additional
reinsurance premium of $400,000 annually for the Terrorism coverage provided
pursuant to Article III of this agreement.
ARTICLE IX
NET PREMIUM INCOME.
The reinsurance rate shall apply to "net premium
income" which shall mean premiums earned on or after the effective date and
prior to the termination date of this agreement on policies to which this
agreement applies before deduction of:
(a)any policyholder dividends;
(b)credits given for any insured policy with a deductible in excess of $2,500;
and
(c)premium for other reinsurance.
ARTICLE X
REPORTING AND ACCOUNTING.
Within 25 days after the close of each
calendar month the REINSURED shall furnish to the CORPORATION a report (in a
form and medium satisfactory to the CORPORATION) of reinsurance premiums due the
CORPORAITON for such month. Such report shall show and properly segregate (by
state and line) the REINSURED'S premiums to which the reinsurance premium rates
apply, and such report shall contain such other statistical information as may
be required by the CORPORATION. The amount due the CORPORATION shall be remitted
to the CORPORATION within 45 days after the close of such month.
ARTICLE XI
CLAIMS.
The REINSURED shall report promptly to the CORPORATION each
occurrence which, in the REINSURED'S reasonable estimate of value of injuries or
damages sought, might involve the reinsurance afforded by this agreement and
shall forward promptly to the CORPORATION copies of such pleadings and reports
of investigation as may be requested by the CORPORATION.
6
Notwithstanding the REINSURED'S reasonable estimate of value, any claim
involving one or more of the following injuries shall be reported to the
CORPORATION:
(a)fatality;
(b)paraplegia or more extensive paralysis;
(c)severe brain injury or brain damage prognosis;
(d)severe burns;
(e)amputations of one or more limbs;
(f)loss of sight or hearing to a substantial degree;
(g)back injury where surgery has been performed or is recommended by the
treating doctor;
(h)severe laceration cases involving the face, arms or legs and leaving serious
cosmetic deformity;
(i)a claim for psychological injury for which there appears to be a reasonable
basis;
(j)multiple fractures or severe internal injuries with high residual permanent
impairment;
(k)any injury where there is, or appears probable, an alleged loss of earnings
for one year or more.
The REINSURED shall also notify the CORPORATION of any occurrence for
which the REINSURED has created a loss reserve equal to or greater than one half
of the REINSURED'S retention hereunder, or any occurrence giving rise to a bad
faith claim covered by Article VI (c) above. The REINSURED shall advise the
CORPORATION of the estimated amount of loss and claim expenses in connection
with each such occurrence and of any subsequent changes.
The REINSURED agrees that it will investigate and will settle or defend
all claims arising under policies with respect to which reinsurance is afforded
by this agreement, and that it will give prompt notice to the CORPORATION of any
claim in excess of the REINSURED'S application retention and prompt notice of
any other event or development which would involve the CORPORATION hereunder,
and