Casualty Excess of Loss Reinsurance Agreement between Lebanon Mutual Insurance Company and Munich American Reinsurance Company
Lebanon Mutual Insurance Company and Munich American Reinsurance Company entered into a reinsurance agreement effective January 1, 1996. Under this agreement, Lebanon Mutual transfers certain casualty insurance risks to Munich American, which agrees to cover losses exceeding specified limits. The agreement outlines the responsibilities of both parties, including premium payments, claims management, and termination conditions. It also details exclusions, policy limits, and procedures for handling insolvency or changes in company structure. The agreement remains in effect continuously unless terminated by either party with proper notice.

Reinsurance Agreement | NO. 63-2422-1/2/3/4/5 | ||
CASUALTY EXCESS OF LOSS REINSURANCE AGREEMENT (hereinafter referred to as the AGREEMENT) | |||
entered into by and between | |||
LEBANON MUTUAL INSURANCE COMPANY Cleona, Pennsylvania (hereinafter referred to as the COMPANY) | |||
and | |||
MUNICH AMERICAN REINSURANCE COMPANY New York, New York (hereinafter referred to as the REINSURER) | |||
Effective: January 1, 1996 | |||
Term: Continuous |
ARTICLE | PAGE | |||||
1 | Purview of the Agreement | 1 | ||||
2 | Parties to the Agreement | 1 | ||||
3 | Commencement and Termination | 2 | ||||
4 | Special Termination | 3 | ||||
5 | Reinsuring Clause | 4 | ||||
6 | Liability of the Reinsurer | 5 | ||||
7 | Net Retained Lines | 5 | ||||
8 | Exclusions | 5 | ||||
9 | Company Policy Limits | 13 | ||||
10 | Definitions | 14 | ||||
11 | Special Acceptances | 16 | ||||
12 | Self-Insured Obligations | 16 | ||||
13 | Other Reinsurance | 17 | ||||
14 | Recoveries | 17 | ||||
15 | Territory | 18 | ||||
16 | Excess of Policy Limits | 18 | ||||
17 | Extra Contractual Obligations | 19 | ||||
18 | Reinsurance Premium | 20 | ||||
ARTICLE | PAGE | |||||
19 | Reports and Remittances | 20 | ||||
20 | Management of Claims and Losses | 21 | ||||
21 | Inspection of Records | 22 | ||||
22 | Errors and Omissions | 22 | ||||
23 | Reserves and Taxes | 22 | ||||
24 | Offset | 22 | ||||
25 | Currency | 23 | ||||
26 | Arbitration | 23 | ||||
27 | Insolvency | 24 | ||||
ATTACHMENTS: | Exhibits A through E | |
Nuclear Incident Exclusion Clause -Liability - Reinsurance (U.S.A.) | ||
Pollution Exclusion Clause |
Article 1 | Purview of the AGREEMENT |
Article 2 | Parties to the AGREEMENT |
Page 1
Article 3 | Commencement and Termination |
Page 2
Article 4 | Special Termination |
1. | Default in payment due under the terms of this AGREEMENT; | ||
2. | Cause an intentional material breach of any term or condition of this AGREEMENT; | ||
3. | Cease writing new or renewal business and/or withdraw from the business of insurance; | ||
4. | Effect a reduction in the net retained liability without the consent of the other party; | ||
5. | Reduce paid-in capital for any reason whatsoever; | ||
6. | Change its existing ownership, management or financial operating structure by: |
a. | selling all or substantially all of its assets | ||
b. | effecting a change in ownership of 10% or more of its stock | ||
c. | effecting a pertinent change in management | ||
d. | amalgamating with or having its shares purchased by any other company, corporation, individual or individuals altering the control of its existing ownership and/or management; |
7. | Have its financial condition impaired by a reduction in policyholders surplus of 25% or more in any 12-month or less period from the inception date of this AGREEMENT; | ||
8. | File a petition for bankruptcy or have proceedings instituted or filed against them by any insurance regulatory authority for insolvency, receivership, liquidation, rehabilitation, conservation, or dissolution; |
Page 3
Article 5 | Reinsuring Clause |
1. | Private Passenger Automobile Liability including | ||
Bodily Injury Liability Property Damage Liability Uninsured and Underinsured Motorists Liability Medical Payments Personal Injury Protection, Property Protection Insurance, and other No Fault coverages written in compliance with the No fault laws of any state howsoever deemed Automobile Physical Damage Collision Coverage Death, Disability or Dismemberment Benefits | |||
2. | Commercial Automobile Liability including | ||
Bodily Injury Liability Property Damage Liability Uninsured and Underinsured Motorists Liability Medical Payments Personal Injury Protection, Property Protection Insurance, and other No Fault coverages written in compliance with the No fault laws of any state howsoever deemed Automobile Physical Damage Collision Coverage | |||
3. | Personal Lines Other Liability including the liability portion (Section II) of Homeowners and Mobile Homeowners policies for the following coverages: | ||
Bodily Injury Liability Property Damage Liability Personal Injury Liability Medical Payments | |||
4. | Commercial Lines Other Liability including General Liability, Comprehensive General Liability, liability portion |
Page 4
(Section ll) of Commercial Multi-Peril policies for the following coverages: | |||
Bodily Injury Liability Property Damage Liability Personal Injury Liability Medical Payments Advertising Injury Liability Fire Legal Liability | |||
5. | Workers Compensation and Employers Liability |
Article 6 | Liability of the REINSURER |
Article 7 | Net Retained Lines |
Article 8 | Exclusions |
1. | All reinsurance assumed by the COMPANY howsoever styled or classified; | ||
2. | Any liability of the COMPANY arising from its participation or membership, whether voluntary or involuntary, in any insolvency fund including any guarantee fund, association, |
Page 5
pool, plan or other facility which provides for the assessment of, payment by, or assumption by the COMPANY of a part or the whole of any claim, debt, charge, fee or other obligations of an insurer, or its successors or assigns, which has been declared insolvent by any authority having jurisdiction; | |||
3. | Any loss or liability accruing to the COMPANY from any insurance written by or through any pools, associations including any so-called joint underwriting association, syndicates, exchanges, plans, funds or other facility directly as a member, subscriber or participant or indirectly by way of any reinsurance or assessments either voluntarily or as required under any statutes or regulations; however, this exclusion shall not apply to business assigned to the COMPANY under mandatory Assigned Risk Plans but only when the business subject to such assignment falls within the business covered by this AGREEMENT and subject to the maximum policy limits stipulated in the Article entitled Company Policy Limits; | ||
4. | Nuclear incident per the Nuclear Incident Exclusion Clause Liability Reinsurance (U.S.A.) attached hereto; | ||
5. | Financial Guarantees or Financial insurance (including residual value or similar types of coverage), insolvency and credit business; | ||
6. | Business written with a deductible or in excess of a self insured amount of more than $10,000 or business written to apply specifically in excess over underlying insurance including any aggregate excess of loss policies (stop loss insurance); | ||
7. | Policies written on a co-indemnity basis with another insurer, reinsurer or other entity including the insured; however, this does not apply to the standard co-insurance provisions of a policy; | ||
8. | Any loss or damage which is occasioned by war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, miliary or usurped power, or martial law or confiscation by order of any government or public authority, as excluded under a standard policy containing a standard war exclusion clause; |
Page 6
9. | Policies covering liability of any insurer or reinsurer for its errors and/or omissions in the negotiation, settlement, or defense of claims or any error and/or omission in dealings with its policyholders in any other business matters; | ||
10. | Environmental Impairment Liability insurance; | ||
11. | Any loss or liability arising out of inhalation, ingestion or exposure to toxic substances including but not limited to asbestos, dioxin and polychlorinated biphenols or goods, products or structures containing such substances as a result of premises operations or completed operations involving the use, manufacture, transportation, storage, repair, installation, removal or disposal of such substances, goods, products or structures either specifically as the intent of such operation or as incidental to any other operations; | ||
12. | Liability arising out of pollution, as per the attached Pollution Exclusion Clause; | ||
13. | Any loss or liability arising from sexual contact, misconduct, or abuse except where the COMPANY may be prohibited from excluding such liability under its policies by law, statute or regulatory authority; | ||
14. | Umbrella Liability business; | ||
15. | Professional Liability business, but not including barber and beauty shop professional liability, druggists liability, pet groomers liability, funeral directors professional liability and printers liability, nor any other innocuous types of professional liability coverages. | ||
16. | Policies issued to a federal, state or local government or any of its governmental agencies or any political subdivision whatsoever; | ||
17. | Liability arising from Insurance Loss Portfolio Transfers of any kind; | ||
18. | Retroactive liability except for prior acts coverage under a claims-made policy; |
Page 7
19. | Liability underwritten or accepted by any third party except the standard interim binding authority granted by the COMPANY to its duly authorized agents; | ||
20. | Liability arising out of ERISA; | ||
21. | Kidnap and Ransom and/or Extortion Coverage; | ||
22. | Insurance coverage for punitive or exemplary damages if written as such; |
1. | Securities Exchange Commission Liability; | ||
2. | Business classified by the COMPANY as Ocean Marine or arising out of the operation or navigation of ships or vessels other than yachts or small pleasure craft; | ||
3. | Railways, tramway, cable cars and lifts; | ||
4. | Sea ports, dry docks, docks, quays and wharves, dams and reservoirs; | ||
5. | Ship building, ship repairing and ship breaking yards including construction, repair or installation work on vessels; | ||
6. | Amusement parks, carnivals, circuses, speed contests and racing; | ||
7. | Ski Resorts; | ||
8. | Waste disposal and deposit sites; | ||
9. | Crane Rentals with and without operators; | ||
10. | Contractors engaged in wrecking and demolition of structures in excess of two stories or in the construction, erection or maintenance of structures in excess of six stories; | ||
11. | Existence, construction, maintenance or inspection of dams; | ||
12. | Underground tunnelling and other subaqueous or subterranean work; |
Page 8
13. | Underground or surface mining and quarrying; | ||
14. | Manufacture and/or production, detonation, processing, storage, handling or transport of: |
a. | Fireworks, fuse(s), cartridges, ammunition, powder, nitroglycerine or any explosives; | ||
b. | Butane, Propane and other liquified gases; | ||
c. | Toxic substances and toxic waste with inherent potential for catastrophic loss; | ||
However, this exclusion shall not apply to the incidental storage, handling or transport of the above-specified materials. |
15. | Exploration, drilling, production, refining and distribution or maintenance work involving oil refinery petroleum products to include but not limited to crude oil, gasoline, natural or artificial fuel gas, butane, propane or liquified petroleum gases; | ||
16. | Liquor Law Liability; | ||
17. | Crop dusting to include application of fertilizers, herbicides, and pesticides for others; | ||
18. | Scaffold installation, repair, removal or rental; | ||
19. | Railroad operation or exposure other than incidental side-track agreement; | ||
20. | Roofing other than residential; | ||
21. | Warehousemens Legal Liability; | ||
22. | Public or private utilities, municipalities and other public authorities, except for water and sewage authorities, including but not limited to fire and law enforcement activities or responsibility, and all other board, commission, or entities responsible for administering or controlling the public sector; | ||
23. | Production of major motion pictures by major motion picture production companies. |
Page 9
1. | Explosives, fireworks, gases and volatile petroleum products manufacture; | ||
2. | Drugs, medicines, pharmaceuticals manufacture; | ||
3. | Chemicals (dyes, cosmetics, beauty products, crop sprays, fertilizers, insecticides, pest and weed control, fumigants); | ||
4. | Ladder manufacturers; | ||
5. | Firearms and/or other weapons manufacturing, gunsmithing; | ||
6. | Power tools and equipment manufacturing; | ||
7. | Electrical control equipment; | ||
8. | Medical equipment manufacture, production, sales and distribution; | ||
9. | Manufacture, distribution, sale and repair of aircraft, aircraft components or other products necessary or critical to aircraft safety or flight; | ||
10. | Manufacture of automobiles, buses, trucks and trailers; | ||
11. | Manufacture of automobile components critical to vehicle safety; | ||
12. | Manufacture of recreational vehicles; | ||
13. | Manufacture of motorcycles; | ||
14. | Manufacture of helmets; | ||
15. | Manufacture or recapping of tires; | ||
16. | Liability arising from risks involved in the mining, handling, processing, manufacture, sale, distribution, storage or use of asbestos, asbestos products, and/or products containing asbestos; |
Page 10
17. | Products liability written without an annual aggregate limit; | ||
18. | Products Integrity Impairment; | ||
19. | Products Guarantee and Products Recall; | ||
20. | Animal feed or additives; | ||
21. | Tobacco or tobacco products manufacture; |
1. | Aviation exposures as respects flight crews; | ||
2. | Shipping Lines as respects ship crews, shipbuilding, ship repairing and shipbreaking; | ||
3. | Utilities (electrical and gas); | ||
4. | Exposures involving underground or subaqueous work; | ||
5. | United States Longshoremen and Harbor Workers or Maritime Act and Jones Act; | ||
6. | Exploration, drilling, production, refining and distribution or maintenance work involving oil refinery petroleum products to include but not limited to crude oil, gasoline, natural or artificial fuel gas, butane, propane or liquified petroleum gas; | ||
7. | Manufacture and/or production, detonation, processing, storage, handling or transport of: |
| Fireworks, fuse(s), cartridges, ammunition, powder, nitroglycerine or any explosives; | ||
| Butane, Propane and other liquified gases; | ||
| Toxic substances and toxic waste with inherent potential for catastrophic loss; | ||
However, this exclusion shall not apply to the incidental storage, handling or transport of the above-specified materials. |
8. | Liability arising from risks involved in the mining, hand-ling, processing, manufacture, sale, distribution, storage or use of asbestos, asbestos products, and/or products containing asbestos; |
Page 11
9. | Contractors engaged in wrecking and demolition of structures in excess of two stories or in the construction, erection or maintenance of structures in excess of six stories; | ||
10. | Railroad operations and exposures, other than incidental side track agreements; | ||
11. | Operations employing the process of nuclear fission or fusion or handling of radioactive material, which operations include but are not limited to: |
| the use of nuclear reactors such as atomic piles, particle accelerators or generators, or | ||
| the use, handling or transportation of radioactive materials, or | ||
| the use, handling or transportation of any weapon of war or explosive device employing nuclear fission or fusion; |
12. | Shipbuilding, ship repairing and shipbreaking yards including construction, repair or installation work on vessels; | ||
13. | Amusement Parks, Carnivals, Circuses, Professional Athletes and Performers; | ||
14. | Ski Resorts; | ||
15. | Waste disposal and deposit operations; | ||
16. | Crop dusting to include application of fertilizers, herbicides, pesticides for others; | ||
17. | Roofing other than residential; | ||
18. | Chemical Manufacturers; |
1. | Police, fire, ambulance or other emergency vehicles; |
Page 12
2. | Vehicles used for the transport of gasoline, LPG, explosives and other toxic or hazardous commodities as defined in General Liability Exclusion No. 17; | ||
3. | Vehicles used in racing or speed contests; | ||
4. | Long haul trucking defined as hauling for others and operating regularly and frequently beyond a 150 mile radius; | ||
5. | Taxicabs, limousines, busses and other public or private livery other than school or church vehicles; | ||
6. | Automobile and other motor vehicle rental and leasing operations; | ||
7. | Logging and lumbering trucks; | ||
8. | Sand and gravel haulers; | ||
9. | Mail or newspaper collection or delivery in cities with populations of more than 25,000; | ||
10. | Vehicle operating with time constraints including but not limited to messenger or delivery services. |
The limits of liability of the Company with respect to any one policy shall be deemed not to exceed: |
1. | Private Passenger Automobile Liability |
Bodily Injury | $1,000,000 per person/ | |
$1,000,000 per occurrence | ||
Property Damage | $1,000,000 per occurrence | |
Combined Single Limit | $1,000,000 per occurrence |
2. | Private Passenger Automobile Uninsured and Underinsured Motorists Coverage |
Bodily Injury | $1,000,000 per person/ | |
$1,000,000 per occurrence | ||
Property Damage | $1,000,000 per occurrence | |
Combined Single Limit | $1,000,000 per occurrence |
Page 13
3. | Private Passenger Automobile Personal Injury Protection and Property Protection Insurance (Basic and Excess) | ||
Statutory Limits | |||
4. | Commercial Automobile Liability |
Bodily Injury | $1,000,000 per person/ | |
$1,000,000 per occurrence | ||
Property Damage | $1,000,000 per occurrence | |
Combined Single Limit | $1,000,000 per occurrence |
5. | Commercial Automobile Uninsured and Underinsured Motorists Coverage |
Bodily Injury | $1,000,000 per person/ | |
$1,000,000 per occurrence | ||
Property Damage | $1,000,000 per occurrence | |
Combined Single Limit | $1,000,000 per occurrence |
6. | Commercial Automobile Personal Injury Protection and Property Protection Insurance (Basic and Excess) | ||
Statutory Limits | |||
7. | Other Bodily Injury and Property Damage Liability Combined Single limit (Comprehensive General Liability Forms) | ||
$1,000,000 per occurrence | |||
8. | Section II Liability under Commercial Multiple Peril Forms | ||
$1,000,000 per occurrence | |||
9. | Section II Liability under Homeowners and Mobile Homeowners Multi-Peril Forms | ||
$1,000,000 per occurrence | |||
10. | Workers Compensation | ||
Statutory Limits |
Page 14
11. | Employers Liability |
Bodily Injury by Accident | $1,000,000 each accident | |
Bodily Injury by Disease | $1,000,000 policy limit | |
Bodily Injury by Disease | $1,000,000 each employee |
A. | Ultimate Net Loss |
This term as used herein shall mean all payments by the COMPANY in settlement of claims or losses, payments of benefits or satisfaction of verdicts, awards, or judgments for which it is liable, including pre-judgment interest or delay damages, excess of original policy limits and extra contractual obligations (as specified in their respective articles), and loss adjustment expenses, after deduction of all net recoveries, salvages and amounts due from other reinsurance which inures to the benefit of the REINSURER under this AGREEMENT, whether collectible or not. However, in the event of the insolvency of the COMPANY, ultimate net loss shall mean the amount of loss which the COMPANY has incurred or for which it is liable after deduction of all net recoveries, salvages, and amounts due from other reinsurance which inures to the benefit of the REINSURER under this AGREEMENT, whether collectible or not, and payment by the REINSURER shall be made to the liquidator, receiver or statutory successor of the COMPANY in accordance with the provisions of the Article entitled Insolvency. | |||
Nothing herein shall be construed to mean that losses under this AGREEMENT are not recoverable until the COMPANYs ultimate net loss has been ascertained. |
B. | Loss Adjustment Expense |
This term shall mean the COMPANYs expenses allocable to losses under this AGREEMENT in connection with the defense and settlement of such claim, loss or legal proceeding including investigation, negotiation and legal expenses; court costs; statutory penalties; bond costs; adjustment and litigation; and post-judgment interest and payment delay damages; arising under the COMPANYs original policies reinsured hereunder. Such expenses shall not include office expenses and salaries of officials or employees of the COMPANY. |
C. | Pre-judgment Interest or Delay Damages |
This term shall mean interest or damages added to a settlement, verdict, award or judgment based on the amount of time prior to the settlement, |
Page 15
verdict, award or judgment that the claim or loss occurred, whether or not made a part of the settlement, verdict, award or judgment. |
D. | Post-judgment Interest or Payment Delay Damages |
This term shall mean interest or damages added to a settlement, verdict, award or judgment as a result of a delayed payment beyond the stipulated payment date assigned by the court at the time of settlement, verdict, award or judgment. |
E. | Policies |
This term as used herein shall mean each of the COMPANYs binders, certificates, policies and contracts providing insurance covered hereunder. |
F. | Occurrence |
This term shall mean each accident, casualty, disaster or occurrence or series of accidents, casualties, disasters or occurrences arising out of one event. | |||
As respects occupational disease under Workers Compensation policies, the term occurrence shall mean an occurrence within the meaning of this AGREEMENT and each case of an employee contracting any disease for which the COMPANY is held liable shall be considered as constituting a separate and distinct occurrence. The date of such occurrence shall be deemed to be the following: |
1. | If the case is cornpensable under the Workers Compensation Law, the date of the beginning of the disability for which compensation is payable. | ||
2. | If the case is not compensable under the Workers Compensation Law, the date that disability due to the said disease actually began. | ||
3. | If the claim is made after employment has ceased, the date of cessation of such employment. |
G. | Direct Subject Casualty Premium Written |
This term shall mean the COMPANYs gross direct subject casualty premium written plus or minus any additional or return premiums resulting from endorsement changes or cancellations, less any premium for facultative reinsurance, for business which is subject to this AGREEMENT. |
Page 16
H. | Direct Subject Casualty Premium Earned |
This term shall mean the COMPANYs direct subject casualty premium unearned at the beginning of a period calculated on the pro rata basis plus the COMPANYS direct subject casualty premium written during such period less the COMPANYs direct subject casualty premium unearned at the end of such period calculated on the pro rata basis. A period may be monthly, quarterly, annually, etc. |
I. | Annual Period |
For the purposes of this AGREEMENT, this term shall mean the 12-month period from January 1st through December 31st of each year. |
Business not within the terms of this AGREEMENT but which the COMPANY wishes to include in the reinsurance coverage provided by this AGREEMENT may be submitted to the REINSURER by the COMPANY for special acceptance and, if accepted by the REINSURER, shall be subject to all of the terms of this AGREEMENT except as modified by the special acceptance. |
Page 17
The COMPANY may purchase facultative excess of loss reinsurance or facultative share reinsurance on the liability of the REINSURER, if, in the underwriting judgment of the COMPANY, the REINSURER will be benefitted thereby. In no event, however, shall the amount required with respect to the COMPANYs retention be reduced nor the amounts stipulated in the Article entitled COMPANY Policy Limits be increased. |
This AGREEMENT applies to policies issued by the COMPANY within the United States of America, its territories and possessions. |
Page 18
Page 19
As a condition precedent to the REINSURERs obligations hereunder, the COMPANY shall pay to the REINSURER the amount of premium as set forth in the Exhibit(s) attached to and forming a part of this AGREEMENT. |
Page 20
A. | Reinsurance Premium |
Within 90 days after the close of each quarter, the COMPANY shall pay to the REINSURER the amount of premium due in accordance with the Premium Section of the Exhibit(s) attached to and forming a part of this AGREEMENT. | |||
Within 30 days after the close of each annual period, the COMPANY shall render to the REINSURER a statement of the adjusted reinsurance premium for the period, calculated as set forth in the Exhibit(s) attached hereto. Any balance due the REINSURER shall be submitted simultaneously with said statement; any balance due the COMPANY shall be remitted promptly by the REINSURER. |
B. | Claims and Losses |
The COMPANY shall report promptly to the REINSURER each claim or loss for which the COMPANYs estimated amount of ultimate net loss exceeds $25,000 or more, and shall also report all cases of serious injury which, regardless of considerations of liability or coverage, might involve this reinsurance, including but not limited to the following: |
1. | significant brain damage | ||
2. | spinal cord injury with paralysis | ||
3. | severe burns resulting in disfigurement | ||
4. | multiple fractures | ||
5. | amputations | ||
6. | fatal injuries | ||
7. | permanent disabilities | ||
8. | sexual molestation or abuse |
The COMPANY shall advise the REINSURER of the estimated amount of ultimate net loss and loss adjustment expense in connection with each such claim or loss and of any subsequent changes in such estimates. | |||
Upon receipt of a definitive statement of ultimate net loss and loss adjustment expense payments from the COMPANY, the REINSURER shall pay promptly to the COMPANY the REINSURERs portion of ultimate net loss payments and loss adjustment expense payments. Any subsequent changes shall be reported by the COMPANY to the REINSURER and the amount due either party shall be remitted promptly. |
Page 21
C. | General |
In addition to the reports required in A and B above, the COMPANY shall furnish such other information as may be required by the REINSURER for the completion of the REINSURERs quarterly and annual statements and internal records. | |||
All reports shall be rendered in forms acceptable to the COMPANY and the REINSURER. | |||
As respects all business the COMPANY shall report to the REINSURER basic statistical information on each claim or loss including but not limited to the line of business, claim number, policy number, date of loss, date of first report, underwriting year (policy effective date), and cause of loss. |
The COMPANY shall allow the REINSURER to inspect, at reasonable times, the records of the COMPANY relevant to the business reinsured under this AGREEMENT, including, but not limited to COMPANY files concerning claims, losses, or legal proceedings which involve or are likely to involve the REINSURER. |
Page 22
The COMPANY or the REINSURER may offset any balance, whether on account of premium, commission, claims or losses, loss adjustment expense, salvage, or otherwise, due from one party to the other under this AGREEMENT or under any other AGREEMENT heretofore or hereafter entered into between the COMPANY and the REINSURER. |
Wherever the word Dollars or the $ sign appears in this AGREEMENT, they shall be construed to mean United States Dollars. |
Page 23
Page 24
IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be executed in duplicate by their duly authorized officers. | |||
In Cleona, Pennsylvania, this 19th day of April, 1996. |
LEBANON MUTUAL INSURANCE COMPANY | ||||
Rollin Rissinger | ||||
And in New York, New York, this 22nd day of January, 1996. | |||
MUNICH AMERICAN REINSURANCE COMPANY |
Vice President | ||||
Vice President |
Page 25
FIRST CASUALTY EXCESS OF LOSS REINSURANCE
AGREEMENT NO. 63-2422-1
Page 1
1. | the REINSURERs paid and outstanding loss from losses occurring during the applicable three-year period, plus | ||
2. | the REINSURERs paid and outstanding allocated loss adjustment expense from losses occurring during the applicable three-year period. |
1. | the initial calculation for the applicable three-year period shall be made at 30% of the REINSURERs provisional Direct Subject Casualty Earned Premium (DSCEP). | ||
2. | After the first 12 months, the calculation shall be: 30% of the most recent years provisional DSCEP. | ||
3. | Following 24 months, IBNR shall be calculated at: 25% of the second most recent years provisional DSCEP 30% of the most recent years provisional DSCEP. | ||
4. | After 36 subsequent months, the rates shall be: 15% of the third most recent years provisional DSCEP 25% of the second most recent years provisional DSCEP 30% of the most recent years provisional DSCEP. | ||
5. | Following 48 months, the calculation shall be: 10% of the fourth most recent years provisional DSCEP 15% of the third most recent years provisional DSCEP 25% of the second most recent years provisional DSCEP 30% of the most recent years provisional DSCEP. |
Page 2
Page 3
SECOND CASUALTY EXCESS OF LOSS REINSURANCE
AGREEMENT NO, 63-2422-2
Page 1
THIRD CASUALTY EXCESS OF LOSS REINSURANCE
AGREEMENT NO. 63-2422-3
Page 1
FOURTH CASUALTY EXCESS OF LOSS REINSURANCE
AGREEMENT NO. 63-2422-4
Page 1
FIFTH CASUALTY EXCESS OF LOSS REINSURANCE
AGREEMENT NO. 63-2422-5
(Uninsured Motorists/Underinsured Motorists Coverage Only)
Page 1
Liability Reinsurance
(U.S.A.)
I. | It is agreed that the policy does not apply under any liability coverage, |
to { injury, sickness, disease, death or destruction bodily injury or property damage | |||
with respect to which an insured under the policy is also an insured under a nuclear energy liability policy issued by Nuclear Energy Liability Insurance Association, Mutual Atomic Energy Liability Underwriters or Nuclear Insurance Association of Canada, or would be an insured under any such policy but for its termination upon exhaustion of its limit of liability. | |||
II. | Family Automobile Policies (liability only), Special Automobile Policies (private passenger automobiles, liability only), Farmers Comprehensive Personal Liability Policies (liability only), Comprehensive Personal Liability Policies (liability only) or policies of a similar nature; and the liability portion of combination forms related to the four classes of policies stated above, such as the Comprehensive Dwelling Policy and the applicable types of Homeowners Policies. | ||
III. | The inception dates and thereafter of all original policies as described in II above, whether new, renewal or replacement, being policies which either |
(a) | become effective on or after May 1st, 1960, or | ||
(b) | become effective before that date and contain the Limited Exclusion Provision set out above; |
provided this paragraph (2) shalt not be applicable to Family Automobile Policies, Special Automobile Policies, or policies or combination policies of a similar nature, issued by the COMPANY on New York risks, until 90 days following approval of the Limited Exclusion Provision by the Governmental Authority having jurisdiction thereof. |
Page 1 of 4
I. | Under any Liability Coverage, to { injury, sickness, disease, death or destruction bodily injury or property damage |
II. | Under any Medical Payments Coverage, or under any Supplementary Payments Provision | ||
relating to { immediate medial or surgical relief first aid | |||
to expenses incurred with respect to { injury, sickness, disease or death bodily injury | |||
resulting from the hazardous properties of nuclear material and arising out of the operation of a nuclear facility by any person or organization. | |||
III. | Under any Liability Coverage to { injury, sickness, disease, death or destruction bodily injury or property damage | ||
resulting from the hazardous properties of nuclear material, if |
(a) | the nuclear material (1) is at any nuclear facility owned by, or operated by or on behalf of, an insured or (2) has been discharged or dispersed therefrom; | ||
(b) | the nuclear material is contained in spent fuel or waste at any time possessed, handled, used, processed, stored, transported or disposed of by or on behalf of an insured; or | ||
(c) | the { injury, sickness, disease, death or destruction bodily injury or property damage |
Page 2
IV. | As used in this endorsement: | ||
hazardous properties include radioactive, toxic or explosive properties; nuclear material means source material, special nuclear material or byproduct material; source material, special nuclear material, and byproduct material have the meanings given them in the Atomic Energy Act of 1954 or in any law amendatory thereof; spent fuel means any fuel element or fuel component, solid or liquid, which has been used or exposed to radiation in a nuclear reactor; waste means any waste material (1) containing byproduct material and (2) resulting from the operation by any person or organization of any nuclear facility included within the definition of nuclear facility under Paragraph (a) or (b) thereof; nuclear facility means |
(a) | any nuclear reactor, | ||
(b) | any equipment or device designed or used for (1) separating the isotopes of uranium or plutonium, (2) processing or utilizing spent fuel, or (3) handling processing or packaging waste, | ||
(c) | any equipment or device used for the processing, fabricating or alloying of special nuclear material if at any time the total amount of such material in the custody of the insured at the premises where such equipment or device is located consists of or contains more than 25 grams of plutonium or uranium 233 or any combination thereof, or more than 250 grams of uranium 235, | ||
(d) | any structure, basin, excavation, premises or place prepared or used for the storage or disposal of waste, |
and includes the site on which any of the foregoing is located, all operations conducted on such site and all premises used for such operations; nuclear reactor means any apparatus designed or used to sustain nuclear fission in a self-supporting chain reaction or to contain a critical mass of fissionable material; |
With respect to injury to or destruction of | |||
property, the word injury or destruction, properly damage includes all forms of includes all forms of radioactive, radioactive contamination of property. contamination of property. |
V. | The inception dates and thereafter of all original policies affording coverages specified in this paragraph (3), whether new, renewal or replacement, being policies which become effective on or after May 1st, 1960, provided this paragraph (3) shall not be applicable to |
(i) | Garage and Automobile Policies issued by the COMPANY on New York risks, or |
Page 3
(ii) | statutory liability insurance required under Chapter 90, General Laws of Massachusetts, |
(4) | Without in any way restricting the operation of paragraph (1) of this Clause, it is understood and agreed that paragraphs (2) and (3) above are not applicable to original liability policies of the COMPANY in Canada and that with respect to such policies this Clause shall be deemed to include the Nuclear Energy Liability Exclusion Provisions adopted by the Canadian Underwriters Association of the Independent Insurance Conference of Canada. |
Page 4
(1) | Bodily injury° or property damage arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants: |
(a) | At or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to , any insured; | ||
(b) | At or from any premises, site or location which is or was at any time used by or for any insured or others for the handling, storage, disposal, processing or treatment of waste; | ||
(c) | Which are or were at any time transported, handled, stored, treated, disposed of, or processed as waste by or for any insured or any person or organization for whom you may be legally responsible; or | ||
(d) | At or from any premises, site or location on which any insured or any contractors or subcontractors working directly or indirectly on any insureds behalf are performing operations: |
(i) | if the pollutants are brought on or to the premises, site or location in connection with such operations by such insured, contractor or subcontractor; or | ||
(ii) | if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants. |
Subparagraphs (a) and (d)(i) do not apply to bodily injury or property damage arising out of heat, smoke or fumes from a hostile fire. | |||
As used in this exclusion, a hostile fire means one which become uncontrollable or breaks out from where it was intended to be. |
(2) | Any loss, cost or expense arising out of any: |
(a) | Request, demand or order that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants: or | ||
(b) | Claim or suit by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of pollutants. |
Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste, Waste includes materials to be recycled, reconditioned or reclaimed. |
Page 2
II. | Exclusion A., 8. of ARTICLE VI, EXCLUSIONS, is amended to read as follows: |
8. | All loss, cost or expense directly or indirectly arising out of, resulting as a consequence of or related to War. War, as utilized herein, shall mean war whether or not declared, civil war, martial law, insurrection, revolution, invasion, bombardment or any use of military force, usurped power or confiscation, nationalization or damage of property by any government, military or other authority. | ||
This exclusion shall apply whether or not there is another cause of loss which may have contributed concurrently or in any sequence to a loss. |
III. | Exclusion A. 25. is added to ARTICLE VI, EXCLUSIONS, and the exclusion reads as follows: |
25. | The Companys liability, including all loss, cost or expense, beyond circumscribed policy provisions, including but not limited to, punitive, exemplary, consequential or compensatory damages, resulting from a claim of an insured or an insureds assignee against the Company, its agent or employees, except as otherwise provided in the Extra Contractual Obligations and Excess of Original Policy Limits Articles. |
IV. | Section 1, LIMIT AND RETENTION of EXHIBIT A, FIRST CASUALTY EXCESS OF LOSS REINSURANCE, is amended to reflect the change in the retention to $115,000 and the change in the limit to $385,000 and the Section reads as follows: |
RETENTION AND LIMIT | ||
The Reinsurer shall pay to the Company the amount of ultimate net loss sustained by the Company in excess of the Companys retention of $115,000 each occurrence, but the Reinsurers limit of liability shall not exceed 100% of $385,000 each occurrence. |
-1-
V. | Paragraphs A., B., and C. of Section 2, PREMIUM of EXHIBIT A, FIRST CASUALTY EXCESS OF LOSS REINSURANCE, are amended to reflect the change in rate to 24.639%, the change in annual minimum premium to $1,374,000 and the change in annual deposit premium to $1,616,000, The section reads in its entirety as follows: |
PREMIUM |
A. | The premium for the reinsurance provided under this Exhibit shall be computed at the rate of 24.639% of the Companys direct subject casualty premium earned on the business covered hereunder. | ||
B. | The annual minimum premium for the reinsurance provided under this Exhibit is $1,374,000. | ||
C. | The annual deposit premium for the reinsurance provided under this Exhibit is $1,616,000. | ||
D. | The Reinsurer shall make a commission allowance of 30% to the Company on the ceded direct subject casualty premium earned to the Reinsurer under this Exhibit. |
VI. | Paragraphs A., B., and C. of Section 2, PREMIUM of EXHIBIT B, SECOND CASUALTY EXCESS OF LOSS REINSURANCE, are amended to reflect the change in rate to 7.69%, the change in annual minimum premium to $429,000 and the change in annual deposit premium to $504,000. The section reads in its entirety as follows: |
PREMIUM |
A. | The premium for the reinsurance provided under this Exhibit shall be computed at the rate of 7.69% of the Companys direct subject casualty premium earned on the business covered hereunder. | ||
B. | The annual minimum premium for the reinsurance provided under this Exhibit is $429,000. | ||
C. | The annual deposit premium for the reinsurance provided under this Exhibit is $504,000. | ||
D. | The Reinsurer shall make a commission allowance of 30% to the Company on the ceded direct subject casualty premium earned to the Reinsurer under this Exhibit. |
VII. | Paragraphs A., B., and C. of Section 2, PREMIUM of EXHIBIT C, THIRD CASUALTY EXCESS OF LOSS REINSURANCE, are amended to reflect the change in rate to |
-2-
3.78%, the change in annual minimum premium to $211,000 and the change in annual deposit premium to $247,000. The section reads in its entirety as follows: |
PREMIUM |
A. | The premium for the reinsurance provided under this Exhibit shall be computed at the rate of 3.78% of the Companys direct subject casualty premium earned on the business covered hereunder. | ||
B. | The annual minimum premium for the reinsurance provided under this Exhibit is $211,000. | ||
C. | The annual deposit premium for the reinsurance provided under this Exhibit is $247,000. | ||
D. | The Reinsurer shall make a commission allowance of 30% to the Company on the ceded direct subject casualty premium earned to the Reinsures under this Exhibit. |
VIII. | Paragraph B. of Section 4, REINSTATEMENT, of EXHIBIT C, THIRD CASUALTY EXCESS OF LOSS REINSURANCE, is amended to reflect the change in the percentage of the clash premium to 48% and the Section reads in its entirety as follows: |
REINSTATEMENT |
A. | As respects Workers Compensation Business reinsured hereunder: | ||
Each claim hereon reduces the amount of indemnity under this Exhibit from the time of occurrence of the loss by the sum paid, and any amount so exhausted is hereby reinstated from the time of the Loss Occurrence without an additional premium charge for each amount so reinstated. Nevertheless, the Reinsurers liability hereunder shall never exceed $1,000,000 in respect of any one Loss Occurrence. | |||
B. | As respects all other Casualty Business reinsured hereunder: | ||
Each claim hereon reduces the amount of indemnity under this Exhibit from the time of occurrence of the loss by the sum paid, but any amount so exhausted is hereby reinstated from the time of occurrence of the loss, in consideration of the payment by the Company of an additional premium equal to the percentage of the face value of this Exhibit (i.e., the fraction of $1,000,000) reinstated, multiplied by 48% (i.e., the clash portion) of the reinsurance premium under this Exhibit for the calendar year in which the loss occurred. Nevertheless, the Reinsurers |
-3-
liability hereunder shall never exceed $1,000,000 in respect of any one Loss Occurrence and, subject to the limit in respect of any one Loss Occurrence, shall be further limited to $2,000,000 in any one Agreement Year by reason of any and all claims arising hereunder. |
IX. | Section 2, PREMIUM, of EXHIBIT E, FIFTH CASUALTY EXCESS OF LOSS REINSURANCE (Applies to Workers Compensation Coverage Only), is amended to reflect the change in the annual premium to $80,691 and the Section reads in its entirety as follows: |
PREMIUM | ||
The annual premium for the reinsurance provided under this Exhibit shall be $80,691, payable by the Company to the Reinsurer as stipulated in the REPORTS AND REMITTANCES Section of this Exhibit. |
MUNICH REINSURANCE AMERICA, INC. | ||||
RG/rg
-4-
I. | Paragraph D of ARTICLE XVIII, MANAGEMENT OF CLAIMS AND LOSSES, is added and the Article read as follows: |
MANAGEMENT OF CLAIMS AND LOSSES |
A. | The Company, or the Third Party Administrator on behalf of the Company, shall investigate and conduct diligently the defense and settlement of all claims and losses arising under its policies with respect to which this Agreement applies. The Company shall have original and primary responsibility for all claim settlements. | ||
B. | When requested by the Reinsurer, the Company shall permit the Reinsurer the right and opportunity, at the expense of the Reinsurer, to be associated with the Company, in the defense or control of any claim, loss, suit or legal proceeding which involves or is likely to involve the Reinsurers obligations under this Agreement and the Company and the Reinsurer shall cooperate in every respect in the defense of any such claim, loss, suit or legal proceeding, but the Reinsurer shall not have any obligation to assume the defense of any claim. | ||
C. | All settlements of claims or losses by the Company, or by the Third Party Administrator on behalf of the Company, within the terms and conditions of its policies which are within the limits set forth in this Agreement shall be binding on the Reinsurer, and the Reinsurer agrees to pay its share of each such settlement subject always to the terms and conditions of this Agreement. | ||
D. | As respect Workers Compensation losses, in the event of a potential settlement of a loss by agreement of the Company, involving a lump sum payment or agreed periodic payments, either of which encompass, at least in part, amounts to be paid in settlement of future liabilities, no recovery under this Agreement shall be available unless the Company shall have first satisfied all required notice of loss stipulated herein and has first counseled with the Reinsurer and the Reinsurer has provided its written consent to such settlement to the Company. |
-1-
II. | Paragraphs A., B., and C. of Section 2, PREMIUM of EXHIBIT A, FIRST CASUALTY EXCESS OF LOSS REINSURANCE, are amended to reflect the change in rate to 27.35%, the change in annual minimum premium to $1,474,000 and the change in annual deposit premium to $1,733,000. The section reads in its entirety as follows: |
PREMIUM |
A. | The premium for the reinsurance provided under this Exhibit shall be computed at the rate of 27.35% of the Companys direct subject casualty premium earned on the business covered hereunder. | ||
B. | The annual minimum premium for the reinsurance provided under this Exhibit is $1,474,000. | ||
C. | The annual deposit premium for the reinsurance provided under this Exhibit is $1,733,000. | ||
D. | The Reinsurer shall make a commission allowance of 30% to the Company on the ceded direct subject casualty premium earned to the Reinsurer under this Exhibit. |
III. | Paragraphs A., B., and C. of Section 2, PREMIUM of EXHIBIT B, SECOND CASUALTY EXCESS OF LOSS REINSURANCE, are amended to reflect the change in rate to 8.35%, the change in annual minimum premium to $450,000 and the change in annual deposit premium to $529,000. The section reads in its entirety as follows: |
PREMIUM |
A. | The premium for the reinsurance provided under this Exhibit shall be computed at the rate of 8.35% of the Companys direct subject casualty premium earned on the business covered hereunder. | ||
B. | The annual minimum premium for the reinsurance provided under this Exhibit is $450,000. | ||
C. | The annual deposit premium for the reinsurance provided under this Exhibit is $529,000. | ||
D. | The Reinsurer shall make a commission allowance of 30% to the Company on the ceded direct subject casualty premium earned to the Reinsurer under this Exhibit. |
IV. | Paragraphs A., B., and C., of Section 2, PREMIUM of EXHIBIT C, THIRD CASUALTY EXCESS OF LOSS REINSURANCE, are amended to reflect the change in rate to 4.72%, the change in annual minimum premium to $254,000 and the change in annual deposit premium to $299,000. The section reads in its entirety as follows: |
-2-
PREMIUM |
A. | The premium for the reinsurance provided under this Exhibit shall be computed at the rate of 4.72% of the Companys direct subject casualty premium earned on the business covered hereunder. | ||
B. | The annual minimum premium for the reinsurance provided under this Exhibit is $254,000. | ||
C. | The annual deposit premium for the reinsurance provided under this Exhibit is $299,000. | ||
D. | The Reinsurer shall make a commission allowance of 30% to the Company on the ceded direct subject casualty premium earned to the Reinsurer under this Exhibit. |
V. | Paragraph B. of Section 4, REINSTATEMENT, of EXHIBIT C, THIRD CASUALTY EXCESS OF LOSS REINSURANCE, is amended to reflect the change in the percentage of the clash premium to 43% and the Section reads in its entirety as follows: |
REINSTATEMENT |
A. | As respects Workers Compensation Business reinsured hereunder: | ||
Each claim hereon reduces the amount of indemnity under this Exhibit from the time of occurrence of the loss by the sum paid, and any amount so exhausted is hereby reinstated from the time of the Loss Occurrence without an additional premium charge for each amount so reinstated. Nevertheless, the Reinsurers liability hereunder shall never exceed $1,000,000 in respect of any one Loss Occurrence. | |||
B. | As respects all other Casualty Business reinsured hereunder: | ||
Each claim hereon reduces the amount of indemnity under this Exhibit from the time of occurrence of the loss by the sum paid, but any amount so exhausted is hereby reinstated from the time of occurrence of the loss, in consideration of the payment by the Company of an additional premium equal to the percentage of the face value of this Exhibit (i.e., the fraction of $1,000,000) reinstated, multiplied by 43% (i.e., the clash portion) of the reinsurance premium under this Exhibit for the calendar year in which the loss occurred. Nevertheless, the Reinsurers liability hereunder shall never exceed $1,000,000 in respect of any one Loss Occurrence and, subject to the limit in respect of any one Loss Occurrence, shall be further limited to $2,000,000 in any one Agreement Year by reason of any and all claims arising hereunder. |
-3-
VI. | Section 2, PREMIUM, of EXHIBIT E, FIFTH CASUALTY EXCESS OF LOSS REINSURANCE (Applies to Workers Compensation Coverage Only), is amended to reflect a rate of 4.40%, an annual minimum premium of $86,000 and an annual deposit premium of $96,000. The section reads in its entirety as follows: |
PREMIUM |
A. | The premium for the reinsurance provided under this Exhibit shall be computed at the rate of 4.40% of the Companys direct subject workers compensation premium earned on the business covered hereunder. | ||
B. | The annual minimum premium for the reinsurance provided under this Exhibit is $86,000. | ||
C. | The annual deposit premium for the reinsurance provided under this Exhibit is $96,000. | ||
D. | Nothing herein. contained shall alter, vary or extend any provision or condition of the Agreement other than as above stated. |
LEBANON MUTUAL INSURANCE COMPANY
MUNICH REINSURANCE AMERICA, INC. | ||||
Vice President |
RG/rg
-4-