Exhibit 10.37


 


First Amendment


To


Reinsurance Pooling Agreement


By and Between


AmCOMP Preferred Insurance Company


And


AmCOMP Assurance Corporation


 


December 31, 2003


 


This First Amendment to
Reinsurance Agreement by and between AmCOMP Preferred Insurance Company (“APIC”)
and AmCOMP Assurance Corporation (“AAC”) (collectively the “Pool Participants”
or “Parties”, or individually a “Pool Participant” or “Party”), is made and
entered into this 31st day of December, 2003.


 


Section 1. Amendment
Generally.   The Parties
hereby agree to amend the Reinsurance Pooling Agreement, dated May 10,
2001, by and between APIC and AAC (the “Pooling Agreement”). Except as
otherwise expressly set forth below in Section 1, Section 2, and Section 3,
below, all other terms and conditions of the Pooling Agreement shall remain
unchanged and shall continue to remain in full force and effect.


 


Section 2. Amendment
of Section 1.4.   Section 1.4
is added to the Pooling Agreement to read as follows:


 


1.4           “Net Assumed Liability” means the amount
by which a Pool Participant’s unearned portion of assumed written premium, paid
losses and loss adjustment expenses incurred that have been assumed but not
paid, and the case and IBNR reserves on assumed losses and loss adjustment
expenses incurred (calculated pursuant to the 2002 NAIC Annual Statement Schedule F
– Part 5, Column 17 format of the other Pool Participant) exceeds the
amount due under the Pooling Agreement from the other Pool Participant for the
unearned portion of ceded written premium, paid losses and loss adjustment
expenses incurred that have been ceded but not reimbursed, and the case and
IBNR reserves on ceded losses and loss adjustment expenses incurred which the
Pool Participant has ceded to the other Pool Participant (calculated pursuant
to the 2002 NAIC Annual Statement Schedule F – Part 5, Column 17
format of the Pool Participant). At any given calculation date, only one Pool
Participant will have a Net Assumed Liability to the other Pool Participant
under the Pooling Agreement.


 


Section 2. Addition
of Section 5.14.     Section 5.14 is added to the Pooling
Agreement to read as follows:


 


5.14         Collateralization of Net Assumed
Liability.     If either Pool
Participant is unauthorized or not accredited to transact reinsurance in any
state of the United States of America or the District of Columbia, and the
other Pool Participant will incur a penalty on its statutory financial
statement filed with insurance regulatory authorities as a result of the lack
of such authorization or accreditation, each Pool Participant agrees to fund
its Net Assumed Liability to the other Pool Participant by one or more of the
following methods: (a) a reinsurance trust; (b) cash advances; (c)


 





















 


escrow accounts. In the event a reinsurance trust is
established pursuant to this Section 5.14, the Pool Participants shall
execute a separate reinsurance trust agreement under which the Pool Participant
with Net Assumed Liability shall be the “grantor” and the other Pool
Participant shall be the “beneficiary” of the assets placed in trust to secure
the grantor’s Net Assumed Liability. The qualifications and minimum
requirements for any trustee and the eligible assets under such a reinsurance
trust agreement shall comply with the laws and regulations of the beneficiary’s
state of domicile. Any reinsurance trust agreement executed pursuant to this Section 5.14
shall contain such terms and conditions that are acceptable to each Pool
Participant and the trustee, subject to any applicable regulatory approvals
which may be required in connection with the execution of the reinsurance trust
agreement. Any amounts secured pursuant to this Section 5.14 through a
reinsurance trust agreement, cash advance or escrow account, shall be adjusted
as of the end of each calendar quarter.


 


Section 3. Amendment
of Exhibit A of the Pooling Agreement.   Exhibit A (Participation Exhibit) of
the Pooling Agreement is amended to read:


 


EXHIBIT A


 


PARTICIPATION EXHIBIT


 


Following the end of each
Pooling Year, each party’s Participation Percentage shall be adjusted to be the
percentage derived by dividing (a) each respective party’s year-end
statutory surplus as to policyholders by (b) the sum of both party’s
year-end statutory surplus as to policyholders for the same year. The adjusted
participation percentage shall be the Participation Percentage for the then
current year.


 


The Participation
Percentages described above may be adjusted from time to time by mutual consent
of the Parties in accordance with Section 5.1 of the Pooling Agreement.


 


IN WITNESS WHEREOF, the
Parties hereto, by their respective duly authorized officers, have signed this
First Amendment to the Pooling Agreement on the date first written above.


 


	
  AmCOMP
  Assurance-Corporation

  	
   

  	
  AmCOMP Preferred
  Insurance Company

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Treasurer

  	
   

  	
  Title:

  	
  Vice President

  
							



 


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EXHIBIT A


 


Amended Participation Exhibit


 


1.             Initial
Participation


 


For purposes of
determining the initial percentage that each party to the Pooling Agreement
shall participate in the Pooled Business contemplated thereby, the following
Participation Percentages shall be used:


 


	
  AmCOMP Assurance
  Corporation

  	
   

  	
  32

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  AmCOMP Preferred
  Insurance Company

  	
   

  	
  68

  	
  %

  



 


2.             Adjusted
Determination of Participation.


 


Following the end of year
of each Pooling Year, each party’s Participation Percentage shall be adjusted
to be the percentage derived by dividing (a) each party’s year-end
statutory policyholder’s surplus by (b) the corresponding year-end total
statutory policyholder’s surplus of both parties. The adjusted participation
percentage shall be the Participation Percentage for the then current year.


 


3.             The participation percentages listed above may be
adjusted from time to time by mutual consent of the Parties in accordance with Section 5.1
of the Pooling Agreement.


 


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