Common use of Loss Settlements Clause in Contracts

Loss Settlements. A. MSRE will advise PRe within seven (7) business days of all Losses that MSRE becomes aware of and may result in a Loss settlement and any subsequent developments with respect thereto under this Agreement that may materially and/or adversely affect the capital position of PRe. Such Loss reporting to PRe will include, but is not limited to, (i) incurred Losses of ten per cent (10%) or more of PRe’s capital position and (ii) any claims that may involve loss in excess of original policy limits (“XOPL”) and extra contractual obligations (“ECO”) settlements. Any inadvertent omission or oversight in providing such advice to PRe is in no way to affect the liability of PRe; however, when discovered, MSRE will notify PRe within three (3) business days of any such omission or oversight. B. MSRE will have the right to settle all Loss-related claims under the Original Policies. However, when so requested by PRe, MSRE will afford PRe, at PRe’s own expense, to associate (although not control) with MSRE in the defense of any lawsuit or other litigation proceeding that involves the Business Covered by this Agreement, and MSRE and PRe will cooperate in every respect in any such defense. C. All valid Loss settlements payable to the Cedents and any related valid ALAE and ULAE payments made by MSRE, including any Ex-Gratia Settlements, are to be unconditionally binding on PRe solely in proportion to PRe’s quota share portion of the subject Original Policy, provided that such Loss settlements payable to the Cedents and ALAE and ULAE payments, are either made (i) within the terms and conditions of this Agreement, or (ii) in addition to coverage required by the terms and conditions of the Original Policy and this Agreement (the “Ex-Gratia Settlement”) solely for the purpose of reducing future liability in an amount greater than the Ex-Gratia Settlement. D. PRe agrees to pay or allow, as the case may be, its share of each such settlement to be made in accordance with this Agreement within five (5) Business Days of receipt of proof of payment of any such settlement from MSRE. In connection with PRe’s obligations in respect of such payments, MSRE may request, and PRe agrees, to grant signing authority to MSRE to fulfill PRe’s obligations under this Agreement, should MSRE determine that such authority was necessary. E. MSRE will deposit all salvage and subrogation recoveries, net of recovery cost, into the Premium Monies Account and credit PRe with PRe's proportionate retroceded share of those recoveries on all Business Covered Losses, ALAE, and ULAE. MSRE agrees to enforce MSRE’s and PRe’s salvage and subrogation rights and to pursue all claims that have the potential for any recoveries in excess of recovery costs related to those rights as regards the Business Covered. F. At all times, MSRE will avoid circumstances and/or actions that could lead to XOPL or ECO claims. However, if an XOPL claim payment is imposed on MSRE by an arbitrator, regulator, or court of competent jurisdiction, then, consistent with this Article, PRe will pay its proportionate share of any such excess. PRe may subsequently pursue recovery from MSRE for any XOPL payment in the event that any such Loss has been incurred because of failure by MSRE, by reason of alleged or willful negligence, fraud, or bad faith, in (i) rejecting an offer of settlement within the Original Policy limit or, (ii) in the preparation of the defense or in the trial of any action against an Insured, or (iii) in the preparation or prosecution of an appeal consequent to any such action. G. The date on which any ECO is incurred will be deemed, in all circumstances, to be the date or dates of the original accident, casualty, disaster, or Loss Occurrence. H. In the event that the Parties cannot agree on fault or payments as regards to any XOPL or ECO situation, any such matter will be resolved by Arbitration as set forth in this Agreement.