Exhibit 10.55
FIFTH AMENDMENT TO THE
REINSURANCE POOLING AGREEMENT
AMENDED AND RESTATED AS OF JANUARY 1, 2000
This Fifth Amendment (the "Fifth Amendment") to the Reinsurance Pooling
Agreement Amended and Restated as of January 1, 2000, as heretofore amended (the
"2000 Pooling Agreement"), by and among State Automobile Mutual Insurance
Company ("State Auto Mutual"), State Auto Property and Casualty Insurance
Company ("State Auto P&C"), Milbank Insurance Company ("Milbank"), State Auto
Insurance Company of Wisconsin ("State Auto Wisconsin"), Farmers Casualty
Insurance Company ("Farmers Casualty"), State Auto Insurance Company of Ohio
("State Auto Ohio") and State Auto Florida Insurance Company ("State Auto
Florida") (collectively, the "Pooled Companies") is made this 8th day of
July 2004, but is effective as of 12:01 a.m. Columbus, Ohio time July 1, 2004.
BACKGROUND INFORMATION
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The State Auto Group of insurance companies ("State Auto") intends to expand the
scope of its commercial insurance operations by offering customers State Auto
Middle Market Insurance (as defined below).
State Auto believes that State Auto Middle Market Insurance is an important
opportunity to increase its penetration in commercial lines and to form closer
ties with its independent insurance agents who distribute State Auto's other
products.
State Auto desires for agents to place State Auto Middle Market Insurance with
Meridian Security Insurance Company ("Meridian Security"), an Indiana domiciled
property casualty insurer which is a wholly owned subsidiary of State Auto
Mutual.
On an interim basis, such coverage shall be placed in State Auto Mutual because
it currently holds the requisite state licenses and rate/form filings, while
Meridian Security is in the process of securing these regulatory approvals.
Placing business with State Auto Mutual will allow earlier entry into this
important market segment.
For the interim period that State Auto Middle Market Insurance is to be written
through State Auto Mutual, said insurance would be subject to the 2000 Pooling
Agreement unless specifically excluded therefrom. State Auto does not intend for
State Auto Middle Market Insurance to be subject to the 2000 Pooling Agreement;
therefore, the 2000 Pooling Agreement needs to be amended to exclude State Auto
Middle Market Insurance.
The Independent Committee of the Board of Directors of each of State Auto Mutual
and State Auto Financial Corporation has approved the exclusion of State Auto
Middle Market Insurance from the 2000 Pooling Agreement.
The purpose of the Fifth Amendment is to exclude State Auto Middle Market
Insurance from the 2000 Pooling Agreement from and after the effective date
hereof.
STATEMENT OF AGREEMENT
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In consideration of the mutual covenants set forth herein and INTENDING TO BE
LEGALLY BOUND HEREBY, the Pooled Companies agree to amend the 2000 Pooling
Agreement as follows:
1. Capitalized terms used in this Fifth Amendment (including the
Background Information) which are not otherwise defined herein shall be
defined as in the 2000 Pooling Agreement and those definitions shall apply
in this Fifth Amendment.
2. It is understood and agreed that State Auto Middle Market Insurance
is defined as follows: State Auto Middle Market Insurance is (i) property
casualty insurance for commercial risks that are larger than those included
in the standard segment of State Auto's business; (ii) underwritten by the
State Auto Middle Market Insurance underwriting unit; and (iii) coded by
State Auto as State Auto Middle Market Insurance.
3. Section 1 a. of the 2000 Pooling Agreement is hereby amended by the
addition of the following sentence: It is understood and agreed that Net
Liabilities excludes any and all liabilities arising out of State Auto
Middle Market Insurance for such insurance written on and after 12:01 a.m.,
July 1, 2004.
4. Section 1 b. of the 2000 Pooling Agreement is hereby amended by the
addition of the following sentence: It is understood and agreed that Net
Premiums excludes any and all premiums arising out of State Auto Middle
Market Insurance for such insurance written on and after 12:01 a.m., July
1, 2004.
5. The following sentence is added to section 2. Cession of the 2000
Pooling Agreement: Notwithstanding anything to the contrary in subsections
(a), (b), (c), (d), (e), and (f) of this section 2, liabilities incurred in
connection with or arising out of State Auto Middle Market Insurance are
not included in the liabilities ceded in the above described subsections of
this section 2.
6. The following sentence is added to section 4. Assumption of
Reinsurance of the 2000 Pooling Agreement: Notwithstanding anything to the
contrary in subsections (a), (b), (c), (d), (e), and (f) of this section 4,
liabilities incurred in connection with or arising out of State Auto Middle
Market Insurance are not included in the liabilities reinsured and assumed
in the above described subsections of this section 4.
7. The following sentence is added to section 7. Premium Payable by
State Auto Mutual of the 2000 Pooling Agreement:
Notwithstanding anything to the contrary in subsections (a), (b), (c),
(d), (e), and (f) of this section 7, no losses, loss expenses, underwriting
expenses and administrative expenses chargeable to State Auto Middle Market
Insurance shall be included in the amounts pro rated among the parties on
the basis of the Respective Percentage of each as described in the above
referenced subsections of this section 7.
8. The following sentence is added to section 9. General Statement of
Intent of the 2000 Pooling Agreement: Notwithstanding anything to the
contrary in subsections (a), (b), (c), (d), (e), (f), (g), and (h) of this
section 9, premiums, losses, loss expenses, underwriting expenses and
administrative expenses chargeable to State Auto Middle Market Insurance
from and after 12:01 a.m., July 1, 2004, are excluded from the scope of the
2000 Pooling Agreement.
9. The following sentence is added to section 10. Losses Excluded of
the 2000 Pooling Agreement: All premiums, losses, loss expenses,
underwriting expenses and administrative expenses chargeable to State Auto
Middle Market Insurance from and after 12:01 a.m., July 1, 2004, are
excluded from the scope of the 2000 Pooling Agreement.
10. The following sentence is added to section 17. Insolvency: The
parties to this Agreement understand and agree that the reinsurance made
under this agreement excludes State Auto Middle Market Insurance for such
business written on and after 12:01 a.m., July 1, 2004.
11. The Fifth Amendment is effective as of 12:01 a.m. Columbus, Ohio
time July 1, 2004 (the "Effective Date"), provided that it is not
disapproved by any insurance regulator with jurisdiction over any party to
the 2000 Pooling Agreement, as amended heretofore and hereby. If the Fifth
Amendment is disapproved as indicated, the Fifth Amendment shall be deemed
null and void and shall not be deemed to have amended the 2000 Pooling
Agreement in any manner whatsoever. This Fifth Amendment shall terminate
when the 2000 Pooling Agreement terminates, absent the earlier termination
hereof by the written consent of all parties hereto.
Except as expressly amended hereby, the 2000 Pooling Agreement shall continue in
full force and effect for the balance of the term thereof.
By the signature of an authorized officer hereon, each of the parties hereto
agrees to the terms of this Fifth Amendment.
State Automobile Mutual Insurance Company
By: /s/ Robert H. Moone
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Robert H. Moone, President
State Auto Property and Casualty Insurance Company
By: /s/ Robert H. Moone
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Robert H. Moone, President
Milbank Insurance Company
By: /s/ Robert H. Moone
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Robert H. Moone, President
State Auto Insurance Company of Wisconsin
By: /s/ Robert H. Moone
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Robert H. Moone, President
Farmers Casualty Insurance Company
By: /s/ Robert H. Moone
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Robert H. Moone, President
State Auto Insurance Company of Ohio
By: /s/ Robert H. Moone
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Robert H. Moone, President
State Auto Florida Insurance Company
By: /s/ Robert H. Moone
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Robert H. Moone, President