REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
REINSURED: HOME STATE INSURANCE GROUP
---------
HOME STATE INSURANCE COMPANY
Red Bank, New Jersey
QUAKER CITY INSURANCE COMPANY
Trevose, Pennsylvania
NEW YORK MERCHANT BAKERS INSURANCE COMPANY
Binghamton, New York
HOME MUTUAL INSURANCE COMPANY OF BINGHAMTON, NEW YORK
Binghamton, New York PINNACLE INSURANCE COMPANY
Carrollton, Georgia ▇▇▇▇▇▇▇▇▇ INSURANCE COMPANY
Wallingford, Connecticut
(hereinafter referred to as the "Company")
TYPE: CASUALTY CLASH
---- EXCESS OF LOSS REINSURANCE AGREEMENT
PERIOD: Losses occurring during the period January 1, 1997 to
------ December 31, 1997, both days
inclusive.
Should this Agreement terminate while a loss occurrence is
in progress, the Reinsurers shall be liable for their share
of all individual losses resulting from such loss
occurrences whether any such individual losses take place
before or after such termination.
CLASS: All in-force, new and renewal business classified by the
----- Company as Casualty, Personal and Commercial Automobile
Liability, Garagekeepers Legal Liability and Garage
Liability.
EXCLUSIONS: See attached schedule.
----------
TERRITORY: As per the Company's original policies.
---------
LIMIT AND
RETENTION: See attached Exhibits A, B, C and D.
---------
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REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
REINSTATEMENT: See attached Exhibits A, B, C and D.
-------------
WARRANTY: Maximum Commercial Automobile Liability policy limit
-------- $5,000,000 or so deemed. It is understood that policies
issued in excess of $5,000,000 shall be reinsured on a
facultative basis. However, the Company has a specific
Reinsurance Program for Commercial Automobile Liability of
$4,950,000 each occurrence excess of $50,000 each
occurrence. For the purpose of this Agreement, $4,500,000
each occurrence (Unlimited Reinstatements) excess of
$500,000 shall inure to the benefit of this program;
$450,000 each occurrence excess of $50,000 shall be
considered as Underlying Reinsurance.
Maximum Personal Automobile Liability policy limit
$1,200,000 or so deemed. However, the Company has a
specific Reinsurance Program for Personal Automobile
Liability of $1,160,000 each occurrence excess of $40,000
each occurrence. For the purpose of this Agreement,
$700,000 each occurrence (Unlimited Reinstatements) excess
of $500,000 shall inure to the benefit of this program;
$460,000 each occurrence excess of $40,000 shall be
considered as Underlying Reinsurance.
Reinsurers hereon to have the benefit of recoveries from a
specific reinsurance in respect of public transportation
PIP coverage of $11,150,000 excess of $100,000 each and
every occurrence deemed to be maintained in force.
It is warranted that the Company writes maximum policy
limits of $1,000,000 or so deemed (Non-Automobile
business). However, the Company has a Multiple Line
Reinsurance Program for non-automobile business of $960,000
each occurrence excess $40,000 each occurrence. For the
purpose of this Agreement, $500,000 each occurrence
(Unlimited Reinstatements) excess of $500,000 shall inure
to the benefit of this program; $460,000 each occurrence
excess of $40,000 shall be considered as Underlying
Reinsurance.
The Company may include up to $50,000 from Personal
Umbrella Liability as part of the Ultimate Net Loss, which
is its maximum net loss from its 5% participation in its
95% Personal Umbrella Quota Share Treaty. It is warranted
that the Company maintains a 95% Quota Share of a
$1,000,000 limit or so deemed.
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REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
RATE: See attached Exhibits A, B, C and D. Rate applies to the
---- Company's subject net earnedpremium income, estimated to be
$142,412,640 for 1997, of which $40,900,300 pertains to
New York only.
DEPOSIT
PREMIUM: See attached Exhibits A, B, C and D. Payable in equal
------- quarterly installments at January 1, April 1, July 1 and
October 1, 1997.
MINIMUM
PREMIUM: See attached Exhibits A, B, C and D.
-------
CLAUSES: Parties to the Agreement.
------- Net Retained Lines.
Ultimate Net Loss - loss adjustment expenses pro rata in
addition to the Agreement limit.
Extra Contractual Obligations on a 90%/10% basis within the
Agreement limit.
Losses in Excess of Policy Limits on a 90%/10% basis within
the Agreement limit.
Subrogation.
Salvage and Recoveries.
Loss Notice and Settlement.
Funding of Reserves.
Offset - applicable only to each layer of this Agreement.
Original Conditions.
Currency.
Taxes.
Federal Excise Tax.
Errors and Omissions not to override Notice of Loss and
Loss Settlement Clause; not to apply to Exclusions.
Access to Records.
Service of Suit - NMA 1998 - Mendes and Mount (where
applicable).
Arbitration.
Insolvency.
Severability.
Minet Re North America, Inc. Intermediary.
WORDING: As per expiring Reinsurance Agreement as far as applicable
------- and as noted herein, which complies with the requirements
of the State of New York Insurance Department.
MMW 3
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REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
We will periodically provide a list of those companies with which Minet Re North
America, Inc. is affiliated, which may be parties to this placement. This list
is available on request.
For and on behalf of:
MINET RE NORTH AMERICA, INC.
-------------------------
Senior Vice President
HOME STATE INSURANCE GROUP
HOME STATE INSURANCE COMPANY
QUAKER CITY INSURANCE COMPANY
NEW YORK MERCHANT BAKERS INSURANCE COMPANY
HOME MUTUAL INSURANCE COMPANY OF BINGHAMTON, NEW YORK
PINNACLE INSURANCE COMPANY
▇▇▇▇▇▇▇▇▇ INSURANCE COMPANY
-------------------------------
Authorized Signature
-------------------------------
Date
Please examine this document carefully and advise us immediately if any of the
details or the security used are not in accordance with your order or
requirements.
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REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
EXCLUSIONS:
----------
1. Assumed Reinsurance other than business assumed via intra-company
reinsurance, from United Pacific Insurance Company for the ▇▇▇▇, Inc.
policy, facultative reinsurance in connection with business
originally produced by the Company and specifically reported to
working-layer reinsurers and Delaware private passenger business
written as a 100% Quota Share of companies with whom Quaker City
Insurance Company has entered into rollover agreements.
2. Loss or liability excluded by the provision of the "Nuclear Incident
Exclusion Clause - Liability - Reinsurance."
3. Financial Guarantee and Insolvency.
4. Insolvency Funds.
5. War Risks as described in the North American War Risk Exclusion
Clause.
6. Loss or Liability excluded by the provisions of the "Pools Exclusion
Clause." It is understood and agreed that this exclusion shall not
apply to individual risks assigned to the Company under an "Assigned
Risk" plan.
7. Speed Contests.
8. Ambulances.
9. Accident and health, aviation, boiler and machinery, fidelity and
surety, when written as such.
10. Workers' Compensation and Employers' Liability, when written as such.
11. Professional Liability, Errors and Omissions Liability, Directors and
Officers Liability, SEC Liability, Fiduciary Liability, when written
as such.
12. Ocean Marine Liability when written as such; not applicable to
watercraft of 26 feet or less in length.
13. Amusement parks, carnivals, circuses, fairs, zoos, and the operation
or manufacture of mechanical or animal rides.
14. Manufacture, application or wholesale distribution of industrial
chemicals, fertilizers, insecticides, herbicides, animal feeds.
15. Manufacture, including component parts, of autos, trucks, buses,
mobile homes, trailers, snowmobiles, tires, motorcycles, go-carts.
16. Manufacture, distribution, sale and repair of aircraft, aircraft
components or other products necessary or critical to aircraft safety
or flight.
17. Crane manufacture or rental.
18. Contractors principally engaged in or construction of:
a. Blasting;
▇. ▇▇▇▇▇▇▇, tunnels, dams, reservoirs;
c. Demolition or wrecking of structures over 4 stories;
d. Erection of iron or steel over 4 stories;
e. Tunnelling;
f. Fumigating or exterminating.
19. Gas or electric utilities.
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REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
20. Manufacture and/or production, detonation, storage, processing,
handling or transport of:
a. Fireworks, fuse(s), cartridges, ammunition, powder,
nitroglycerine or any explosives;
b. Gases and/or air under pressure in containers;
c. Butane, methane, propane and other liquified gases;
d. Toxic substances and toxic waste with inherent potential for
catastrophic loss;
e. Asbestos and asbestos products.
21. Products Recall.
22. Railroad Liability.
23. Municipality Liability.
24. Underground or surface mining and quarrying.
25. Nursing homes or residential care facilities.
26. Liquor Liability, when written as such.
27. Security Guard Liability.
28. Manufacture, assembly or wholesale distribution of:
a. Industrial farm machinery;
b. Ladders and scaffolding;
c. Athletic equipment; not applicable to sporting goods stores;
d. Pharmaceuticals;
e. Medical/surgical products;
f. Tobacco products;
g. Fire alarms, burglar alarms, sprinkler systems;
h. Railroad products, wheels, axles, brakes, etc.;
i. Toys;
j. Valves--industrial type.
29. Oil lease operators, driller, exploration.
30. Medical Malpractice.
31. Stevedoring.
32. Insurance coverage for punitive or exemplary damages when written as
such.
33. Landfill operations.
34. Warehousemen's Legal Liability.
35. Firearms and/or other weapons manufacturing, repairing, distribution
or sale.
36. Electrical control equipment.
37. Manufacture of helmets.
38. Manufacture or recapping of tires.
39. Products integrity impairment and products guarantee.
40. Animal feed or additives, not to include retail pet stores.
41. Commercial Umbrella Liability.
MMW 2
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REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
EXHIBIT A
FIRST CASUALTY CLASH
EXCESS OF LOSS REINSURANCE AGREEMENT
------------------------------------
(BN970011)
LIMIT AND
RETENTION: 100% of $500,000 Ultimate Net Loss each and every loss
--------- occurrence in excess of $500,000 Ultimate Net Loss each and
every loss occurrence.
REINSTATEMENT: Two full reinstatements - first reinstatement at 50% as to
------------- time and pro rata as to amount; second reinstatement at
100% as to time and pro rata as to amount.
RATE: 0.126% of the Company's subject net earned premium income.
----
DEPOSIT
PREMIUM: $180,000 (National Pool: $128,300; New York Pool: $51,700)
------- payable in four equal quarterly installments of $45,000
(National Pool: $32,075; New York Pool: $12,925) each at
January 1, April 1, July 1 and October 1, 1997.
MINIMUM
PREMIUM: $162,000 (National Pool: $115,470; New York Pool: $46,530).
-------
The National Pool consists of: Home State Insurance Company
(40%); Quaker City Insurance Company (25%); Pinnacle
Insurance Company (20%); and ▇▇▇▇▇▇▇▇▇ Insurance Company
(15%).
The New York Pool consists of: New York Merchant Bakers
Insurance Company (85%); Home Mutual Insurance Company of
Binghamton, New York (15%).
Reinsurers Effective January 1, 1997:
------------------------------------
% FEIN NAIC
-
Signet Star Reinsurance Company 10.000% ▇▇-▇▇▇▇▇▇▇ 32603
Wilmington, Delaware
Transatlantic Reinsurance Company 10.000% ▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Underwriters Reinsurance Company 40.000% ▇▇-▇▇▇▇▇▇▇ 22314
Concord, New Hampshire -------
Sub-Total: 60.000%
MMW 1
1/7/97
REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
Through Swire Fraser Insurance Brokers Limited:
-----------------------------------------------
Underwriting Members of Lloyd's
London, England (as per Schedule) 31.304% AA-1122000
Terra Nova Insurance Company Limited,
London 8.696% AA-1121425
-------
Sub-Total: 40.000%
Placement Total: 100.000%
--------
MMW 2
1/7/97
REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
SCHEDULE OF
UNDERWRITING MEMBERS OF LLOYD'S PARTICIPATION
FIRST CASUALTY CLASH EXCESS OF LOSS REINSURANCE AGREEMENT
---------------------------------------------------------
(BN970011)
Syndicate Pseudonym AIIN Share
--------- --------- ---- -----
570 GNR AA-1126570 8.697%
205 HGJ AA-1126205 5.217%
1141 JEM AA-1127141 5.217%
780 BFC AA-1126780 5.217%
▇▇▇ ▇▇▇ ▇▇-▇▇▇▇▇▇▇ 3.478%
1096 RAS AA-1127096 3.478%
------
Total Participation through the
Underwriting Members of Lloyd's 31.304%
-------
MMW
1/7/97
REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
EXHIBIT B
SECOND CASUALTY CLASH
EXCESS OF LOSS REINSURANCE AGREEMENT
------------------------------------
(BN970012)
RETENTION: 100% of $1,500,000 Ultimate Net Loss each and every loss
--------- occurrence in excess of $1,000,000 Ultimate Net Loss each
and every loss occurrence.
REINSTATEMENT: One full reinstatement at 100% as to time and pro rata as
------------- to amount.
RATE: 0.178% of the Company's subject net earned premium income.
----
DEPOSIT
PREMIUM: $250,000 (National Pool: $178,200; New York Pool: $71,800)
------- payable in four equal quarterly installments of $62,500
(National Pool: $44,550; New York Pool: $17,950) each at
January 1, April 1, July 1 and October 1, 1997.
MINIMUM
PREMIUM: $225,000 (National Pool: $160,380; New York Pool: $64,620).
-------
The National Pool consists of: Home State Insurance Company
(40%); Quaker City Insurance Company (25%); Pinnacle
Insurance Company (20%); and ▇▇▇▇▇▇▇▇▇ Insurance Company
(15%).
The New York Pool consists of: New York Merchant Bakers
Insurance Company (85%); Home Mutual Insurance Company of
Binghamton, New York (15%).
Reinsurers Effective January 1, 1997:
------------------------------------
% FEIN NAIC
- ---- ----
Signet Star Reinsurance Company 10.000% ▇▇-▇▇▇▇▇▇▇ 32603
Wilmington, Delaware
Transatlantic Reinsurance Company 10.000% ▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Underwriters Reinsurance Company 40.000% ▇▇-▇▇▇▇▇▇▇ 22314
Concord, New Hampshire -------
Sub-Total: 60.000%
MMW 1
1/7/97
REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
Through Swire Fraser Insurance Brokers Limited:
----------------------------------------------
Underwriting Members of Lloyd's (as per Schedule) AA-1122000
London, England 35.000%
Terra Nova Insurance Company Limited,
London 5.000% AA-1121425
-------
Sub-Total: 40.000%
Placement Total: 100.000%
========
MMW 2
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REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
SCHEDULE OF
UNDERWRITING MEMBERS OF LLOYD'S PARTICIPATION
SECOND CASUALTY CLASH EXCESS OF LOSS REINSURANCE AGREEMENT
----------------------------------------------------------
(BN970012)
Syndicate Pseudonym AIIN Share
--------- --------- ---- -----
570 GNR AA-1126570 8.334%
205 HGJ AA-1126205 3.333%
▇▇▇ ▇▇▇ ▇▇-▇▇▇▇▇▇▇ 5.667%
1141 JEM AA-1127141 5.000%
780 BFC AA-1126780 3.333%
1007 RCV AA-1127007 5.000%
1096 RAS AA-1127096 3.333%
------
Total Participation through the
Underwriting Members of Lloyd's 35.000%
-------
MMW
1/7/97
REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
EXHIBIT C
THIRD CASUALTY CLASH
EXCESS OF LOSS REINSURANCE AGREEMENT
------------------------------------
(BN970033)
LIMIT AND
RETENTION: 100% of $2,000,000 Ultimate Net Loss each and every loss
--------- occurrence in excess of $2,500,000 Ultimate Net Loss each
and every loss occurrence.
REINSTATEMENT: One full reinstatement at 100% as to time and pro rata as
------------- to amount.
RATE: 0.140% of the Company's subject net earned premium income.
----
DEPOSIT
PREMIUM: $200,000 (National Pool: $142,560; New York Pool: $57,440)
------- payable in four equal quarterly installments of $50,000
(National Pool: $35,640; New York Pool: $14,360) each at
January 1, April 1, July 1 and October 1, 1997.
MINIMUM
PREMIUM: $180,000 (National Pool: $128,304; New York Pool: $51,696).
-------
The National Pool consists of: Home State Insurance Company
(40%); Quaker City Insurance Company (25%); Pinnacle
Insurance Company (20%); and ▇▇▇▇▇▇▇▇▇ Insurance Company
(15%).
The New York Pool consists of: New York Merchant Bakers
Insurance Company (85%); Home Mutual Insurance Company of
Binghamton, New York (15%).
Reinsurers Effective January 1, 1997:
------------------------------------
% FEIN NAIC
- ---- ----
Signet Star Reinsurance Company 10.000% ▇▇-▇▇▇▇▇▇▇ 32603
Wilmington, Delaware
Underwriters Reinsurance Company 40.000% ▇▇-▇▇▇▇▇▇▇ 22314
Concord, New Hampshire -------
Sub-Total: 50.000%
MMW 1
1/7/97
REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
Through Swire Fraser Insurance Brokers Limited:
----------------------------------------------
Underwriting Members of ▇▇▇▇▇'▇ ▇▇-1122000
London, England (as per Schedule) 50.000%
-------
Sub-Total: 50.000%
Placement Total: 100.000%
========
MMW 2
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REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
SCHEDULE OF
UNDERWRITING MEMBERS OF LLOYD'S PARTICIPATION
THIRD CASUALTY CLASH EXCESS OF LOSS REINSURANCE AGREEMENT
---------------------------------------------------------
(BN970033)
Syndicate Pseudonym AIIN Share
--------- --------- ---- -----
570 GNR AA-1126570 9.327%
205 HGJ AA-1126205 5.597%
▇▇▇ ▇▇▇ ▇▇-▇▇▇▇▇▇▇ 5.597%
1141 JEM AA-1127141 4.478%
▇▇▇ ▇▇▇ ▇▇-▇▇▇▇▇▇▇ 5.597%
▇▇▇ ▇▇▇ ▇▇-▇▇▇▇▇▇▇ 7.463%
1007 RCV AA-1127007 7.463%
1096 RAS AA-1127096 4.478%
------
Total Participation through the
Underwriting Members of Lloyd's 50.000%
-------
MMW
1/7/97
REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
EXHIBIT D
FOURTH CASUALTY CLASH
EXCESS OF LOSS REINSURANCE AGREEMENT
------------------------------------
(BN970034)
LIMIT AND
RETENTION: 100% of $2,000,000 Ultimate Net Loss each and every loss
--------- occurrence in excess of $4,500,000 Ultimate Net Loss each
and every loss occurrence.
REINSTATEMENT: One full reinstatement at 100% as to time and pro rata as
------------- to amount.
RATE: 0.098% of the Company's subject net earned premium income.
----
DEPOSIT
PREMIUM: $140,000 (National Pool: $99,790; New York Pool: $40,210)
------- payable in four equal quarterly installments of $35,000
(National Pool: $24,947.50; New York Pool: $10,052.50) each
at January 1, April 1, July 1 and October 1, 1997.
MINIMUM
PREMIUM: $126,000 (National Pool: $89,811; New York Pool: $36,189).
-------
The National Pool consists of: Home State Insurance Company
(40%); Quaker City Insurance Company (25%); Pinnacle
Insurance Company (20%); and ▇▇▇▇▇▇▇▇▇ Insurance Company
(15%).
The New York Pool consists of: New York Merchant Bakers
Insurance Company (85%); Home Mutual Insurance Company of
Binghamton, New York (15%).
Reinsurers Effective January 1, 1997:
------------------------------------
% FEIN NAIC
- ---- ----
Signet Star Reinsurance Company 10.000% ▇▇-▇▇▇▇▇▇▇ 32603
Wilmington, Delaware
Transatlantic Reinsurance Company 10.000% ▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Underwriters Reinsurance Company 40.000% ▇▇-▇▇▇▇▇▇▇ 22314
Concord, New Hampshire -------
Sub-Total: 60.000%
MMW 1
1/7/97
REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
Through Swire Fraser Insurance Brokers Limited:
----------------------------------------------
Underwriting Members of ▇▇▇▇▇'▇ ▇▇-1122000
London, England (as per Schedule) 34.667%
Terra Nova Insurance Company Limited,
London 5.333% AA-1121425
------
Sub-Total: 40.000%
Placement Total: 100.000%
========
MMW 2
1/7/97
REINSURANCE COVER NOTE
Agreement No. BN970011/12/33/34
SCHEDULE OF
UNDERWRITING MEMBERS OF LLOYD'S PARTICIPATION
FOURTH CASUALTY CLASH EXCESS OF LOSS REINSURANCE AGREEMENT
----------------------------------------------------------
(BN970034)
Syndicate Pseudonym AIIN Share
--------- --------- ---- -----
570 GNR AA-1126570 6.667%
205 HGJ AA-1126205 4.000%
1007 RCV AA-1127007 4.000%
▇▇▇ ▇▇▇ ▇▇-▇▇▇▇▇▇▇ 4.000%
▇▇▇ ▇▇▇ ▇▇-▇▇▇▇▇▇▇ 5.333%
780 BFC AA-1126780 2.667%
▇▇▇ ▇▇▇ ▇▇-▇▇▇▇▇▇▇ 3.200%
1141 JEM AA-1127141 2.133%
1096 RAS AA-1127096 2.667%
------
Total Participation through the
Underwriting Members of Lloyd's 34.667%
-------
MMW
1/7/97
