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EXHIBIT 10.24
FINANCIAL PACIFIC
INSURANCE COMPANY
Agreement No. 118
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PROPERTY FACULTATIVE BINDING AGREEMENT
NO. 118
between
GENERAL REINSURANCE CORPORATION
a Delaware corporation
having its principal offices at
Financial Centre
695 East Main Street P.O. Box 10350
Stamford, Connecticut 06904-2350
(herein referred to as the "Reinsurer")
and
FINANCIAL PACIFIC INSURANCE COMPANY
8583 Elder Creek Road, Suite 100
Sacramento, California
(herein referred to as the "Company")
SECTION I - BINDING AUTHORITY
The Company shall bind on behalf of the Reinsurer, with respect to each
individual risk that has a total insured value of greater than $10,000,000 but
no greater than $25,000,000 and is insured under policies issued by the Company,
a maximum amount of reinsurance of $8,000,000 in excess of a Company retention
of $2,000,000. Such policies shall be classifiable in the NAIC form of annual
statement as fire, allied lines, inland marine, commercial multiple peril
(property coverages), and automobile physical damage (comprehensive and
collision) and shall insure risks wherever located in the United States of
America.
This Agreement shall apply to individual risks where the Company's
liability attaches, increases, or renews on and after July 1, 1996. All
reinsurance bound under this Agreement shall be governed by the terms and
conditions of the Reinsurer's Certificate of Facultative Reinsurance.
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SECTION II - MECHANICS OF BINDING
Within 90 days after binding the Reinsurer, the Company shall forward to
the Reinsurer the Reinsurer's Property Facultative Worksheet for each risk,
attaching pertinent underwriting information such as inspection reports,
diagrams, and policy forms.
If the Company fails to notify the Reinsurer within 90 days after binding
the Reinsurer, the risk shall be individually submitted and the effective date
of reinsurance shall be determined by mutual agreement.
Promptly upon receipt of such Worksheet and information, the Reinsurer
shall review the submission and provide the Company with a premium quotation. If
the Company accepts such premium quotation, the Reinsurer shall issue a
Facultative Reinsurance Certificate retroactive to the date it was bound, which
shall become the reinsurance contract between the parties and which shall be
cancelable in accordance with its terms.
If the Company rejects the premium quotation, it shall advise the
Reinsurer within 5 days after the date of such quotation and reinsurance
coverage shall be canceled flat. If the Company fails to notify the Reinsurer of
its rejection within 5 days after the date of such quotation, the Reinsurer
shall issue a Facultative Reinsurance Certificate for the period from the
inception date of the binder to the date on which the Company notifies the
Reinsurer of its rejection of the quotation. In such instance, the Company shall
pay to the Reinsurer a reinsurance premium equal to pro rata of the Reinsurer's
premium quotation for the time the Certificate is in force.
SECTION III - DEFINITIONS
(a) RISK
The Company shall establish what constitutes one risk, provided:
(1) A building and its contents, including time element coverages,
shall never be considered more than one risk;
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(2) When two or more buildings and their contents are situated at
the same general location, the Company shall identify on its
records at the time of acceptance by the Company those
individual buildings and their contents that are considered
to constitute each risk; if such identification is not made,
each building and its contents shall be considered to be a
separate risk.
(b) BUILDING
This term shall mean each structure that is considered by the local
fire insurance rating organization to be a separate building for
rate making purposes. With reference to structures not rated
specifically by the local fire insurance rating organization, the
term building shall mean each separately roofed structure enclosed
within exterior walls.
SECTION IV - EXCLUSIONS
The Company may not bind the Reinsurer on:
(a) Business accepted by the Company as reinsurance from other insurers
other than its affiliates,
(b) Policies written to apply in excess of underlying insurance or
policies written with a deductible or franchise of more than
$25,000; however, this exclusion shall not apply to policies which
provide a percentage deductible or franchise in connection with
windstorm;
(c) Insurance against earthquake, when written as such; however, this
exclusion shall not apply to ensuing loss by fire or explosion not
otherwise excluded;
(d) Insurance on growing crops;
(e) Insurance against flood, surface water, waves, tidal waves,
overflow of any body of water, or their spray, all whether driven
by wind or not, except when written in conjunction with fire and
otherwise eligible perils;
(f) Business classified as fidelity;
(g) Coverage afforded for loss or damage resulting from failure to
account or pay for any goods or merchandise sold on credit,
delivered under deferred payment agreements, consigned for sale, or
delivered under any trust or floor plan agreements, except under
standard accounts receivable policies;
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(h) Coverage afforded for any loss or damage caused by or resulting from:
(1) Explosion of steam boilers, steam pipes, steam engines or steam
turbines owned by, leased by or operated under the control of the
insured; however, this exclusion shall not apply to loss or damage
resulting from fire or combustion explosion, nor to loss or damage
caused by or resulting from the explosion of gases or fuel within the
furnace of any fired vessel or within the flues or passages through
which the gases of combustion pass;
(2) Artificially generated electric current, including electric arcing,
that disturbs electrical devices, appliances or wires- however, this
exclusion shall not apply to ensuing loss by fire not otherwise
excluded;
(3) Mechanical breakdown, including rupture or bursting caused by
centrifugal force; however, this exclusion shall not apply to any
resulting loss or damage caused by elevator collision;
(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) Risks which have a total insured value of more than $25,000,000;
(1) Mobile homes unless written as part of a commercial multiple peril policy;
(m) Watercraft;
(n) Inland marine business with respect to the following:
(1) All bridges and tunnels;
(2) Cargo insurance when written as such with respect to ocean, lake, or
inland waterways vessels;
(3) Faulty film, tape, processing and editing insurance and cast
insurance;
(4) Stationary drilling rigs;
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(5) Furriers' customers policies;
(6) Garment contractors policies;
(7) Insurance on livestock under so-called "mortality policies";
(8) Jewelers' block policies and furriers' block policies;
(9) Mining equipment while underground;
(10) Motor truck cargo as respects long haul vehicles;
(11) Radio and television broadcasting towers;
(12) Registered mail insurance when the limit of any one addressee on any
one day is more than $50,000;
(13) Builders risks;
(o) Vacant or unoccupied properties;
(p) Risks located on the keys and islands listed in Appendix A attached
hereto;
(q) Risks located within one mile of tidal waters, including the Intracoastal
Waterway, as respects the Gulf of Mexico from Brownsville, Texas to Key
West, Florida and the Atlantic Ocean from Key West, Florida to Sandy Hook,
New Jersey;
(r) 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;
(s) Coverage afforded for pollutant clean up or removal, including time
element coverage associated therewith, under any commercial property
policy or any inland marine policy written by the Company which does not
contain the provisions of 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 implementing such exclusion. If the Company elects to
implement an exclusion independent of ISO, such exclusion will be deemed a
suitable substitute provided the Com-
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pany has submitted the wording to the Reinsurer and received the
Reinsurer's prior approval.
Section V - ERRORS AND OMISSIONS
The Reinsurer shall not be relieved of liability because of an inadvertent
error or accidental omission of the Company, of a clerical or administrative
nature, in reporting any claim or loss or in reporting any business reinsured
under this Agreement, provided that the error or omission is rectified
immediately after discovery. The Company shall not be liable for any errors or
omissions on the part of the Reinsurer in transferring information from the
Worksheet to the Certificate of Facultative Reinsurance.
Section VI - INSPECTION
The Company shall allow the Reinsurer to inspect, at reasonable times, the
records of the Company relevant to the reinsurance bound in accordance with this
Agreement, including Company files concerning claims, losses, or legal
proceedings which involve or are likely to involve the Reinsurer.
Section VII - TERMINATION
Either party may withdraw this Agreement by sending to the other by
registered mail to the address listed in this Agreement, notice stating the time
and date when, not less than 90 days after the date of mailing of such notice,
withdrawal shall be effective. If the Reinsurer withdraws this binding
authority, it shall issue Certificates of Facultative Reinsurance for any
reinsurance bound by the Company prior to the effective date of such withdrawal.
Section VII - CHANGES OR ENDORSEMENTS
The terms of this Agreement shall not be waived or changed except by
endorsement issued hereto executed by a duly authorized representative of the
Company and the Reinsurer.
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Any increase in the Company's liability on risks covered hereunder shall
be automatically bound, subject to the Limit of Liability of the Reinsurer as
set forth in the section entitled BINDING AUTHORITY and subject to all other
terms of this Agreement, for a period of not more than 90 days from the date of
such increase.
The Company shall notify the Reinsurer of all increases by forwarding a
copy of the Company's amendatory endorsement or notice of change which shall be
acknowledged by the Reinsurer in the form of an endorsement to the Certificate
of Facultative Reinsurance with the additional reinsurance premium, if any,
entered thereon.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate,
this 6th day of February, 1997,
GENERAL REINSURANCE CORPORATION
[SIG]
Vice President
Attest: [SIG]
and this 10th day of February, 1997
FINANCIAL PACIFIC INSURANCE COMPANY
[SIG]
Attest: [SIG]
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Agreement No. 118
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APPENDIX A
Attached to and made a part of
AGREEMENT NO. 118
EXCLUDED KEYS AND ISLANDS
ALABAMA: Oyster Keys
Piney Island
Aux Herbes Island Plantation Key
Dauphin Island St. George Island
St. Vincent Island
FLORIDA: Sand Keys
Santa Rosa Island
Amelia Island Sanibel Island
Anclote Island Siesta Key
Anna Marie Island Snead Island
Big Pine Key Snipe Keys
Big Torch Key Stock Island
Bush Key Sugarloaf Key
Cabbage Key Ten Thousands Islands
Captiva Island Treasure Island
Caladesi Island Upper Matecumbe Key
Casey Key Vaca Key
Cayo Costa Island
Cedar Key GEORGIA:
Coquina Key
Crooked Key Cumberland Island
Cudjoe Key Jekyll Island
Elliott Key Ossabaw Island
Estero Island St. Catherines Island
Gasparilla Island St. Simons Island
Hog Island Sapelo Island
Honeymoon Island Skidaway Island
Hutchinson Island Tybee Island
J.N. Ding Darling NWR Wassaw Island
Johnston Key
Jupiter Island LOUISIANA:
Key Biscayne
Key Largo Breton Island
Key West Chandeleur Island
Long Key Curlew Island
Longboat Key Freemason Island
Lower Matecumbe Key Grand Gosier Island
Marco Island Grand Isle
Merritt Island Grand Terre Island
Meed Keys Isle au Pitre
Mullet Key Marsh Island
No Name Key North Island
North Captiva Island Shell Keys
Old Rhodes Key
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MISSISSIPPI: TEXAS:
Cat Island Brazos Island
Horn Island Galveston Island
Petit Bois Island High Island
Ship Island Matagorda Island
Mustang Island
NORTH CAROLINA: Padre Island
San Jose Island
Cedar Island South Padre Island
Durant Island
Harkers Island VIRGINIA:
Knotts Island
Mackay Island Cedar Island
Ocean Isle Island Cobb Island
Ocracoke Island Fishermans Island
Pea Island Hog Island
Roanoke Island (Nags Head) Metomkin Island
Portsmounth Island Myrite Island
Smith Island Parramore Island
Plum Tree Island
SOUTH CAROLINA: Ship Shoal Island
Tangier Island
Cape Island Wallops Island
Capers Island Wreck Island
Cedar Island
Daufuskie Island
Dewees Island
Edisto Island
Fripp Island
Folly Island
Hilton Head Island
Hunting Island
Isle of Palms
John Island
Kiawah Island
Morgan Island
Morris Island
Murphy Island
North Island
Pritchards Island
Seabrook Island
South Island
The Grand Strand
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Appendix A
Agreement No. II 8