MATERIAL
RESPECTS, THE STATUTORY FINANCIAL POSITION AND RESULTS OF OPERATIONS OF THE
CEDING COMPANY AS OF THEIR RESPECTIVE DATES OR FOR THE RESPECTIVE PERIODS
COVERED THEREBY.
(I)
NO MATERIAL ADVERSE EFFECT.
SINCE THE LAST STATUTORY FINANCIAL
STATEMENTS OF THE CEDING COMPANY AND ANY SECURITIES EXCHANGE COMMISSION FILINGS
MADE BY THE PARENT ENTITY OF THE CEDING COMPANY, THERE HAS NOT OCCURRED ANY
EVENT OR EVENTS THAT, INDIVIDUALLY OR IN THE AGGREGATE, HAS OR HAVE HAD OR WOULD
BE REASONABLY EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT WITH RESPECT TO THE
CEDING COMPANY.
34
SECTION 18.02
COVENANTS OF THE CEDING COMPANY.
(A)
INVESTIGATIONS.
TO THE EXTENT PERMITTED BY APPLICABLE LAW OR
REGULATION, THE CEDING COMPANY WILL NOTIFY THE REINSURER IMMEDIATELY, IN
WRITING, OF ANY AND ALL INVESTIGATIONS OF THE CEDING COMPANY CONDUCTED BY ANY
FEDERAL OR STATE GOVERNMENTAL AUTHORITY COMMENCING AFTER THE DATE HEREOF, OTHER
THAN ROUTINE STATE INSURANCE DEPARTMENT EXAMINATIONS.
(B)
STATUTORY ACCOUNTING PRINCIPLES.
THE CEDING COMPANY WILL PREPARE
ITS FINANCIAL STATEMENTS AS REQUIRED BY, AND IN ACCORDANCE WITH, SAP.
(C)
EXISTENCE; CONDUCT OF BUSINESS.
THE CEDING COMPANY WILL DO OR
CAUSE TO BE DONE ALL THINGS REASONABLY NECESSARY TO PRESERVE, RENEW AND KEEP IN
FULL FORCE AND EFFECT ITS LEGAL EXISTENCE AND THE RIGHTS, LICENSES, PERMITS,
PRIVILEGES AND FRANCHISES MATERIAL TO THE CONDUCT OF ITS BUSINESS.
(D)
COMPLIANCE WITH LAW.
THE CEDING COMPANY WILL COMPLY WITH ALL
STATUTES, LAWS, ORDINANCES, RULES, REGULATIONS, JUDGMENTS, DECREES, ORDERS,
INJUNCTIONS, WRITS, PERMITS, OR LICENSES OF ANY GOVERNMENTAL AUTHORITY
APPLICABLE TO THE CEDING COMPANY OR BY WHICH IT OR ITS PROPERTIES OR ASSETS IS
BOUND OR SUBJECT, EXCEPT WHERE THE FAILURE TO DO SO, INDIVIDUALLY OR IN THE
AGGREGATE, WOULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON
THE CEDING COMPANY'S ABILITY TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT.
(E)
RESTRICTION ON LIENS.
THE CEDING COMPANY SHALL NOT CREATE, INCUR,
ASSUME OR SUFFER TO EXIST ANY LIENS ON THE ASSETS IN THE FUNDS WITHHELD ACCOUNT
OWNED ON THE DATE OF THIS AGREEMENT OR HEREAFTER ACQUIRED, OR ON ANY INTEREST
THEREIN OR THE PROCEEDS THEREOF.
(F)
GOVERNMENTAL NOTICES.
THE CEDING COMPANY SHALL PROVIDE THE
REINSURER, WITHIN FIVE (5) BUSINESS DAYS AFTER RECEIPT THEREOF, COPIES OF ANY
WRITTEN NOTICE OR REPORT FROM ANY GOVERNMENTAL AUTHORITY WITH RESPECT TO THE
BUSINESS REINSURED UNDER THIS AGREEMENT AND A WRITTEN SUMMARY OF ANY MATERIAL
ORAL COMMUNICATION WITH ANY GOVERNMENTAL AUTHORITY WITH RESPECT TO THE BUSINESS
REINSURED UNDER THIS AGREEMENT.
SECTION 18.03
REPRESENTATIONS AND WARRANTIES OF THE REINSURER.
THE
REINSURER HEREBY REPRESENTS AND WARRANTS TO THE CEDING COMPANY AS FOLLOWS:
(A)
ORGANIZATION AND QUALIFICATION.
THE REINSURER IS A CORPORATION
DULY INCORPORATED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF
BERMUDA AND HAS ALL REQUISITE CORPORATE POWER AND AUTHORITY TO OPERATE ITS
BUSINESS AS NOW CONDUCTED, AND IS DULY QUALIFIED AS A FOREIGN CORPORATION TO DO
BUSINESS, AND, TO THE EXTENT LEGALLY APPLICABLE, IS IN GOOD STANDING, IN EACH
JURISDICTION WHERE THE CHARACTER OF ITS OWNED, OPERATED OR LEASED PROPERTIES OR
THE NATURE OF ITS ACTIVITIES