Exhibit 10.17
Guy Carpenter & Company, Inc.
Centennial Lakes, Suite 400
GUY CARPENTER 3600 Minnesota Drive
Edina, MN 55435
952 920 3300 Fax 952 920 9382
Placement Slip
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File #: 2557-00-0001-00
Effective Date: January 1, 2003
COMPANY:
PROFESSIONALS DIRECT INSURANCE COMPANY
Grand Rapids, Michigan
(herein called the COMPANY)
TITLE:
FIRST EXCESS CASUALTY REINSURANCE AGREEMENT
BUSINESS COVERED:
New and renewal business classified by the Company as Lawyers Professional
Liability, including, but not limited to, claims made business written or
assumed under the Company's Select and Essentials or Premier Programs.
Prior Acts and Extended Reporting Endorsements covered as per original
policy.
TERRITORY:
To follow the Company's policies as respects insureds domiciled in the
United States, its territories or possessions.
PERIOD:
Continuous and to take effect January 1, 2003 as respects new and renewal
business. Annual or multi-year renewals thereafter as mutually agreed.
Original policy shall be issued for a maximum policy period of 12 months
plus odd time (not exceeding 18 months in all), plus any extended reporting
period endorsements.
Underwriting year account basis.
Cancellation at December 31, 2003, or any December 31 thereafter, by either
party via 180 days prior notice by certified or registered mail. Run-off
for all policies in force at the date of termination until their natural
expiration.
Page: 2 of 5
GUY CARPENTER File #: 2557-00-0001-00
Effective Date: January 1, 2002
PERIOD CONTINUED:
Reinsurers' liability will continue in the event any extended discovery or
reporting options are exercised in accordance with the original policies,
and/or in the event the Company is bound by statute, regulation, or
judicial decision to continue coverage.
LIMIT & RETENTION:
$500,000 each original insured, each and every claim in excess of $500,000
each original insured, each and every claim. Loss Expenses to be included
within and subject to the Reinsurers' limit of liability.
It is understood and agreed all ceded policies shall include claims expense
within limits of liability or so deemed.
EXCLUSIONS:
1. Insolvency Funds Exclusion Clause
2. Pools, Associations, and Syndicates
3. Nuclear Incident Exclusion Clause - Liability - Reinsurance
4. All actual or threatened loss or damage (including all consequential
loss or damage of any type) caused by, arising or resulting from, or
in connection with, an act or acts of Terrorism, including all costs
and expenses of whatever nature, related thereto. For purposes of this
exclusion, "Terrorism" shall mean any act(s), attempt(s) or threat(s)
thereof, which endangers human life or health, tangible or intangible
property or infrastructure, or intimidates, disrupts or coerces a
government or a unit of government, business or commercial enterprise,
the public, or any segment thereof, in furtherance of political,
religious, ideological or social objectives. This Exclusion shall
apply regardless of any otherwise covered cause, event or peril
contributing concurrently or in any other sequence to the loss.
PREMIUM:
85% of the layer net increased limits ceded premium.
Within thirty (30) days of the end of each quarter, the Company shall
furnish the Reinsurer with a statement of account detailing the ceded
premium to be paid to the Reinsurer together with a bordereau of policies
ceded under this agreement during the quarter.
Page: 3 of 5
GUY CARPENTER File #: 2557-00-0001-00
Effective Date: January 1, 2002
RESERVES:
Letters of Credit and/or Trust Agreements required from unauthorized
Reinsurers for outstanding losses and expenses, recoverables, IBNR, and
unearned premium.
GENERAL CONDITIONS:
All reinsurance under this Contract shall be subject to the same rates,
terms, conditions, deductibles, waivers and interpretations and to the same
modifications and alterations as the respective policies of the Company.
"Original Insured" shall mean all interests covered under one Policy.
"Claim" shall mean any notice received by the Company in writing of an
incident, or claim or suit which is sufficient to enable the Company to
establish a claim advice file. A Claim, for purposes hereon, shall include
each Claim or series of Claims arising out of any one incident as respects
any one Insured, such Claim(s) arising due to the same accident, error or
omission in providing a professional service, or series of accidents,
errors or omissions in providing professional service having a common
cause, unless otherwise defined in the Company's original policy.
"Increased Limits Net Written Premium" as used herein, shall mean the
Company's gross written premium associated by the Company to the limits
ceded to this contract. As respects business produced through agents and
brokers, it is understood and agreed the Company may gross up their ILF
premium for the representative expenses of acquiring the business, with
said commission not to exceed 15% of the layer increased limits net written
premium.
CLAUSES:
Access to Records Clause
Amendments
Arbitration Clause
Confidentiality Clause
Coverage
Currency Clause
Definitions (ALAE included within the UNL; DJ expenses covered)
ECO 90%, XPL 90% (within UNL on ceded policies)
Exclusions
Federal Excise Tax Clause
Governing Law Clause
Indemnification and Errors and Omissions Clause
Insolvency Clause, applies severally to each reinsured entity
Loss Notices and Settlements
Page: 4 of 5
GUY CARPENTER File #: 2557-00-0001-00
Effective Date: January 1, 2002
CLAUSES CONTINUED:
Net Retained Lines
Offset Clause, this Agreement only
Other Reinsurance
Reinsurance Follows Original Policies
Reinsurance Premium
Reserve and Funding
Reports and Remittances
Retention and Limit
Salvage and Subrogation Clause
Service of Suit Clause
Settlements Clause
Several Liability Notice - LSW - 1001
Taxes Clause
Term and Cancellation
Territory
GUY CARPENTER & COMPANY, INC., Intermediary Clause
INFORMATION:
Estimated 2003 gross ceded premium equals $1,700,000.
Page: 5 of 5
GUY CARPENTER File #: 2557-00-0001-00
Effective Date: January 1, 2002
BROKERAGE:
10.00% of net premium ceded to reinsurers.
ACCEPTED:
First Layer: 15% of $500,000 Ref # 03XL02001
Reinsurer: AmerInst Insurance Company, Ltd.
FEIN #:
NAIC #:
Authorized Signature: /s/ Stuart Grayston
Date: February 27, 2003