ARE WRITTEN AS TRADITIONAL PROGRAM
BUSINESS.
"POOL REINSURANCE" SHALL MEAN PROPERTY CATASTROPHE AND EXCESS OF LOSS
REINSURANCE CEDED BY CPIC TO AN INSURER THAT IS NOT A PARTICIPATING COMPANY THAT
INURES TO THE BENEFIT OF THE TRADITIONAL PROGRAM BUSINESS POOL.
"POOLING PERCENTAGES" SHALL BE THOSE PERCENTAGES SET FORTH ON SCHEDULE 1
ATTACHED HERETO, AS AMENDED FROM TIME TO TIME.
"PROGRAM BUSINESS" SHALL MEAN NARROWLY DEFINED CLASSES OF BUSINESS THAT ARE
UNDERWRITTEN ON AN INDIVIDUAL POLICY BASIS BY PROGRAM UNDERWRITING AGENTS ON
BEHALF OF INSURANCE COMPANIES.
2
"Program Underwriting Agent" means an insurance intermediary that aggregates
business from retail and general agents and manages business on behalf of
insurance companies, including functions such as risk selection and
underwriting, premium collection, policy form design and client service.
"TRADITIONAL PROGRAM BUSINESS POOL" SHALL MEAN TRADITIONAL PROGRAM BUSINESS
WRITTEN BY OR ON BEHALF OF THE PARTICIPATING COMPANIES OR ASSUMED BY A
PARTICIPATING COMPANY (INCLUDING SUCH BUSINESS ASSUMED BY TICNY FROM ITS
AFFILIATES), THAT IS POOLED AND ALLOCATED TO EACH OF THE PARTICIPATING COMPANIES
BASED UPON THEIR POOLING PERCENTAGE AS SET FORTH IN THIS POOLING AGREEMENT.
"TRADITIONAL PROGRAM BUSINESS" SHALL MEAN BLOCKS OF PROGRAM BUSINESS IN EXCESS
OF $5 MILLION IN GROSS WRITTEN PREMIUM THAT TICNY HAS HISTORICALLY UNDERWRITTEN,
CONSISTING OF NON-AUTO RELATED PERSONAL LINES AND THE FOLLOWING COMMERCIAL LINES
OF BUSINESS: RETAIL STORES AND WHOLESALE TRADES, COMMERCIAL AND RESIDENTIAL REAL
ESTATE, RESTAURANTS, GROCERY STORES, OFFICE AND SERVICE INDUSTRIES, AND ARTISAN
CONTRACTORS.
ARTICLE II
Cessions to Traditional Program Business Pool
TICNY SHALL AUTOMATICALLY AND OBLIGATORILY CEDE TO CPIC AS REINSURANCE, AND CPIC
SHALL BE OBLIGATED TO ACCEPT AS ASSUMED REINSURANCE, ONE HUNDRED PERCENT (100%)
OF THE PREMIUM AND NET LIABILITIES WITH RESPECT TO POLICIES ISSUED OR ASSUMED BY
TICNY, TO BE COMBINED WITH THE PREMIUM AND NET LIABILITIES OF CPIC UNDER
POLICIES ISSUED OR ASSUMED BY CPIC, PROVIDED, HOWEVER, THAT THE TOTAL GROSS
WRITTEN PREMIUM OF CPIC AFTER POOLING SHALL NOT EXCEED $50 MILLION FOR THE FIRST
12 MONTH PERIOD ENDING MARCH 31, 2007, SUBJECT TO A GROWTH FACTOR OF 25% PER
EACH 12 MONTH PERIOD THEREAFTER, UNLESS OTHERWISE AGREED BY THE PARTIES.
ARTICLE III
PARTICIPATION IN TRADITIONAL PROGRAM BUSINESS POOL
CPIC SHALL ESTABLISH THE TRADITIONAL PROGRAM BUSINESS POOL, WHICH SHALL CONSIST
OF THE PREMIUM AND NET LIABILITY UNDER ALL TRADITIONAL PROGRAM BUSINESS WRITTEN
OR ASSUMED BY CPIC AND TICNY (INCLUDING BUSINESS ASSUMED BY CPIC PURSUANT TO
THIS POOLING AGREEMENT).
CPIC SHALL AUTOMATICALLY AND OBLIGATORILY CEDE TO
TICNY, AND RETAIN FOR CPIC'S OWN ACCOUNT, THE APPLICABLE POOLING PERCENTAGES OF
SUCH NET LIABILITY AND TICNY SHALL AUTOMATICALLY AND OBLIGATORILY ACCEPT SUCH
CESSIONS. TICNY'S SHARE
3
SHALL BE AS SET FORTH IN SCHEDULE 1 HERETO, AS AMENDED FROM TIME TO TIME. SUCH
POOLING PERCENTAGES SHALL BE APPLIED TO ALL TRADITIONAL PROGRAM BUSINESS WRITTEN
BY THE PARTICIPATING COMPANIES.
ANY CHANGE IN THE POOLING PERCENTAGES SHALL BE
MADE ONLY BY A WRITTEN AMENDMENT TO SCHEDULE 1 OF THIS POOLING AGREEMENT SIGNED
BY THE PARTIES HERETO OR AS OTHERWISE SET FORTH IN ARTICLE XVI OF THIS POOLING
AGREEMENT.