EQUALS OR EXCEEDS 99 % AT THE END OF THE CALENDAR QUARTER
IMMEDIATELY PRECEDING THE DATE OF SUCH NOTICE. IF THE PARTIES CANNOT AGREE AS TO
THE CALCULATION OF THE NET LOSS RATIO OR CEDING COMMISSION, WITHIN 30 DAYS OF
RECEIVING THE APPROPRIATE REPORT, THE CALCULATION SHALL BE ARBITRATED. THE
ACTUARIAL FIRM OF TOWERS PERRIN SHALL FURNISH AN ARBITER FOR COMPANY AND
REINSURER WILL CHOOSE ANOTHER ACTUARIAL FIRM TO FURNISH ITS ARBITER. THOSE TWO
ARBITERS WILL SELECT A THIRD INDEPENDENT ACTUARIAL FIRM TO FURNISH THE THIRD
ARBITER. HOWEVER, IT IS AGREED THAT IN THE EVENT OF TERMINATION BY REINSURER
PURSUANT TO THIS PROVISION, THE PARTIES WILL ACT REASONABLY TO NEGOTIATE A NEW
REINSURANCE AGREEMENT ON TERMS SIMILAR TO THOSE THEN BEING OFFERED BY OTHER
REINSURERS.
C.
IN THE EVENT EITHER PARTY TERMINATES THIS AGREEMENT IN ACCORDANCE
WITH PARAGRAPH A. OR B. ABOVE, THE REINSURER SHALL PARTICIPATE IN ALL POLICIES
CEDED WITHIN THE TERMS OF THIS AGREEMENT WRITTEN OR RENEWED BY THE COMPANY AFTER
RECEIPT OF NOTICE OF TERMINATION BUT PRIOR TO TERMINATION, AND SHALL REMAIN
LIABLE FOR ALL CESSIONS IN FORCE AT TERMINATION OF THIS AGREEMENT; HOWEVER, THE
LIABILITY OF THE REINSURER SHALL CEASE WITH RESPECT TO LOSS OCCURRENCES
SUBSEQUENT TO THE FIRST ANNIVERSARY, NATURAL EXPIRATION OR CANCELLATION OF EACH
POLICY CEDED, BUT NOT TO EXTEND BEYOND TWELVE (12) MONTHS AFTER SUCH
TERMINATION. THE COMPANY AND THE REINSURER MAY AGREE TO TERMINATE THIS AGREEMENT
OR SOME PORTION OF THE BUSINESS COVERED ON A CUT-OFF BASIS. UPON SUCH
TERMINATION, THE REINSURER SHALL INCUR NO LIABILITY FOR LOSS OCCURRENCES
SUBSEQUENT TO THE EFFECTIVE DATE OF TERMINATION AND THE REINSURER SHALL RETURN
TO THE COMPANY THE REINSURER'S PORTION OF THE UNEARNED PREMIUM RESERVE FOR ALL
IN FORCE POLICIES LESS PREVIOUSLY PAID CEDING COMMISSION ON SUCH UNEARNED
PREMIUM RESERVE.
5
D.
Either the Company or the Reinsurer may terminate this Agreement
at any time by the giving of thirty (30) days prior written notice to the other
party upon the happening of any one of the following circumstances:
(1)
A STATE INSURANCE DEPARTMENT OR OTHER LEGAL AUTHORITY ORDERS THE
OTHER PARTY TO CEASE WRITING BUSINESS, OR;
(2)
THE OTHER PARTY HAS BECOME MERGED WITH, ACQUIRED OR CONTROLLED BY
ANY COMPANY, CORPORATION, OR INDIVIDUAL(S) NOT CONTROLLING THE PARTY'S
OPERATIONS PREVIOUSLY, OR
(3)
THE OTHER PARTY HAS REINSURED ITS ENTIRE LIABILITY UNDER THIS
AGREEMENT WITHOUT THE TERMINATING PARTY'S PRIOR WRITTEN CONSENT, OR
(4)
THE COMPANY CEASES TO RETAIN ANY OF THE RISKS OF THE BUSINESS
COVERED.
E.
THE COMPANY MAY TERMINATE THIS AGREEMENT IMMEDIATELY UPON THE
HAPPENING OF ANY OF THE FOLLOWING CIRCUMSTANCES:
(1)
THE REINSURER HAS BECOME INSOLVENT OR HAS BEEN PLACED INTO
LIQUIDATION OR RECEIVERSHIP (WHETHER VOLUNTARY OR INVOLUNTARY), OR THERE HAS
BEEN INSTITUTED AGAINST IT PROCEEDINGS FOR THE APPOINTMENT OF A RECEIVER,
LIQUIDATOR, REHABILITATOR, CONSERVATOR, OR TRUSTEE IN BANKRUPTCY, OR OTHER AGENT
KNOWN BY WHATEVER NAME, TO TAKE POSSESSION OF ITS ASSETS OR CONTROL OF ITS
OPERATIONS, OR
(2)
THE REINSURER'S STATUTORY POLICYHOLDERS' SURPLUS HAS BEEN REDUCED
BY EITHER 50% OF THE