Endorsement to Casualty Excess of Loss Reinsurance Agreement between Merchants Mutual Insurance Company, Merchants Insurance Company of New Hampshire, Inc., and American Re-Insurance Company

Summary

This endorsement amends the existing Casualty Excess of Loss Reinsurance Agreement between Merchants Mutual Insurance Company, Merchants Insurance Company of New Hampshire, Inc., and American Re-Insurance Company. Effective January 1, 2004, it updates policy limits for various liability coverages, adjusts reinsurance premium rates and minimum/deposit premium amounts, and adds an exclusion for losses related to fungal pathogens or bacteria. The changes apply to both current and future policies, clarifying the financial responsibilities and coverage limits between the parties.

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EX-10.E 2 l09971aexv10we.txt EX-10.E ENDORSEMENT TO CASUALTY EXCESS OF LOSS AGMNT EXHIBIT 10(e) No. 2521-0027-E002 ENDORSEMENT Attached to and forming part of the CASUALTY EXCESS OF LOSS REINSURANCE AGREEMENT No. 2521-0027 between MERCHANTS MUTUAL INSURANCE COMPANY, Buffalo, New York and MERCHANTS INSURANCE COMPANY OF NEW HAMPSHIRE, INC., Concord, New Hampshire (hereinafter collectively referred to as "Company") and AMERICAN RE-INSURANCE COMPANY, a Delaware Corporation with Administrative Offices in Princeton, New Jersey (hereinafter referred to as the "Reinsurer"). It is mutually understood and agreed by the parties hereto that effective January 1, 2004, as respects the Company's in-force, new and renewal policies, as respects losses occurring on or after said date, this Agreement is amended to read as follows: I. The policy limits for Section II Liability under Businessowners are increased to $2,000,000 in ARTICLE IV, COMPANY POLICY LIMITS, and the Article reads as follows: ARTICLE IV COMPANY POLICY LIMITS For the purpose of determining the Company Retention and the Reinsurer's limit of liability with respect to each Exhibit of this Agreement, the limits of liability of the Company with respect to any one Policy shall be deemed not to exceed: Automobile Bodily Injury Liability $1,000,000 each person $1,000,000 each occurrence Automobile Property Damage Liability $1,000,000 each occurrence Automobile Liability Combined Single Limit $1,000,000 each occurrence Uninsured/Underinsured Motorists Coverage $1,000,000 each person $1,000,000 each occurrence Personal Injury Protection Coverage $1,000,000 each occurrence Other Bodily Injury Liability $2,000,000 each occurrence Other Property Damage Liability $2,000,000 each occurrence Other Liability Combined Single Limit $2,000,000 each occurrence Section II Liability under Commercial Multiple Peril $2,000,000 each occurrence Section II Liability under Businessowners $2,000,000 each occurrence Section II Liability under Homeowners Multiple Peril $1,000,000 each occurrence
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Section II Liability under Farmowners Multiple Peril $1,000,000 each occurrence
Employers' Liability (1) In all states with Statutory Limits Statutory Limits (2) In All Other States (i) Bodily Injury by Accident $1,000,000 each accident (ii) Bodily Injury by Disease $1,000,000 policy limit (iii) Bodily Injury by Disease $1,000,000 each employee Owners and Contractors Protective Liability (OCP) $5,000,000 each occurrence*
*The Company warrants that it shall purchase facultative reinsurance for policies greater than $2,000,000 with policy limits not to exceed $5,000,000. II. Section 4, REINSURANCE PREMIUM, of EXHIBIT A, FIRST CASUALTY EXCESS OF LOSS REINSURANCE COVER, is amended to reflect the change in rate for Commercial Automobile Liability (including PIP) to 4.77% and the change in rate for Commercial Multiple Peril (Section II), Business Owners (Section II), General Liability and the Liability Section of Contractors Coverall to 6.40%, and the Section reads in its entirety as follows: Section 4 REINSURANCE PREMIUM A. With respect to business in force at the effective time and date of this Exhibit, the Company shall pay to the Reinsurer a reinsurance premium equal to the product of the applicable gross rate set forth in the Schedule of Rates below times the Company's unearned premium for each class of Casualty business reinsured hereunder, calculated on the monthly pro rata basis as of the effective time and date of this Exhibit. B. With respect to business becoming effective at and after the effective time and date of this Agreement, the Company shall pay to the Reinsurer a reinsurance premium equal to the product of the applicable gross rate set forth in the Schedule of Rates below times the Company's Gross Net Written Premium for each class of Casualty business covered under this Exhibit. SCHEDULE OF RATES Class of Business Gross Rate - ----------------- ---------- Private Passenger Automobile Liability (including PIP) 0.xx% Commercial Automobile Liability (including PIP) x.xx%
-2- No. 2521-0027-E002 Workers' Compensation and Employers' Liability x.xx% Commercial Multiple Peril (Section II), Business Owners (Section II), x.xx% General Liability and the Liability Section of Contractors Coverall Homeowners Multiple Peril (Section II) and Farmowners Multiple Peril No Charge (Section II)
III. Section 4, REINSURANCE PREMIUM, of EXHIBIT B, SECOND CASUALTY EXCESS OF LOSS REINSURANCE COVER, is amended to reflect the change in the minimum premium amount to $xxx,xxx and the change in the deposit premium amount to $xxx,xxx, and the Section reads in its entirety as follows: Section 4 REINSURANCE PREMIUM A. With respect to business in force and business becoming effective at and after at the effective time and date of this Exhibit, the Company shall pay to the Reinsurer a reinsurance premium equal to x.xx% times the Company's unearned premium for the Casualty business reinsured hereunder, calculated on the monthly pro rata basis as of the effective time and date of this Exhibit. B. The annual minimum premium for the reinsurance provided for each Agreement Year hereunder is $xxx,xxx. C. The annual deposit premium for the reinsurance provided for each Agreement Year hereunder is $xxx,xxx. IV. Section 4, REINSURANCE PREMIUM, of EXHIBIT C, THIRD CASUALTY EXCESS OF LOSS REINSURANCE COVER, is amended to reflect the change in the minimum premium amount to $xxx,xxx and the change in the deposit premium amount to $xxx,xxx, and the Section reads in its entirety as follows: Section 4 REINSURANCE PREMIUM A. With respect to business in force and business becoming effective at and after at the effective time and date of this Exhibit, the Company shall pay to the Reinsurer a reinsurance premium equal to 0.xx% times the Company's unearned premium for the Casualty business reinsured hereunder, calculated on the monthly pro rata basis as of the effective time and date of this Exhibit. -3- No. 2521-0027-E002 B. The annual minimum premium for the reinsurance provided for each Agreement Year hereunder is $xxx,xxx. C. The annual deposit premium for the reinsurance provided for each Agreement Year hereunder is $xxx,xxx. V. Section 5, REINSURANCE PREMIUM, of EXHIBIT D, WORKERS' COMPENSATION EXCESS OF LOSS REINSURANCE COVER, is amended to reflect the change in the rate to x.xx%, the change in the minimum premium amount to $xxx,xxx, and the change in the deposit premium amount to $xxx,xxx. The Section reads in its entirety as follows: Section 5 REINSURANCE PREMIUM A. With respect to business in force and business becoming effective at and after at the effective time and date of this Exhibit, the Company shall pay to the Reinsurer a reinsurance premium equal to x.xx% times the Company's unearned premium for the Casualty business reinsured hereunder, calculated on the monthly pro rata basis as of the effective time and date of this Exhibit. B. The annual minimum premium for the reinsurance provided for each Agreement Year hereunder is $xxx,xxx. C. The annual deposit premium for the reinsurance provided for each Agreement Year hereunder is $xxx,xxx. VI. Section 8, EXCLUSIONS, is added to EXHIBIT D, WORKERS' COMPENSATION EXCESS OF LOSS REINSURANCE COVER, and the Section reads in its entirety as follows: Section 8 EXCLUSIONS In addition to the exclusions in Article III of this Agreement, the following exclusion shall also apply: All loss, cost or expense directly or indirectly arising out of, resulting from or in any manner related to Fungal Pathogens or Bacteria whether or not there is another cause of loss which may have contributed concurrently or in any sequence to a loss. -4- No. 2521-0027-E002 "Fungal Pathogens" as utilized herein, shall mean any fungus or Mycota or any byproduct or type of infestation produced by such fungus or Mycota, including but not limited to, mold, mildew, mycotoxins, spores or any biogenic aerosols. IN WITNESS WHEREOF the parties hereto have caused this Endorsement to be executed in this day of , 2004; ACCEPTED: MERCHANTS MUTUAL INSURANCE COMPANY MERCHANTS INSURANCE COMPANY OF NEW HAMPSHIRE, INC. ______________________________ and in Princeton, New Jersey this day of , 2003. AMERICAN RE-INSURANCE COMPANY _____________________________ Vice President DATED: February 23, 2004 RG/rg -5-