Quota Share Reinsurance Agreement
REINSURED: Amwest Surety Insurance Company Calabasas, California
REINSURER: Underwriters Reinsurance Company Calabasas, California
SUBJECT
BUSINESS: Business classified as Surety by Reinsured.
SUBJECT
LOSS: Subject Loss shall be defined as Loss, ALAE and
ULAE for losses with a discovery date during the
term of this agreement. "Losses Discovered"
shall be deemed to mean new losses reported on
or after the effective date and specifically
excludes any development of losses discovered by
the Company prior to inception relating to
business inforce as of July 1, 1998.
SUBJECT
PREMIUM: Unearned Premium as of June 30, 1998, PLUS Written
Premium during the Term for Subject Business,
TERM: July 1, 1998 to June 30, 1999.
LIMIT: 15.0% Quota ,hare of Subject Premium.
CEDING
COMMISSION: Provisional: 75.09"0 at 25,0% Loss and I AE Ratio.
Sliding- 1 for 1 to
Minimum: 67.0% at 33.0% Loss and LAE Ratio.
FUNDS
WITHHELD
ACCOUNT: The Funds Withheld Account (FWA) shall be established
and maintained by the Reinsured. The balance 'in the
FWA shall be calculated at follows:
100% of Ceded Subject Premium,
Less Ceding Commission,
Less Reinsurer Expense,
Less Ceded Paid Loss,
Plus Interest Credit
Interest shall be credited quarterly to the FWA
by the Reinsured at a rate of 1.5% multiplied by
the average daily balance in the FWA over the
quarter.
REINSURER
EXPENSE: Flat $400,000, payable in four installments at
October 1, 1998; December 31, 1998; March 31,
1999; and June 30, 1999. Reinsurer Expense is
payable in addition to the 15.0% of Subject
Premium.
EXCLUSIONS: 1. Inuring reinsurance which is uncollectable.
2. Others to conform to Excess Treaty.
ACCOUNTS&
RIEMITTANCES: Quarterly within 45 days, the Reinsured shall furnish
the following:
1. GNWPI on Subject Business.
2. Net Earned Premiums on Subject Business.
3. Ceded Subject Loss Outstanding.
4. Ceded Subject Loss Paid.
5. FWA balance.
Balances due either party will be payable
quarterly within 45 days. Ceded Subject Loss
shall first be paid from the FWA, and then from
the Reinsurer's own funds.
COMMUTATION: The Company may commute this agreement at any
time on or after December 31, 1998. As
consideration for commutation, the Reinsurer
shall release 100%, of the FWA back to the
Company. Commutation shall fully and finally
release the Reinsurer from all liability under
this agreement.
INSOLVENCY: In the event of the insolvency of the REINSURED,
this reinsurance shall be payable directly to the
REINSURED or to its liquidator. receiver, conservator,
or statutory successor on the basis of the liability of
the REINSURED without diminution because of the
insolvency of the REINSURED or because the liquidator,
receiver, conservator, or statutory successor of the
REINSURED has failed to pay all or a portion of a claim.
It is agreed, however, that the liquidator, receiver,
conservator, or statutory successor of the REINSURED
shall give written notice to the REINSURER of the
pendency of a claim against the REINSURED indicating
the policy insured which claim would involve a possible
liability on the part of the REINSURER within a
reasonable time after such claim is filed in the
conservation or liquidation proceeding or the
receivership, and that during the pendency of such a
claim, the REINSURER may investigate such claim and
interpose, at their own expense, in the proceeding where
such claim is to be adjudicated, any defense or
defenses that they may deem available to the REINSURED
or its liquidator, receiver, conservator, or statutory
successor. The expense thus incurred by the REINSURER
shall be chargeable, subject to the approval of the
court, against the REINSURED as part of the expense of
conservation or liquidation to the extent of a pro rata
share of the defense undertaken by the REINSURER.
URC SHARE: 100% of 15.0% Quota Share.
Agreed to Cede: Accepted by:
Xxxxxx P,. Xxx Date Xxxxxxx X. Xxxxxxxx Date
Amwest Surety Insurance Company Underwriters Reinsurance Company
