SHALL PAY THE AMOUNT OF SUCH
DIFFERENCE TO THE CEDING COMPANY NO LATER THAN EIGHT (8) BUSINESS DAYS FOLLOWING
THE DELIVERY OF SUCH INVOICE TO THE REINSURER.
SECTION 9.04
REINSURANCE TRUST.
(A)
ANY TRUST AGREEMENT ESTABLISHING A
REINSURANCE TRUST FOR THE BENEFIT OF THE CEDING COMPANY SHALL COMPLY IN ALL
RESPECTS WITH THE STATUTES AND REGULATIONS OF THE STATE OF IOWA.
(B)
THE ASSETS DEPOSITED IN SUCH REINSURANCE
TRUST SHALL (I) BE VALUED ACCORDING TO THEIR CURRENT FAIR MARKET VALUE AND
(II) CONSIST ONLY OF PERMITTED ASSETS.
(C)
PRIOR TO DEPOSITING ASSETS WITH THE
TRUSTEE, THE REINSURER SHALL EXECUTE ASSIGNMENTS, ENDORSEMENTS IN BLANK OR
TRANSFER LEGAL TITLE TO THE TRUSTEE OF ALL SHARES, OBLIGATIONS OR ANY OTHER
ASSETS REQUIRING ASSIGNMENTS, IN ORDER THAT THE CEDING COMPANY, OR THE TRUSTEE
UPON
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THE DIRECTION OF THE CEDING COMPANY, MAY WHENEVER NECESSARY NEGOTIATE ANY SUCH
ASSETS WITHOUT CONSENT OR SIGNATURE FROM THE REINSURER OR ANY OTHER ENTITY.
(D)
ALL SETTLEMENTS OF ACCOUNT UNDER SUCH A
TRUST AGREEMENT BETWEEN THE CEDING COMPANY AND THE REINSURER SHALL BE MADE IN
CASH OR ITS EQUIVALENT.
(E)
NOTWITHSTANDING ANY OTHER PROVISION HEREOF,
ASSETS IN ANY REINSURANCE TRUST MAY BE WITHDRAWN BY THE CEDING COMPANY AT ANY
TIME AND SHALL BE UTILIZED AND APPLIED BY THE CEDING COMPANY OR ANY OF ITS
SUCCESSORS IN INTEREST BY OPERATION OF LAW, INCLUDING ANY LIQUIDATOR,
REHABILITATOR, RECEIVER OR CONSERVATOR OF THE CEDING COMPANY, WITHOUT DIMINUTION
BECAUSE OF INSOLVENCY ON THE PART OF THE CEDING COMPANY OR THE REINSURER, ONLY
FOR THE FOLLOWING PURPOSES:
(I)
TO REIMBURSE THE CEDING COMPANY FOR THE
QUOTA SHARE OF PREMIUMS WHICH ARE RETURNED TO THE OWNERS OF THE REINSURED
POLICIES BECAUSE OF CANCELLATIONS OF SUCH REINSURED POLICIES;
(II)
TO REIMBURSE THE CEDING COMPANY FOR THE
QUOTA SHARE OF CLAIMS PAID PURSUANT TO THE PROVISIONS OF THE REINSURED POLICIES;
(III)
TO FUND AN ACCOUNT WITH THE CEDING COMPANY
(WHEN COMBINED WITH ANY FUNDS WITHHELD AMOUNT AND AMOUNTS AVAILABLE UNDER
LETTERS OF CREDIT PURSUANT TO SECTION 9.05) IN AN AMOUNT AT LEAST EQUAL TO THE
CEDING COMPANY'S DEDUCTION FOR REINSURANCE CEDED ON CEDED RESERVES;
(IV)
TO PAY ANY OTHER AMOUNTS WHICH THE CEDING
COMPANY CLAIMS ARE DUE UNDER THIS AGREEMENT; AND
(V)
TO PAY ANY NET SETTLEMENT AMOUNT OR FUNDS
WITHHELD ADJUSTMENT DUE FROM THE CEDING COMPANY TO THE REINSURER.
NOTWITHSTANDING THE FOREGOING, THE CEDING COMPANY SHALL NOT WITHDRAW FUNDS FROM
ANY REINSURANCE TRUST UNTIL THE EXPIRATION OF ANY PAYMENT PERIODS ACCORDED THE
REINSURER UNDER SECTION 8.03, AND THEN ONLY UPON PROVIDING THE REINSURER WITH
WRITTEN NOTICE AT LEAST FIVE (5) BUSINESS DAYS PRIOR TO SUCH WITHDRAWAL.
(F)
THE CEDING COMPANY SHALL PROMPTLY RETURN
TO THE REINSURANCE TRUST ANY ASSETS WITHDRAWN IN EXCESS OF THE ACTUAL AMOUNTS
REQUIRED IN PARAGRAPHS (I) THROUGH (V) IMMEDIATELY ABOVE OR ANY AMOUNTS THAT ARE
SUBSEQUENTLY DETERMINED NOT TO BE DUE UNDER PARAGRAPH (IV) IMMEDIATELY ABOVE
("REINSURANCE TRUST EXCESS WITHDRAWALS").
THE CEDING COMPANY SHALL ALSO PAY
INTEREST ON ANY REINSURANCE TRUST EXCESS WITHDRAWALS AT A RATE EQUAL TO SIX
PERCENT (6%)