EXHIBIT 10.80
REFERRAL AGREEMENT
BETWEEN
RENAISSANCE UNDERWRITING MANAGERS LTD.
AND
PLATINUM UNDERWRITERS REINSURANCE, INC.
This Referral Agreement ("Agreement"), dated as of November 3, 2003, is made and
entered into by and between Renaissance Underwriting Managers Ltd. ("RUM") and
Platinum Underwriters Reinsurance, Inc. (the "Company").
In consideration of the mutual covenants contained in the following Articles and
upon the terms and conditions as set forth therein, the parties hereto agree as
follows:
ARTICLE I: OBLIGATIONS OF THE PARTIES
RUM, a subsidiary of Renaissance Re Holdings Ltd ("Renaissance"), and the
Company have entered into an Agreement whereby RUM will from time to time
provide referrals of treaty and facultative reinsurance contracts to the Company
for compensation as outlined herein. RUM will not retain any liability as
respects those contracts referred except as provided in Article V; and the
Company will be responsible for the management of such business in all respects.
ARTICLE II: TERM
(1) TERM: This Agreement shall be effective from November 1, 2002 through
October 31, 2007 as respects treaty and facultative reinsurance
contracts with inception and/or anniversary dates during the period.
(2) This Agreement is not cancelable prior to the expiration date by either
party. Run-off or cut-off of this Agreement will be mutually agreed. If
no agreement can be reached, the contract shall run-off.
ARTICLE III: DEFINITIONS
The following definitions will apply to this Agreement:
(1) "SUBJECT BUSINESS" will consist of "RENAISSANCE RE GROUP BUSINESS" and
"DIRECTED BUSINESS" as defined below.
"RENAISSANCE RE GROUP BUSINESS" is defined as all treaty and
facultative reinsurance contracts ceded to the Company from companies
owned or managed by Renaissance or any of its subsidiaries. Renaissance
Re Group Business will be specifically listed in Exhibit A, which will
be added to this Agreement and updated monthly.
"DIRECTED BUSINESS" is defined as all treaty and facultative
reinsurance contracts ceded to the Company from companies that are not
owned or managed by Renaissance or any of its subsidiaries that were
directed to the Company by RUM. Directed Business will be specifically
listed in either Exhibit B or Exhibit B Prime, which will be added to
the Agreement and updated monthly or as contracts are added.
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The Company has the sole right to determine which contracts will be
added to Exhibit B and Exhibit B Prime. Contracts listed in Exhibit B
shall be considered Directed Business for all renewals by the Company
until the Termination of this Agreement. Contracts listed in Exhibit B
Prime shall only be considered Directed Business for the annual period
listed on Exhibit B Prime.
At the time of referral of potential Subject Business, the parties will
clearly indicate in which Exhibit the contracts will be included.
(2) "AGREEMENT" means this Agreement, together with the exhibits hereto, as
the same may be amended in accordance herewith from time to time.
(3) "ANNUAL PERIOD" as used herein will initially be from November 1, 2002
to October 31, 2003 and each 12-month period thereafter until the
expiration of this Agreement on October 31, 2007.
(4) "AVERAGE QUARTERLY EXPERIENCE ACCOUNT BALANCE" means, for the purpose
of Article IV(3) hereof, the sum of the Interest Credit Base on the
last day of the current quarter plus the Interest Credit Base on the
last day of the immediately prior quarter, multiplied by 0.50. However,
for the initial quarter of this Agreement, the Average Quarterly
Experience Account Balance shall equal the Interest Credit Base on the
last day of such quarter multiplied by 0.50.
(5) "AVERAGE QUARTERLY ONE-YEAR TREASURY NOTE RATE" means, for the purpose
of Article IV(3) hereof, the one-year Treasury Note rate prevailing on
the last day of the applicable quarter, multiplied by 90 divided by
360.
(6) "GROSS LOSSES INCURRED" means, for the purpose of Article IV(2) hereof,
for each Annual Period, the gross losses and loss adjustment expenses
paid as of the date of calculation, plus the ceded reserves for losses
and loss adjustment expenses outstanding as of the same date (including
any ceded reserves for incurred but not reported loss and loss
adjustment expense as carried on the audited financial statements of
the Company), it being understood and agreed that all losses and
related loss adjustment expenses under the contracts allocated to an
Annual Period shall be charged to the Annual Period, regardless of the
date said losses actually occur.
(7) "GROSS PREMIUMS WRITTEN" means all direct premiums written by the
Company on Subject Business, without deduction for any premiums ceded
by the Company or premiums paid for reinsurance recoveries which inure
to the benefit of the Company.
(8) "INTEREST CREDIT BASE" means, for the purpose of Article IV(3) hereof,
the year-to-date collected Gross Premiums Written minus the
year-to-date gross losses and loss adjustment expenses paid, minus the
year-to-date acquisition expenses paid.
ARTICLE IV: FEES AND COMMISSIONS
(1) FINDER'S FEE
Within 30 days following each Annual Period, the Company shall pay to
RUM a Finder's Fee on the Directed Business included in EXHIBIT B and
EXHIBIT B PRIME written by the Company pursuant to this Agreement for
the Annual Period.
The Finder's Fee Rate shall be 1.0% percent of Gross Premiums Written
for all pro-rata business, 2.5% of Gross Premiums Written on all excess
of loss business, and 7.5% of the Company's margin on all
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finite business. The Finder's Fee will not apply to the portion of the
premium retroceded to RenRe pursuant to Article V.
The Finder's Fee Payment will be calculated based on the Finder's Fee
Rate as indicated in the preceding paragraph and will be deemed to be
final when paid. The determination as to what constitutes pro-rata,
excess of loss and finite business will be mutually agreed by RUM and
the Company. Margin will be calculated on finite business by a method
mutually agreed by both parties.
(2) PROFIT COMMISSION
This Profit Commission Article will apply to all Subject Business
included in this Agreement as listed in Exhibit A, the "Renaissance Re
Group Business" and Exhibit B and Exhibit B Prime, the "Directed
Business".
In consideration of the services rendered by RUM pursuant to this
Agreement, the Company shall pay RUM a Profit Commission in respect of
each Annual Period. RUM shall calculate the amount of Profit Commission
due for each Annual Period. The Profit Commission will be resettled 30
days following the end of each Annual Period until all income and
liability for the Subject Business applicable to that Annual Period is
extinguished or until mutually agreed by both parties.
The Amount of Profit will be equal to the positive balance, if any,
derived from the following formula: the earned portion of Gross
Premiums Written less the sum of: (i) Gross Losses Incurred and (ii)
actual expenses paid (direct expenses including but not limited to
brokerage and FET) by the Company on Subject Business plus an Interest
Credit, calculated at the option of RUM.
The Profit Commission Rate for each Annual Period shall be twenty (20%)
percent. The Profit Commission shall be equal to the Amount of Profit
multiplied by the Profit Commission Rate.
The Company will calculate and provide interim reports of the Profit
Commission as of each September 30th within 30 days following each
Annual Period. There will be a separate profit commission calculation
for each Annual Period with unlimited deficit carry forward. As
respects each calculation, any additional Profit Commission due RUM
shall be paid by the Company with the report, and any return Profit
Commission shown to be due the Company shall be paid by RUM within 30
days after receipt of the report.
Profit Commission shall not apply to the portion of the premium
retroceded to RenRe, pursuant to Article V.
(3) INTEREST CREDIT
This Interest Credit article will apply to all Subject Business
included in this Agreement as listed in EXHIBIT A, the "Renaissance Re
Group Business", EXHIBIT B and EXHIBIT B PRIME, the "Directed
Business", and RUM will have the right to calculate a quarterly
Interest Credit on the funds held by the Company in respect of the
applicable Subject Business. The Interest Credit will equal the Average
Quarterly Experience Account Balance multiplied by the applicable
Average Quarterly one-year US Treasury Note rate. The Company agrees to
provide the quarterly premium collected, loss and loss adjustment
expenses paid and acquisition expenses paid for the purpose of this
calculation, at the end of each Annual Period, and shall pay the
Interest Credit concurrently with the Annual Profit Commission payment,
if requested by RUM.
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ARTICLE V: RETROCESSION OF SUBJECT BUSINESS
(1) OPTION TO RETROCEDE CONTRACTS: At the sole option of RUM, RUM will have
the right to designate individual contracts from the Directed Business
listed in Exhibit B and Exhibit B Prime to be retroceded to Renaissance
Reinsurance Ltd. ("RenRe") on a quota share basis. No more than 30% of
Company's signed line may be required to be retroceded to RenRe
pursuant to this Article V. RUM must designate the contracts to be
retroceded to RenRe within 30 days from the date on which the contracts
are listed in Exhibit B or Exhibit B Prime (but not to exceed 60 days
from the inception of the contract), subject to any extension agreed to
by the parties. The contracts designated by RUM to be retroceded will
be specifically listed in Exhibit C, which will be attached to this
Agreement and updated monthly, or as contracts are added. The Company
and RenRe will enter into a separate quota share retrocession agreement
with respect to the contracts included on Exhibit C.
(2) AGGREGATE CAP TO RETROCEDED CONTRACTS: As respects those contracts
retroceded to RenRe pursuant to Article V (1) above, RUM at its sole
option, can designate which of those contracts listed in Exhibit C will
be subject to an Aggregate Loss Ratio Cap provided by the Company.
Those contracts designated by RUM will be listed specifically in an
Exhibit D, which will be attached to this Agreement and updated
monthly, or as contracts are added. The Aggregate Loss Ratio Cap
provided by the Company will limit the maximum liability of RenRe from
those contracts listed in Exhibit D to 225% of Gross Premiums Written
for each Annual Period. The Aggregate Loss Ratio Cap will apply to the
combined performance of all contracts listed in Exhibit D. At the time
of referral of potential Subject Business, the parties will clearly
indicate in which Exhibit the contracts will be included.
(3) EXPENSE OVERRIDE: As of each September 30th, RUM will pay to the
Company an Expense Override Payment in consideration of the Aggregate
Loss Ratio Cap provided by the Company in Article V (2) above.
The Expense Override Rate shall be 3.0% percent.
The Expense Override Payment will be the product of the Expense
Override Rate times the Gross Premiums Written for the Contracts listed
in Exhibit D for the Annual Period ending on the applicable September
30th. The Expense Override Payment shall be payable simultaneously with
the Finder's Fee in Article IV (1).
ARTICLE VI: TERMS AND CONDITIONS
(1) This Agreement shall not restrict the rights or ability of RUM to offer
services similar to those contemplated hereby to third parties
including its own affiliates. The Company waives any claim based on any
conflict of interest on the part of RUM or its employees arising from
any RUM affiliate carrying on business similar to that of the Company.
(2) If any part of this Agreement shall be adjudged by any court of
competent jurisdiction to be invalid, such judgment will not affect or
nullify the remainder of this Agreement but the effect thereof will be
confined to the part immediately involved in the controversy adjudged.
(3) The waiver by either party hereto of any breach of this Agreement,
whether in a single instance or repeatedly, shall not be construed as a
waiver of rights under this Agreement to terminate the same because of
similar, additional or future breaches. Further, such waiver shall not
in any manner be construed as a waiver by the other party to strictly
adhere to the terms and conditions of this Agreement nor as a waiver of
any claim for damages or other remedy by reason of such breach.
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(4) Without the written consent of the other party, this Agreement may not
be assigned by either of the parties hereto. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and
permitted assigns. Any such assignments shall be subject to all
necessary regulatory approvals.
(6) This Agreement may not be amended, and none of its provisions may be
modified, except expressly by an instrument signed by the parties
hereto; provided, however that the parties shall not modify or amend
any material provision of this Agreement if such action requires the
prior approval of the Bermuda Registrar of Companies and/or the
Maryland Insurance Administration, without first obtaining such
approval.
(7) This Agreement shall not be construed to create the relationship of
employer or employee, partnership, or any type of joint venture
relationship, between the Company and RUM or their respective
affiliates.
(8) Nothing in this Agreement is intended to confer any rights or remedies
under or by reason of this Agreement on any persons other than RUM and
the Company and their respective successors. Nothing in this Agreement
is intended to relieve or discharge the obligations or liability of any
third persons to RUM or the Company. No provision of this Agreement
shall give any third persons any right of subrogation or action over or
against RUM or the Company.
(9) Except as provided herein, RUM shall not have any other or further
obligations or responsibilities to the Company, including, but not
limited to, any liability for the uncollectability of any reinsurance
premium, the profitability of the business of the Company, the solvency
of any person (including the Company) or the failure of third parties
(including insurers and reinsurers) to fulfill their obligations.
(10) This Agreement, including any exhibits hereto, sets forth the entire
understanding of the parties with respect to the transactions
contemplated hereby, and merges and supersedes all prior discussions,
agreements, promises, representations, warranties and arrangements of
every kind and nature between them as to the subject matter hereof, and
neither party shall be bound by any condition, warranty or
representation relating to such subject matter other than as expressly
provided for in this Agreement or as may be set forth in a subsequent
writing signed by the party which is to be bound thereby.
(11) No uncertainty or ambiguity herein shall be construed or resolved
against either party, whether under any rule of construction or
otherwise. Neither party to this Agreement shall be considered the
draftsman. The parties acknowledge and agree that this Agreement has
been reviewed, negotiated and accepted by the parties and their
attorneys and shall be construed and interpreted according to the
ordinary meaning of the words used so as fairly to accomplish the
purposes and intentions of all parties hereto.
(12) All notices or other communications that are required or permitted
hereunder shall be in writing and sufficient if delivered by hand, or
by courier or overnight carrier, to the Company or RUM at its address
set forth below (or at such other address as the Company or RUM may
designate by notice as provided hereunder), and shall be deemed to have
been delivered as of the date so delivered.
If to the Company:
Platinum Underwriters Reinsurance, Inc.
195 Broadway
New York, NY 10007
Attention: James M. Conway, General Counsel
Facsimile: (212) 809-7565
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If to RUM:
Renaissance Underwriting Managers Ltd.
Renaissance House
8-12 East Broadway
Pembroke HM19 Bermuda
Attention: Stephen H. Weinstein, General Counsel
Facsimile: (441) 296-5037
ARTICLE VII: ARBITRATION
(1) As a condition precedent to any right of action under this Agreement,
any dispute arising out of, or related in any way to, this Agreement or
the transactions hereunder, including its formation and validity, shall
be submitted to a panel of arbitrators sitting in Bermuda, unless the
parties agree otherwise. The panel shall be composed of two
arbitrators, one to be chosen by each party, and an umpire to be chosen
by the arbitrators. The arbitrators and umpire shall be disinterested,
active or retired executive officers of property or casualty insurance
or reinsurance companies, not under the control or management of either
party to this Agreement.
(2) The party demanding arbitration shall do so by written notice in
accordance with the notice provisions of this Agreement. The
arbitration demand shall state the issues to be resolved and shall name
the arbitrator appointed by the demanding party. Within 30 days of
receipt of the demand for arbitration, the responding party shall
notify the demanding party of any additional issues to be resolved in
the arbitration and the name of the responding party's appointed
arbitrator. If the responding party refuses or neglects to appoint an
arbitrator within 30 days following receipt of the written arbitration
demand, then the demanding party may appoint the second arbitrator, but
only after providing 10 days' written notice of its intention to do so,
and only if such other party has failed to appoint the second
arbitrator within such 10 day period. The two arbitrators shall, before
instituting the hearing, select an impartial arbitrator to act as the
umpire and preside over the hearing. If the two arbitrators fail to
agree on the selection of a third arbitrator within 30 days after
notification of the appointment of the second arbitrator, the selection
of the umpire will be made by the American Arbitration Association.
(3) The panel shall make its decision in the context of the custom and
usage of the insurance and reinsurance industry. They shall interpret
this Agreement as an honorable engagement, and shall settle any dispute
under this Agreement according to an equitable, rather than strictly
legal, interpretation of its terms with a view to effecting the general
purpose of this Agreement. The panel is relieved of all judicial
formality and may abstain from following the strict rules of law. The
panel shall have the power to fix all procedural rules for the
arbitration, including but not limited to, the discretionary power to
make orders regarding any matters which it may consider proper under
the circumstances of the case relating to pleadings, discovery,
inspection of documents, and examination of witnesses. The panel shall
have the power to receive and act upon such evidence, whether oral or
written, as it in its sole discretion shall deem relevant to the
dispute.
(4) The panel shall render a decision in writing within 60 days after the
matter is finally submitted to it unless the parties agree to an
extension. Any decision by a majority of the panel members shall be
final and binding on the parties. If either of the parties fails to
comply with the panel's decision, the other party may apply for its
enforcement to a court of competent jurisdiction.
(5) Unless ordered differently by the panel, each party shall bear the
expenses of its own arbitrator, and shall jointly and equally bear with
the other party the expenses of the umpire. In the event both
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arbitrators are chosen by one party, the fees of all three arbitrators
shall be equally divided between the parties. The remaining costs of
the arbitration proceeding shall be allocated by the panel as part of
it award.
(6) Except as otherwise provided herein, all proceedings pursuant hereto
shall be governed by the laws of the State of New York without giving
effect to any choice or conflict of laws provision or rule (whether the
State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New
York.
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be executed
in its company name by its respective Officer, hereunto duly authorized as of
the date first written above.
PLATINUM UNDERWRITERS REINSURANCE, INC.
SIGNED by /s/ Michael D. Price
--------------------
Name: Michael D. Price
Title: President
RENAISSANCE UNDERWRITING MANAGERS LTD.
SIGNED by /s/ John D. Nichols, Jr.
------------------------
Name: John D. Nichols, Jr.
Title: Executive Vice President
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