Exhibit 10.67

 

GUY CARPENTER

 

Guy Carpenter & Company, Inc.

       

44 Whippany Road

 

Telephone    973-401-5000

       

P.O. Box 1966

 

Facsimile     973-984-8260

       

Morristown, New Jersey 07962-1966

Placement Slip

   

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File #:

 

8493-0009-01/2/3/4

       

Effective Date:

 

January 1, 2003

 

 

COMPANY:

 

SCPIE HOLDINGS, INC.,

AND/OR SCPIE INDEMNITY COMPANY,

AND/OR AMERICAN HEALTHCARE INDEMNITY COMPANY,

AND/OR AMERICAN HEALTHCARE SPECIALTY COMPANY,

AND/OR SCPIE INSURANCE SERVICES, INC.,

AND/OR SCPIE MANAGEMENT SERVICES, INC.,

LOS ANGELES, CALIFORNIA

 

TYPE:

 

FIRST – FOURTH EXCESS OF LOSS REINSURANCE

 

BUSINESS COVERED:

 

  1.   Physicians & Surgeons Comprehensive Professional and Business Liability,
including Clinics and Clinical Laboratories.

 

  2.   Professional and Business Liability Policies for Hospitals and Healthcare
Facilities, including:

 

  a.   Modified Claims Made Coverage Hospitals and Medical Centers (Primary &
Excess);

 

  b.   Claims Made Coverage Hospitals and Medical Centers (Primary & Excess);

 

  c.   Excess Automobile Liability and Excess Employers Liability associated
with the policy forms outlined above.

 

  3.   Errors and Omissions Liability Policies for Managed Care Organizations,
and Directors and Officers Liability Policies.

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File #:

 

8493-0009-01/2/3/4

       

Effective Date:

 

January 1, 2003

 

BUSINESS COVERED (Continued):

 

  4.   Physicians and Surgeons Comprehensive Professional Liability and Personal
Umbrella Business underwritten by Brown & Brown, Inc., Tampa, Florida.

 

TERM:

 

 

January 1, 2003 to December 31, 2003 as respects claims made during the calendar
year 2003.

 

The term “claims made” as used herein shall mean (A) In respect of Claims Made
Policies, claims first notified to the Company during the term of this Agreement
on any inforce policy or reporting endorsement arising out of incidents
subsequent to the retroactive date of said policy as the result of the rendering
of or failure to render a professional service or the reporting of losses which
arise from the insured premises and operations incidental to the practice of a
physician, hospital or managed care organization and/or (B) In respect of
Occurrence, or Modified Claims Made Policies, claims or losses first notified to
the Company during the term of this Agreement.

 

Retroactive date January 1, 1976, except for Extra Contractual Obligations which
is January 1, 1979.

 

In the event of cancellation or non-renewal, and at the option of the Reinsured,
Reinsurers agree to run-off policies in force until natural expiration not to
exceed 12 months from the expiration date hereon, at terms to be mutually
agreed.

 

TERRITORY:

 

As per the Company’s original policies, contracts, or binders.

 

EXCLUSIONS:

 

  1.   Insolvency Funds.

 

  2.   Nuclear Incident—Liability—Reinsurance.

 

  3.   Assumed Reinsurance other than for Licensing, Financial Rating Purposes
or Acquisition Purposes.

 

  4.   Terrorism per NMA 2929.

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File #:

 

8493-0009-01/2/3/4

       

Effective Date:

 

January 1, 2003

 

LIMIT AND RETENTION:

 

First Layer:

 

  A.)   $3,000,000 each and every loss in excess of $2,000,000 each and every
loss.

 

Reinsurers maximum aggregate liability, during the term of this Agreement shall
be $18,000,000.

 

Not withstanding the foregoing it is a condition hereto that an Annual Aggregate
Deductible of $3,000,000, otherwise recoverable, shall first be deducted before
any liability attaches hereon.

 

Second Layer:

 

A.)

  

$5,000,000 each and every loss in excess of $5,000,000 each and every loss.

B.)

  

Reinstatements—

 

First—Computed Pro-Rata as to amount, 60% as to Premium.

        

Second—Computed Pro-Rata as to amount, 100% as to Premium.

 

 

Third Layer:

 

A.)

  

$10,000,000 each and every loss in excess of $10,000,000 each and every loss.

B.)

  

Reinstatements—

 

One in all computed Pro-Rata as to amount, 100% as to Premium.

 

Fourth Layer:

 

A.)

  

$30,000,000 each and every loss in excess of $20,000,000 each and every loss

B.)

  

Reinstatements—

 

One in all computed Pro Rata as to amount, 100% as to Premium.

 

WARRANTY:

 

1.)

  

In respect of Physicians and Surgeons Comprehensive Professional and Business
Liability Policies, including Clinics and Clinical Laboratories, the Maximum
Policy Limit is $10,000,000 subject to inuring protection of $8,000,000 in
excess of $2,000,000 with a maximum aggregate of $8,000,000 during each 12 month
period, or so deemed.

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File #:

 

8493-0009-01/2/3/4

       

Effective Date:

 

January 1, 2003

 

WARRANTY (Continued):

 

  2.)   Coverage for Professional and Business Liability Policies for Hospitals
is restricted to policies incepting prior to January 1, 2002, the Maximum Policy
Limit is $50,000,000, or so deemed.

 

  3.)   In respect of Professional and Business Liability Policies for
Healthcare Facilities, the Maximum Policy Limit is $10,000,000 for policies
incepting prior to January 1, 2002, and $5,000,000 for policies incepting on or
after January 1, 2002, or so deemed.

 

  4.)   In respect of Errors and Omissions Liability Policies for Managed Care
Organizations, Directors and Officers Liability Policies, and Employment
Practices Liability Insurance, the Maximum Policy Limit is $5,000,000 for
policies incepting prior to January 1, 2002, and $1,000,000 for policies
incepting on or after January 1, 2002, or so deemed.

 

  5.)   In respect of Professional and Business Liability Policies for Dentists,
excluding coverages for Oral and Maxillofacial Surgeons, the Maximum Policy
Limit is $10,000,000, for policies incepting prior to January 1, 2002, and
$2,000,000 for policies incepting on or after January 1, 2002, or so deemed.

 

PREMIUM:

 

First Layer:

4.43% of G.N.E.P.I.

Deposit—$5,760,000 payable $2,880,000 semi-annually.

Minimum—$4,600,000

 

Second Layer:

2.47% of G.N.E.P.I.

Deposit—$3,210,000 payable $1,605,000 semi-annually.

Minimum—$2,568,000

 

Third Layer:

1.45% of G.N.E.P.I.

Deposit—$1,885,000 payable $942,500 semi-annually.

Minimum—$1,508,000

 

Fourth Layer:

1.00% of G.N.E.P.I.

Deposit—$1,300,000 payable $650,000 semi-annually.

Minimum—$1,040,000.

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File #:

 

8493-0009-01/2/3/4

       

Effective Date:

 

January 1, 2003

 

ATTACHMENT OF LIABILITY:

 

  (A)   For purposes of determining the attachment of the Reinsurers liability
hereunder as respects any one loss, all losses (including Discovery Period
Losses) involving one or more Original Insureds, arising from the same incident,
and in which First Notice of Claim or Circumstance is notified to the Company
during the term of this Agreement shall be covered hereunder.

 

  (B)   The date of a loss hereunder shall be the earliest date, within the term
of this Agreement, that the Company has received First Notice of Claim or
Circumstance.

 

ACCOUNTING:

 

Premiums—Payments within 60 days of respective due date.

Losses—Payments within 60 days of receipt of proof of loss.

Outstanding losses reported individually as they occur.

 

GENERAL CONDITIONS:

 

Loss Adjustment Expenses to be included with the Ultimate Net Loss.

Excess of Original Policy Limits Clause.

80% Extra Contractual Obligations Clause.

Ultimate Net Loss Clause including Declaratory Judgement Expenses incurred in
connection with coverage questions and legal actions related to a specific
claim.

Net Retained Lines Clause.

Notice of Loss Clause.

Loss Funding Clause—Including IBNR (See Attached).

Special Funding Clause.

Confidentiality Clause.

Commutation Clause by Mutual Agreement.

Federal Excise Tax Clause.

Errors and Omissions Clause.

Insolvency Clause.

Offset Clause—BRMA 36A

Service of Suit Clause.

Mode of Execution Clause.

Arbitration Clause.

Access to Records Clause.

Guy Carpenter & Company, Inc. Intermediary Clause.

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File #:

 

8493-0009-01/2/3/4

       

Effective Date:

 

January 1, 2003

 

INFORMATION:

 

 

   

2003 Premium Estimates by Line:

          

Physicians SCPIE

  

$

87,600,000

   

Physicians (Standard) AHI-CA

  

$

12,200,000

   

Physicians Other than CA. Std. AHI

  

$

1,800,000

   

Physicians—Non Standard AHI

  

$

1,300,000

   

Physicians—Non Standard AHSIC

  

$

300,000

        

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Subtotal:        

  

$

103,200,000

   

Hospitals

  

$

300,000

   

Healthcare Facilities

  

$

6,800,000

   

Healthcare Providers

  

$

1,600,000

   

Umbrella

  

$

500,000

   

Managed Care E&O

  

$

700,000

   

Directors & Officers

  

$

1,000,000

        

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Subtotal:        

  

$

10,900,000

   

Brown & Brown

          

Physicians

  

$

14,100,000

   

Phys.—Dentists & Oral Surgeons

  

$

1,800,000

        

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Subtotal:        

  

$

15,900,000

   

Grand Total:

  

$

130,000,000

 

 

REGULATION 98:

 

Premium and loss payments made to Guy Carpenter & Company, Inc. shall be
deposited in a Premium and Loss Account in accordance with Section 32.3(a)(1) of
Regulation 98 of the New York Insurance Department. The parties hereto consent
to withdrawals from said account in accordance with Section 32.3(a)(3) of the
Regulation, including interest and Federal Excise Tax.

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File #:

 

8493-0009-01/2/3/4

       

Effective Date:

 

January 1, 2003

 

ACCEPTED:

 

            First Layer:

       

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            Second Layer:

       

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            Third Layer:

       

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            Fourth Layer:

       

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Reinsurer:

       

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Reference #:

       

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FEIN # & NAIC #:

       

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Authorized Signature:

       

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Date:

       

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