EXHIBIT 10.31
DATED: 16 SEPTEMBER, 1997
PXRE MANAGING AGENCY
LIMITED (1)
AND
XXXXXXXXXXX INSURANCE
SERVICES
LIMITED (2)
AGREEMENT
FOR THE PROVISION OF INSURANCE AND
CORPORATE MANAGEMENT SERVICE
XXXXXXXXXXX GROUP
000 XXXXXXXXX XXXXXX
XXXXXX XX0X 0XX
REF. JM8/17.9.97
INDEX
CLAUSE HEADING PAGE NUMBER
1 DEFINITIONS AND INTERPRETATION 3
2 RECITALS 6
3 PERIOD OF AGREEMENT 6
4 APPOINTMENT OF MANAGER 6
5 POWERS AND DUTIES OF MANAGER 7
6 OBLIGATIONS OF THE COMPANY 9
7 TERMINATION 11
8 MANAGER'S DUTY OF CARE 13
9 APPOINTMENT OF SUB-AGENTS 13
10 DOCUMENTS 13
11 SUPPLEMENTAL ACTS 14
12 CONFIDENTIALITY AND REPUTATION 14
13 INTELLECTUAL PROPERTY 14
14 RESTRICTIONS 14
15 NOTICES 15
16 MISCELLANEOUS PROVISIONS 15
17 LAW AND JURISDICTION 16
THE FIRST SCHEDULE
Remuneration and expenses payable
by the Company to the Manager 18
THE SECOND SCHEDULE
Services and Procedures Manual 20
2
THIS AGREEMENT is made the day of 16 September 1997
BETWEEN:-
(1) PXRE MANAGING AGENCY LIMITED, a company (registered in England under No.
3251363) whose registered office is at One Xxxxxxxxxxx Xxxxxx, Xxxxxx XX0X
0XX ("the Company"); and
(2) XXXXXXXXXXX INSURANCE SERVICES LIMITED, a company (registered in England
under No. 1918744) whose registered office is at One Xxxxxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX ("the Manager").
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement (including the Schedule) the expressions set forth
below (where the context so admits) bear the meanings stated beside them
respectively: -
Expression Meaning
"Accounting Year" the period from the lst January to the
31st December (inclusive) in each year and
for the purposes of this Agreement the first
Accounting Year shall be the period from the
lst January 1997 to the 31st December 1997
(inclusive);
"Authorised Persons" those persons who have been duly
authorised by the Company to give Proper
Instructions, and whose identity as such has
been notified in writing by the Company to
the Manager;
"the Bank Accounts" the bank accounts to be opened and
maintained by the Company pursuant to
Clause 6.2;
"the Board" the board of directors of the Company;
"Confidential Information" information of a confidential
nature concerning and relating to the
goodwill of the Undertaking or the Manager
(as the case may be), including (without
prejudice to the generality of the
foregoing) information as to customers,
clients, finances, business policy and the
like;
"the Core Functions" the core functions of the
Company comprised in the Managing Agent's
Agreement and which Lloyd's require shall
not be sub-contracted namely compliance,
underwriting contracts of insurance at
Lloyd's, reinsuring such contracts in
3
whole or in part, paying claims on such
contracts and syndicate monitoring;
"the Dedicated Staff" the employees of the Group who are employed
wholly or mainly to provide the Services
and who are identified in the Services and
Procedures Manual (and any replacements
thereof or additions thereto agreed to in
writing by the parties);
"the Deed of Undertaking" the Composite Undertaking dated 20th
December 1996 and made between PXRE
Corporation (1), the Company (2), the
executive directors of the Company (3),
PXRE (4) and Lloyd's (5);
"Designated Persons" those persons, including officers and/or
employees of corporations other than the
Company, to whom an Authorised Person has,
either wholly or in part, and either on a
permanent or temporary basis, delegated his
authority to give Proper Instructions, and
written notice confirming this fact, duly
signed by such Authorised Person, will be
conclusive proof of such authority, unless
written notice to the contrary is given by
the Company or Authorised Person to the
Manager, in which event the Designated
Person's authority to give Proper
Instructions will terminate forthwith:
"the Group" the group of companies (as defined by
Section 42 of the Landlord and Tenant Act
1954) of which the Manager is a member
company;
"Insurance" any policies, slips, certificates,
contracts, covers or other written or oral
evidence of insurance or reinsurance or
indemnity or guarantees including any
contract or policy which would normally be
treated as similar to a contract or policy
of insurance by underwriters carrying on
business in Great Britain;
"the Laws" the laws of England and Wales (including
delegated legislation and regulations of any
competent authority);
"Lloyd's" the Society incorporated by Lloyd's Xxx 0000
by the name of Lloyd's;
"the Managing the Managing Agent's Agreement (Corporate
Member) dated
4
Agent's Agreement" 23rd September 1996 and made between PXRE
(1) and the Company (2);
"Proper Instructions" all instructions to the Manager given by
Authorised Persons or Designated Persons
concerning any of the matters referred to in
this Agreement, which instructions must be
given either in writing and signed by the
Authorised Person or Designated Person
concerned, or telephonically, provided such
telephonic instructions are confirmed in
writing and signed by the Authorised Person
or Designated Person concerned within 5 days
after they were given;
"PXRE" PXRE Limited (a Corporate Member of Lloyd's
registered in England);
"the Services" the services to be performed by the Manager
in terms of this Agreement and in the
Services and Procedures Manual;
"the Services and the Manual, a copy of which forms the Second
Procedures Manual" Schedule hereto, and which sets out (inter
alia) the Services to be provided by the
Manager hereunder and the procedures to be
observed in relation thereto by the parties
and any amendments or substitutions thereto
agreed in writing by the parties from time
to time;
"the Undertaking: the business operations and undertakings of
the Company.
1.2 In this Agreement, unless the context otherwise requires:-
1.2.1 any reference to a Clause or Schedule is a reference to a
Clause of or Schedule to this Agreement; and the Schedules
form part of and are deemed to be incorporated in this
Agreement;
1.2.2 any reference to persons includes a reference to firms,
corporations or unincorporated associations,
1.2.3 any reference to the singular includes a reference to the
plural and vice versa, and any reference to the masculine
includes a reference to the feminine and vice versa; and
1.2.4 words and expressions defined in the Companies Xxx 0000 bear
the same respective meanings.
1.3 In this Agreement headings and titles are used for ease of reference
only, and do not affect the interpretation of this Agreement.
5
2. RECITALS
2.1 The Company is the managing agent of PXRE which carries on business as a
Corporate Member of Lloyd's.
2.2 The Manager is a company providing (inter alia) insurance and corporate
management services and the parties hereto have agreed that the Manager
shall provide such services to the Company on the terms hereinafter
appearing.
3. PERIOD OF AGREEMENT
This Agreement shall (subject to the provisions for earlier termination
contained in Clause 7 and the First Schedule) be for the term commencing
on the 1st day of January 1997 and expiring on the 31st day of December
1997 and, thereafter, shall continue from year to year until determined
in accordance with the provisions of Clause 7.
4. APPOINTMENT OF MANAGER
4.1 The Company hereby appoints the Manager to provide the Services
and, subject to the overall direction by the Company by means of
Proper Instructions, the Manager shall:-
4.1.1 provide the Services in a proper and a businesslike
manner; and
4.1.2 have full power and authority to carry out the
Services on behalf of the Company and to exercise all
such powers which may be necessary in the ordinary
course of the business of the Company to effect
provision of the Services, including (but without
limiting the generality of the foregoing) the power
to enter into binding contracts on behalf of the
Company, and to exercise such powers, authorities and
discretions in relation to the Company as are vested
in the Board and on its behalf as the Company may,
with the agreement of the Manager, from time to time
by Proper Instructions delegate to the Manager.
4.2 The Manager hereby accepts such appointment and agrees to carry out its
obligations set forth herein upon the terms herein contained and in
accordance with the Laws until its appointment shall be terminated as
herein provided.
4.3 Save where specifically provided in the Services and Procedures Manual,
nothing contained in this Agreement shall:-
4.3.1 impose on the Manager any obligation to control, manage or
provide underwriting accounts in respect of any insurance
business underwritten pursuant to the Managing
6
Agent's Agreement or otherwise on behalf of or in the name of
PXRE, or to deal with or settle any claims arising out of or in
connection therewith; or
4.3.2 permit the Manager to exercise any of the powers and discretions
specifically vested in the Company pursuant to this Agreement, or
on behalf of the Company to waive or amend the terms hereof, or
of any of the Proper Instructions given by the Company hereunder.
5. POWERS AND DUTIES OF MANAGER
In the exercise of its powers and duties hereunder and without prejudice
to the foregoing generality thereof the Manager shall:-
5.1 have the powers, authorities and duties set out in the Services and
Procedures Manual;
5.2 perform, on behalf of the Company, those functions and obligations
referred to in the Managing Agent's Agreement which relate to the
provision of insurance and corporate management services but not those
which relate to the provision of investment management services,
PROVIDED THAT such functions and obligations which it performs in terms
of this Clause shall be deemed not to be sub-contracted to the Manager
if and to the extent that they relate to Core Functions;
5.3 promptly pay into the appropriate Bank Accounts all sums (if any)
received by the Manager for and on behalf of the Company AND:-
5.3.1 receipt of monies in any currencies other than pounds sterling,
US dollars or other currencies for which accounts have been
opened shall, at the discretion of the Manager, either be
converted into pounds sterling or US dollars as soon as
reasonably possible following their receipt, or be retained in
the currency in which they were originally received; and
5.3.2 operate the Bank Accounts on behalf of the Company and draw
monies therefrom in accordance with the requirements of the
Undertaking and the various limits and restrictions in relation
thereto to be agreed in accordance with the terms of the Services
and Procedures Manual, but not so as to raise an overdraft or
otherwise to borrow against such accounts without having obtained
the prior written consent thereto of the Company;
5.4 notify the Company forthwith if the monies in the Bank Accounts are at
any time, in the opinion of the Manager:-
7
5.4.1 insufficient to meet the current overall requirements of the
Undertaking, and the Company hereby undertakes, on receipt of
such notice, forthwith to transfer funds to the Bank Accounts in
an amount sufficient to make up the shortfall; or
5.4.2 in excess of the current overall requirements of the Undertaking,
and, subject to the provisions of Clause 6.3, the Manager shall
place such excess funds at the disposal of the Company;
5.4.3 PROVIDED THAT the Manager shall not be responsible for the
investment of any monies in the Bank Accounts, except to the
extent provided in the Services and Procedures Manual;
5.5 provide offices and secretarial and clerical staff as will be suitable
and sufficient for the use and day to day running of the Company,
PROVIDED THAT the Company shall not be entitled to the exclusive use of
such offices and secretarial and clerical staff, AND FURTHER PROVIDED
THAT, if the Company wishes to employ insurance underwriting staff and
have the exclusive use of any underwriting premises in connection with
PXRE, it shall provide such staff and premises itself;
5.6 use its best endeavours to advise the Company in regard to the Laws
affecting the Undertaking in the United Kingdom and shall ensure that
the Manager shall not, on behalf of the Company, enter into any contract
in contravention thereof;
5.7 subject to the Company providing the Manager with all necessary
information requested by the Manager in connection therewith, make all
necessary returns to the competent authorities in the United Kingdom in
respect of insurance business on behalf of the Company and in respect of
PXRE and, in particular, shall make all necessary returns to Lloyd's on
behalf of PXRE or, if the Company so requests, shall supply the Company
with the figures required in order for it to complete any such returns
itself;
5.8 use all reasonable endeavours, at the expense of the Company, to collect
any monies due to the Company or collectable by the Company in respect
of PXRE, whether in respect of premiums, reinsurance recoveries or
otherwise, until such time as the Company has appointed its own
personnel to perform such functions;
5.9 cause appropriate books of account and records relating to PXRE and the
Undertaking to be kept;
5.10 subject to the Company providing the Manager with all necessary
information requested by the Manager, cause to be submitted to the
Company on or before the expiration of three months following the end of
each financial year of the Company a draft statement of account in
respect of the Undertaking for such year in such form as may be
reasonably required by
8
the Company including a statement of interest and dividends earned from,
and capital gains or losses sustained on, any deposits or investments;
5.11 render to the Company reports in relation to the Company and PXRE in
accordance with the Services and Procedures Manual and cause a
representative of the Manager to attend all such meetings of the Company
in the United Kingdom as the Company may reasonably require;
5.12 permit any officer of the Company or any other person or persons
nominated by the Company for this purpose to examine and make copies of
all books of account, records, reports, documents and statements kept
pursuant to this Clause or otherwise in connection with PXRE and the
Undertaking;
5.13 shall observe and comply with the Laws and with all lawful resolutions
of the Board and other lawful orders and Proper Instructions given to it
from time to time by the Company or its duly appointed officers which
are consistent with the Manager's specific obligations hereunder; and
5.14 comply with the procedures set out in the Services and Procedures
Manual.
6. OBLIGATIONS OF THE COMPANY
The Company shall:-
6.1 pay to the Manager in consideration of its services hereunder
remuneration and expenses in accordance with the provisions of the
Schedule;
6.2 open and maintain with Lloyds Bank plc, Leadenhall Street, London EC3
(and/or such other banks in England as the Company may determine) bank
accounts in pounds sterling, US dollars and in such other currencies as
it may deem necessary for the efficient and proper conduct of the
business of the Company and PXRE, and shall provide the Manager with an
appropriate mandate pursuant to which the Manager will be able to
operate any such accounts to the extent necessary to fulfil its
obligations under this Agreement;
6.3 save and in accordance with the provisions of the Services and
Procedures Manual, not withdraw monies from the Bank Accounts without
giving at least 3 business days' prior written notice of its intention
to do so to the Manager;
6.4 by payments into the Bank Accounts, promptly provide all such monies as
may from time to time be required by the Manager to meet all payments
properly payable out of or chargeable against any of the Bank Accounts;
6.5. indemnify the Manager and any employee of the Group against any losses,
damages, costs, expenses, actions, proceedings, claims or liabilities,
of whatsoever nature, arising out of or
9
in connection with this Agreement or which the Manager or such employee
may incur hereunder or otherwise in the provision of the Services,
whether to the Company or to any other person, firm or company
whatsoever, save as a result of or arising from the wilful default,
negligence, recklessness or fraud of the Manager or such employee
PROVIDED THAT:-
6.5.1 the Manager shall provide the Company, as soon as reasonably
possible, with copies of such documentation and/or sufficient
information in relation to any claims, demands, summonses, writs
and related documents which it or any employee may receive and
in respect of which it or any employee may be indemnified in
terms of this Agreement and shall give all such assistance as
the Company may reasonably require in defending or resisting or
otherwise dealing with the same, and the Manager and/or employee
(as the case may be) shall not admit liability thereto or make
any offer of any settlement thereof without the prior written
consent of the Company (which shall not be unreasonably
withheld); and
6.5.2 the Company may, if it so desires, take over the defence of any
such actions or prosecute any such claim in the name of the
Manager or the employee concerned;
6.6 save with the prior written consent of the Manager, not during the
currency of this Agreement appoint or employ any other person, firm or
company to provide services for the Company or PXRE corresponding to the
Services or any part thereof. If, with the due consent of the Manager,
the Company shall appoint any such other person, firm or company, the
Company shall forthwith notify the Manager of such appointment, and
shall provide the Manager with such information in relation thereto as
the Manager may reasonably request;
6.7 procure that a meeting of the Board or such other persons as may be
nominated by the Company for this purpose from time to time shall be
convened:-
6.7.1 at least once in every quarter of the Accounting Year, for the
purpose of considering any statements, accounts, reports and
other relevant documentation from time to time rendered by the
Manager to the Company pursuant to this Agreement; and
6.7.2 within 7 days after the Manager shall, by written notice to the
Company, have requested such meeting, for the purpose of
considering any matters which, in its reasonable opinion, the
Manager requires to be dealt with at such meeting;
6.8 until such time as the Company has appointed its own personnel to
perform such functions, procure that full written particulars of any
reinsurance protection placed for PXRE shall be given to the Manager as
soon as reasonably possible, together with such other information in
relation thereto as the Manager may reasonably require in the
performance of its obligations hereunder;
10
6.9 on or before the 21st day of August in each year, or such date as
dictated by Lloyd's regulations, procure that the Company shall, in
consultation with the Manager (and having due regard to the Manager's
representations in relation thereto), prepare and adopt a business plan
for the next following Accounting Year and shall conduct its business in
accordance with such business plan; and
6.10 comply with any specific requirements imposed by Lloyd's in relation to
the conduct of the Company's business and the management of PXRE,
including those contained in the Deed of Undertaking.
7. TERMINATION
7.1 This Agreement may be terminated by either party on not less than 180
days' written notice to the other party expiring on the 31st December in
any year;
7.2 The Company may terminate this Agreement with immediate effect, by
giving written notice to the Manager:-
7.2.1 if the Manager (for any reason) be prevented from carrying out
its obligations under this Agreement; or
7.2.2 if the Manager be in material breach of any of the terms of this
Agreement, which, in the case of a breach capable of remedy, is
not remedied by the Manager within 14 days of receipt by the
Manager of a notice from the Company specifying the breach and
requiring its remedy; or
7.2.3 if the Manager shall fail or refuse, within 14 days of receipt
of written warning, to perform the Services or the duties
reasonably and properly required of it under this Agreement; or
7.2.4 if the Manager becomes bankrupt, enters into liquidation (other
than for the purpose of reconstruction without insolvency) or
makes any composition with its creditors, or has an
administrator or administrative receiver appointed over all or
part of its undertaking or assets (or suffers any process or
event analogous to those referred to in this Clause 7.2.4 in any
other country or jurisdiction); or
7.2.5 if there is a change of control of the Manager from the party
currently having ultimate control of the Manager, being Xxxxxx
Xxxxxxxx Holdings Limited, and, for the purpose of this Clause
7.2.5, the expression "change of control" shall bear the same
meaning as it has in terms of Section 416 of the Income and
Corporation Taxes Act of 1988; or
11
7.2.6 if the Manager be prohibited by law from carrying on its
business or a substantial part thereof in Great Britain.
7.3 The Manager may terminate this Agreement with immediate effect, by
giving written notice to the Company:-
7.3.1 if the Company (for any reason) be prevented from carrying out
its obligations under this Agreement; or
7.3.2 if the Company be in material breach of any of the terms of this
Agreement, which, in the case of a breach capable of remedy is
not remedied by the Company within 14 days of receipt by the
Company of a notice from the Manager specifying the breach and
requiring its remedy; or
7.3.3 if the Company becomes bankrupt, enters into liquidation (other
than for the purpose of reconstruction without insolvency) or
makes any composition with its creditors, or has an
administrator or administrative receiver appointed over all or
part of its undertaking or assets (or suffers any process or
event analogous to those referred to in this Clause 7.3.3 in any
other country or jurisdiction); or
7.3.4 if there is a change of control of the Company from the party
currently having ultimate control of the Company, being PXRE
Corporation, and, for the purpose of this Clause 7.3.4, the
expression "change of control" shall bear the same meaning as it
has in terms of Section 416 of the Income and Corporation, Taxes
Act of 1988; or
7.3.5 if the Company be prohibited by law from carrying on its
business or a substantial part thereof in Great Britain.
7.4 Either party may terminate this Agreement in accordance with the
provisions of sub-clause 1.3.2 and sub-clause 2 of the First Schedule
hereto;
7.5 This Agreement will terminate forthwith upon the termination, for
whatsoever reason, of the Managing Agent's Agreement;
7.6 PROVIDED THAT:-
7.6.1 notice under any of sub-clauses 7.2.2, 7.2.4, 7.3.2 and 7.3.4
above may only validly be served within three months after the
party serving such notice first became aware of the circumstance
giving rise to such right of termination; and
7.6.2 any termination of this Agreement shall not affect any accrued
rights and obligations of the parties hereto, nor shall it
affect the coming into force or continuance in force
12
of any provision of this Agreement which is, expressly or by
implication, intended to come into or continue in force at or
after such termination.
8. MANAGER'S DUTY OF CARE
The Manager shall perform its duties in terms hereof in good faith and
with due diligence, and shall employ reasonable care in the exercise of
its authorities and the performance of its duties and obligations under
this Agreement, but the Manager shall not be responsible for any acts or
omissions of the underwriting staff which are directly employed by the
Company or PXRE.
9. APPOINTMENT OF SUB-AGENTS
9.1 Save as provided in the Services and Procedures Manual and in Clause 9.2
of this Agreement, the Manager may not appoint or employ any sub-agents
to perform any of the Services on its behalf without the prior written
consent of the Company.
9.2 The Manager shall be permitted to appoint or employ any member company
of the Group, at its own expense, to exercise and perform all or any of
the Manager's powers and duties under this Agreement.
9.3 If the Manager delegates any of its obligations under this Agreement
pursuant to Clause 9.2 or otherwise in accordance with the Services and
Procedures Manual, then the Manager shall be liable to the Company for
the acts and omissions of the entity to which it has delegated those
obligations under this Agreement to the same extent as it would have
been had those acts and omissions been its own.
10. DOCUMENTS
10.1 The Manager hereby acknowledges that the originals and/or copies of all
records and documents (whether on computer or paper) relating to the
provision of the Services belong to the Company, and the Manager shall,
as soon as reasonably practicable after the termination of this
Agreement, deliver to the Company all such originals and/or copies of
such records and documents as may be in its possession, and shall not be
entitled to any lien over any of them, provided that the Manager shall
be entitled to retain and use copies of any documents which it
specifically requires in order to enable it to comply with any relevant
Laws, but any such documents must be returned to the Company as soon as
their retention in order to comply with such Laws is no longer
necessary.
10.2 The Company shall, for a period of at least 6 years after termination of
this Agreement, preserve in a safe place in England the originals of all
records and documents delivered by the Manager to the Company pursuant
to sub-clause 10.1 and shall permit the Manager, on reasonable prior
written notice, to have access to and, at the Manager's expense, to make
13
copies of, such records as may be reasonably required by the Manager in
connection with or in contemplation of any legal proceedings.
11. SUPPLEMENTAL ACTS
The parties hereto shall execute and do all such lawful acts deeds and
things as may be necessary for the purpose of carrying into effect all
the provisions of this Agreement.
12. CONFIDENTIALITY AND REPUTATION
12.1 Neither of the parties hereto shall (except under compulsion of law or
in accordance with the Laws), whether before or after the termination of
this Agreement, disclose to any person not duly authorised by the
relevant party to receive the same, any Confidential Information of
which the other party shall have become possessed during the period of
this Agreement and each party shall employ all reasonable endeavours to
prevent any such disclosure.
12.2 Neither party shall knowingly do or suffer to be done any act or thing
which would or might reasonably be expected to prejudice materially or
bring into disrepute the goodwill, business or reputation of the other
party.
13. INTELLECTUAL PROPERTY
Nothing in this Agreement shall give the Manager any rights in respect
of any trade names or trade marks used by the Company in relation to the
Undertaking or any goodwill associated with it. The Manager acknowledges
that, except as expressly provided in this Agreement, it shall acquire,
in providing the Services, no rights in respect of such trade names,
trade marks or goodwill arising from the Undertaking, and that all such
rights and goodwill are, and shall remain, vested in the Company.
14. RESTRICTIONS
14.1 The parties agree and acknowledge that it is reasonable and necessary
for the protection of the goodwill and trade connections of the
Undertaking that the Manager should be restrained in the terms of the
covenants contained in this Agreement from making available or using for
the benefit of itself or a competitor or potential competitor of the
Company Confidential Information which it has obtained and is likely to
obtain in the course of performing the Services.
14.2 The Company covenants with the Manager (for itself and as agent of the
Group) that the Company will not without the prior written consent of
the Manager at any time during the term of this Agreement and for a
period of one year after the expiration or sooner termination of this
Agreement directly or indirectly attempt to solicit or entice away from
the Group or engage or employ any person who at any time is or has been
employed by the Group in the
14
provision of the whole or any part of the Services unless such person
ceased to be employed in the provision of such Services at least twelve
months before such solicitation, enticement, engagement or employment.
14.3 The parties hereby acknowledge and agree that:-
14.3.1 each of the sub-clauses contained in this Clause 14 constitutes
an entirely separate, severable and independent covenant and
restriction;
14.3.2 the duration, extent and application of each of the restrictions
contained in this Clause 14 are no greater than is necessary for
the protection of the goodwill and trade connections of the
Undertaking and/or the Manager (as the case may be); and
14.3.3 in the event that any restriction on either of them contained in
this Clause 14 shall be found void but would be valid if some
part thereof were deleted, such restrictions shall apply with
any such deletion as may be necessary to make it valid and
effective.
15. NOTICES
15.1 All notices hereunder shall be in writing and shall be delivered by
hand, registered post or facsimile transmission to the address of the
relevant party set out in this Agreement or such other address as may be
notified by a party to the other under the provisions of this Clause
15.1 from time to time. Notices posted to an address outside the United
Kingdom shall be sent by prepaid airmail.
15.2 Any notice referred to in Clause 15.1 above shall be deemed to have been
received:-
15.2.1 if delivered by hand, on the date of delivery;
15.2.2 if delivered by post within the United Kingdom, at the end of
the second working day after posting, including the day of
posting if a working day;
15.2.3 if sent by pre-paid airmail, at the end of the seventh working
day after posting, including the day of posting if a working
day; and
15.2.4 if sent by facsimile transmission, on the expiry of 12 hours
after despatch or on commencement of the working day following
despatch, whichever is the later, and a transmission report
confirming uninterrupted transmission to the appropriate
facsimile number shall be prima facie proof of such receipt.
16. MISCELLANEOUS PROVISIONS
15
16.1 No failure on the part of either party to exercise, and no delay on its
part in exercising, any right or remedy under this Agreement, nor any
custom or practice of the parties at variance with the terms of this
Agreement, will constitute a waiver thereof, nor will any single or
partial exercise of any such right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy.
The rights and remedies provided in this Agreement are cumulative and
not exclusive of any rights or remedies provided by the law.
16.2 No amendment of this Agreement shall be binding upon the parties unless
made in writing and signed by a duly authorised representative of each
of the parties.
16.3 The illegality, invalidity or unenforceability of any provision of this
Agreement under the law of any jurisdiction shall not affect its
legality, validity or enforceability under the law of any other
jurisdiction nor the legality, validity or enforceability of any other
provision, and if any provision or part of any provision of this
Agreement is found by a competent court or other competent authority to
be void or unenforceable, such provision or part of a provision shall be
deleted from this Agreement, and the remaining provisions or parts of
the provisions shall continue in full force and effect.
16.4 Save in accordance with the terms of this Agreement, no party may,
without the prior written consent of the other party, assign or transfer
any of its rights or obligations under this Agreement, in whole or in
part, absolutely or conditionally.
16.5 For the avoidance of doubt nothing in this Agreement shall be
interpreted as indicating that the Manager has any right of ownership in
any part of the Company's business, and nothing in this Agreement shall
constitute a partnership or joint venture between the parties, nor a
relationship of employer and employee.
16.6 This Agreement supersedes all prior agreements, arrangements and
undertakings between the parties, and constitutes the entire agreement
between the parties relating to the subject matter of this Agreement to
the exclusion of all terms and representations (excepting those made
fraudulently) whether express or implied, written or oral.
17. LAW AND JURISDICTION
This Agreement will be governed by the laws of England, and the parties
agree to submit to the non-exclusive jurisdiction of the English Courts.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.
16
SIGNED by
the duly authorised representative of
PXRE MANAGING AGENCY LIMITED /s/ Xxxxxxx X. Xxxxxxxxx
in the presence of:-
Witness /s/ Xxxx Xxxxxx
Address 000 Xxxxxxxxx Xxxxxx
Xxxxxx XX0
Occupation Deputy Compliance Officer
SIGNED by
the duly authorised representative of
XXXXXXXXXXX INSURANCE SERVICES LIMITED /s/ X.X. Xxxxxx
in the presence of:- /s/ R.K.L. White
Witness /s/ Xxxx Xxxxxx
Address 000 Xxxxxxxxx Xxxxxx
Xxxxxx XX0
Occupation Deputy Compliance Officer
17
THE FIRST SCHEDULE
REMUNERATION AND EXPENSES PAYABLE
BY THE COMPANY TO THE MANAGER
1. As consideration for the Manager's performance of the Services hereunder
the Company shall pay to the Manager:-
1.1 an initial Management Fee for the period from the lst day of
January 1997 to the 31st day of December 1997 of 'L'135,580
and thereafter such annual Management Fee ("the Management Fee")
as the parties may from time to time agree in writing, such fee
to be payable quarterly in advance on or before the lst day of
January, April, July and October in each year;
1.2 a fee the amount of which shall be calculated by reference to the
amount of time spent by the Dedicated Staff in the performance of
the Services and by applying the agreed hourly time charges set
out against each of the names of the relevant Dedicated Staff in
the Services and Procedures Manual (subject to review as
hereinafter provided). Such fee shall be payable monthly in
arrears upon receipt by the Company of an appropriate invoice and
satisfactory supporting evidence of time incurred;
1.3 PROVIDED THAT:-
1.3.1 in November of each calendar year during the period of
this Agreement the parties will review the Management Fee
and the said hourly time charges referred to in sub-clause
1.2 above, with a view to agreeing to any appropriate or
necessary adjustment thereto for the following year or
years, it being the intention of the parties that the
Management Fee and the said hourly time charges should be
fair and reasonable; and
1.3.2 failing agreement between the parties as to the amount of
the Management Fee or the hourly time charges referred to
in subclause 1.3.1 above, either party hereto shall be
entitled to terminate this Agreement by notice to the
other in writing such termination to take effect from the
end of the period in respect of which there is an agreed
Management Fee and hourly time charges;
1.4 all reasonable travel, subsistence, hotel and the like expenses
actually incurred by the Manager in connection with the provision
of the Services and the performance of its duties under this
Agreement, will be paid by the Company within 30 days of the
Manager providing the Company with a written statement setting
out the details of such expenses, together with original
receipts, invoices or other appropriate evidence of such
expenses.
18
2. In the event that the obligations or workload imposed on the Manager
under this Agreement, in the reasonable opinion of the Manager, are
materially increased in consequence of and in order to comply with a
change in any Lloyd's or statutory requirements, the Manager shall be
entitled to require that the terms of this Agreement and the Management
Fee be varied to the extent as reasonably required by the Manager to
compensate for such increase. Failing agreement between the parties as
to the terms of such variation the Manager will be entitled to terminate
this Agreement by not less than 30 days notice in writing.
3. Furthermore, if the Company has given the Manager its specific consent
to the appointment of any professional advisers, sub-agents or other
third parties and has agreed to reimburse the Manager for any fees,
costs or disbursements relating to work undertaken on the Company's
behalf or the Manager's behalf in relation to PXRE and/or the
Undertaking or the performance of the Services by any such persons, then
the Manager may submit details of such fees, costs or disbursements to
the Company, which details shall be supported by appropriate invoices
and receipts, and the Company shall, within 30 days of receipt of such
details, reimburse the Manager for the full cost thereof.
4. All monies payable to the Manager under this Agreement are exclusive of
Value Added Tax which, if applicable, shall be added to such monies and
be payable by the Company at the rate in force at the time when such
monies become due.
5. All monies payable to the Manager under this Schedule shall be paid in
pounds sterling and shall be deemed to accrue from day to day. All such
monies shall be payable at the address of the Manager given under this
Agreement or elsewhere as the Manager may, by written notice to the
Company, direct. In the event of the Company defaulting in payment of
any such monies by the due date then (without prejudice to any other
right or remedy which the Manager may have) the Company shall pay to the
Manager interest on such overdue monies (before as well as after any
judgment obtained in connection therewith) calculated at the rate of 4
per cent per annum above the base rate of Lloyds Bank plc from time to
time from and including the date of default until and including the date
of final payment.
19
procedure manual
PXRE
THE SECOND SCHEDULE
SERVICES AND PROCEDURES MANUAL
[In relation to the Agreement between
PXRE Managing Agency Limited
and
Xxxxxxxxxxx Insurance Services Limited
dated [ ]]
20
procedure manual
PXRE
SECTION
1 DEFINITIONS
2. PROPER INSTRUCTIONS
3. DIRECTORS AND OFFICERS
4. SENIOR STAFF
5. COMPLIANCE OFFICER
6. TECHNICIANS
SERVICES AND PROCEDURES
7. INVESTMENT
8. BANKING
9. UNDERWRITING
10. PREMIUM RECORDING
11. ACCOUNTING
12. ANCILLARY SERVICES
13. COMPLAINTS PROCEDURE
14. REPORTING
21
procedure manual
PXRE
APPENDICES
I DEDICATED STAFF
II COMPLIANCE OFFICER'S TERMS OF REFERENCE
III UNDERWRITING ACCOUNT
IV SYNDICATE QUARTERLY RETURN
V MANAGING AGENCY SOLVENCY RETURN
22
procedure manual
PXRE
1. DEFINITIONS
"THE AGREEMENT" The Agreement for the provision of
insurance and corporate management services between
PXRE Managing Agency limited (1) and Xxxxxxxxxxx
Insurance Serviced Limited (2) dated [ ]
AMIS Advanced Management Information Systems
CPE Continuing Professional Education
IBNR Incurred But Not Reported
IT Information Technology
LCO Lloyd's Claims Office
"LLOYD'S the Society incorporated by Xxxxx'x Xxx, 0000,
by the name of Lloyd's
LORS Lloyd's Outwards Reinsurance System
LPSO Lloyd's Policy Signing Office
NAIC National Association of Insurance Commissioners
PIM Premium Income Monitoring
PTF Premiums Trust Fund
PXRE PXRE Managing Agency Limited
RDS Realistic Disaster Scenario
RITC Re Insurance to Close
SCM Syndicate Claims Message
USM Underwriters Signing Message
UK & US GAAP Generally Accepted Accounting Practice
WIS Xxxxxxxxxxx Insurance Services Limited
23
procedure manual
PXRE
2. PROPER INSTRUCTIONS
Persons currently authorised to provide "Proper Instructions" are the officers
of PXRE Managing Agency Limited.
3. DIRECTORS AND OFFICERS
WIS will provide directors and officers in accordance with the applications made
to Lloyd's, with the exception that Xxxxx Childs replaces Xxxxxxx Xxxxx. WIS
reserves the right to replace such directors and officers as may be required
from time to time after consultation with the Board.
Time allocation will accord with the requirements specified by Lloyd's and will
be reflected in the applications.
4. SENIOR STAFF
WIS will supply an Appropriate person who will act as the account Executive to
PXRE, and who will be responsible for:
the finance function
money laundering,
taxation
foreign legislation
statutory reporting
WIS will also supply an appropriate person who shall be responsible for: -
IT management
systems analysis
data base maintenance
24
procedure manual
PXRE
5. COMPLIANCE OFFICER
The compliance officer will carry out the duties specified in the terms of
reference attached as appendix II hereto.
6. TECHNICIANS
WIS will supply, on a shared service basis, staff to perform the following
services: -
Processing of underwriting transactions
Performing syndicate accounting functions
Performing Agency accounting functions
SERVICES AND PROCEDURES
7. INVESTMENT
WIS will set up automatic sweep facilities for the bank to transfer surplus
funds in the PTF accounts to interest bearing deposit accounts with the bank
appointed by the Board.
PXRE Managing Agency Limited has appointed Whittingdales as investment managers.
WIS will not be responsible for the investment of the syndicate's funds.
Investing funds in alternative securities will be decided by the Investment
Committee of the managing agency and its investment adviser.
8. BANKING
The necessary accounts will be operated in accordance with mandates as defined
by the Board from time to time.
9. UNDERWRITING
WIS will not perform any underwriting activity. All underwriting staff will be
appointed by the Board of PXRE Managing Agency Limited.
The underwriting team will be responsible for referencing all risks.
25
procedure manual
PXRE
10. PREMIUM RECORDING
On receipt of details of the signed premium income from the LPSO, on the
syndicate's underwriting system, WIS will match the reference and attach it to
the risk. WIS will be responsible for preparing the various signed premium
income reports as described below in the section titled 'Reports'.
11. ACCOUNTING
WIS will maintain the accounting records of the agency and syndicate on the
Olympic IGL system which also incorporates a management information system
(AMIS) or on such other systems from time to time as may be required.
The accounting records will be maintained in US dollars, Canadian dollars,
Sterling and converted sterling. Transactions will be recorded in their original
settlement currency.
WIS will: -
enter details of all cash movements on all the agency and
syndicate bank accounts including trust accounts.
reconcile the bank accounts on a monthly basis.
reconcile the underwriting transactions to the monthly Lloyd's
Central Accounting statement. Any reconciling differences will
be reported [forthwith] by WIS to the Underwriter.
recharge to the syndicate expenses incurred in terms of the
policy, as approved by the Board.
ensure that all expenses are presented to the underwriter for
authorisation before they are settled. Payment will be effected
by WIS from the agency's bank account/x.
Xxxxx'x charges will be directly debited by Lloyd's. These will be accounted for
accordingly by WIS.
12. ANCILLARY SERVICES
WIS Will:-
prepare the quarterly VAT return for the agency and syndicate.
26
procedure manual
PXRE
complete the annual Syndicate Information Statement reflecting
the US underwriting results and submit this information to
Lloyd's in accordance with the timetable set by them.
provide the underwriter with all necessary information to
facilitate the production of the US surplus lines/reinsurance
business regulatory reporting requirements as set down by the
New York Insurance Department and monitored by Lloyd's Market
Reporting & Solvency Department.
complete the annual return required by the National Association
of Insurance Commissioners (NAIC).
assist the underwriter in agreeing the underwriting result for
each closed year of account with the Inland Revenue.
provide Lloyd's with all information as may be required to make
due return to the Canadian Tax authorities.
through its parent company, provide payroll, personnel,
appropriate office space and equipment as agreed, office
services and equipment as may be necessary which will be
provided at cost by Xxxxxxxxxx Group Limited.
13. COMPLAINTS PROCEDURE
Complaints should be addressed to the accounts executive in the first instance
as specified in the Agreement.
14. REPORTING
WIS will prepare the following reports:- (Other reports may be available at a
cost to be agreed calculated on a time and material basis.)
BOARD REPORTS
Cash flows
Actual versus projected cash flow will be reported in tabular or
graphical format depending on the agency Board requirements. Movements
will be broken down between premiums, claims, reinsurance premiums,
reinsurance recoveries, syndicate expenses and Corporate Name charges.
27
procedure manual
PXRE
Underwriting Account
This report will be presented in the format required by Lloyd's. A copy
of the standard underwriting account is attached at appendix II.
Syndicate expenses
A breakdown of syndicate expenses into expense categories required by
Lloyd's, as a minimum, with a comparison to budgeted expenses will be
prepared.
Agency Accounts
A profit and loss account and balance sheet will be prepared.
Syndicate Monitoring Forms
These include:
A forecast of the year of account result, based on the underwriter's
forecast of the ultimate loss ratio for the business categories and a
`best' estimate of investment income and syndicate expenses.
An income analysis by business class reflecting a comparison between
budgeted and actual gross and net premium income.
A detailed trading summary by solvency class reflecting a comparison
between actual to date and the underwriter's 36 month estimate of net
premium income and incurred claims by value and as a percentage of
premium income.
Net underwriting progression statistics, or triangulations at least by
whole account.
LLOYD'S REPORTS
Premium Income Monitoring
WIS will assist the underwriter in preparing the PIM reports required by
Lloyd's and in accordance with their reporting requirements.
28
procedure manual
PXRE
Syndicate Quarterly Return
WIS will be responsible for producing this return within the timetable
set by Lloyd's. Attached at appendix III is a copy of the return as
prescribed by Lloyd's Regulatory Board. WIS will require assistance from
the Underwriter when completing Form 1, Form 3, Form 6 and Form 14.
Managing Agency Solvency Return
WIS will compete the above return as required by Lloyd's. A copy of the
return (QFI) is attached at appendix IV.
Solvency Return
WIS will complete the annual Solvency Return in the format required by
Lloyd's.
The active underwriter will be responsible for aggregate and RDS
monitoring as well as determining IBNR or RITC.
ANNUAL REPORTS
Annual Financial Statements
An annual report will be prepared for the syndicate covering the year
from 1 January to 31 December. The report will be in the format as
prescribed in terms of the bye-laws set down by Lloyd's of London.
An annual report will be prepared for the agency covering the year from
1 January to 31 December. The report will be in the format as required
by Lloyd's and the Companies Act.
The active underwriter will be responsible for aggregate and RDS
monitoring as well as determining IBNR or RITC.
All the syndicate's reports will be available in the three reporting currencies
and converted sterling. Agency reports will only be in sterling.
29
