Exhibit 10.57

 

Execution Copy

 

AMENDED AND RESTATED

UNCONDITIONAL CAPITAL MAINTENANCE AGREEMENT

AMONG

AMERICAN INTERNATIONAL GROUP, INC.

AND

AIG PROPERTY CASUALTY INC.

AND

THE INSURANCE COMPANIES NAMED ON SCHEDULE 1

 

This Amended and Restated Unconditional Capital Maintenance Agreement (this
“Agreement”), is made, entered into and effective as of February 18, 2014, by
and among American International Group, Inc., a corporation organized under the
laws of the State of Delaware (“AIG”), AIG Property Casualty Inc., a corporation
organized under the laws of the State of Delaware (“AIGPC”), and each of the
insurance companies listed on Schedule 1 hereto (each, a “Company” and
collectively, the “Fleet”).

 

WITNESSETH:

 

WHEREAS, each Company is a property-casualty insurer subject to certain capital
requirements of the insurance laws and regulations of its applicable
jurisdiction of incorporation set forth on Schedule 1 (the “Domiciliary State”);

 

WHEREAS, each Company is an indirect wholly owned subsidiary of each of AIG and
AIGPC;

 

WHEREAS, AIG has an interest in unconditionally maintaining the Fleet’s
financial condition (the “Fleet” for purposes of this Agreement shall be treated
as one insurance company as if each Company combined its financial attributes
into one entity); and

 

WHEREAS, AIG, AIGPC and each Company executed that certain Unconditional Capital
Maintenance Agreement on February 20, 2013 (the “2013 CMA”) and the parties have
agreed to amend and restate such 2013 CMA as provided in this Agreement:

 

NOW, THEREFORE, in consideration of the mutual promises herein contained, the
parties hereto agree as follows:

 

1.             Capital Contributions.  In the event that the Fleet’s Total
Adjusted Capital for each of the Fleet’s first and third fiscal quarters (as
determined based

 

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on each Company’s first and third fiscal quarterly filed statutory financial
statements, respectively, subject to any adjustments or modifications thereto
required by the applicable Domiciliary State’s insurance department or the
Fleet’s independent auditors) falls below the Specified Minimum Percentage of
the Fleet’s projected year-end Authorized Control Level RBC (in each case as
estimated by AIGPC as of the end of each such first and third fiscal quarters,
as the case may be, taking into account (for purposes of such estimation) facts
and circumstances occurring after the end of such fiscal quarter but before such
time as AIG would be obligated pursuant to paragraph 3 to make a contribution to
AIGPC), AIG shall, within the respective time periods set forth under paragraph
3, in accordance with paragraph 4 and in compliance with applicable law, provide
to AIGPC cash, cash equivalents, securities or other instruments that qualify
(as admitted assets in the appropriate jurisdiction) for purposes of calculating
the Fleet’s Total Adjusted Capital, as a contribution and not as a loan, in an
amount such that the Fleet’s Total Adjusted Capital as of the end of each of the
Fleet’s second and fourth fiscal quarter, as the case may be, will be projected
at year-end to be at least equal to the Specified Minimum Percentage of the
Fleet’s Authorized Control Level RBC.  Notwithstanding the foregoing, AIG may,
at any time as it deems necessary in its sole discretion and in compliance with
applicable law, make a contribution to AIGPC in such amount as is required for
the Fleet’s Total Adjusted Capital to equal a percentage of its Authorized
Control Level RBC determined to be appropriate by AIGPC and AIG.

 

2.             Defined Terms.  For the avoidance of doubt, the terms “Total
Adjusted Capital” and “Authorized Control Level RBC” shall have the meanings
ascribed thereto under the insurance laws and regulations of the applicable
Domiciliary State, or, if not defined therein, shall have the meanings ascribed
thereto in the risk-based capital (“RBC”) instructions promulgated by the
National Association of Insurance Commissioners (“NAIC”). The term “Specified
Minimum Percentage” shall be equal to the percentage set forth on Schedule 2
attached hereto, which shall be agreed to by AIG and AIGPC at least once every
year beginning upon the date of the filing of each Company’s 2014 Annual
Statement with the applicable Domiciliary State’s insurance department and
following review against the capital adequacy standards and criteria (“Agency
Criteria”) of each of Standard & Poor’s Corp. (“S&P”), Moody’s Investors Service
(“Moody’s”) and A.M. Best Company (“A.M. Best”).  Notwithstanding the obligation
of AIGPC and AIG to review the Specified Minimum Percentage on an annual basis,
the parties hereto agree to review and revise the Specified Minimum Percentage
on a more frequent basis, if the parties agree it is appropriate, to take into
account (a) any material changes after the date hereof to any Agency Criteria
adopted by any of S&P, Moody’s or A.M. Best, on the one hand, or to the law of
any applicable Domiciliary State or NAIC RBC rules or instructions, on the other
hand, which causes the results under the Agency Criteria to diverge from that
under the law of any applicable Domiciliary State or NAIC RBC rules or
instructions, (b) any Company completes a material transaction that is treated
materially differently by the Agency Criteria, on the one hand, and the NAIC RBC
rules or instructions, on

 

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the other hand, or (c) any other material development or circumstance affecting
the Fleet or any Company which AIG and AIGPC agree merits a reevaluation of the
Specified Minimum Percentage then in effect.

 

3.             Timing of Capital Contributions.  AIGPC and AIG agree that any
contribution to be made under paragraph 1 will take place within the following
two time periods per year, as applicable: (a) during the time beginning on the
first business day after the last filing of any Company’s first fiscal quarterly
statutory financial statements and ending on the last business day prior to the
end of the Fleet’s second fiscal quarter; and (b) during the time beginning on
the first business day after the last filing of any Company’s third fiscal
quarterly statutory financial statements and ending on the last business day
prior to the end of the Fleet’s fourth fiscal quarter. Notwithstanding the
foregoing, in compliance with applicable law, any capital contribution provided
for under paragraph 1 may be made by AIG after the close of any fiscal quarter
or fiscal year of the Fleet but prior to the last filing by any Company of its
statutory financial statements for such fiscal quarter or fiscal year,
respectively, and contributions of this nature shall be recognized as capital
contributions receivable as of the balance sheet date of the yet to be filed
quarterly or annual financial statement (as the case may be), pursuant to
paragraph 8 of Statement of Statutory Accounting Principles No. 72, to the
extent approved by the applicable Domiciliary State.

 

4.             Funding Mechanics.  At the time that any contribution is due
under paragraph 3, AIG agrees that it will either (a) make such contribution to
AIGPC and AIGPC shall further contribute such funds, securities or instruments
to the applicable subsidiaries in furtherance of the purposes of this Agreement
and in the reasonable discretion of the management of AIGPC, or (b) make such
contribution directly to any applicable Company without receiving any capital
stock or other ownership interest in exchange therefor.  All contributions
contemplated under this Agreement shall be approved and made in compliance with
applicable law, including, without limitation, approval by the board of
directors of each applicable entity and any prior notice or approval
requirements specified under applicable rules and regulations.

 

5.             AIG Policies.  Subject to the requirements of applicable law and
the approval, to the extent required, by any or all of any Company’s or AIGPC’s
senior management, relevant management committees, board of directors, and of
any insurance regulator, each Company and AIGPC hereby acknowledges that, in a
manner consistent with past practice and any other reasonable requirements of
AIG, it will comply with all financial and budgetary planning, risk mitigation,
derisking or pricing, corporate governance, investment, informational and
procedural requirements set forth by AIG.

 

6.             No Failure to Claim.  AIG hereby waives any failure or delay on
the part of AIGPC or any Company in asserting or enforcing any of its rights or
in making any claims or demands hereunder.

 

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7.             Termination.  Unless earlier terminated in accordance with this
paragraph 7, this Agreement shall continue indefinitely.  AIG shall have the
absolute right to terminate this Agreement upon thirty (30) days’ prior written
notice to AIGPC and each applicable Company, which notice shall state the
effective date of termination (the “Termination Date”); provided, however, that
AIG agrees not to terminate this Agreement unless (a) AIG significantly modifies
the corporate structure or ownership of AIGPC or any Company, or (b) AIG sells
AIGPC or any Company to an acquirer, in each case, (i) having a rating from at
least one of S&P, Moody’s, A.M. Best or a substitute agency, which is a
nationally recognized statistical rating organization, that is at least equal to
the lower of (x) AIG’s then-current rating from such agency or (y) the
then-current rating of AIGPC or such Company, as applicable, being restructured
or sold as supported by this Agreement from such agency; or (ii) such that,
immediately on the effective date of the modification of the corporate structure
or sale by AIG of AIGPC or such Company, AIGPC’s or such Company’s
capitalization, as applicable, is consistent with the minimum capital adequacy
standards and criteria of at least one of S&P, Moody’s, A.M. Best or a
substitute agency, which is a nationally recognized statistical rating
organization, for a rating that is equal to or better than AIGPC’s or such
Company’s, as applicable, then-current rating on the date immediately preceding
such modification of corporate structure or sale.  To the extent not terminated
previously by AIG pursuant to the foregoing, this Agreement will terminate
automatically, with respect to any particular Company, one year after the
closing of any sale of such Company by AIG, and all provisions hereof will be of
no further force and effect.  For the avoidance of doubt, the termination of
this Agreement pursuant to this paragraph 7 shall not relieve either party of
any obligation it may owe to the other party hereunder that existed prior to,
and remains outstanding as of, the Termination Date.

 

8.             Policyholder Rights.  Any policyholder holding a policy issued by
any Company prior to the termination of this Agreement shall have the right to
demand that such Company enforce such Company’s rights under paragraphs 1, 3 and
4 of this Agreement, and, if such Company fails or refuses to take timely action
to enforce such rights or such Company defaults in any claim or other payment
owed to any such policyholder when due, such policyholder may proceed directly
against AIG to enforce such Company’s rights under paragraphs 1, 3 and 4 of this
Agreement; provided, however, that no policyholder of any Company may take any
action authorized under this paragraph 8 unless and until (a) such policyholder
has given AIG written notice of its intent to enforce the terms of this
Agreement as provided in this paragraph 8, which notice shall specify in
reasonable detail the nature of and basis for the policyholder’s complaint and
(b) AIG has failed to comply with this Agreement within sixty (60) days after
such notice is given; and, provided, further, that upon termination of this
Agreement in accordance with paragraph 7 hereof, the rights of any policyholder
as provided for under this paragraph 8 shall terminate effective as of the
Termination Date, except with respect to the obligation of AIG (if any) to

 

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make capital contributions to any Company pursuant to paragraphs 1, 3 and 4 of
this Agreement solely to the extent such obligation arose prior to, and remained
unsatisfied as of, the Termination Date (it being understood that upon AIG’s
satisfaction of all such obligations after the Termination Date, no such
policyholder shall have any rights against AIGPC or any Company or AIG, as the
case may be, under this paragraph 8).

 

9.             No Indebtedness; No Policyholder Recourse Against AIG.  This
Agreement is not, and nothing herein contained and nothing done pursuant hereto
by AIG shall constitute or be construed or deemed to constitute, an evidence of
indebtedness or an obligation or liability of AIG as guarantor, endorser, surety
or otherwise in respect of any obligation, indebtedness or liability, of any
kind whatsoever, of AIGPC or any Company.  This Agreement does not provide, and
is not intended to be construed or deemed to provide, any policyholder of any
Company with recourse to or against any of the assets of AIG.

 

10.          Notices.  Any notice, instruction, request, consent, demand or
other communication required or contemplated by this Agreement shall be in
writing, shall be given or made or communicated by United States first class
mail, addressed as follows:

 

If to AIG:

 

American International Group, Inc.

175 Water Street

New York, New York 10038

Attention:  Secretary

 

If to AIGPC:

 

AIG Property Casualty Inc.

175 Water Street, 24th Floor

New York, NY 10038

Attention:  Chief Financial Officer

 

with a copy (which shall not constitute notice) to:

 

AIG Property Casualty U.S. Law Department

175 Water Street, 18th Floor

New York, NY 10038

Attention:  AIG Property Casualty U.S. General Counsel

 

11.          Fiscal Year.  Each of the Companies represents that its fiscal year
is the same as each other Company and covenants that it shall not change its
fiscal year without the prior written consent of AIG.

 

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12.          Successors.  The covenants, representations, warranties and
agreements herein set forth shall be mutually binding upon and inure to the
mutual benefit of AIG and its successors and each of AIGPC and each Company and
its successors.

 

13.          Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of New York, without giving effect to the principles
of conflict of laws.

 

14.          Severability.  If any provision of this Agreement shall be declared
null, void or unenforceable in whole or in part by any court, arbitrator or
governmental agency, said provision shall survive to the extent it is not so
declared and all the other provisions of this Agreement shall remain in full
force and effect unless, in each case, such declaration shall serve to deprive
any of the parties hereto of the fundamental benefits of or rights under this
Agreement.

 

15.          Entire Agreement; Amendments.  This Agreement constitutes the
entire agreement among the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussion, whether oral or written, of the parties without the
need for any action.  This Agreement may be amended at any time by written
agreement or instrument signed by the parties hereto.

 

16.          Headings.  The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

17.          Counterparts.  This Agreement may be signed by the parties in one
or more counterparts which together shall constitute one and the same agreement
among the parties.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

 

AMERICAN INTERNATIONAL GROUP, INC.

 

 

 

 

 

By:

/s/ Charles S. Shamieh

 

 

Name:

Charles S. Shamieh

 

 

Title:

Senior Vice President and Chief Corporate Actuary

 

 

 

 

 

AIG PROPERTY CASUALTY INC.

 

 

 

 

 

By:

/s/ James Bracken

 

 

Name:

 James Bracken

 

 

Title:

Chief Financial Officer and Senior Vice President

 

 

 

 

 

By:

/s/ Denis M. Butkovic

 

 

Name:

Denis M. Butkovic

 

 

Title:

Assistant Secretary

 

 

 

 

 

AIG ASSURANCE COMPANY

 

 

 

 

 

By:

/s/ Richard Hoskins

 

 

Name:

Richard Hoskins

 

 

Title:

Chief Financial Officer and Senior Vice President

 

 

 

 

 

By:

/s/ Denis M. Butkovic

 

 

Name:

Denis M. Butkovic

 

 

Title:

Secretary

 

 

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AIG PROPERTY CASUALTY COMPANY

 

 

 

 

 

By:

/s/ Richard Hoskins

 

 

Name:

Richard Hoskins

 

 

Title:

Chief Financial Officer and Senior Vice President

 

 

 

 

 

By:

/s/ Denis M. Butkovic

 

 

Name:

Denis M. Butkovic

 

 

Title:

Secretary

 

 

 

 

 

AIG SPECIALTY INSURANCE COMPANY

 

 

 

 

 

By:

/s/ Richard Hoskins

 

 

Name:

Richard Hoskins

 

 

Title:

Chief Financial Officer and Senior Vice President

 

 

 

 

 

By:

/s/ Denis M. Butkovic

 

 

Name:

Denis M. Butkovic

 

 

Title:

Secretary

 

 

 

 

 

AIU INSURANCE COMPANY

 

 

 

 

 

By:

/s/ Richard Hoskins

 

 

Name:

Richard Hoskins

 

 

Title:

Chief Financial Officer and Senior Vice President

 

 

 

 

 

By:

/s/ Denis M. Butkovic

 

 

Name:

Denis M. Butkovic

 

 

Title:

Secretary

 

 

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AMERICAN HOME ASSURANCE COMPANY

 

 

 

 

 

By:

/s/ Richard Hoskins

 

 

Name:

Richard Hoskins

 

 

Title:

Chief Financial Officer and Senior Vice President

 

 

 

 

 

By:

/s/ Denis M. Butkovic

 

 

Name:

Denis M. Butkovic

 

 

Title:

Secretary

 

 

 

 

 

COMMERCE AND INDUSTRY INSURANCE COMPANY

 

 

 

 

 

By:

/s/ Richard Hoskins

 

 

Name:

Richard Hoskins

 

 

Title:

Chief Financial Officer and Senior Vice President

 

 

 

 

 

By:

/s/ Denis M. Butkovic

 

 

Name:

Denis M. Butkovic

 

 

Title:

Secretary

 

 

 

 

 

GRANITE STATE INSURANCE COMPANY

 

 

 

 

 

By:

/s/ Richard Hoskins

 

 

Name:

Richard Hoskins

 

 

Title:

Chief Financial Officer and Senior Vice President

 

 

 

 

 

By:

/s/ Denis M. Butkovic

 

 

Name:

Denis M. Butkovic

 

 

Title:

Secretary

 

 

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ILLINOIS NATIONAL INSURANCE CO.

 

 

 

 

 

By:

/s/ Richard Hoskins

 

 

Name:

Richard Hoskins

 

 

Title:

Chief Financial Officer and Senior Vice President

 

 

 

 

 

By:

/s/ Denis M. Butkovic

 

 

Name:

Denis M. Butkovic

 

 

Title:

Secretary

 

 

 

 

 

LEXINGTON INSURANCE COMPANY

 

 

 

 

 

By:

/s/ Richard Hoskins

 

 

Name:

Richard Hoskins

 

 

Title:

Chief Financial Officer and Senior Vice President

 

 

 

 

 

By:

/s/ Denis M. Butkovic

 

 

Name:

Denis M. Butkovic

 

 

Title:

Secretary

 

 

 

 

 

 

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA.

 

 

 

 

 

By:

/s/ Richard Hoskins

 

 

Name:

Richard Hoskins

 

 

Title:

Chief Financial Officer and Senior Vice President

 

 

 

 

 

By:

/s/ Denis M. Butkovic

 

 

Name:

Denis M. Butkovic

 

 

Title:

Secretary

 

 

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NEW HAMPSHIRE INSURANCE COMPANY

 

 

 

 

 

By:

/s/ Richard Hoskins

 

 

Name:

Richard Hoskins

 

 

Title:

Chief Financial Officer and Senior Vice President

 

 

 

 

 

By:

/s/ Denis M. Butkovic

 

 

Name:

Denis M. Butkovic

 

 

Title:

Secretary

 

 

 

 

 

THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA

 

 

 

 

 

By:

/s/ Richard Hoskins

 

 

Name:

Richard Hoskins

 

 

Title:

Chief Financial Officer and Senior Vice President

 

 

 

 

 

By:

/s/ Denis M. Butkovic

 

 

Name:

Denis M. Butkovic

 

 

Title:

Secretary

 

 

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SCHEDULE 1

 

 

 

Company

 

Domiciliary State

(a)

 

AIG Assurance Company

 

PA

(b)

 

AIG Property Casualty Company

 

PA

(c)

 

AIG Specialty Insurance Company

 

IL

(d)

 

AIU Insurance Company

 

NY

(e)

 

American Home Assurance Company

 

NY

(f)

 

Commerce and Industry Insurance Company

 

NY

(g)

 

Granite State Insurance Company

 

PA

(h)

 

Illinois National Insurance Co.

 

IL

(i)

 

Lexington Insurance Company

 

DE

(j)

 

National Union Fire Insurance Company of Pittsburgh, Pa.

 

PA

(k)

 

New Hampshire Insurance Company

 

PA

(l)

 

The Insurance Company of the State of Pennsylvania

 

PA

 

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SCHEDULE 2

 

The Specified Minimum Percentage shall equal 300% of the Fleet’s Authorized
Control Level RBC.

 

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