EXHIBIT 10.11
WILLIS
Reference : SGT5667.
Reinsured : National Indemnity Company.
Type : Quota Share.
REINSURED: NATIONAL INDEMNITY COMPANY, Omaha, USA.
PERIOD: Covering business incepting
between 1 January 2002 and 31
May 2002, both days inclusive,
in respect of the 2002 year of
account excluding the
reinsurance to close from
earlier years of account. In
addition US Surplus Lines
Business written between 1 June
2002 and 30 June 2002, both days
inclusive, is covered hereunder.
TYPE: Quota Share.
INTEREST: To cover the Reinsured's
liabilities assumed under Quota
Share Agreement, Willis Ltd
Reference SGT5648, in the name
of Syndicate 2020, Wellington
Underwriting, and in respect of
their Whole Account from 1
January 2002 to 31 May 2002,
plus US Surplus Lines Business
written from 1 June 2002 to 30
June 2002.
TERRITORIAL SCOPE: Worldwide
TREATY DETAIL: The Reinsurer agrees to accept a 34%
share of the Reinsured's 35.70% Quota
Share allocation of Syndicate 2020,
Wellington Underwriting's Whole Account
for the specified period.
Syndicate 2020, Wellington
Underwriting's Stamp Capacity
for 2002: GBP 625,000,000
All of the above is subject to a
maximum ceded premium of 34% of
30% of Stamp Capacity or GBP
63,750,000.
The above capacity and limit are
calculated at the following
rates of exchange:
GBP 1 = USD 1.55 = CAD 2.27 =
EUR 1.52 = AUD 2.51 = JPY 170.91
= ZAR 10.29 = CHF 2.39.
The Reinsurer shall share in the
benefits (to the extent
WILLIS
Reference : SGT5667.
Reinsured : National Indemnity Company.
Type : Quota Share.
recoveries are collected) and
costs of all reinsurances
protecting Syndicate 2020,
Wellington Underwriting's Whole
Account, other than the Whole
Account Stop Loss coverage
bought by the Syndicate.
PREMIUM: Reinsurer's quota share of 100%
Whole Account premium written
less Reinsured's commissions and
expenses. (Premiums are original
premiums less all overseas
levies, taxes and original
brokerage and commissions, with
no further deduction for any
other fees, costs, or levies).
CASH LOSS: GBP 170,000 any one loss to this
reinsurance (net of claims
collectable under other
reinsurances).
OVERRIDING COMMISSION: 9.0 % on gross net premiums
ceded. Gross net premiums are
original premiums less all
overseas levies, taxes and
original brokerage and
commissions. Net premiums are
Gross net premiums less
reinsurance costs.
PROFIT COMMISSION: 10% (after 7.5% Reinsurer's
expenses) on profit amount up to
20% of Net Premiums. 25%
thereafter. Provisional Profit
Commission payable by Reinsurer
at 31 December, 2004 and
adjustable quarterly thereafter
until execution of Reinsurer's
Commutation and Hold Harmless
Agreement.
Plus an additional 2% with
calculation based on profit
prior to the application of any
Profit Commission calculation on
the original Quota Share
Agreement (Willis Ltd Reference
SGT5648)
Payment of any provisional
Profit Commission is to be made
by 31 March 2005. Subsequent
quarterly adjustments to the
Profit Commission are to be paid
within 90 days of the end of
each quarter.
REINSURANCE PREMIUM ALLOCATION: 34% of Reinsurance Premium costs
allocated to the Qualifying
Quota Share underwritten by the
Reinsured, Willis Limited
Reference SGT5648.
2
WILLIS
Reference : SGT5667.
Reinsured : National Indemnity Company.
Type : Quota Share.
ACCOUNTS: Quarterly. Accounts to be
rendered within 45 days of due
date.
Account to be paid in settlement
currencies.
Undisputed items to be paid
within 15 working days of
rendering, other items upon
agreement.
First Quarterly Account as at 30
September, 2002.
Funds Withheld Basis. Interest
payable to be calculated at
either the rates on USD Funds
and GBP Funds as reported in the
Syndicate's accounts, or the
applicable 90 days London
Interbank Offer Rates (LIBOR),
whichever is the lesser, as
applied to each currency
individually. No interest on
funds withheld which are due
from Reinsurer from date of
Reinsured's payment of Account.
TAXES: Federal Excise Tax as applicable
to be deducted from Premium due
Reinsurer.
LETTERS OF CREDIT: Reinsurer to provide appropriate
Letter of Credit to the amount
of 40% of Expected Gross Written
Premium ceded hereunder, plus
Letters of Credit required in
excess of this amount in order
to comply with NAIC
requirements, as applicable.
Letters of credit must be in
form required for NICO to
receive credit for reinsurance
under NAIC model credit for
reinsurance act.
GENERAL CONDITIONS: Subject to Lloyd's and FSA
approval.
Arbitration Clause as attached.
Proper Law and Jurisdiction
governing this Reinsurance
(including Arbitration Tribunal)
shall be the law of Nebraska.
All reinsurances (excess of loss
or otherwise) purchased by
Syndicate 2020, Wellington
Underwriting, to be for common
account, other than Whole
Account Stop Loss. Costs and
recoveries to be shown
separately in each account to
the extent that such information
is provided by
3
WILLIS
Reference : SGT5667.
Reinsured : National Indemnity Company.
Type : Quota Share.
Syndicate 2020.
The Reinsurer shall hereon
follow the fortunes of Syndicate
2020, Wellington Underwriting
and the Reinsured in respect of
all original business and all
common account reinsurances
which are the subject matter of
this reinsurance.
This Reinsurance may be commuted
at the request of either party
after five years from inception
and at any subsequent
anniversary date, at conditions
to be agreed. Nevertheless this
Reinsurance may not be commuted
any earlier than the original
Qualifying Quota Share (Willis
Limited Reference SGT5648)
except by Agreement.
Access to Records, as attached.
Willis Limited Intermediary
Clause, amended for direct
settlements, as attached.
Offset, as attached.
No Third Party Rights, as
attached.
Non-waiver, as attached.
Insolvency, as attached.
Noted and agreed that the
Reinsurer has made their own
underwriting investigations of
the business to be ceded
hereunder.
WORDING: To be agreed.
OFFSET
- ------
The Reinsured or the Reinsurer may offset any balance(s) due from the other
under this Agreement or any other reinsurance agreement between them. Each party
may exercise such right at any time whether the balance(s) due are on account of
premiums or losses or otherwise.
4
WILLIS
Reference : SGT5667.
Reinsured : National Indemnity Company.
Type : Quota Share.
NO THIRD PARTY RIGHTS
- ---------------------
In no event shall anyone other than the Reinsurer or the Reinsured have any
rights under this Agreement, whether under the Third Parties' Rights under
Contracts Act (1999) or otherwise.
NON-WAIVER
- ----------
The failure of the Reinsured or the Reinsurer to insist on compliance with this
Agreement or to exercise any right or remedy hereunder shall not constitute a
waiver of any rights or remedy contained herein or otherwise, nor estop either
party from thereafter demanding full and complete compliance nor prevent either
party from exercising such rights or remedy in the future.
INSOLVENCY
- ----------
In the event of the insolvency or liquidation of the Reinsured, this reinsurance
shall be payable solely to the Reinsured or to its liquidator, receiver,
conservator or statutory successor in accordance with all the terms and
conditions of this Agreement. Under no circumstances shall the Reinsurer's
obligations be accelerated in time or enlarged in the event of the insolvency,
scheme of arrangement or other impairment of the Reinsured.
Insolvency Clause to be amended as required for Reinsured to receive credit for
this reinsurance under NAIC model credit for reinsurance act.
ARIAS ARBITRATION AGREEMENT
- ---------------------------
All disputes and differences arising under or in connection with this Agreement
shall be referred to arbitration under ARIAS Arbitration Rules.
The Arbitration Tribunal shall consist of three arbitrators, one to be appointed
by the Claimant, one to be appointed by the Respondent and the third to be
appointed by the two appointed arbitrators.
The third member of the Tribunal shall be appointed as soon as practicable (and
no later than 28 days) after the appointment of the two party-appointed
arbitrators. The Tribunal shall be constituted upon the appointment of the third
arbitrator.
The Arbitrators shall be persons (including those who have retired) with not
less than ten years' experience of insurance or reinsurance within the industry.
Where a party fails to appoint an arbitrator within 14 days of being called upon
to do so or where the two party-appointed arbitrators fail to appoint a third
within 28 days of their appointment, then upon application ARIAS (US) will
appoint an arbitrator to fill the vacancy. At any time prior to the appointment
by ARIAS (US) the party or arbitrators in default may make such appointment.
5
WILLIS
Reference : SGT5667.
Reinsured : National Indemnity Company.
Type : Quota Share.
The Tribunal may in its sole discretion make such orders and directions as it
considers to be necessary for the final determination of the matters in dispute.
The Tribunal shall have the widest discretion permitted under the law governing
the arbitral procedure when making such orders or directions.
The seat of arbitration shall be Omaha, Nebraska.
The proper law of this Agreement shall be the law of Nebraska.
ACCESS TO RECORDS
- -----------------
The Reinsurer or their duly authorised representatives shall, at all reasonable
times and upon reasonable notice being given, be entitled to inspect all
relevant records, correspondence and documents in the possession of the
Reinsured relating to the adjustment of a loss or losses under this Agreement.
This entitlement shall continue for as long as the Reinsurer remains liable
under this Agreement.
A copy of the Inspection Report and/or a summary of its findings shall be
delivered to the Reinsured within four weeks of the completion of the inspection
and any costs and expenses incurred under any such inspection shall be borne by
the Reinsurer.
Notwithstanding the foregoing, this Article shall not be understood to alter any
other terms of this Agreement and the Reinsurer shall not delay payment of
amounts due to the Reinsured pending the results of any such inspection. However
this shall not prejudice the Reinsurer rights to recover any amounts they have
paid to the Reinsured which, following such inspection, are proven to be outside
of the terms of this Agreement.
INTERMEDIARY
- ------------
Willis Limited, Ten Trinity Square, London, EC3P 3AX are recognised as the
intermediary negotiating this Agreement; through whom all communications
relating thereto shall be transmitted to both parties.
Notwithstanding the above payments of balances due shall be made directly
between the Reinsured and Reinsurer.
6
WILLIS
Reference : SGT5667.
Reinsured : National Indemnity Company.
Type : Quota Share.
SIGNING PAGE
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| Signed |
| Line % |
Approved for National Indemnity Company
06 June 2002
by /s/ Forrest N. Katter, Secretary
--------------------------------
Forrest N. Katter, Secretary