EX-10.16





Exhibit 10.16
  



  

CERTAIN
 CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS "[*****]", HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY
DISCLOSED.













NON-FLORIDA REINSTATEMENT
PREMIUM PROTECTION 

REINSURANCE
 CONTRACT

issued to

TypTap
Insurance Company
 Ocala, Florida

Homeowners Choice Property & Casualty
Insurance Company, Inc.
 Tampa, Florida

including
any and/or all companies that are or may hereafter become affiliated therewith
  

 
  



 



 
 
			
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NON-FLORIDA REINSTATEMENT
PREMIUM PROTECTION 

REINSURANCE CONTRACT

 

TABLE OF CONTENTS



  
 
	
Article
	  
	  
	  
	
Page

	  
	  
	
Preamble
	  
	
3

	
1
	  
	 Business
Covered
	  
	
3

	
2
	  
	
Coverage
	  
	
3

	
3
	  
	
Term
	  
	
4

	
4
	  
	 Special
Termination
	  
	
4

	
5
	  
	
Territory
	  
	
5

	
6
	  
	
Exclusions
	  
	
5

	
7
	  
	
Premium
	  
	
6

	
8
	  
	
Definitions
	  
	
7

	
9
	  
	 Original
Conditions
	  
	
7

	
10
	  
	 No Third
Party Rights
	  
	
7

	
11
	  
	 Notice of
Loss and Loss Settlements
	  
	
8

	
12
	  
	 Late
Payments
	  
	
8

	
13
	  
	
Offset
	  
	
9

	
14
	  
	
Currency
	  
	
9

	
15
	  
	 Unauthorized
Reinsurance
	  
	
10

	
16
	  
	
Taxes
	  
	
12

	
17
	  
	 Access to
Records
	  
	
12

	
18
	  
	
Confidentiality
	  
	
13

	
19
	  
	 Errors and
Omissions
	  
	
14

	
20
	  
	
Insolvency
	  
	
14

	
21
	  
	 Run-Off
Reinsurer
	  
	
15

	
22
	  
	
Arbitration
	  
	
16

	
23
	  
	 Expedited
Arbitration
	  
	
17

	
24
	  
	 Service of
Suit
	  
	
18

	
25
	  
	 Governing
Law
	  
	
19

	
26
	  
	 Entire
Agreement
	  
	
19

	
27
	  
	
Non-Waiver
	  
	
19

	
28
	  
	
Agency
	  
	
19

	
29
	  
	
Intermediary
	  
	
20

	
30
	  
	 Mode of
Execution
	  
	
20

	  
	  
	 
Company Signing Block
	  
	
21

	  
	  
	  
	  
	  

	
Attachments
	  
	  
	  

	  
	  
	 Trust
Agreement Requirements Clause
	  
	
22



  
  


			
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NON-FLORIDA
 REINSTATEMENT PREMIUM PROTECTION 

REINSURANCE CONTRACT

(the “Contract”)

issued to

TypTap Insurance Company

Ocala, Florida

Homeowners Choice Property & Casualty
Insurance Company, Inc.
 Tampa, Florida

including any and/or all companies that are or
may hereafter become affiliated therewith

(collectively, the
“Company”)
 by

THE SUBSCRIBING REINSURER(S) IDENTIFIED
IN THE
INTERESTS AND LIABILITIES AGREEMENT(S)
ATTACHED TO AND FORMING PART OF THIS CONTRACT

(the “Reinsurer”)

 


article 1
 Business Covered

This Contract is to indemnify the Company in
respect of the liability that may accrue to the Company as a result of Reinstatement Premium the Company may become liable to pay under the reinstatement provisions of the Non-Florida Property Catastrophe Excess of Loss Reinsurance Contract,
effective at 12:01 a.m., Standard Time, June 1, 2021 and expiring 12:01 a.m., Standard Time, June 1, 2022, Document Number:  UBWP0003 (the “Original Contract”), subject to the terms and conditions herein
contained.  The Original Contract covers losses under Policies covering direct and assumed business classified by the Company as the property perils of Homeowners, Condominium Owners, Renters and Dwelling, in force at the inception of this
Contract, or issued or renewed during the term of this Contract.  A copy of the Original Contract is attached to and forms part of this Contract.

article
 2
 coverage

The Reinsurer shall be liable to pay the
Reinstatement Premium obligations under the Original Contract.
  
 
			
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article 3

Term

This Contract shall take effect at 12:01 a.m.,
Standard Time, June 1, 2021, and unless terminated prior to that time and date as provided in the Special Termination Article, shall remain in effect until 12:01 a.m., Standard Time, June 1, 2022, applying to Loss Occurrences commencing
during the term of this Contract.  For purposes of this Contract, “Standard Time” shall mean the time as described in the original Policy.

ARTICLE
 4
 SPECIAL TERMINATION


	 A.
	 The Company may terminate a Subscribing
Reinsurer’s percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event of any of the following circumstances:



 
	
 
	 1.
	 The Subscribing Reinsurer ceases underwriting
operations.



 
	
 
	 2.
	 A state insurance department or other legal
authority orders the Subscribing Reinsurer to cease writing business, or the Subscribing Reinsurer is placed under regulatory supervision.



 
	
 
	 3.
	 The Subscribing Reinsurer has become
insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there have been instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, trustee in bankruptcy,
or other agent known by whatever name, to take possession of its assets or control of its operations.



 
	
 
	 4.
	 The Subscribing Reinsurer’s
policyholders’ surplus (or the equivalent under the Subscribing Reinsurer’s accounting system) as reported in such financial statements of the Subscribing Reinsurer as designated by the Company, has been reduced by 20% of the amount
thereof at any date during the prior 12-month period (including the period prior to the inception of this Contract).



 
	
 
	 5.
	 The Subscribing Reinsurer has become, or has
announced its intention to become, merged with or acquired or controlled by any company, corporation, or individual(s) not controlling the Subscribing Reinsurer’s operations at the inception of this Contract.





	
 
	 6.
	 The Subscribing Reinsurer has retroceded its
entire liability under this Contract without the Company’s prior written consent, except for retrocessions to members of the Subscribing Reinsurer’s holding company group.



 
	
 
	 7.
	
The Subscribing
Reinsurer has been assigned an A.M. Best’s rating of less than “A-” and/or an S&P rating of less than “BBB+.”  However, as respects Underwriting 




 
 
			
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		 Members of Lloyd’s, London, a Lloyd’s Market Rating of less than “A-” by A.M. Best and/or less
than “BBB+” by S&P shall apply.



 
	
 
	 8.
	 The Subscribing Reinsurer has hired an
unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.



 
	
 
	
9.
	 The Subscribing Reinsurer has
in any other way assigned its interests or delegated its obligations under this Contract to an unaffiliated entity.



 
	
 
	
10.
	 The Subscribing Reinsurer has
failed to post or maintain required collateral to secure its obligations as required under this Contract, and has not cured such deficiency within 30 days following written notice thereof from the Company.





	

	 Notwithstanding the foregoing, agreement by a
Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (8) and (9) of this
paragraph.



 
	 B.
	 The Subscribing Reinsurer shall have no
liability for Reinstatement Premium arising from Loss Occurrences commencing after termination.  The premium due the Subscribing Reinsurer hereunder (including any minimum premium) shall be prorated based on the period of the Subscribing
Reinsurer’s participation hereon, and the Subscribing Reinsurer shall immediately return any excess premium received.




article
 5
 Territory

The territorial limits of this Contract shall be
identical with those of the Original Contract.

article
 6
 exclusions

This Contract shall follow the exclusions set
forth in the Original Contract.
  
 
			
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ARTICLE 7

Premium
 
	 A.
	 The premium for this Contract shall be based
on the Layers of the Original Contract.  The Company shall pay the Reinsurer a deposit premium in accordance with the schedule set forth below.  The adjusted premium to be paid to the Reinsurer for the reinsurance provided under
each Layer shall be calculated as the Rate on Line set out below multiplied by the Final Premium for that Layer:



 
			
	
PREMIUM SCHEDULE

	
 

Layer
	
Rate on Line
	
Deposit

Premium

	
Second Layer
	
[*****%]
 	
[$*****]
 
	
Third Layer
	
[*****%]
 	
[$*****]
 
	
Fourth Layer
	
[*****%]
 	
[$*****]
 
	
Fifth Layer
	
[*****%]
 	
[$*****]
 
	
Sixth Layer
	
[*****%]
 	
[$*****]
 


 
	 B.
	 The deposit premiums set forth in paragraph
A above shall be payable to the Reinsurer by the Company in installments as follows:



 
					
	
DEPOSIT INSTALLMENT
SCHEDULE

	
Layer
	
June 1, 2021
	
September 1, 2021
	
January 1, 2022
	
April 1, 2022

	
Second Layer
	
[$*****]
	
[$*****]
 	
[$*****]
 	
[$*****]
 
	
Third Layer
	
[$*****]
 	
[$*****]
 	
[$*****]
 	
[$*****]
 
	
Fourth Layer
	
[$*****]
 	
[$*****]
 	
[$*****]
 	
[$*****]
 
	
Fifth Layer
	
[$*****]
 	
[$*****]
 	
[$*****]
 	
[$*****]
 
	
Sixth Layer
	
[$*****]
 	
[$*****]
 	
[$*****]
 	
[$*****]
 


 
	 C.
	
By April 1,
2022, the Company shall calculate and report the Final Premium in accordance with paragraph A above.  If the Final Premium for a Layer is less than the deposit premium payable hereunder (including the fourth deposit premium installment),
the fourth quarterly deposit premium installment shall be waived, and any amount in excess of the sum of the previously paid three deposit premium installments shall be remitted to the Reinsurer with the Company’s report.  If the
Final Premium is less than the sum of the previously paid three deposit premium installments, the Reinsurer shall remit the difference to the Company.  Notwithstanding the foregoing, if the Final Premium for a Layer is greater than the
deposit premium payable hereunder (including the fourth deposit premium installment), the 



  


			
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		 Company shall remit to the Reinsurer the difference between the Final Premium and the full deposit premium within 45
days after the expiration of this Contract.



 
	 D.
	 The Company shall furnish the Reinsurer with
such reasonably available information as may be reasonably required by the Reinsurer for completion of the Reinsurer’s financial statements.




article
 8
 definitions
 
	 A.
	 “Reinstatement Premium” means
premium paid by the Company for each Layer under the provisions of the Reinstatement Article of the Original Contract.  Reinstatement Premium shall be calculated at pro rata of the original reinsurance premium, being pro rata only for the
amount being reinstated.  If, at the time of a loss settlement under the Original Contract, the reinsurance premium thereunder is not yet known, Reinstatement Premium shall be based upon the deposit premium, subject to adjustment when said
reinsurance premium is finally established.  Nothing in this clause shall be construed to mean that amounts are not recoverable hereunder until the Company’s final Reinstatement Premium has been ascertained.  All recoveries
received subsequent to reimbursement hereunder shall be applied as if received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.



 
	 B.
	 “Loss Occurrence” shall follow
the definition set forth in the Original Contract.



 
	 C.
	 “Final Premium” means the total
reinsurance premium except for Reinstatement Premium.



 
	 D.
	 “Policy” means any binder,
policy, or contract of insurance or reinsurance issued, accepted or held covered provisionally or otherwise, by or on behalf of the Company.




ARTICLE
 9
 ORIGINAL CONDITIONS

All reinsurance under this Contract shall be
subject to the same terms, conditions, waivers and interpretations, and to the same modifications and alterations as the Original Contract.  However, in no event shall this be construed in any way to provide coverage outside the terms and
conditions set forth in this Contract.
 
article 10
 No Third Party Rights

This Contract is solely between the Company and
the Reinsurer, and in no instance shall any insured, claimant or other third party have any rights under this Contract except as may be expressly provided otherwise herein.

 
 
			
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article 11

NOTICE OF LOSS AND LOSS settlements


	 A.
	 The Company shall advise the Reinsurer
promptly of all losses that, in the opinion of the Company, may result in a claim hereunder and of all subsequent developments thereto that may materially affect the position of the Reinsurer.



 
	 B.
	 The Company alone and at its full discretion
shall adjust, settle or compromise all claims and losses.



 
	 C.
	 As respects losses subject to the Original
Contract, all loss settlements made by the Company, whether under strict Policy terms or by way of compromise, shall be binding upon the Reinsurer, and the Reinsurer agrees to pay or allow, as the case may be, its share of each such settlement
immediately upon receipt of reasonable evidence of the amount paid by the Company or that the Company estimates it will pay within the next 14 days.  Within 30 days after receipt of the Reinsurer’s payment, the Company shall report to the
Reinsurer the positive difference, if any, of the Reinsurer’s payment, minus the Reinsurer’s share of losses subject to this Contract that the Company has paid, or becomes liable to pay, as of the date of the report.  Any such
positive difference shall be remitted to the Reinsurer with the Company’s report.




ARTICLE
 12
 LATE PAYMENTS
 
	 A.
	 In the event any payment due either party is
not received by the Intermediary by the payment due date, the party to whom payment is due may, by notifying the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to pay, an interest penalty on the amount past due
calculated for each such payment on the last business day of each month as follows:



 
	
 
	 1.
	 The number of full days that have expired
since the overdue date or the last monthly calculation, whichever the lesser; times



 
	
 
	 2.
	 1/365th of the sum of the six-month United
States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made, plus 1%; times



 
	
 
	 3.
	 The amount past due, including accrued
interest.



 
	

	 Interest shall accumulate until payment of
the original amount due plus interest penalties have been received by the Intermediary.



 
	 B.
	 The due date shall, for purposes of this
Article, be determined as follows:



  
 
			
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	 1.
	
Payments from the Reinsurer to the Company shall be due on the date on which the demand for payment (including delivery
of bordereaux or quarterly or monthly reports) is received by the Reinsurer, and shall be overdue 30 days thereafter.



 
	
 
	 2.
	 Payments from the Company to the Reinsurer
shall be due on the dates specified within this Contract.  Payments shall be overdue 30 days thereafter except for the first installment of premium, if applicable, which shall be overdue 60 days from inception or 30 days
from final line-signing, whichever the later.  Reinstatement Premium, if applicable, shall have as a due date the date when the Company receives payment for the claim giving rise to such Reinstatement Premium, and payment shall be overdue
30 days thereafter. In the event a due date is not specifically stated for a given payment, the overdue date shall be 30 days following the date of billing.



 
	 C.
	 If the information contained in the
Company’s demand for payment is insufficient or not in accordance with the conditions of this Contract, then within 30 days the Reinsurer shall request from the Company all additional information necessary to validate its claim and the
payment due date as defined in paragraph B shall be deemed to be the date upon which the Reinsurer received the requested additional information.  This paragraph is only for the purpose of establishing when a payment is overdue, and shall
not alter the provisions of the Notice of Loss and Loss Settlements Article or other pertinent contractual stipulations.



 
	 D.
	 In the event arbitration is necessary to
settle a dispute, the panel shall have the authority to make a determination awarding interest to the prevailing party.  Interest, if any, awarded by the panel shall supersede the interest amounts outlined
herein.



 
	 E.
	 Any interest owed pursuant to this Article
may be waived by the party to which it is owed.  Waiver of such interest, however, shall not affect the waiving party’s rights to other interest amounts due as a result of this Article.




ARTICLE
 13
 OFFSET

Each party hereto shall have, and may exercise
at any time and from time to time, the right to offset any and all balances due from a party to the other arising under this Contract.  In the event of the insolvency of a party hereto, offsets shall only be allowed in accordance with the
provisions of any applicable law governing offset entitlement.

ARTICLE
 14
 Currency
 
	 A.
	 Where the word “Dollars” and/or
the sign “$” appear in this Contract, they shall mean United States Dollars, and all payments hereunder shall be in United States Dollars.




 
 
			
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	 B.
	
For purposes of this Contract, where the Company receives or pays amounts in currencies other than United States
Dollars, such amounts shall be converted into United States Dollars at the actual rates of exchange at which these amounts are entered in the Company’s books.




ARTICLE
 15
 UNAUTHORIZED REINSURANCE


	 A.
	 This Article applies only to the extent a
Subscribing Reinsurer does not qualify for credit with any insurance regulatory authority having jurisdiction over the Company’s reserves.



 
	 B.
	 The Company agrees, in respect of business
falling within the scope of this Contract, that when it files with its insurance regulatory authority, or sets up on its books liabilities as required by law, it shall forward to the Reinsurer a statement showing the proportion of such liabilities
applicable to the Reinsurer.  The “Reinsurer’s Obligations” shall be defined as any amounts due the Company under this Contract, as set up on the Company’s books.



 
	 C.
	 The Reinsurer’s Obligations shall be
funded by funds withheld, cash advances, Trust Agreement or a Letter of Credit (LOC).  The Reinsurer shall have the option of determining the method of funding provided it is acceptable to the insurance regulatory authorities having
jurisdiction over the Company’s reserves.



 
	 D.
	 When funding by Trust Agreement, the
Reinsurer shall ensure that the Trust Agreement complies with the provisions of the “Trust Agreement Requirements Clause” attached hereto.  When funding by an LOC, the Reinsurer agrees to apply for and secure timely delivery to
the Company of a clean, irrevocable and unconditional LOC issued by a bank and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves in an amount equal to the Reinsurer’s
Obligations.  Such LOC shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless 30 days (or such other time period as may
be required by insurance regulatory authorities), prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the LOC extended for any additional
period.



 
	 E.
	 The Reinsurer and the Company agree that any
funding provided by the Reinsurer pursuant to the provisions of this Contract may be drawn upon at any time, notwithstanding any other provision of this Contract, and be utilized by the Company or any successor, by operation of law, of the Company
including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company, for the following purposes, unless otherwise provided for in a separate Trust Agreement:



 
	
 
	 1.
	 to reimburse the Company for the
Reinsurer’s Obligations, the payment of which is due under the terms of this Contract and that has not been otherwise paid;




 
 
			
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	 2.
	
to make refund of any sum that is in excess of the actual amount required to pay the Reinsurer’s Obligations under this Contract (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by a Trust Agreement);



 
	
 
	 3.
	 to fund an account with the Company for the
Reinsurer’s Obligations.  Such cash deposit shall be held in an interest bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the
Reinsurer.  Any taxes payable on accrued interest shall be paid out of the assets in the account that are in excess of the Reinsurer’s Obligations (or in excess of 102% of the Reinsurer’s Obligations, if funding is provided by
a Trust Agreement).  If the assets are inadequate to pay taxes, any taxes due shall be paid or reimbursed by the Reinsurer;



 
	
 
	 4.
	 to pay the Reinsurer’s share of any
other amounts the Company claims are due under this Contract.



 
	 F.
	 If the amount drawn by the Company is in
excess of the actual amount required for E(1) or E(3), or in the case of E(4), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.  All of the foregoing shall be applied
without diminution because of insolvency on the part of the Company or the Reinsurer.



 
	 G.
	 The issuing bank shall have no responsibility
whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the
Company.



 
	 H.
	 At annual intervals, or more frequently at
the discretion of the Company, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer’s Obligations for the sole purpose of amending the LOC or other method of funding, in the following
manner:



 
	
 
	 1.
	 If the statement shows that the
Reinsurer’s Obligations exceed the balance of the LOC as of the statement date, the Reinsurer shall, within 30 days after receipt of the statement, secure delivery to the Company of an amendment to the LOC increasing the amount of credit
by the amount of such difference.  Should another method of funding be used, the Reinsurer shall, within the time period outlined above, increase such funding by the amount of such difference.



 

	
 
	 2.
	 If, however, the statement shows that the
Reinsurer’s Obligations are less than the balance of the LOC (or that 102% of the Reinsurer’s Obligations are less than the trust account balance if funding is provided by a Trust Agreement), as of the statement date, the Company shall,
within 30 days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the LOC reducing the amount of credit available by the amount of such excess credit.  Should another
method of funding be used, the Company shall, within the time period outlined above, decrease such funding by the amount of such excess.




 
 
			
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ARTICLE 16

Taxes
 
	 A.
	 In consideration of the terms under which
this Contract is issued, the Company undertakes not to claim any deduction of the premium hereon when making Canadian tax returns or when making tax returns, other than Income or Profits Tax returns, to any state or territory of the United States of
America or to the District of Columbia.



 
	 B.
	 1.Each Subscribing Reinsurer has agreed to
allow, for the purpose of paying the Federal Excise Tax, the applicable percentage of the premium payable hereon (as imposed under the Internal Revenue Code) to the extent such premium is subject to Federal Excise Tax.





	
 
	 2.
	 In the event of any return of premium
becoming due hereunder, the Subscribing Reinsurer shall deduct the applicable percentage of the premium from the amount of the return, and the Company or its agent should take steps to recover the Tax from the U.S.
Government.



 
ARTICLE 17
 access to records


	 A.
	 The Reinsurer or its duly authorized
representatives shall have the right to visit the offices of the Company to inspect, examine, audit, and verify any of the policy, accounting or claim files (“Records”) relating to business reinsured under this Contract during regular
business hours after giving five working days’ prior notice.  This right shall be exercisable during the term of this Contract or after the expiration of this Contract.  Notwithstanding the above, the Reinsurer shall not
have any right of access to the Records of the Company if it is not current in all undisputed payments due the Company.



 
	 B.
	 Notwithstanding the above, the Company
reserves the right to withhold from the Reinsurer any Privileged Documents.  However, the Company shall permit and not object to the Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured
hereunder following final settlement or final adjudication of the case or cases involving such claim, with prejudice against all claimants and all parties to such adjudications; the Company may defer release of such Privileged Documents if there are
subrogation, contribution, or other third party actions with respect to that claim or case, and the Company’s defense might be jeopardized by release of such Privileged Documents.  In the event that the Company seeks to defer release
of such Privileged Documents, it shall, in consultation with the Reinsurer, take other steps as reasonably necessary to provide the Reinsurer with the information it reasonably requires to indemnify the Company without causing a loss of such
privileges or protections.  The Reinsurer shall not have access to Privileged Documents relating to any dispute between the Company and the Reinsurer.



 
	 C.
	 For purposes of this
Article:



  
 
			
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	 1.
	
“Privileged Documents” means any documents that are Attorney-Client Privilege Documents and/or Work Product Privilege
Documents.



 
	
 
	 2.
	 “Attorney-Client Privilege
Documents” means communications of a confidential nature between (a) the Company, or anyone retained by or at the direction of the Company, or its in‐house or outside legal counsel, or anyone in the control of such legal counsel,
and (b) any in-house or outside legal counsel, if such communications relate to legal advice being sought by the Company and/or contain legal advice being provided to the Company.



 
	
 
	 3.
	 “Work Product Privilege
Documents” means communications, written materials and tangible things prepared by or for in-house or outside counsel, or prepared by or for the Company, in anticipation of or in connection with litigation, arbitration, or other dispute
resolution proceedings.




ARTICLE
 18
 confidentiality


	 A.
	 The Reinsurer hereby acknowledges that the
documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential
to the Company. Confidential Information shall not include documents, information or data that the Reinsurer can show:



 
	
 
	 1.
	 are publicly known or have become publicly
known through no unauthorized act of the Reinsurer;



 
	
 
	 2.
	 have been rightfully received from a third
person without obligation of confidentiality; or



 
	
 
	 3.
	 were known by the Reinsurer prior to the
placement of this Contract without an obligation of confidentiality.



 
	 B.
	 Absent the written consent of the Company,
the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies (except to the extent necessary to enable affiliated companies or third parties engaged by the Reinsurer to perform services
related to this Contract on behalf of the Reinsurer), except:



 
	
 
	 1.
	 when required by retrocessionaires as
respects business ceded to this Contract;



 
	
 
	 2.
	 when required by regulators performing an
audit of the Reinsurer’s records and/or financial condition; or



 
	
 
	 3.
	 when required by external auditors performing
an audit of the Reinsurer’s records in the normal course of business.



  
 
			
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Further, the Reinsurer agrees not to use any Confidential Information for any purpose not related to the
performance of its obligations or enforcement of its rights under this Contract.
 
	 C.
	 Notwithstanding the above, in the event that
the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at least 10 days
prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.



 
	 D.
	 The provisions of this Article shall extend
to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.




ARTICLE
 19
 Errors and Omissions

Any inadvertent error, omission or delay in
complying with the terms and conditions of this Contract shall not be held to relieve either party hereto from any liability that would attach to it hereunder if such error, omission or delay had not been made, provided such error, omission or delay
is rectified immediately upon discovery.
 
ARTICLE 20
 insolvency


	 A.
	 If more than one company is referenced within
the definition of “Company” in the Preamble to this Contract, this Article shall apply severally to each such company.  Further, this Article and the laws of the domiciliary state shall apply in the event of the insolvency of
any company covered hereunder.  In the event of a conflict between any provision of this Article and the laws of the domiciliary state of any company covered hereunder, that domiciliary state’s laws shall
prevail.



 
	 B.
	
In the event
of the insolvency of the Company, this coverage (or the portion of any risk or obligation assumed by the Reinsurer, if required by applicable law) shall be payable directly to the Company, or to its liquidator, receiver, conservator or statutory
successor, either:  (1) on the basis of the liability of the Company, or (2) on the basis of claims filed and allowed in the liquidation proceeding, whichever may be required by applicable statute, without diminution because of
the insolvency of the Company or because the liquidator, receiver, conservator or statutory successor of the Company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or
statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against the Company indicating the Policy or bond reinsured, which claim would involve a possible liability on the part of the Reinsurer within
a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the
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		 deem available to the Company or its liquidator, receiver, conservator or statutory successor.  The expense
thus incurred by the Reinsurer shall be chargeable, subject to the approval of the court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit that may accrue to the Company
solely as a result of the defense undertaken by the Reinsurer.



 
	 C.
	 Where two or more reinsurers are involved in
the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this reinsurance Contract as though such expense had been incurred by the
Company.



 
ARTICLE 21
 RUN-OFF REINSURER


	 A.
	 “Run-off Reinsurer” means any
Subscribing Reinsurer that:



 
	
 
	 1.
	 has been ordered by a state insurance
department or other legal authority to cease writing business, or has been placed under regulatory supervision or in rehabilitation; or



 
	
 
	 2.
	 has ceased reinsurance underwriting
operations; or



 
	
 
	 3.
	 has transferred its claims-paying authority
to an unaffiliated entity; or



 
	
 
	 4.
	 engages in a process of Scheme of Arrangement
or similar procedure related to this Contract, including but not limited to an insurance business transfer scheme pursuant to Part VII of the Financial Services and Markets Act 2000 (U.K.), as may be amended from time to time;
or



 
	
 
	 5.
	 in any other way has assigned its interests
or delegated its obligations under this Contract to an unaffiliated entity.




Notwithstanding the foregoing,
agreement by a Lloyd’s syndicate to follow claim settlements procedures under Lloyd’s Claims Scheme (Combined) shall not constitute a transfer of its claims-paying authority, for purposes of subparagraphs (3) and (5) of this
paragraph.
 
	 B.
	 Notwithstanding any other provision of this
Contract, in the event that a Subscribing Reinsurer becomes a Run-off Reinsurer at any time, the Company may elect, by giving written notice to the Run-off Reinsurer at any time thereafter, that all or any of the following shall apply to the Run-off
Reinsurer’s participation hereunder:



 
	
 
	 1.
	 Should the Run-off Reinsurer fail to pay
amounts due hereunder, the interest penalty specified in the Late Payments Article shall be increased by 0.5% for each 30 days that a payment is past due, subject to a maximum increase of 7.0%.




 
 
			
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	 2.
	
The Run-off Reinsurer’s liability for losses for Policies covered by this Contract shall be commuted.  In the event the Company and
the Run-off Reinsurer cannot agree on the commutation amount of the Run-off Reinsurer’s liability under such Policies, they shall appoint an actuary and/or appraiser to assess such liability and shall
share equally any expense of the actuary and/or appraiser.  If the Company and the Run-off Reinsurer cannot agree on an actuary and/or appraiser, the Company and the Run-off Reinsurer each shall nominate three individuals, of whom the
other shall decline two, and the final appointment shall be made by drawing lots.  Payment by the Run-off Reinsurer of the amount of liability ascertained shall constitute a complete and final release of both parties under this
Contract.



 
	
 
	 3.
	 The Run-off Reinsurer shall have no right of
access to the Records of the Company if the Run-off Reinsurer has denied payment of any claim hereunder or there is a pending arbitration between the Company and the Run-off Reinsurer regarding any claim hereunder.  A reservation of rights
shall be considered a denial of a claim.  Notwithstanding the above, the Run-off Reinsurer shall continue to have access to Records of the Company for any claim for which it has raised a query within 30 days of its receipt of a billing,
but any inspection of Records must be completed within 90 days of receipt of billing or access will be deemed waived.



 
	
 
	 4.
	 The provisions of the Arbitration Article
shall not apply.  



 
	 C.
	 The Company’s waiver of any rights
provided in this Article is not a waiver of that right or other rights at a later date.




ARTICLE
 22
 arbitration
 
	 A.
	 Any dispute arising out of the
interpretation, performance or breach of this Contract, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators.  Notice requesting arbitration shall be in writing and sent certified or
registered mail, return receipt requested.



 
	 B.
	 One arbitrator shall be chosen by each party
and the two arbitrators shall then choose an impartial third arbitrator who shall preside at the hearing.  If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after
10 days’ prior notice by certified or registered mail of its intention to do so, may appoint the second arbitrator.



 
	 C.
	
If the two
arbitrators do not agree on a third arbitrator within 60 days of their appointment, the third arbitrator shall be chosen in accordance with the procedures for selecting the third arbitrator in force on the date the arbitration is demanded,
established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).  The arbitrators shall be persons knowledgeable about insurance and reinsurance who have no personal or financial interest in the result of the
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		 otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was
chosen and the arbitration shall continue.



 
	 D.
	 Within 30 days after all arbitrators have
been appointed, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules of hearings.



 
	 E.
	 The panel shall be relieved of all judicial
formality and shall not be bound by the strict rules of procedure and evidence.  Notwithstanding anything to the contrary in this Contract, the arbitrators may at their discretion, consider underwriting and placement information provided
by the Company to the Reinsurer, as well as any correspondence exchanged by the parties that is related to this Contract.  The arbitration shall take place in Tampa, Florida, or at such other place as the parties shall agree. The decision
of any two arbitrators shall be in writing and shall be final and binding.  The panel is empowered to grant interim relief as it may deem appropriate.



 
	 F.
	 The panel shall interpret this Contract as an
honorable engagement rather than as merely a legal obligation and shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible after the hearings.  Judgment upon
an award may be entered in any court having jurisdiction thereof.



 
	 G.
	 Each party shall bear the expense of its own
arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator.  The remaining costs of the arbitration shall be allocated by the panel.  The panel may, at its discretion, award such further
costs and expenses as it considers appropriate, including but not limited to attorneys’ fees, to the extent permitted by law.




ARTICLE
 23
 Expedited Arbitration


	 A.
	 Notwithstanding the
provisions of the Arbitration Article, in the event an amount in dispute hereunder $1,000,000 or less, the parties will submit to an expedited arbitration process with the use of a single arbitrator.  The arbitrator will be chosen in
accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS). 



 
	 B.
	 Each party’s case
will be submitted to the arbitrator within 100 calendar days of the date of determination of the arbitrator.  Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of
two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.



 
	 C.
	 
Within 120 calendar days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator.  
As the parties agree that time is of the essence, the sole arbitrator does not have the authority to lengthen the schedule, absent agreement of both parties.  
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		 arbitration panel as provided in the Arbitration Article, and said Article will apply to all matters not specifically
addressed above.




ARTICLE
 24
 service of suit


	 A.
	 This Article applies only to those
Subscribing Reinsurers not domiciled in the United States of America, and/or not authorized in any state, territory and/or district of the United States of America where authorization is required by insurance regulatory
authorities.



 
	 B.
	 This Article shall not be read to conflict
with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as
an alternative to the Arbitration Article for resolving disputes arising out of this Contract.



 
	 C.
	 In the event of the failure of the Reinsurer
to perform its obligations hereunder, the Reinsurer, at the request of the Company, shall submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be
understood to constitute a waiver of the Reinsurer’s rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another
court as permitted by the laws of the United States or of any state in the United States.  The Reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by the Reinsurer
or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court jurisdiction and, in any suit instituted against the Reinsurer upon this Contract, shall abide by the final
decision of such court or of any appellate court in the event of an appeal.



 
	 D.
	 Service of process in such suit may be made
upon:



 
	
 
	 1.
	 as respects Underwriting Members of
Lloyd’s, London: Lloyd’s America, Inc., Attention: Legal Department, 280 Park Avenue, East Tower, 25th Floor, New York, New York 10017;





	
 
	 2.
	 as respects any other Subscribing Reinsurer:
Messrs. Mendes and Mount, 750 Seventh Avenue, New York, New York 10019-6829, or another party specifically designated in the Subscribing Reinsurer’s Interests and Liabilities Agreement attached hereto.  




The above-named are authorized
and directed to accept service of process on behalf of the Reinsurer in any such suit.
 
	 E.
	
Further,
pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the Reinsurer hereby designates the Superintendent, Commissioner or Director of Insurance, or other officer specified for that purpose in
the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf 




 
 
			
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		 of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the
person to whom the said officer is authorized to mail such process or a true copy thereof.




ARTICLE
 25
 GOVERNING LAW

This Contract shall be governed as to
performance, administration and interpretation by the laws of the State of Florida, exclusive of conflict of law rules.  However, with respect to credit for reinsurance, the rules of all applicable states shall apply.

ARTICLE
 26
 Entire Agreement

This Contract sets forth all of the duties and
obligations between the Company and the Reinsurer and supersedes any and all prior or contemporaneous written agreements with respect to matters referred to in this Contract.  This Contract may not be modified or changed except by an
amendment to this Contract in writing signed by both parties.  However, this Article shall not be construed as limiting the admissibility of evidence regarding the formation, interpretation, purpose or intent of this Contract.

ARTICLE
 27
 NON-WAIVER

The failure of the Company or the Reinsurer to
insist on compliance with this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights contained in this Contract nor prevent either party from thereafter demanding full and complete compliance nor prevent
either party from exercising such remedy in the future.

ARTICLE
 28
 AGENCY

For purposes of sending and receiving notices
and payments required by this Contract, the reinsured company that is set forth first in the Preamble to this Contract shall be deemed the agent of all other reinsured companies referenced in the Preamble.  In no event, however, shall any
reinsured company be deemed the agent of another with respect to the terms of the Insolvency Article.
  
 
			
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ARTICLE 29

Intermediary

Guy Carpenter & Company, LLC, is hereby
recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including notices, statements, premiums, return premiums, commissions, taxes, losses, Loss Adjustment Expenses, salvages, and loss
settlements) relating thereto shall be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary shall be deemed payment to the Reinsurer.  Payments by the Reinsurer to the
Intermediary shall be deemed payment to the Company only to the extent that such payments are actually received by the Company.

ARTICLE
 30
 mode of execution


	 A.
	 This Contract may be executed
by:



 
	
 
	 1.
	 an original written ink signature of paper
documents;



 
	
 
	 2.
	 an exchange of facsimile copies showing the
original written ink signature of paper documents;



 
	
 
	 3.
	 electronic signature technology employing
computer software and a digital signature or digitizer pen pad to capture a person’s handwritten signature in such a manner that the signature is unique to the person signing, is under the sole control of the person signing, is capable of
verification to authenticate the signature and is linked to the document signed in such a manner that if the data is changed, such signature is invalidated.



 
	 B.
	 The use of any one or a combination of these
methods of execution shall constitute a legally binding and valid signing of this Contract.  This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an
original.



  
 
			
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IN WITNESS WHEREOF, the Company has caused this Contract to be executed by its duly authorized representative(s), who also confirms the Company’s review of and agreement to be bound by the terms and conditions of the Interests
and Liabilities Agreements attached to and forming part of this Contract;

On this _____ day of __________, in the year of
2021.
 TYPTAP INSURANCE COMPANY

Homeowners Choice Property & Casualty
Insurance Company, Inc.
  

 
 
						
	
Signature:
	  
	  
	
Title:
	  
	  

	  

	
Print Name:
	  
	  
	  
	  
	  




 
  

 
  

 
  

NON-FLORIDA Reinstatement Premium Protection

Reinsurance Contract
  

 
  

 

 
 
			
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TRUST AGREEMENT REQUIREMENTS CLAUSE


	 A.
	 Except as provided in paragraph B of this
Clause, if the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust Agreement:



 
	
 
	 1.
	 Requires the Reinsurer to establish a trust
account for the benefit of the Company, and specifies what the Trust Agreement is to cover;



 
	
 
	 2.
	 Stipulates that assets deposited in the trust
account shall be valued according to their current fair market value and shall consist only of cash (United States legal tender), and certificates of deposit (issued by a United States bank and payable in United States legal tender), or any
combination of the two, provided that the investments are issued by an institution that is not the parent, subsidiary or affiliate of either the Reinsurer or the Company;



 
	
 
	 3.
	 Requires the Reinsurer, prior to depositing
assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the Company, or the trustee upon the direction of
the Company, may whenever necessary negotiate these assets without consent or signature from the Reinsurer or any other entity;



 
	
 
	 4.
	 Requires that all settlements of account
between the Company and the Reinsurer be made in cash or its equivalent; and



 
	
 
	 5.
	 Provides that assets in the trust account
shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the Company or the Reinsurer.



 
	
B.
	 If a ceding insurer is
domiciled in California and the Reinsurer satisfies its funding obligations under the Unauthorized Reinsurance Article by providing a Trust Agreement, the Reinsurer shall ensure that the Trust
Agreement:



 
	
 
	 1.
	 Provides that assets deposited in the trust
account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States financial institution as defined in California Insurance Code Section
922.7(a) and payable in United States dollars, and investments permitted by the California Insurance Code, or any combination of the above. 



 
	
 
	 2.
	 Provides that investments in or issued by an
entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed 5% of total investments.



 
	
 
	 3.
	
Requires the
Reinsurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all 




 
 
			
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		 shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may, whenever necessary, negotiate these assets without consent or signature from the Reinsurer or any other entity.



 
	
 
	 4.
	 Provides that assets in the trust account
shall be withdrawn only as permitted in this Contract, without diminution because of the insolvency of the ceding insurer or the Reinsurer.



 
	 C.
	 If there are multiple ceding insurers that
collectively comprise the Company, “regulatory authorities” as referenced in subparagraph A(2) above, shall mean the individual ceding insurer’s domestic regulator.  




 
 
			
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