Property Excess Catastrophe Reinsurance Contract between Allied World Assurance Companies and Reinsurers (May 1, 2006 - May 1, 2007)

Summary

This contract is between Allied World Assurance Company and its affiliates and their reinsurers. It provides property excess catastrophe reinsurance coverage from May 1, 2006, to May 1, 2007, for losses in the U.S., its territories, Puerto Rico, D.C., and Canada. The agreement covers specified excess layers above certain retention amounts, with limits and premiums detailed for each layer. It excludes offshore energy and certain terrorism-related losses, and includes terms for reinstatement, premium payments, and loss adjustment expenses. The contract is subject to specific exclusions and conditions as outlined in the summary.

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EX-10.22 6 y15272a3exv10w22.txt EX-10.22: PROPERTY EXCESS CATASTROPHE REINSURANCE CONTRACT Exhibit 10.22 [Logo of Benfield] ALLIED WORLD ASSURANCE COMPANY, LTD Allied World Assurance Company (Europe) Limited Allied World Assurance Company (Reinsurance) Limited Allied World Assurance Company (U.S.) Inc. Newmarket Underwriters Insurance Company PROPERTY EXCESS CATASTROPHE REINSURANCE CONTRACT MAY 1, 2006 THROUGH MAY 1, 2007 SUMMARY OF TERMS Estimated Subject Net Written Premium May 1, 2006 - May 1, 2007: $132,000,000
PERCENT LAYER LIMIT XS RETENTION ROL RATE 100% DEPOSIT PLACED CEDED PREMIUM LIMIT PLACED ----- ----- -- --------- --- ---- ------------ ------ ------------- ------------ First $ 40,000,000 xs $ 35,000,000 36.00% 10.909% $ 14,400,000 33.75% $ 4,860,000 $ 13,500,000 Second $ 50,000,000 xs $ 75,000,000 32.50% 12.311% $ 16,250,000 97.05% $ 15,770,625 $ 48,525,000 Third $ 65,000,000 xs $125,000,000 22.50% 11.080% $ 14,625,000 100.00% $ 14,625,000 $ 65,000,000 Fourth $ 85,000,000 xs $190,000,000 8.00% 5.152% $ 6,800,000 100.00% $ 6,800,000 $ 85,000,000 - -------- ------------ -- ------------ ----- ------ ------------ ------ ------------ ------------ TOTAL $240,000,000 XS $ 35,000,000 21.70% 39.451% $ 52,075,000 $ 42,055,625 $212,025,000
NOTES: - ----- 1. BUSINESS COVERED: Excess liability which may accrue to the Company under its policies, contracts and binders of insurance in force at the effective date hereof or issued or renewed on or after that date, and classified by the Company as Property business. As respects the Fourth Excess Layer, this Contract shall only cover losses resulting form earthquake and ensuing perils. Offshore Energy business is specifically excluded under this Contract. 2. TERM: Contract effective 12:01am May 1, 2006 to 12:01am May 1, 2007. 3. TERRITORY: The United States, its territories or possessions, Puerto Rico, the District of Columbia and Canada. 4. REINSTATEMENT: Each layer, one reinstatement at 100% as to time, pro rata as to amount. 5. OTHER REINSURANCE: The Company is permitted to carry Treaty and/or Facultative reinsurance that inures to the benefit of this Contract; premium will be deducted from the gross subject written premium. 6. ULTIMATE NET LOSS: Ultimate net loss includes loss adjustment expense subject to the Contract. 7. ECO/XPL: All Layers, 90% of extra contractual obligations, 90% of excess limits liability, limited to 25.0% of the Company's UNL for the loss occurrence. 8. PREMIUM: Deposit premiums payable in quarterly installments May 1, August 1 and November 1 of 2006 and February 1, 2007. Annual Minimum Premium for each excess layer shall be 80% of the Annual Deposit Premium. 9. TERRORISM: This Contract excludes any loss directly or indirectly involving the utilization of a biological, chemical, nuclear or radioactive device. This Contract also excludes coverage from events determined to be an "act of terrorism" by the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Extension Act of 2005. Notwithstanding, this reinsurance Contract will pay actual loss or damage caused by any act of terrorism which does not meet the definition of "act of terrorism" by the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Extension Act of 2005. - ----------- ** A reinsurance contract reflecting the binding terms discussed in this term sheet will be prepared in the near future by our reinsurers in accordance with industry practice.