Company retains net for its
own account shall be included.
B. The amount of the Reinsurer's liability hereunder in respect of any loss or
losses shall not be increased by reason of the inability of the Company to
collect from any other reinsurer(s), whether specific or general, any
amounts which may have become due from such reinsurer(s), whether such
inability arises from the insolvency of such other reinsurer(s) or
otherwise.
ARTICLE XX
TRIA INUREMENT
A. As respects any "insured loss," as defined in the Terrorism Risk Insurance
Act of 2002, including the Terrorism Risk Insurance Extension Act of 2005,
and any other extensions or amendments thereto ("TRIA"), for which the
Reinsurer makes a payment to the Company under this Contract, the following
provisions shall apply.
B. If the sum of
1. Financial assistance provided under TRIA to the Company and its
affiliates, if any, (as "affiliate" is defined in TRIA) with respect
to all "insured loss" that applies to each "program year," as defined
in TRIA and
Page 16
2. Amounts due from all reinsurance which the Company and its affiliates,
if any, purchase, including but not limited to this reinsurance, all
other treaty reinsurance and all facultative reinsurance, and whether
collectible or not, under which there is a recoverable for any such
"insured loss"
exceeds the amount of the Company's and its affiliates', if any, gross
"insured loss," the excess amount shall be allocated to the Reinsurer in
the ratio that the Reinsurer's liability for the "insured loss" under this
Contract bears to the total collectible reinsurance recoverables for the
"insured loss" under 2 above.
C. Upon receipt of payment under TRIA by the Company and its affiliates, if
any, the Company shall pay to or credit the Reinsurer under this Contract
with the Reinsurer's share of such excess amount determined in accordance
with the preceding paragraph.
ARTICLE XXI
SPECIAL ACCEPTANCES
A. Business not within the terms of this Contract may be submitted to the
Reinsurer for special acceptance and, if accepted by the Reinsurer, shall
be subject to all of the terms of this Contract, except as modified by the
Special Acceptance.
B. Renewal of Policies, which have previously received a Special Acceptance
under prior Contracts, are deemed to be covered hereunder.
C. Further, should a reinsurer become party to this Contract subsequent to the
acceptance of any business not normally covered hereunder, that reinsurer
will automatically accept the special acceptances as being part of this
Contract.
ARTICLE XXII
MORTGAGEE REINSURANCE ENDORSEMENTS
A. To induce a mortgagee named in a policy of the Company to accept such
policy, the Company and the Reinsurer may agree to name such mortgagee as a
third party beneficiary in a Mortgagee Reinsurance Endorsement made a part
of this Contract. For each such mortgagee Reinsurance Endorsement so
issued, the Company shall indemnify the Reinsurer for any and all
liability, loss, cost, or expense the Reinsurer may sustain or incur in
excess of its obligations under this Contract by reason of the issuance of
such Mortgagee Reinsurance Endorsement.
B. If the Reinsurer becomes liable to a mortgagee under any Mortgagee
Reinsurance Endorsement, the Reinsurer shall, to the extent of its
liability:
1. Benefit pro-rata in reductions of the Company's loss by salvage,
subrogation, compromise, or otherwise.
Page 17
2. Be automatically subrogated to all of the mortgagee's rights against
the Company under the policy.
3. Be completely discharged from its obligation to make any payment to
the Company under this Contract and be entitled to set off against any
amount due from the Reinsurer to the Company under this or any other
agreement for any amounts for which the Reinsurer would not be liable
except for the existence of such Mortgagee Reinsurance Endorsement.
C. The Reinsurer shall have the right to cancel any Mortgagee Reinsurance
Endorsement by notice to the mortgagee.
D. Prior to the termination date, the Company shall advise the Reinsurer as to
which of the above options shall apply.
ARTICLE XXIII
THIRD PARTY RIGHTS (BRMA 52C MODIFIED)
Except for the provisions of the MORTGAGEE REINSURANCE ENDORSEMENTS ARTICLE,
this Contract is solely between the Company and the Reinsurer, and in no
instance shall any other party have any rights under this Contract except as
expressly provided otherwise in the INSOLVENCY ARTICLE.
ARTICLE XXIV
SEVERABILITY (WSEV1)
If any provision of this Contract shall be rendered illegal or unenforceable by
the laws or regulations of any state, such provision shall be considered void in
such state, but this shall not affect the validity or enforceability of any
other provision of this Contract or the enforceability of such provision in any
other jurisdiction.
ARTICLE XXV
GOVERNING LAW (BRMA 71A)
This Contract shall be governed as to performance, administration and
interpretation by the laws of the State of Pennsylvania, exclusive of that
state's rules with respect to conflicts of law, except as to rules with respect
to credit for reinsurance, in which case the applicable rules of all states
shall apply.
Page 18
ARTICLE XXVI
ACCESS TO RECORDS (BRMA 1E)
The Reinsurer or its designated representatives shall have access to the books
and records of the Company on matters relating to this reinsurance at all
reasonable times for the purpose of obtaining information concerning this
Contract or the subject matter hereof.
ARTICLE XXVII
INSOLVENCY
A. In the event of the insolvency of the Company, this reinsurance shall be
payable directly to the Company or to its liquidator, receiver, conservator
or statutory successor, with reasonable provision for verification, on the
basis of the liability of the Company without diminution because of the
insolvency of the Company or because the liquidator, receiver, conservator
or statutory successor of the Company has failed to pay all or a portion of
any claim. It is agreed, however, that the liquidator, receiver,
conservator or statutory successor of the Company shall give written notice
to the Reinsurer of the pendency of a claim against the Company indicating
the Policy or bond reinsured, which claim would involve a possible
liability on the part of the Reinsurer, within a reasonable time after such
claim is filed in the conservation or liquidation proceeding or in the
receivership, and that during the pendency of such claim, the Reinsurer may
investigate such claim and interpose, at its own expense, in the proceeding
where such claim is to be adjudicated, any defense or defenses that it may
deem available to the Company or its liquidator, receiver, conservator or
statutory successor. The expense thus incurred by the Reinsurer shall be
chargeable, subject to the approval of the Court, against the Company as
part of the expense of conservation or liquidation to the extent of a
proportionate share of the benefit which may accrue to the Company solely
as a result of the defense undertaken by the Reinsurer.
B. Where two or more subscribing reinsurers are involved in the same claim and
a majority in interest elect to interpose defense to such claim, the
expense shall be apportioned in accordance with the terms of this Contract
as though such expense had been incurred by the Company.
C. It is further agreed that, in the event of the insolvency of the Company,
the reinsurance under this Contract shall be payable directly by the
Reinsurer to the Company or its liquidator, receiver, conservator, or
statutory successor, except as provided by Section 4118(a) of the New York
Insurance Law or except (1) where this Contract specifically provides
another payee of such reinsurance in the event of the insolvency of the
Company or (2) where the Reinsurer with the consent of the direct insured
or insureds has assumed such Policy obligations of the Company as direct
obligations of the Reinsurer to the payees under such Policies and in
substitution for the obligations of the Company to such payees.
Page 19
D. In the event of the insolvency of any company or companies listed in the
designation of "Company" under this Contract, this Article shall apply only
to the insolvent company or companies.
ARTICLE XXVIII
ARBITRATION (WARB1)
A. As a condition precedent to any right of action hereunder, any
irreconcilable dispute arising out of the interpretation, performance or
breach of this Contract, including the formation or validity thereof,
whether arising before or after the expiry or termination of the Contract,
shall be submitted for decision to a panel of 3 arbitrators. Notice
requesting arbitration will be in writing and sent by certified mail,
return receipt requested, or such reputable courier service as is capable
of returning proof of receipt of such notice by the recipient to the party
demanding arbitration.
B. One arbitrator shall be appointed by each party. If either party fails to
appoint its arbitrator within 30 days after being requested to do so by the
other party, the latter, after 10 days notice by certified mail or
reputable courier as provided above of its intention to do so, may appoint
the second arbitrator.
C. The two arbitrators shall, before instituting the hearing, appoint an
impartial third arbitrator who shall preside at the hearing. If the 2
arbitrators are unable to agree upon the third arbitrator within 30 days of
their appointment, the Company shall petition the American Arbitration
Association to appoint the third arbitrator. If the American Arbitration
Association fails to appoint the third arbitrator within 30 days of being
requested to do so, either party may request a district court judge of the
federal district court having jurisdiction over the geographical area in
which the arbitration is to take place, or if the federal court declines to
act, the state court having general jurisdiction in such area to select the
third arbitrator from a list of 6 individuals (3 named by each arbitrator
previously appointed). All arbitrators shall be disinterested active or
former senior executives of insurance or reinsurance companies or
Underwriters at Lloyd's, London.
D. Within 30 days after notice of appointment of all arbitrators, the panel
shall meet and determine timely periods for briefs, discovery procedures
and schedules for hearings. The panel shall be relieved of all judicial
formality and shall not be bound by the strict rules of procedure and
evidence. Unless the panel agrees otherwise, arbitration shall take place
in Bala Cynwyd, Pennsylvania, but the venue may be changed when deemed by
the panel to be in the best interest of the arbitration proceeding. Insofar
as the arbitration panel looks to substantive law, it shall consider the
law of the State of Pennsylvania. The decision of any 2 arbitrators when
rendered in writing shall be final and binding. The panel is empowered to
grant interim relief as it may deem appropriate.
E. The panel shall make its decision considering the custom and practice of
the applicable insurance and reinsurance business as promptly as possible
following the termination of the hearings. Judgment upon the award may be
entered in any court having jurisdiction thereof.
Page 20
F. If more than one subscribing reinsurer is involved in arbitration where
there are common questions of law or fact and a possibility of conflicting
awards or inconsistent results, all such subscribing reinsurers shall
constitute and act as one party for purposes of this Article and
communications shall be made by the Company to each of the subscribing
reinsurers constituting the one party; provided, however, that nothing
therein shall impair the rights of such subscribing reinsurers to assert
several, rather than joint defenses or claims, nor be construed as changing
the liability of the subscribing reinsurers under the terms of this
Contract from several to joint.
G. Each party shall bear the expense of its own arbitrator and shall jointly
and equally bear with the other party the cost of the third arbitrator. The
remaining costs of the arbitration shall be allocated by the panel. The
panel may, at its discretion, award such further costs and expenses as it
considers appropriate, including but not limited to attorneys fees, to the
extent permitted by law. However, the panel may not award any exemplary or
punitive damages.
ARTICLE XXIX
SERVICE OF SUIT (WSOS4)
(This Article is applicable if the subscribing reinsurer is not domiciled in the
United States of America and/or is not authorized in any State, Territory or
District of the United States where authorization is required by insurance
regulatory authorities. This Article is not intended to conflict with or
override the obligation of the parties to arbitrate their disputes in accordance
with the ARBITRATION ARTICLE.)
A. In the event of the failure of the subscribing reinsurer to pay any amount
claimed to be due hereunder, the subscribing reinsurer, at the request of
the Company, shall submit to the jurisdiction of a court of competent
jurisdiction within the United States. Nothing in this Article constitutes
or should be understood to constitute a waiver of the subscribing
reinsurer's rights to commence an action in any court of competent
jurisdiction in the United States, to remove an action to a United States
District Court, or to seek a transfer of a case to another court as
permitted by the laws of the United States or of any state in the United
States. The subscribing reinsurer, once the appropriate court is selected,
whether such court is the one originally chosen by the Company and accepted
by subscribing reinsurer or is determined by removal, transfer, or
otherwise, as provided for above, shall comply with all requirements
necessary to give said court jurisdiction and, in any suit instituted
against it upon this Contract, shall abide by the final decision of such
court or of any appellate court in the event of an appeal.
B. Service of process in such suit may be made upon the agent for the service
of process ("agent") named below, depending on the jurisdiction where the
Company chooses to bring suit:
1. If the suit is brought in the State of California, the law firm of
Mendes and Mount, 445 South Figueroa, 38th Floor, Los Angeles,
California 90071 shall be authorized
Page 21
and directed to accept service of process on behalf of the
subscribing reinsurer in any such suit;
2. If the suit is brought in the State of New York, the law firm of
Mendes and Mount, 750 Seventh Avenue, New York, New York 10019
shall be authorized and directed to accept service of process on
behalf of the subscribing reinsurer in any such suit;
3. If the suit is brought in any state other than California or New
York, either of the agents described in subparagraphs 1 or 2
above shall be authorized and directed to accept service of
process on behalf of the subscribing reinsurer in any such suit;
or
4. If the subscribing reinsurer has designated an agent in the
subscribing reinsurer's Interests and Liabilities Agreement
attached hereto, then that agent shall be authorized and directed
to accept service of process on behalf of the subscribing
reinsurer in any suit. However, if an agent is designated in the
subscribing reinsurer's Interests and Liabilities Agreement and
the agent is not located in California as respects a suit brought
in California or New York as respects a suit brought in New York,
in keeping with the laws of the states of California and New York
which require that service be made on an agent located in the
respective state if a suit is brought in that state, the
applicable office of Mendes and Mount stipulated in subparagraphs
1 and 2 above must be used for service of suit unless the
provisions of paragraph C of this Article apply.
C. Further, pursuant to any statute of any state, territory or district
of the United States that makes provision therefor, the subscribing
reinsurer hereby designates the Superintendent, Commissioner or
Director of Insurance, or other officer specified for that purpose in
the statute, or his successor or successors in office, as its true and
lawful attorney upon whom may be served any lawful process in any
action, suit or proceedings instituted by or on behalf of the Company
or any beneficiary hereunder arising out of this Contract, and hereby
designates the above-named as the person to whom the said officer is
authorized to mail such process or a true copy thereof.
ARTICLE XXX
MODE OF EXECUTION (WMOE1)
This Contract may be executed either by an original written ink signature of
paper documents, by an exchange of facsimile copies showing the original written
ink signature of paper documents, or by electronic signature by either party
employing appropriate software technology as to satisfy the parties at the time
of execution that the version of the document agreed to by each party shall
always be capable of authentication and satisfy the same rules of evidence as
written signatures. The use of any one or a combination of these methods of
execution shall constitute a legally binding and valid signing of this Contract.
This Contract may be executed in one or more counterparts, each of which, when
duly executed, shall be deemed an original.
Page 22
ARTICLE XXXI
INTERMEDIARY (WINT8)
Willis Re Inc., 1835 Market Street, Suite 2700, Philadelphia, Pennsylvania 19103
is hereby recognized as the intermediary negotiating this Contract and through
whom all communications relating thereto shall be transmitted to the Company or
the Reinsurer. However, all communications concerning accounts, claim
information, funds and inquiries related thereto shall be transmitted to the
Company or the Reinsurer through Willis Re Inc., 5420 Millstream Road, P.O. Box
3000, McLeansville, North Carolina 27301-3000. Payments by the Company to Willis
Re Inc. shall be deemed to constitute payment to the Reinsurer and payments by
the Reinsurer to Willis Re Inc. shall be deemed to constitute payment to the
Company only to the extent that such payments are actually received by the
Company.
IN WITNESS WHEREOF, the Company by its duly authorized representative has
executed this Contract as of the date specified below:
Signed this 24th day of January, 2007.
PHILADELPHIA INSURANCE COMPANY
PHILADELPHIA INDEMNITY INSURANCE COMPANY
By /s/ Christopher J. Maguire
----------------------------------
Christopher J. Maguire
Executive VP & CUO
Page 23
NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE -
REINSURANCE - U.S.A.
1) This Agreement does not cover any loss or liability accruing to the
Reinsured, 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 Agreement does not cover any loss or liability accruing to the
Reinsured, 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:
I. Nuclear reactor power plants including all auxiliary property on the
site, or
II. Any other nuclear reactor installation, including laboratories
handling radioactive materials in connection with reactor
installations, and "critical facilities" as such, or
III. Installations 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
IV. Installations other than those listed in paragraph 2) III 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 Agreement does not cover any loss or liability by radioactive
contamination accruing to the Reinsured, 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 the Reinsured 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 1st, January 1960, this sub-paragraph b) shall
only apply provided the said radioactive contamination exclusion provision has
been approved by the Government Authority having jurisdiction thereof.
4) Without in any way restricting the operations of paragraphs 1), 2) and 3)
hereof, this Agreement does not cover any loss or liability by radioactive
contamination accruing to the Reinsured, 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 Reinsured 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) Reinsured to be sole judge of what constitutes:
a) substantial quantities, and
b) the extent of installation, plant or site.
NOTE: Without in any way restricting the operations of paragraph 1) hereof, it
is understood and agreed that:
a) all policies issued by the Reinsured on or before 31st, December 1957,
shall be free from the application of the other provisions of this Clause until
expiry date or 31st, December 1960, whichever first occurs whereupon all the
provisions of this Clause shall apply,
b) with respect to any risk located in Canada policies issued by the
Reinsured on or before 31st, December 1958, shall be free from the application
of the other provisions of this Clause until expiry date or 31st, December 1960,
whichever first occurs whereupon all the provisions of this Clause shall apply.
WAR EXCLUSION
As regards interests which at time of loss or damage are on shore, no liability
shall attach hereto in respect of 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.
This War Exclusion Clause shall not, however, apply to interests which at time
of loss or damage are within the territorial limits of the United States of
America (comprising the fifty States of the Union and the District of Columbia,
its territories and possessions, including the Commonwealth of Puerto Rico and
including Bridges between the United States of America and Mexico provided they
are under United States ownership), Canada, St. Pierre and Miquelon, provided
such interests are insured under original policies, endorsements or binders
containing a standard war or hostilities or warlike operations exclusion clause.
Nevertheless, this clause shall not be construed to apply to loss or damage
occasioned by riots, strikes, civil commotion, vandalism, malicious damage.
(WILLIS LOGO)
UMR: B0576UMX4834
Reinsured: PHILADELPHIA INSURANCE COMPANY
Type: Property 4th Excess of Loss Reinsurance Agreement
SECURITY DETAILS
PERIOD: 1 January 2007 to 1 January 2008
REINSURER: ________________________________
(AMLIN LOGO) (GRAPHIC) AML 2001
RAB1662207CB
NON-MARINE
WRITTEN LINE(S): 6.25% REF: _______________
FINAL SIGNED LINE(S): 6.16%
Signed this 2nd day of January 2007
Willis Limited, a Lloyd's broker, authorised and regulated by the Financial
Services Authority. Registered Office Ten Trinity Square, London ECJP 3AX
Registered number 181116 England and Wales
Page 1 of 3
(WILLIS LOGO)
UMR: B0576UMX4834
Reinsured: PHILADELPHIA INSURANCE COMPANY
Type: Property 4th Excess of Loss Reinsurance Agreement
SECURITY DETAILS
PERIOD: 1 January 2007 to 1 January 2008
REINSURER: ________________________________
(BRIT INSURANCE LOGO) (GRAPHIC) BRT 2987
FB022E07A000
WRITTEN LINE(S): 8.5% REF: FB0022307A000
FINAL SIGNED LINE(S): 8.38%
Signed this ___ day of ___________ 200_
Willis Limited, a Lloyd's broker, authorized and regulated by the Financial
Services Authority. Registered Office Ten Trinity Square, London ECJP 3AX
Registered number 18116 England and Wales
Page 2 of 3
(WILLIS LOGO)
UMR: B0576UMS4834
Reinsured: PHILADELPHIA INSURANCE COMPANY
Type: Property 4th Excess of Loss Reinsurance Agreement
SECURITY DETAILS
PERIOD: 1 January 2007 to 1 January 2008
REINSURER: ________________________________
(GRAPHIC) RTH 1414
RTH 1414
______________________
WRITTEN LINE(S): 2 1/2% REF: XR07CE495W2X
FINAL SIGNED LINE(S): 2.46%
Signed this 2nd day of January 2007
Willis Limited, a Lloyd's broker, authorized and regulated by the Financial
Services Authority. Registered Office Ten Trinity Square, London ECJP 3AX
Registered number 18116 England and Wales
Page 3 of 3
INTERESTS AND LIABILITIES AGREEMENT
(the "Agreement")
of
HANNOVER RUCKVERSICHERUNG AG
(the "Subscribing Reinsurer")
with respect to the
PROPERTY FOURTH PER RISK EXCESS OF LOSS
REINSURANCE AGREEMENT
(the "Contract")
issued to
PHILADELPHIA INSURANCE COMPANY
PHILADELPHIA INDEMNITY INSURANCE COMPANY
BALA CYNWYD, PENNSYLVANIA
AND ANY ADDITIONAL COMPANY ESTABLISHED OR ACQUIRED BY THE COMPANY
(the "Company")
The Subscribing Reinsurer shall have a 5.00% share in the interests and
liabilities of the "Reinsurer" as set forth in the Contract attached hereto and
executed by the Company.
This Agreement shall commence at 12:01 a.m., Eastern Standard Time, January 1,
2007, and shall continue in force until 12:01 a.m., Eastern Standard Time,
January 1, 2008, unless earlier terminated in accordance with the attached
Contract.
The share of the Subscribing Reinsurer in the interests and liabilities of the
"Reinsurer" shall be several and not joint with the share of any other
subscribing reinsurer. In no event shall the Subscribing Reinsurer participate
in the interests and liabilities of the other subscribing reinsurers.
IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized
representative has executed this Agreement as of the date specified below:
Signed this 26th day of January, 2007 .
HANNOVER RUCKVERSICHERUNG AG
By /s/ Andreas Steinweg
----------------------------------------
North American Property
Department-TD 10
INTERESTS AND LIABILITIES AGREEMENT
(the "Agreement")
of
QBE REINSURANCE CORPORATION
(the "Subscribing Reinsurer")
with respect to the
PROPERTY FOURTH PER RISK EXCESS OF LOSS
REINSURANCE AGREEMENT
(the "Contract")
issued to
PHILADELPHIA INSURANCE COMPANY
PHILADELPHIA INDEMNITY INSURANCE COMPANY
BALA CYNWYD, PENNSYLVANIA
AND ANY ADDITIONAL COMPANY ESTABLISHED OR ACQUIRED BY THE COMPANY
(the "Company")
The Subscribing Reinsurer shall have a 3.00% share in the interests and
liabilities of the "Reinsurer" as set forth in the Contract attached hereto and
executed by the Company.
This Agreement shall commence at 12:01 a.m., Eastern Standard Time, January 1,
2007, and shall continue in force until 12:01 a.m., Eastern Standard Time,
January 1, 2008, unless earlier terminated in accordance with the attached
Contract.
The share of the Subscribing Reinsurer in the interests and liabilities of the
"Reinsurer" shall be several and not joint with the share of any other
subscribing reinsurer. In no event shall the Subscribing Reinsurer participate
in the interests and liabilities of the other subscribing reinsurers.
IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized
representative has executed this Agreement as of the date specified below:
Signed this 6th day of February, 2007.
QBE REINSURANCE CORPORATION
By /s/ Gregory R. Cuilwik
----------------------------------