AGREEMENT OF REINSURANCE
No. 0079460
between
EMPLOYERS REINSURANCE CORPORATION
(herein referred to as the "Reinsurer")
and
CALFARM INSURANCE COMPANY
Sacramento, California
ZENITH INSURANCE COMPANY
Woodland Hills, California
ZNAT INSURANCE COMPANY
Woodland Hills, California
Their Quota Share Reinsurers
(herein referred to as the "Company")
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In consideration of the promises set forth in this Agreement, the parties agree
as follows:
ARTICLE I - SCOPE OF AGREEMENT
As a condition precedent to the Reinsurer's obligations under this
Agreement, the Company shall cede to the Reinsurer the business described in
this Agreement, and the Reinsurer shall accept such business as reinsurance from
the Company.
ARTICLE II - 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. However, if the Company becomes
insolvent, the liability of the Reinsurer shall be modified to the extent set
forth in the article entitled INSOLVENCY OF THE COMPANY. In no
instance shall any insured of the Company or any claimant against an insured of
the Company have any rights under this Agreement.
ARTICLE III - LIMIT AND RETENTION
The Reinsurer shall pay to the Company, with respect to each loss event,
95% of the amount of ultimate net loss in excess of the sum of:
(a) The Company Retention of $5,000,000; and
(b) The First Excess Cover of $10,000,000; and
(c) The Second Excess Cover of $5,000,000,
but not exceeding the Limit of Liability of the Reinsurer of 95% of the next
$5,000,000 of ultimate net loss with respect to such loss event nor 95% of
$10,000,000 with respect to all loss events commencing during the term of this
Agreement.
The Company shall retain net for its own account, with respect to each loss
event, the entire amount of the Company Retention plus the remaining 5% of such
ultimate net loss.
ARTICLE IV - TERM
This Agreement shall apply to loss events which commence during the period
from September 1, 1993 to August 31, 1994, both dates inclusive, at the place of
the loss event.
This Agreement shall not apply to loss events which commence prior to the
effective date of this Agreement and continue during any part of the term of
this Agreement. However, this Agreement shall apply to loss events which
commence during and continue beyond the term of this Agreement and in the
computation of the liability of the Reinsurer the entire ultimate net loss
resulting from each such loss event shall be included, subject to the
limitations set forth in paragraph (f) of the article entitled DEFINITIONS.
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ARTICLE V - DEFINITIONS
(a) PROPERTY BUSINESS
This term shall mean direct property business written by the Company,
as defined, and classified in its Association Edition of Annual
Statement for Fire and Casualty Companies as:
(1) Fire;
(2) Allied lines (including extended coverage);
(3) Farmowners multiple peril (applicable property and inland
marine lines only);
(4) Homeowners multiple peril (applicable property and inland
marine lines only);
(5) Commercial multiple peril (applicable property lines only);
(6) Blanket personal property;
(7) Inland marine;
(8) Earthquake;
(9) Garagekeepers legal liability (comprehensive only);
on risks located in the United States of America.
(b) COMPANY RETENTION
This term shall mean the amount the Company shall retain for its
own account; however, this requirement shall be satisfied if this
amount is retained by the Company or its affiliated companies
under common management or common ownership.
(c) ULTIMATE NET LOSS
This term shall mean all payments by the Company of claims and
losses, within the limits of liability or amounts of insurance of
the policies of the Company, and adjustment expense, after
deduction of salvage and other recoveries and after deduction of
amounts due from all other reinsurance other than the reinsurance
pooling arrangement between Zenith Insurance Company, CalFarm
Insurance Company and ZNAT Insurance Company,
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whether collectible or not. If the Company becomes insolvent, this
definition shall be modified to the extent set forth in the article
entitled INSOLVENCY OF THE COMPANY.
(d) ADJUSTMENT EXPENSE
This term shall mean expenditures by the Company in the direct defense
of claims and as allocated to an individual claim or loss, other
than for office expenses and for the salaries and expenses of
employees of the Company or of any subsidiary or related or wholly
owned company of the Company, made in connection with the disposition
of a claim, loss, or legal proceeding including investigation,
negotiation, and legal expenses; court costs, statutory penalties;
prejudgment interest or delayed damages; and interest on any judgment
or award.
(e) PREJUDGMENT INTEREST OR DELAYED DAMAGES
This term shall mean interest or damages added to a settlement,
verdict, award, or judgment based on the amount of time prior to the
settlement, verdict, award, or judgment whether or not made part of
the settlement, verdict, award, or judgment.
(f) LOSS EVENT
This term shall mean an occurrence or series of occurrences arising
out of one event, provided that only the claims and losses sustained
by the Company during the continuous period of 168 hours selected by
the Company shall be used in the determination of the ultimate net
loss; and only one such continuous period of 168 hours shall apply
with respect to one event.
Additionally, with respect to riot or civil commotion and other causes
of loss resultant therefrom, only claims and losses sustained by the
Company on risks within the limits of one city, town, or village
immediately adjacent thereto shall be used in the determination of
ultimate net loss.
(g) SUBJECT NET EARNED PREMIUM
This term shall mean the direct premium earned by the Company during
the term of the Agreement on the business reinsured hereunder after
deduction of return premiums and after deduction of premiums paid for
reinsurance which inures to the benefit of the Reinsurer.
For purposes of this Agreement, subject net earned premium shall be
deemed to be 100% of the premiums on the lines of business reinsured
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hereunder. However, on the following lines, which are the so-called
package policies (only when written on an indivisible premium basis)
subject net earned premium shall be determined as:
(1) 88% of the total homeowners and boatowners policy premiums;
(2) 80% of the total farmowners and commercial multiple peril
policy premiums.
When any of the above policies is written on a divisible premium
basis, the actual premium for the lines of business included in this
Agreement shall be used rather than the percentage stated above.
ARTICLE VI - EXCLUSIONS
This Agreement shall not apply to:
(a) All lines of business not specifically covered hereunder;
(b) Reinsurance assumed by the Company other than reinsurance assumed by
Zenith Insurance Company from CalFarm Insurance Company or ZNAT
Insurance Company; all liability assumed under excess of loss
insurance or reinsurance contracts;
(c) All business excluded by the Pools, Associations and Syndicates
Exclusion Clause attached hereto and made a part hereof;
(d) Policies issued under retrospectively rated plans; policies issued
with a deductible of more than $100,000, provided this exclusion shall
not apply to policies which customarily provide a percentage
deductible on the perils of earthquake or windstorm;
(e) Liability coverages under homeowners, farmowners and commercial
package policies; i.e., comprehensive personal, farm or commercial
liability, medical payments and physical damage to property of others;
(f) All casualty, fidelity, surety, forgery, boiler and machinery,
burglary or glass business or coverages (not applicable to Section I
coverages of multiple peril policies);
(g) The following risks, coverages and kinds of insurance:
(1) Accident and health;
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(2) Animal or livestock mortality policies; however, this exclusion
shall not apply to fowl;
(3) Automobile; however, this exclusion shall not apply with respect
to garagekeepers legal liability coverages;
(4) Aviation;
(5) Commercial hulls or hulls other than outboard motorboat and
sailboat coverages;
(6) Credit warranty, financial guarantees;
(7) First class or registered mail;
(8) Gas or oil drilling risks;
(9) Growing or standing crops, other than fire insurance; all crop
hail insurance or any other coverages provided in connection
therewith;
(10) Jewelers and furriers block;
(11) Negative film syndicates;
(12) Ocean marine;
(13) Railroad Property;
(h) Flood, surface water, waves, tidal water or tidal waves, overflow of
streams or other bodies of water or spray from any of the foregoing,
all whether driven by wind or not, unless written in conjunction with
the peril of fire of similar amount;
(i) 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;
(j) Difference in conditions insurance and similar kinds of insurance,
howsoever styled;
(k) Consequential, punitive, exemplary or compensatory damages resulting
from an action taken by any policyholder, insured or assignee, against
the Company for alleged or actual bad faith, fraud or negligence in
the settlement of a claim;
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(l) Risks which have a total insurable value of more than $250,000,000;
(m) War risk, bombardment, invasion, insurrection, rebellion, revolution,
military or usurped power, or confiscation by order of any government
or public authority, as excluded under a standard of policy containing
a standard war exclusion clause;
(n) Nuclear incident per the Nuclear Incident Exclusion - Physical
Damage - Reinsurance (NMA 1119) attached hereto;
(o) Liability of the Company arising from its participation or membership,
whether voluntary or involuntary, in any insolvency fund, including
any guarantee fund, association, pool, plan or other facility which
provides for the assessment of, payment by, or assumption by the
company of a part or the whole of any claim, debt, charge, fee or
other obligations of an insurer, or its successors or assigns, which
has been declared insolvent by any authority having jurisdiction;
(p) 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 manufacturing, transit, prelaunch, launch, and in-orbit);
(q) Coverage afforded by ISO Pollutant Clean Up and Removal Additional
Aggregate Limit of Insurance Endorsement CP 04 07 (Ed. 4/86) or as
subsequently amended or by any similar endorsement affording such
coverage;
(r) Pollutant clean up or removal under any commercial property policy or
any inland marine policy written by the Company which does not contain
ISO Changes-Pollutants Endorsement CP 01 86 (Ed. 4/86) or as
subsequently amended; however, this exclusion does not apply to any
risk located in a jurisdiction which has not approved the Insurance
Services Office exclusion or where other regulatory constraints
prohibit the Company from attaching such endorsement. If the Company
elects to file an endorsement independent of ISO, such endorsement
will be deemed a suitable substitute provided the company has
submitted the wording to the Reinsurers and received the Reinsurer's
prior approval.
ARTICLE VII - REINSURANCE PREMIUMS
As a condition precedent to the Reinsurer's obligations hereunder, the
Company shall pay to the Reinsurer .407% of the subject net earned premium
during the term of the Agree-
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ment, subject to a minimum reinsurance premium of $175,500 and deposit
reinsurance premium of $195,000.
ARTICLE VIII - AUTOMATIC REINSTATEMENT
The Limit of Liability of the Reinsurer under this Agreement with respect
to each loss event shall be reduced by an amount equal to the amount of
liability paid by the Reinsurer, but that part of the liability of the Reinsurer
that is so reduced shall be automatically reinstated from the commencement of
the loss event for which payment is made; however, the Limit of Liability of the
Reinsurer with respect to all loss events commencing during the term of this
Agreement shall not exceed the amount set forth in the article entitled LIMIT
AND RETENTION. In consideration of this automatic reinstatement, the Company
shall pay to the Reinsurer for each amount reinstated an additional reinsurance
premium that shall be pro rata of the reinsurance premium set forth in the
article entitled REINSURANCE PREMIUM. The additional reinsurance premium shall
be the product of the reinsurance premium set forth in the article entitled
REINSURANCE PREMIUM, multiplied by the amount of the reinstated Limit of
Liability of the Reinsurer divided by the total Limit of Liability of the
reinsurer for each loss event irrespective of the time of the commencement of
this loss event.
The reinsurance premium so developed for each amount reinstated shall be in
addition to the reinsurance premium set forth in the article entitled
REINSURANCE PREMIUM.
ARTICLE IX - MANAGEMENT OF CLAIMS AND LOSSES
The Company shall investigate and settle or defend all claims and losses.
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 of the Company within
the terms and limits of its policies which are within the limits
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set forth in the applicable Agreement shall be binding on the Reinsurer, subject
to the terms of this Agreement.
ARTICLE X - RECOVERIES
The Company shall pay to or credit the Reinsurer with the Reinsurees
portion of any recovery obtained from salvage, subrogation, or other insurance.
Adjustment expenses for recoveries shall be deducted from the amount recovered.
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
rights of salvage, subrogation, and its rights against insurers or to assign
these rights to the Reinsurer.
Recoveries shall be distributed to the parties in an order inverse to that
in which their liabilities accrued.
ARTICLE XI - ERRORS AND OMISSIONS
The Reinsurer shall not be relieved of liability because of an error or
accidental omission of the Company in reporting any claim or loss or any
business reinsured under this Agreement, provided that the error or omission is
rectified promptly after discovery. The Reinsurer shall be obligated only for
the return of the premium paid for business reported but not reinsured under
this Agreement.
ARTICLE XII - REPORTS AND REMITTANCES
(a) REINSURANCE PREMIUM
On or before the beginning of each calendar quarter, the Company shall
pay to the Reinsurer one quarter of the deposit reinsurance premium
stipulated in the article entitled REINSURANCE PREMIUM.
On or before October 15, 1994, the Company shall render to the
Reinsurer a report of the subject net earned premium by the Company
during the term of this Agreement. The Company shall calculate the
reinsurance
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premium thereon, shall balance such amount against the deposit
reinsurance premium previously paid, and the difference due either
party, subject to the minimum reinsurance premium, shall be remitted
promptly.
(b) CLAIMS AND LOSSES
The Company shall report promptly to the Reinsurer each loss event
which, in the Company's opinion, may involve the reinsurance afforded
by this Agreement. The Company shall advise the Reinsurer of the
estimated amount of ultimate net loss in connection with each loss
event and of any subsequent changes in such estimate.
Upon receipt of a definitive statement of ultimate net loss from the
Company, the Reinsurer shall promptly pay to the Company the
Reinsurer's portion of ultimate net loss. Any subsequent changes in
the amount of ultimate net loss shall be reported by the Company to
the Reinsurer and the amount due either party shall be remitted
promptly.
(c) P.C.S. CATASTROPHE BULLETINS
The Company shall furnish to the Reinsurer, upon request, the
following information with respect to each catastrophe set forth in
the Catastrophe Bulletins published by the Property Claim Services:
(1) The preliminary estimate of the amount recoverable from the
Reinsurer;
(2) The Reinsurer's portion of claims, losses, and adjustment expense
paid less salvage recovered during each calendar quarter;
(3) The Reinsurer's portion of reserves for claims, losses, and
adjustment expense at the end of each calendar quarter.
(d) GENERAL
In addition to the reports required by (a), (b), and (c) above, the
Company shall furnish such other information as may be required by the
Reinsurer for the completion of the Reinsurer's quarterly and annual
statements and internal records.
All reports shall be rendered on forms or in format acceptable to the
Company and the Reinsurer.
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ARTICLE XIII - REINSURANCE OVER THIS AGREEMENT
The Company shall advise the Reinsurer of any reinsurance of the Company
that would apply over and beyond the Limit of Liability of the Reinsurer under
this Agreement.
ARTICLE XIV - SPECIAL ACCEPTANCES
Business not within the terms of this Agreement 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 Agreement except as modified by the special
acceptance.
ARTICLE XV - RESERVES AND TAXES
The Reinsurer shall maintain the required reserves as to the Reinsurer's
portion of unearned premium, claims, losses, and adjustment expense.
The Company shall be liable for all premium taxes on premium ceded to the
Reinsurer under this Agreement. If the Reinsurer is obligated to pay any
premium taxes on this premium, the Company shall reimburse the Reinsurer;
however, the Company shall not be required to pay taxes twice on the same
premium.
ARTICLE XVI - OFFSET
The Company or the Reinsurer may offset any balance, whether on account of
premium, commission, claims or losses, adjustment expense, salvage, or
otherwise, due from one party to the other under this Agreement or under any
other agreement heretofore or hereafter entered into between the Company and the
Reinsurer.
ARTICLE XVII - INSPECTION OF RECORDS
The Company shall allow the Reinsurer to inspect, at reasonable times,
the records of the Company relevant to the business reinsured under
this Agreement, including Company
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files concerning claims, losses, or legal proceedings which involve or are
likely to involve the Reinsurer.
ARTICLE XVIII - ARBITRATION
Any unresolved difference of opinion between the Reinsurer and the Company
shall be submitted to arbitration by three arbitrators. One arbitrator shall be
chosen by the Reinsurer, and one shall be chosen by the Company. The third
arbitrator shall be chosen by the other two arbitrators within ten (10) days
after they have been appointed. If the two arbitrators cannot agree upon a
third arbitrator, each arbitrator shall nominate three persons of whom the other
shall reject two. The third arbitrator shall then be chosen by drawing lots.
If either party fails to choose an arbitrator within thirty (30) days after
receiving the written request of the other party to do so, the latter shall
choose both arbitrators, who shall choose the third arbitrator. The arbitrators
shall be impartial and shall be active or retired persons whose principal
occupation is or was as an officer of property and casualty insurance or
reinsurance companies.
The party requesting arbitration (the "Petitioner") shall submit its brief
to the arbitrators within thirty (30) days after notice of the selection of the
third arbitrator. Upon receipt of the Petitioner's brief, the other party (the
"Respondent") shall have thirty (30) days to file a reply brief. On receipt of
the Respondent's brief, the Petitioner shall have twenty (20) days to file a
rebuttal brief. Respondent shall have twenty (20) days from the receipt of
Petitioner's rebuttal brief to file its rebuttal brief. The arbitrators may
extend the time for filing of briefs at the request of either party.
The arbitrators are relieved from judicial formalities and, in addition to
considering the rules of law and the customs and practices of the insurance and
reinsurance business, shall make their award with a view to effecting the
intent of this Agreement. The decision of the majority shall be final and
binding upon the parties. The costs of arbitration, including the fees
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of the arbitrators, shall be shared equally unless the arbitrators decide
otherwise. The arbitration shall be held at the times and places agreed upon by
the arbitrators.
ARTICLE XIX - INSOLVENCY OF THE COMPANY
In the event of the insolvency of the Company, the reinsurance proceeds
will be paid to the Company or the liquidator immediately upon demand, with
reasonable provision for verification, on the basis of the amount of the claim
allowed in the insolvency proceeding without diminution by reason of the
inability of the Company to pay all or part of the claim.
The Reinsurer shall be given written notice of the pendency of each claim
against the Company on the policy(ies) reinsured hereunder within a reasonable
time after such claim is filed in the insolvency proceedings. The Reinsurer
shall have the right to investigate each such claim and to interpose, at its own
expense, in the proceeding where such claim is to be adjudicated, any defenses
which it may deem available to the Company or its liquidator. The expense thus
incurred by the Reinsurer shall be chargeable, subject to court approval,
against the insolvent Company as part of the expense of liquidation to the
extent of a proportionate share of the benefit which may accrue to the Company
solely as a result of the defense undertaken by the Reinsurer.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
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executed in duplicate,
this 8th day of March ,1994
EMPLOYERS REINSURANCE CORPORATION
By:______________________________
SECOND VICE PRESIDENT
Attest:
______________________
Vice President
and this 16th day of March, 1994
CALFARM INSURANCE COMPANY
ZENITH INSURANCE COMPANY
ZNAT INSURANCE COMPANY
By:________________________
SR VICE-PRES.
Attest:
______________________
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NUCLEAR INCIDENT EXCLUSION CLAUSE -
PHYSICAL DAMAGE - REINSURANCE - USA
(1) This Agreement 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 Agreement 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:
(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 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 the 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 1st January 1960 this sub-paragraph (b) shall only
apply provided the said radioactive contamination exclusion
provision has been approved by the Governmental 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 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) The Company 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 operation of paragraph (1) hereof, it
is understood and agreed that:
(a) all policies issued by the Company 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
Company 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.
POOLS, ASSOCIATIONS, AND SYNDICATES
EXCLUSION CLAUSE
SECTION A
Excluding:
All business derived directly or indirectly from any Pool, Association, or
Syndicate which maintains its own reinsurance facilities.
Any Pool or Scheme (whether voluntary or mandatory) formed after March 1,
1968, for the purpose of insuring Property whether on a country-wide basis
or in respect of designated areas. This exclusion shall not apply to so-
called Automobile Insurance Plans or other Pools formed to provide
coverage for Automobile Physical Damage.
SECTION B
It is agreed that business written by the Company for the same perils,
which is known at the time to be insured by, or in excess of underlying amounts
placed in the following Pools, Associations, or Syndicates, whether by way of
insurance or reinsurance, is excluded hereunder.
Industrial Risk Insurers, Associated Factory Mutuals, Improved Risk
Mutuals.
Any Pool, Association, or Syndicate formed for the purpose of writing Oil,
Gas, or Petro-Chemical Plants and/or Oil or Gas Drilling Rigs.
United States Aircraft Insurance Group, Canadian Aircraft Insurance Group,
Associated Aviation Underwriters, American Aviation Underwriters.
Section B does not apply:
(a) Where the Total Insured Value over all interests of the risk in
question is less than $250,000,000.
(b) To interests traditionally underwritten as Inland Marine or Stock
and/or Contents written on a Blanket basis.
(c) To Contingent Business Interruption, except when the Company is aware
that the key location is known at the time to be insured in any Pool,
Association, or Syndicate named above, other than as provided for
under Section B(a).
(d) To risks as follows: Offices, Hotels, Apartments, Hospitals, Educational
Establishments, Public Utilities (Other than Railroad Schedules) and
Builders Risks on the classes of risks specified in the subsection (d)
only.
SECTION C
NEVERTHELESS the Reinsurer specifically agrees that liability accruing
to the Company for its participation in: The Florida Residential Property and
Casualty Joint Underwriting Association shall not be excluded or:
(1) The following so-called "Coastal Pools"
ALABAMA INSURANCE UNDERWRITING ASSOCIATION
FLORIDA WINDSTORM UNDERWRITING ASSOCIATION
LOUISIANA INSURANCE UNDERWRITING ASSOCIATION
MISSISSIPPI WINDSTORM UNDERWRITING ASSOCIATION
NORTH CAROLINA INSURANCE UNDERWRITING
ASSOCIATION
SOUTH CAROLINA WINDSTORM AND HAIL
UNDERWRITING ASSOCIATION
TEXAS CATASTROPHE PROPERTY INSURANCE
ASSOCIATION
and
(2) All "Fair Plan" and "Rural Risk Plan" business,
for all perils otherwise protected hereunder shall not be excluded herefrom,
except that this Agreement does not include any increase in such liability
resulting from (1) the inability of any other participant in such "Coastal Pool"
and/or "Fair Plan" and/or "Rural Risk Plan" to meet its liability; or (2) any
claim against such "Coastal Pool" and/or "Fair Plan" and/or "Rural Risk Plan",
or any participant therein, including the Company, whether by way of subrogation
or otherwise, brought by or on behalf of any insolvency fund.