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CASUALTY AND SPECIALTY
QUOTA SHARE RETROCESSION AGREEMENT
BY AND BETWEEN
PLATINUM UNDERWRITERS BERMUDA, LTD.
and
PLATINUM UNDERWRITERS REINSURANCE, INC.
This
Casualty and Specialty Quota Share Retrocession Agreement (this
"Agreement"), dated as of January 1, 2007, is made by and between
Platinum
Underwriters Bermuda, Ltd., a Bermuda-domiciled insurance company
(the
"Retrocessionaire"), and Platinum Underwriters Reinsurance, Inc.
a
Maryland-domiciled insurance company (the "Retrocedant").
NOW
THEREFORE, in consideration of the premises and of the mutual
promises
set forth herein, Retrocedant and Retrocessionaire agree as
follows:
ARTICLE 1 - BUSINESS COVERED
The Retrocedant hereby obligates itself to retrocede to the
Retrocessionaire and
the Retrocessionaire hereby obligates itself to accept a sixty
percent (60%)
quota share of the reinsurance and retrocession contracts
classified by the
Retrocedant under certain reserving classes identified on Schedule
1 hereto and
underwritten by Retrocedant on or after the Effective Date
(collectively, the
"Reinsurance Contracts").
ARTICLE 2 - COMMENCEMENT AND TERMINATION
This Agreement shall take effect and shall apply to all Reinsurance
Contracts
that incept on or after 12:01 a.m. New York time, January 1, 2007
(the
"Effective Date"). It shall remain continuously in force but may be
terminated
by either party giving at least ninety (90) days' notice in writing
to the other
party.
Upon the expiration or termination of this Agreement, the
Retrocessionaire shall
remain liable hereunder for it's pro rata share of the Reinsurance
Contracts
until the expiration, cancellation or termination of the
Retrocedant's
liabilities under the Reinsurance Contracts.
ARTICLE 3 - ORIGINAL CONDITIONS
All retrocessions assumed under this Agreement shall be subject to
the same
rates, terms, conditions, waivers and interpretations, and to the
same
modifications and alterations, as the respective Reinsurance
Contracts.
This Agreement is solely between the Retrocedant and the
Retrocessionaire, and
in no instance shall any other party have any rights under this
Agreement except
as expressly provided otherwise in the Insolvency Article.
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ARTICLE 4 - PREMIUMS
The Retrocedant shall retrocede to the Retrocessionaire an amount
equal to sixty
(60%) of Gross Net Premium due under the Reinsurance Contracts.
The Retrocessionaire shall pay a ceding commission equal to the sum
of (i) one
hundred percent (100%) of the actual expenses incurred by
Retrocedant in
acquiring the business ceded to the Retrocessionaire under this
Agreement,
including all commissions and brokerage, and (ii) seven and a
quarter percent
(7.25%) of the Gross Net Premium ceded to the Retrocessionaire
under this
Agreement.
For purposes of this Agreement, the term "Gross Net Premium" is the
amount equal
to (i) the Gross Premium ceded to Retrocedant under the respective
Reinsurance
Contracts less (ii) return premium paid or payable by the
Retrocedant under the
respective Reinsurance Contracts, and (iii) premiums paid or
payable by the
Retrocedant for inuring reinsurance as described in Article 7
hereof.
ARTICLE 5 - EXCLUSIONS
The following Exclusion Clauses are attached to and form part of
this Agreement:
1.
Nuclear Incident
Exclusion Clause - Liability - Reinsurance- U.S.A.
(BRMA 35A).
2.
Nuclear Incident
Exclusion Clause - Liability - Reinsurance - Canada
(BRMA 35D).
3.
Pools,
Associations, and Syndicates as per Pools, Associations, and
syndicate Exclusion Clause.
4.
War Risk
Exclusion Clause.
5.
Insolvency Funds
Exclusion Clause.
6.
Any Excess of
Loss Retrocession Agreement by and between Platinum Re
(UK) Limited and the Retrocedant.
7.
Reinsurance
Contracts subject to certain Collateral Agreements, and
which the Retrocedant has identified or will identify in Appendix 2
to
this Agreement.
8.
Liabilities
assumed by the Retrocedant from the Retrocessionaire
pursuant to any excess of loss retrocession agreement between
the
parties.
ARTICLE 6 - TERRITORY
Coverage applies within the territorial limits of the Reinsurance
Contracts
covered hereunder.
ARTICLE 7 - INURING REINSURANCE
It is understood and agreed that when the Retrocedant warrants that
it is in the
best interest of the Retrocedant and the Retrocessionaire,
Retrocedant may
purchase facultative reinsurance and/or any other treaty
reinsurance. The
premium for said inuring reinsurance that inures to the benefit of
the
Retrocessionaire will reduce the Gross Net Premium pursuant to
Article 4 hereof.
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Notwithstanding the above, facultative and treaty reinsurance
listed in Appendix
1 hereto shall not inure to the benefit of the
Retrocessionnaire.
ARTICLE 8 - LOSS AND LOSS EXPENSE
Retrocessionaire shall be liable for sixty percent (60%) of all
loss, loss
adjustment expenses and other payment obligations as incurred by
Retrocedant
under the Reinsurance Contracts on and after the Effective Date net
of all
salvages and recoveries under inuring reinsurance.
Notwithstanding the above, Retrocessionaire's maximum liability for
loss and
loss expense shall be limited to 230% of the Gross Net Premium
ceded to
Retrocessionaire under this Agreement.
ARTICLE 9 - EXTRA CONTRACTUAL OBLIGATIONS
This Agreement shall protect the Retrocedant and any original
reinsured, within
the limits hereof, where the loss includes any Extra Contractual
Obligations.
The term "Extra Contractual Obligations" is defined as those
liabilities not
covered under any other provision of this Agreement and which arise
from the
handling of any claim on business covered hereunder, such
liabilities arising
because of, but not limited to, the following: failure by any
original reinsured
to settle within the policy limit, or by reason of alleged or
actual negligence,
fraud, or bad faith in rejecting an offer of settlement or in the
preparation of
the defense or in the trial of any action against its insured or
reinsured or in
the preparation or prosecution of an appeal consequent upon such
action.
The date on which any Extra Contractual Obligation is incurred by
any original
reinsured shall be deemed, in all circumstances, to be the date of
the original
disaster and/or casualty.
However, this Article shall not apply where the loss has been
incurred due (i)
solely to the acts, or failure to act, of the Retrocedant in
handling its claims
or (ii) to fraud by a member of the Board of Directors or a
corporate officer of
any original reinsured acting individually or collectively or in
collusion with
any individual or corporation or any other organization or party
involved in the
presentation, defense or settlement of any claim covered
hereunder.
ARTICLE 10 - EXCESS OF ORIGINAL POLICY LIMITS
This Agreement shall protect the Retrocedant and any original
reinsured, within
the limits hereof, in connection with loss in excess of the limit
of its
original policy, such loss in excess of the limit having been
incurred because
of failure of the original reinsured to settle within the policy
limit or by
reason of alleged or actual negligence, fraud, or bad faith in
rejecting an
offer of settlement or in the preparation of the defense or in the
trial of any
action against its insured or reinsured or in the preparation or
prosecution of
an appeal consequent upon such action.
However, this Article shall not apply where the loss has been
incurred due (i)
solely to the acts, or failure to act, of the Retrocedant in
handling its claims
or (ii) to fraud by a member of the Board of Directors or a
corporate officer of
the original reinsured acting individually or collectively or in
collusion with
any individual or corporation or any other organization or party
involved in the
presentation, defense or settlement of any claim covered
hereunder.
For the purpose of this Article, the word "loss" shall mean any
amounts for
which the original reinsured or Retrocedant would have been
contractually liable
to pay had it not been for the limit of the original policy.
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ARTICLE 11 - ADMINISTRATION OF REINSURANCE CONTRACTS
SECTION 11.01 Administration. The parties agree that, as of the
Effective Date, Retrocedant shall have the sole authority to
administer the
Reinsurance Contracts in all respects, which authority shall
include, but not be
limited to, authority to bill for and collect premiums, adjust all
claims and
handle all disputes thereunder and to effect any and all
amendments,
commutations and cancellations of the Reinsurance Contracts.
Retrocedant shall
not settle any claims, waive any right, defense, setoff or
counterclaim relating
to the Reinsurance Contracts with respect to amounts in excess of
$5 million or
make any ex gratia payments in each case without the prior written
consent of
Retrocessionaire, which consent shall not be unreasonably withheld
or delayed.
SECTION 11.02 Reporting and Regulatory Matters. Each party
shall
provide the notices and filings required to be made by it to state
regulatory
authorities as a result of this Agreement. Notwithstanding the
foregoing, each
party shall provide to the other party any information in its
possession
regarding the Reinsurance Contracts as reasonably required by the
other party to
make such filings and in a form as agreed to by the parties.
SECTION 11.03 Duty to Cooperate. Upon the terms and subject to
the
conditions and other agreements set forth herein, each party agrees
to use its
commercially reasonable efforts to take, or cause to be taken, all
actions, and
to do, or cause to be done, and to assist and cooperate with the
other party in
doing, all things necessary or advisable to perform the
transactions
contemplated by this Agreement.
ARTICLE 12 - FOLLOW THE FORTUNES
It is the intent of this Agreement that the Retrocessionaire shall
in every case
in which this Agreement applies and in the proportions specified
herein, "follow
the fortunes" of the Retrocedant in respect of risks the
Retrocessionaire has
accepted under this Agreement.
ARTICLE 13 - REPORTS AND REMITTANCES
Within thirty (30) days after the close of each month, the
Retrocedant will
furnish the Retrocessionaire with a report summarizing the written
premium ceded
less return premium, allowances, commission, premiums for inuring
reinsurance,
losses paid, loss adjustment expense paid, monies recovered, and
net balance due
either party. In addition, the Retrocedant will furnish the
Retrocessionaire a
monthly statement showing the unearned premium, the total reserves
for
outstanding losses including loss adjustment expense, a breakdown
for paid and
outstanding catastrophe losses and loss adjustment expenses, and
such other
information as may be required by the Retrocessionaire for
completion of its
statutory financial statements and other filings.
The net balance wi
