Common use of Initial Premium Clause in Contracts

Initial Premium. (a) The Initial Premium shall be payable by the Cedant to the Reinsurer on the Closing Date. The payment of the Initial Premium is a condition precedent to the liability of the Reinsurer under this Agreement. The Cedant’s obligation to pay the Initial Premium to the Reinsurer shall be satisfied on the Closing Date in accordance with Section 3.03(b). The Initial Premium and the components thereof shall be subject to adjustment following the Closing Date in accordance with Section 3.05. (b) The “Initial Premium” shall be an amount equal to: (i) the aggregate statutory reserves, as of the Effective Time, in respect of the Reinsured Liabilities (without regard to the transactions contemplated by this Agreement), determined in a manner consistent with the Cedant’s historical practices utilizing reserving methods and assumptions for applying Cedant SAP which are consistent with the reserving methods and assumptions utilized by the Cedant to prepare the Reference File; plus (ii) the Effective Date IMR.