REINSURANCE COVER NOTE
Agreement No. BN970028/71/72/73
MEMORANDUM OF REINSURANCE EFFECTED ON BEHALF OF:
REINSURED: HOME STATE INSURANCE GROUP
- ---------
HOME STATE INSURANCE COMPANY
Red Bank, New Jersey
QUAKER CITY INSURANCE COMPANY
Trevose, Pennsylvania
NEW YORK MERCHANT BAKERS INSURANCE COMPANY
Binghamton, New York
HOME MUTUAL INSURANCE COMPANY OF BINGHAMTON, NEW YORK
Binghamton, New York PINNACLE INSURANCE COMPANY
Carrollton, Georgia WESTBROOK INSURANCE COMPANY
Wallingford, Connecticut (hereinafter referred to as
the "Company"
TYPE: MEDICAL AND REHABILITATION EXPENSES
- ---- EXCESS OF LOSS REINSURANCE AGREEMENT
PERIOD: Continuous Agreement covering losses occurring from
- ------ January 1, 1997, Eastern Standard Time, subject to
cancellation at any January 1 anniversary thereafter
by either party giving ninety (90) days' prior written
notice. In the event of cancellation, the Reinsurer
shall run off coverage of the in-force business to
natural expiration.
CLASS: All in-force, new and renewal business written by the
- ----- Company, classified as Personal Injury Protection
(PIP) under No-Fault Insurance Laws in all states, Canada
and Mexico. Exhibit A, attached to and forming part of
this Agreement, provides coverage for Pennsylvania
Extraordinary Medical Benefits on Private Passenger
Automobile. Exhibits B, C and D, attached to and forming
part of this Agreement, provides coverage on Commercial
Automobile Charter, Line and School Bus Transportation
vehicles and all other Commercial Automobile and Private
Passenger vehicles in all states, Canada and Mexico.
EXCLUSIONS: As respects Commercial Automobile and Private Passenger
- ---------- Automobile, this Agreement shall not apply to "bodily
injury":
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Agreement No. BN970028/71/72/73
1. Sustained by any person while intentionally causing or
attempting to cause "bodily injury" to:
EXCLUSIONS
(Continued): a. himself;
- ----------- b. herself; or
c. any other person;
nor will the Company pay Accidental Death Benefits on
behalf of that person.
2. Sustained by any person while committing a felony.
3. Sustained by any person while seeking to elude lawful
apprehension or arrest by a law enforcement official.
4. Caused by or as a consequence of:
a. discharge of a nuclear weapon (even if
accidental);
b. war (declared or undeclared);
c. civil war;
d. insurrection; or
e. rebellion or revolution.
5. From or as a consequence of the following whether
controlled or uncontrolled or however caused:
a. nuclear reaction;
b. radiation; or
c. radioactive contamination.
6. Extra Contractual Obligations and Loss in Excess of
Policy Limits.
7. Insolvency funds.
As respects Private Passenger Automobile, this Agreement
shall not apply to "bodily injury":
8. Sustained by any person while maintaining or using a
"motor vehicle" knowingly converted by that person.
However, this exclusion (8) does not apply to:
a. insured; or
b. any insured's "family member".
9. Sustained by any person, who, at the time of the
accident:
a. is the owner of one or more registered "motor
vehicles" and none of those "motor vehicles"
have in effect the financial responsibility
required by the Act; or
b. is "occupying" a "motor vehicle" owned by that
person for which the financial responsibility
required by the Act is not in effect.
10. Sustained by any person maintaining or using a "motor
vehicle" while located for use as a residence or
premises.
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REINSURANCE COVER NOTE
Agreement No. BN970028/71/72/73
11. Sustained by any person injured as a result of conduct
within the course of the business of repairing,
servicing or otherwise maintaining "motor vehicles".
This exclusion (11) does not apply if the conduct is
off the business premises.
12. Sustained by any person while "occupying":
EXCLUSIONS
(Continued): a. a recreational vehicle designed for use off
- ----------- public roads; or
b. a motorcycle, moped, or similar-type
vehicle.
13. Sustained by any person as a direct result of loading
or unloading any "motor vehicle."
As respects Private Passenger Automobile in Exhibit A
only, this Agreement shall not apply to "bodily
injury":
14. Sustained by a pedestrian if the accident occurs
outside of Pennsylvania. This exclusion (14) does not
apply to:
a. insured; or
b. any insured's "family member."
TERRITORIAL
SCOPE: Losses wheresoever arising as per the Company's original
- ----- policies.
LIMIT AND
RETENTION: See Exhibits A, B, C and D.
- ---------
PREMIUM: See Exhibits A, B, C and D.
- -------
GENERAL
CONDITIONS Commutation Clause - five (5) years after the end of each
- ---------- Agreement year this Agreement is in force, the Company
shall advise the Reinsurer of any outstanding claims and/or
occurrences during that Agreement year which have not been
finally settled and which may cause a claim under this
Agreement.
The Company or the Reinsurer may then, or at any time
thereafter, request that their Liability of such unsettled
claims be commuted. Upon such request, the Reinsurer and
the Company shall review all claims and shall attempt to
reach a settlement by mutual agreement. If the Reinsurer
and the Company cannot reach a settlement by mutual
agreement, then the Reinsurer and the Company shall
mutually appoint an independent actuary (FSA/FCA or
ASA/ACAS) who shall investigate, determine and capitalize
the present value of any such unsettled claims. In the
event the Reinsurer and the Company cannot reach an
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REINSURANCE COVER NOTE
Agreement No. BN970028/71/72/73
agreement on an independent actuary, each party shall
appoint an actuary within thirty (30) days after receipt of
the written request for commutation. The requesting party
may appoint a second actuary if the responding party fails
to appoint an actuary within thirty (30) days after being
requested to do so. The two (2) appointed
GENERAL
CONDITIONS
(Continued): actuaries will then appoint a third actuary. If the third
- ----------- actuary does not respond within thirty (30) days of their
appointment, each of the two (2) appointed GENERAL
CONDITIONS (Continued): actuaries shall name three (3)
individuals, of whom the other shall decline two (2), and
the decision shall be made by drawing lots. All actuaries
selected by drawing lots shall be disinterested in the
outcome of the commutation.
Any payment by the Reinsurer under this clause shall
constitute a complete release of the Reinsurer for their
Liability as respects all claims. The cost of any
independent actuary shall be shared on an equal basis by
the Reinsurer and the Company. This clause shall survive
the expiration or cancellation of this Agreement.
CLAUSES: Parties to the Agreement.
- ------- Net Retained Lines.
Ultimate Net Loss - Loss Adjustment Expenses included in
the limit of the Agreement.
Subrogation.
Salvage and Recoveries.
Definition of Loss Occurrence.
Loss Notice and Settlements.
Funding of Reserves.
Currency.
Taxes.
Access to Records.
Errors and Omissions not to override Loss Notice and
Settlements, and not to apply to Exclusions.
Original Conditions.
Insolvency.
Arbitration.
Federal Excise Tax.
Service of Suit - NMA 1998 - Mendes & Mount (where
applicable).
Minet Re North America, Inc. Intermediary.
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REINSURANCE COVER NOTE
Agreement No. BN970028/71/72/73
WORDING: As per expiring Reinsurance Agreement as far as applicable
- ------- and as noted herein, which complies with the requirements
of the State of New York Insurance Department.
We will periodically provide a list of those companies with which Minet Re North
America, Inc. is affiliated, which may be parties to this placement. This list
is available on request.
For and on behalf of:
MINET RE NORTH AMERICA, INC.
-------------------------
Vice President
HOME STATE INSURANCE GROUP
HOME STATE INSURANCE COMPANY
QUAKER CITY INSURANCE COMPANY
NEW YORK MERCHANT BAKERS INSURANCE COMPANY
HOME MUTUAL INSURANCE COMPANY OF BINGHAMTON, NEW YORK
PINNACLE INSURANCE COMPANY
WESTBROOK INSURANCE COMPANY
- ------------------------------
Authorized Signature
- ------------------------------
Date
Please examine this document carefully and advise us immediately if any of the
details or the security used are not in accordance with your order or
requirements.
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REINSURANCE COVER NOTE
Agreement No. BN970028/71/72/73
EXHIBIT A
PENNSYLVANIA MEDICAL AND REHABILITATION EXPENSES
EXCESS OF LOSS REINSURANCE AGREEMENT
------------------------------------
(BN970028)
LIMIT AND
RETENTION: $1,000,000 ultimate net loss each and every person in
- --------- excess of $100,000 ultimate net loss each and every person.
Subject to a lifetime aggregate reinsured limit of
$1,000,000 per person and a $50,000 limit per person, per
year, after the first eighteen (18) months of eligibility.
Coverage shall apply only if the incurred casualty medical
expenses of an individual exceeds $100,000 during the first
five (5) years of eligibility.
DEPOSIT
PREMIUM: $20,000 adjusted annually at ISO rate per vehicle. Deposit
- ------- payable in four equal quarterly installments of $5,000 on
January 1, April 1, July 1 and October 1, 1997.
MINIMUM
PREMIUM: $20,000 annually.
- -------
Reinsurer Effective January 1, 1997:
- -----------------------------------
% FEIN NAIC
- ---- ----
Federal Insurance Company
Indianapolis, Indiana 100% 13-1963496 20281
----
Through Duncanson & Holt, Inc.
Placement Total: 100%
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REINSURANCE COVER NOTE
Agreement No. BN970028/71/72/73
EXHIBIT B
---------
PER PERSON MEDICAL AND REHABILITATION EXPENSES
EXCESS OF LOSS REINSURANCE AGREEMENT
------------------------------------
(BN970071)
LIMIT AND
RETENTION: $2,250,000 ultimate net loss each and every person, each
- --------- and every loss occurrence, in excess of $250,000 ultimate
net loss each and every person, each and every loss
occurrence.
RATE: 5.75% of subject matter net written premium. 1997 estimated
- ---- premium for Bus PIP is $850,000.
DEPOSIT
PREMIUM: $40,000 payable in four equal quarterly installments of
- ------- $10,000 on January 1, April 1, July 1 and October 1, 1997,
subject to adjustment at December 31, 1997.
MINIMUM
PREMIUM: $40,000 annually.
- -------
Reinsurer Effective January 1, 1997:
- ------------------------------------
% FEIN NAIC
- ---- ----
Federal Insurance Company
Indianapolis, Indiana 100% 13-1963496 20281
----
Through Duncanson & Holt, Inc.
Placement Total: 100%
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REINSURANCE COVER NOTE
Agreement No. BN970028/71/72/73
EXHIBIT C
FIRST PER OCCURRENCE MEDICAL AND REHABILITATION EXPENSES
EXCESS OF LOSS REINSURANCE AGREEMENT
------------------------------------
(BN970072)
LIMIT AND
RETENTION: $2,250,000 each and every loss occurrence in excess of
- --------- $250,000 each and every loss occurrence.
Maximum any one person $250,000. Two-person warranty.
RATE: 4.50% of subject matter net written premium. 1997 estimated
- ---- premium for Bus PIP is $850,000.
DEPOSIT
PREMIUM: $31,000 payable in four equal quarterly installments of
- ------- $7,750 on January 1, April 1, July 1 and October 1, 1997,
subject to adjustment at December 31, 1997.
MINIMUM
PREMIUM: $31,000 annually.
- -------
Reinsurer Effective January 1, 1997:
- ------------------------------------
% FEIN NAIC
- ---- ----
Federal Insurance Company
Indianapolis, Indiana 100% 13-1963496 20281
----
Through Duncanson & Holt, Inc.
Placement Total: 100%
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REINSURANCE COVER NOTE
Agreement No. BN970028/71/72/73
EXHIBIT D
---------
SECOND PER OCCURRENCE MEDICAL AND REHABILITATION EXPENSES
EXCESS OF LOSS REINSURANCE AGREEMENT
------------------------------------
(BN970073)
LIMIT AND
RETENTION: $8,750,000 each and every loss occurrence in excess of
- --------- $2,500,000 each and every loss occurrence.
Maximum any one person $250,000. Three-person warranty.
RATE: 2.50% of subject matter net written premium. 1997 estimated
- ---- premium for Bus PIP is $850,000.
DEPOSIT
PREMIUM: $17,000 payable in four equal quarterly installments of
- ------- $4,250 on January 1, April 1, July 1 and October 1, 1997,
subject to adjustment at December 31, 1997.
MINIMUM
PREMIUM: $17,000 annually.
- -------
Reinsurer Effective January 1, 1997:
- ------------------------------------
% FEIN NAIC
- ---- ----
Federal Insurance Company
Indianapolis, Indiana 100% 13-1963496 20281
----
Through Duncanson & Holt, Inc.
Placement Total: 100%
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