Exhibit 10.46


 


UK TITLE QUOTA SHARE REINSURANCE AGREEMENT


 


BETWEEN


 


ACE
EUROPEAN MARKETS INSURANCE LIMITED

(REINSURED)


 


AND


 


ACE CAPITAL
RE OVERSEAS LTD.

(REINSURER)


 

















 


UK TITLE
QUOTA SHARE REINSURANCE AGREEMENT


 


This
UK Title Quota Share Reinsurance Agreement (“Agreement”),
dated as of June 1, 2003, is made and entered into by and between ACE European
Markets Insurance Limited (the “Reinsured”)
and ACE Capital Re Overseas Ltd, (the “Reinsurer”)


 


In
consideration of the mutual covenants contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Reinsured and the Reinsurer agree as follows:


 


	
  TERM:

  	
   

  	
  Means
  the period from and including June 1, 2003 to and including the last day of
  the Underwriting Period (as defined in the Agency Agreement),

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Upon
  the end of the Term, this Agreement shall remain in effect with respect to
  Issued Contracts (as defined in the Agency Agreement) which are issued by the
  Reinsured on or prior to the last day of the Term until the earlier of their
  natural expiration, termination, or renewal and the Reinsured shall continue
  to account to the Reinsurer for any Reinsurance Premium, recoveries and other
  amounts payable in respect of such Issued Contracts.

  
	
   

  	
   

  	
   

  
	
  AGENCY AGREEMENT:

  	
   

  	
  Means
  that certain Underwriting Management Agreement, dated May 15, 2003 and
  effective June 1, 2003, by and between the Reinsured and Legal &
  Contingency Limited (the “Agent”).

  
	
   

  	
   

  	
   

  
	
  REINSURING AGREEMENT:

  	
   

  	
  The
  Reinsured shall cede to the Reinsurer, and the Reinsurer shall accept as
  reinsurance from the Reinsured, one-hundred percent (100%) (the “Quota Share Percentage”) of the liability
  of the Reinsured under any and all Issued Contracts issued or entered into by
  the Reinsured during the Term.

  
	
   

  	
   

  	
   

  
	
  EXCLUSIONS:

  	
   

  	
  This
  Agreement does not cover any business other than Issued Contracts.

  
	
   

  	
   

  	
   

  
	
  REINSURANCE PREMIUM:

  	
   

  	
  The
  Reinsured shall pay the Reinsurer an amount equal to (a) 92.50% (“Premium Percentage”) of the Gross Written
  Premium on each Issued Contract (the “Reinsurance
  Premium”) less (b) the amount payable by the Reinsured to the
  Agent (as hereinafter defined) pursuant to Section 5.2 of the Agency
  Agreement. As used herein “Gross Written
  Premium” means gross premium written less cancellations and return
  premiums.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For
  purposes of clarification and not limitation, the Premium Percentage is net
  of all commissions and is calculated as provided in Schedule 1 attached
  hereto.

  
	
   

  	
   

  	
   

  
	
  PROFIT COMMISSION:

  	
   

  	
  The
  Reinsurer shall pay the Reinsured, on the day that is one business day prior
  to the day the Profit Commission (as defined in the Agency

  



 

















 


	
   

  	
   

  	
  Agreement)
  is payable by the Reinsured to the Agent pursuant to Section 5.1 of the
  Agency Agreement, an amount equal to such Profit Commission.

  
	
   

  	
   

  	
   

  
	
  FULL REINSURANCE CLAUSE:

  	
   

  	
  The
  Reinsurer shall at all times follow the loss settlements made by the
  Reinsured (provided they are within the terms of the applicable Issued
  Contract and this Agreement) and pay the Reinsured the Quota Share Percentage
  of the loss adjustment expenses (other than management and office expenses of
  the Reinsured and salaries of its employees) paid by the Reinsured in
  connection with the investigation, settlement or contesting the validity of
  claims or losses, including, without limitation, the fees and expenses of
  attorneys and experts.

  
	
   

  	
   

  	
   

  
	
  SIMULTANEOUS PAYMENT CLAUSE:

  	
   

  	
  In
  the event any claim covered by this Agreement exceeds twenty five thousand
  pounds sterling (£25,000), the Reinsurer agrees that, if requested, it shall
  pay its share of such loss by wire transfer of same day Federal Funds by
  12:00 pm New York Time on the date which is one business day prior to the
  date such loss payment is expected to be paid by the Reinsured.

  
	
   

  	
   

  	
   

  
	
  TERRITORY:

  	
   

  	
  This
  Agreement shall provide coverage on properties located in Great Britain,
  Northern Ireland, Isle of Mann and Channel Islands.

  
	
   

  	
   

  	
   

  
	
  CLAIMS CO-OPERATION:

  	
   

  	
  The
  Reinsured shall give immediate notice to the Reinsurer upon its becoming
  aware of any claim under an Issued Contract or any circumstance which could
  give rise to such a claim.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The
  Reinsured shall furnish the Reinsurer with all information known to the
  Reinsured respecting claims or possible claims notified and shall thereafter
  keep the Reinsurer fully informed as regards all developments relating
  thereto as soon as they occur. So long as the Reinsurer is not in default of
  its obligations under this Agreement, the Reinsurer shall have the right to
  direct the Reinsured (and the Reinsured shall act in accordance with the
  direction of the Reinsurer) in connection with the investigation, adjustment,
  settlement and litigation of any claim or potential claim arising under an
  Issued Contract and the Reinsured shall not adjust, settle or litigate any
  claim without the prior written consent of the Reinsurer or its
  representative.

  
	
   

  	
   

  	
   

  
	
  SUBROGATION AND RECOVERY:

  	
   

  	
  In
  the event the Reinsured has any rights of subrogation, salvage, recovery or
  claims reimbursement or rights against any person or entity who or which may
  be legally responsible in damages for any loss that is the subject of a valid
  claim under an Issued Contract (individually and collectively, “Recoveries”), the Reinsured shall use its
  best efforts to pursue such Recoveries, provided
  that, so long as the Reinsurer is not in default of its
  obligations under this Agreement, the Reinsurer shall have the sole right to
  direct the Reinsured (and the Reinsured shall act in accordance with the
  direction of the Reinsurer) in connection with any right of Recovery.

  



 


2

















 


	
   

  	
   

  	
  The
  Reinsured shall account to, and credit, the Reinsurer with the Quota Share
  Percentage of any Recoveries (after deduction of the costs of obtaining such
  Recoveries) received or recovered by the Reinsured. This provision shall survive
  the Term and remain in effect until all Recoveries relating to any claim paid
  by the Reinsurer hereunder shall have been obtained.

  
	
   

  	
   

  	
   

  
	
  EXTRA CONTRACTUAL OBLIGATIONS:

  	
   

  	
  In
  the event the Reinsured pays or is held liable to pay any punitive,
  exemplary, compensatory or consequential damages (herein referred to as “Extra Contractual Obligations”) because
  of alleged or actual bad faith or negligence on its part in handling a claim
  under an Issued Contract covered hereunder, such Extra Contractual Obligations
  shall be added to the Reinsured’s loss, if any, under the Issued Contract
  involved, and the sum thereof shall be (i) subject to the protection of this
  Agreement and (ii) the obligation of the Reinsurer notwithstanding any other
  limitation of this reinsurance coverage.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  An
  Extra Contractual Obligation shall be deemed to have occurred on the same
  date as the claim covered or alleged to be covered under this Agreement.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Recoveries
  from any form of coverage that protects the Reinsured against claims that are
  the subject matter of this provision shall inure to the benefit of the
  Reinsurer.

  
	
   

  	
   

  	
   

  
	
  LOSS IN EXCESS OF POLICY LIMITS:

  	
   

  	
  This
  Agreement shall protect the Reinsured in respect of any loss that the
  Reinsured may be legally liable to pay in excess of the limit of its Issued
  Contracts, including, without limitation, any loss in excess of that limit
  having been incurred because of its failure to settle within the insurance
  limit or by reason of alleged or actual negligence, fraud or bad faith in rejecting
  an offer of settlement or in the preparation of the defence or in trial of
  any action against the original insured or in the preparation or prosecution
  of an appeal consequent upon such action.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For
  the purposes of this provision, the word “loss” shall mean any amount that
  the Reinsured would have been contractually obligated to pay had it not been
  for the limit of an Issued Contract.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Recoveries
  from any form of coverage that protects the Reinsured against claims that are
  the subject matter of this provision shall inure to the benefit of the
  Reinsurer.

  
	
   

  	
   

  	
   

  
	
  ERRORS AND OMISSIONS:

  	
   

  	
  Any
  inadvertent delay, omission, or error shall not be held to relieve either
  party hereto from any liability which would attach to it hereunder if such
  delay, omission or error had not been made, providing such omission or error
  is rectified upon discovery.

  



 


3

















 


	
  REPORTS AND REMITTANCES:

  	
   

  	
  The
  Reinsured shall provide the Reinsurer with a monthly policy and premium bordereaux
  within fifteen (15) days following the end of each calendar month showing:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)             The
  dollar amount of the Reinsurance Premium due for such month,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)          The
  dollar amount payable by the Reinsured to the Agent pursuant to Section 5.2
  of the Agency Agreement,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)       the
  dollar amount of the Quota Share Percentage of losses paid by the Reinsured
  in respect of Issued Contracts during such month,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iv)      the
  amount of any salvages, subrogation and other recoveries received by the Reinsured
  during such month with respect to losses covered under the Issued Contracts,
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (v)         such
  policy detail as agreed by the parties.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If
  the Net Due with respect to any calendar month is a positive number, the
  Reinsured shall pay such Net Due to the Reinsurer within forty-five (45) days
  following the end of such calendar month. If the Net Due with respect to any
  calendar month is a negative number, the Reinsurer shall pay the absolute
  value of such Net Due to the Reinsured within forty-five (45) days following
  the end of such calendar month. As used herein, the term “Net Due” means the
  difference between (a) the sum of clauses (i) and (iv) of this section and
  (b) the sum of clauses (ii) and (iii) of this section.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  In
  addition to the items set forth in clauses (i) through (v) above, the
  Reinsured shall provide the Reinsurer with (a) within five (5) business days
  of receipt thereof, a copy of the bordereaux received from the Agent pursuant
  to Clause 4.2 of Appendix B of the Agency Agreement and (b) within 45 days of
  each Fiscal Year (as defined in the Agency Agreement) of the Underwriting
  Period, a detailed computation of the Profit Commission payable pursuant to
  Section 5.1 of the Agency Agreement.

  
	
   

  	
   

  	
   

  
	
  AMENDMENTS AND ASSIGNMENT:

  	
   

  	
  This
  Agreement may not be assigned without the prior written consent of the
  Reinsurer and the Reinsured. This Agreement may be amended only by a written
  instrument executed by the Reinsurer and the Reinsured. Such duly executed
  amendments will be considered an integral part of this Agreement.

  
	
   

  	
   

  	
   

  
	
  BOOKS AND RECORDS:

  	
   

  	
  For
  as long as either party remains under any liability hereunder, the Reinsured
  shall, upon request by the Reinsurer, make available for inspection at any
  reasonable time by such representatives as may be authorised by the Reinsurer
  for that purpose, all information relating to business reinsured hereunder in
  the Reinsured’s possession or under its control or to which it has access
  under any agreement and the Reinsurer

  



 


4

















 


	
   

  	
   

  	
  shall
  he permitted to make copies of such information (at its own expense).

  
	
   

  	
   

  	
   

  
	
  SET OFF:

  	
   

  	
  Either
  party may at its discretion set off against any amounts due from the other
  party under this Agreement or any other agreements between the parties any
  amounts that are due and owing to the other party.

  
	
   

  	
   

  	
   

  
	
  EXERCISE OF RIGHTS UNDER AGENCY AGREEMENT:

  	
   

  	
  The
  Reinsured hereby expressly agrees that (a) prior to exercising any right as
  the “Insurer” under the Agency Agreement it shall (i) notify the Reinsurer in
  writing of its intention with respect to such right to be exercised and (ii)
  exercise any such right only with the prior written consent of the Reinsurer
  and (b) it will exercise any right or refrain from exercising any right as
  the “Insurer” under the Agency Agreement as directed by the Reinsurer.

  
	
   

  	
   

  	
   

  
	
  AMENDMENT OF AGENCY AGREEMENT:

  	
   

  	
  The
  Agency Agreement may not be amended, assigned or otherwise modified without
  the prior written consent of the Reinsurer.

  
	
   

  	
   

  	
   

  
	
  ARBITRATION:

  	
   

  	
  Any
  dispute, controversy, or claim arising out of or relating to this Agreement,
  or the breach, termination or invalidity thereof, shall be finally settled
  under the Rules of Arbitration of the LCIA (“LCIA Rules”) by one or three
  arbitrators appointed in accordance with the LCIA Rules. The seat of the
  arbitration shall be London. The language of the arbitration shall be
  English. Judgment on any award may be entered in any court of competent
  jurisdiction.

  
	
   

  	
   

  	
   

  
	
  GOVERNING LAW:

  	
   

  	
  This
  Agreement shall be governed by, and construed in accordance with, English law
  and the parties hereby submit to the non-exclusive jurisdiction of the
  English courts for all purposes relating to this Agreement. This clause is
  not intended to override the agreement of the parties to arbitrate as set forth
  in the “Arbitration” section hereof.

  
	
   

  	
   

  	
   

  
	
  THIRD PARTY RIGHTS:

  	
   

  	
  Nothing
  herein shall be deemed to create any obligation or to establish any right
  against in favor of any third parties or persons not parties to this
  Agreement.

  
	
   

  	
   

  	
   

  
	
  COUNTERPARTS:

  	
   

  	
  This
  Agreement may be executed in any number of counterparts, and by different
  parties hereto in separate counterparts, each of which when so executed and
  delivered shall be an original, but all of which shall together constitute
  one and the same instrument.

  
	
   

  	
   

  	
   

  
	
  HEADINGS:

  	
   

  	
  The
  headings of the several sections and subsections of this Agreement are
  inserted for convenience only, and shall not in any way affect the meaning or
  construction of any provision of this Agreement.

  
	
   

  	
   

  	
   

  
	
  SEVERABILITY:

  	
   

  	
  To
  the extent that this Agreement may be in conflict with any applicable law or
  regulation, this Agreement shall be amended, at the mutual agreement of both
  the Reinsured and the Reinsurer, to the extent possible, to comply with such
  law and regulation. If any term or provision of this Agreement shall be found
  by a court of competent

  



 


5

















 


	
   

  	
   

  	
  jurisdiction
  to be illegal or otherwise unenforceable, the same shall not invalidate the
  whole of this Agreement, but such term or provision shall be deemed modified
  to the extent necessary in the court’s opinion to render such term or
  provision enforceable, and the rights and obligations of the parties shall be
  construed and enforced accordingly preserving to the fullest permissible
  extent the intent and agreements of the parties set forth herein.

  
	
   

  	
   

  	
   

  
	
  CURRENCY:

  	
   

  	
  All
  payments by either party to the other under this Agreement are in Pounds
  Sterling.

  
	
   

  	
   

  	
   

  
	
  BROKERAGE: NOTICES:

  	
   

  	
  There shall be no broker or intermediary for this Agreement.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Any
  notice required or permitted hereunder shall be in writing and shall be
  delivered personally, sent by facsimile transmission, sent by prepaid air
  courier or sent by certified, registered or express mail, postage prepaid.
  Any such notice shall be deemed delivered when received as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If to the Reinsurer:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ACE Capital Re Overseas Ltd.

  
	
   

  	
   

  	
  Victoria Hall

  
	
   

  	
   

  	
  11 Victoria Street

  
	
   

  	
   

  	
  Hamiltoin HM HX, Bermuda

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  Corporate Secretary

  
	
   

  	
   

  	
  Telephone:

  	
  441-297-9730

  
	
   

  	
   

  	
  Facsimile:

  	
  441-297-9704

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a simultaneous copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ACE Capital Re Inc.

  
	
   

  	
   

  	
  1325 Avenue of the Americas

  
	
   

  	
   

  	
  New York, NY 10019

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  General
  Counsel

  
	
   

  	
   

  	
  Telephone:

  	
  212-974-0100

  
	
   

  	
   

  	
  Facsimile:

  	
  212-581-3268

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If to the Reinsured:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ACE
  European Markets Insurance Limited (London Branch)

  
	
   

  	
   

  	
  100
  Leadenhall Street

  
	
   

  	
   

  	
  London
  EC3A 3BP

  
	
   

  	
   

  	
  United
  Kingdom

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:
  Carmel Caramagna

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:

  
	
   

  	
   

  	
  Telephone: 011 44 207 173 7000

  



 


6

















 


	
   

  	
   

  	
  Any
  party may by notice given in accordance with this Section to the other
  parties designate another address or person for receipt of notices hereunder.

  
	
   

  	
   

  	
   

  
	
  ACCOUNTS:

  	
   

  	
  All payments shall be made to the accounts of the
  applicable party as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  To the Reinsured:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Account
  Name:

  	
  ACE
  European Markets Insurance Limited

  
	
   

  	
   

  	
  Bank
  Name:

  	
  Bank
  of Ireland - Treasury

  
	
   

  	
   

  	
   

  	
  Colvill
  House

  
	
   

  	
   

  	
   

  	
  Talbot
  Street

  
	
   

  	
   

  	
   

  	
  Dublin
  1 Ireland

  
	
   

  	
   

  	
  Bank
  Swift Address:

  	
  BIGTIE2D

  
	
   

  	
   

  	
  Account
  Number:

  	
  1819299

  
	
   

  	
   

  	
  IBAN
  Number:

  	
  IE03
  BIGT 9024 8501 3489 22

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  To the Reinsurer:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Financial
  Institution: JP Morgan/Chase

  
	
   

  	
   

  	
  ABA
  No.:

  	
  021-000-021

  
	
   

  	
   

  	
  Account
  No.:

  	
  910-2711-208

  
	
   

  	
   

  	
  Account
  Name:

  	
  ACE
  Capital Re Overseas

  



 


[The next
page is the signature page.]


 


7

















 


IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed and delivered by
their duly authorized officers as of the effective date hereof.


 


	
  For
  and on behalf of the Reinsured:

  	
  For
  and on behalf of the Reinsurer:

  
	
   

  	
   

  
	
  ACE
  EUROPEAN MARKETS INSURANCE LIMITED

  	
  ACE
  CAPITAL RE OVERSEAS LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ James C. Hooban

  	
   

  	
  /s/
  Rebecca L. Carne

  	
   

  
	
  Name:

  	
  James
  C. Hooban

  	
  Name:

  	
  Rebecca
  L. Carne

  
	
  Title:

  	
  Managing
  Director

  	
  Title:

  	
  Director

  
	
  Date:

  	
  December
  15, 2003

  	
  Date:

  	
   

  
						



 

















 


SCHEDULE 1


 


CALCULATION OF PREMIUM PERCENTAGE


 


The
Premium Percentage is calculated as follows:


 


	
  (A) 
  Gross Premiums Written (net of cancellations & return premiums)

  	
   

  	
  100.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  (B) 
  minus Ceding Commission
  to Reinsured (7.5% x (A))

  	
   

  	
  (7.50

  	
  )%

  
	
   

  	
   

  	
   

  	
   

  
	
  (C) 
  equals Net to Reinsurer
  (or “Premium Percentage”)

  	
   

  	
  92.50

  	
  %