CLAIM UNDER A FACULTATIVE CERTIFICATE, NOTICE THEREOF SHALL BE GIVEN
TO THE REINSURER.
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5.2
THE COMPANY WILL BE THE SOLE JUDGE AS TO WHAT CONSTITUTES A CLAIM OR LOSS
COVERED UNDER THE POLICIES CEDED HEREUNDER AND AS TO THE COMPANY'S LIABILITIES
THEREUNDER.
THE COMPANY SHALL, AT ITS SOLE DISCRETION, ADJUST, INVESTIGATE,
SETTLE, COMPROMISE OR DEFEND ALL CLAIMS AND LOSSES.
ALL LOSS SETTLEMENTS MADE
BY THE COMPANY SHALL BE BINDING UPON THE REINSURER, AND AMOUNTS FALLING TO THE
SHARE OF THE REINSURER SHALL BE PAYABLE BY IT UPON REASONABLE EVIDENCE OF THE
AMOUNT PAID OR TO BE PAID BEING GIVEN BY THE COMPANY.
5.3
WHEN REQUESTED BY THE REINSURER, THE COMPANY SHALL PERMIT THE REINSURER, AT
THE EXPENSE OF THE REINSURER, TO BE ASSOCIATED WITH THE COMPANY IN THE DEFENSE
OF ANY CLAIM, LOSS, OR LEGAL PROCEEDING WHICH INVOLVES, OR IS LIKELY TO INVOLVE,
THE REINSURER.
ARTICLE VI - SALVAGE AND SUBROGATION
6.1
THE COMPANY HEREBY AGREES TO ENFORCE ITS RIGHTS TO SALVAGE OR SUBROGATION
RELATING TO ANY LOSS, A PART OF WHICH LOSS WAS SUSTAINED BY THE REINSURER, AND
TO PROSECUTE ALL CLAIMS ARISING OUT OF SUCH RIGHTS.
IN THE EVENT THE COMPANY
SHALL REFUSE OR NEGLECT TO ENFORCE ITS RIGHTS TO SALVAGE OR SUBROGATION, THE
REINSURER IS AUTHORIZED AND EMPOWERED TO BRING ANY APPROPRIATE ACTION IN THE
NAME OF THE COMPANY OR ITS POLICYHOLDER OR OTHERWISE TO ENFORCE THOSE RIGHTS,
AND THE COMPANY SHALL COOPERATE FULLY WITH THE REINSURER IN ITS EFFORTS TO
ENFORCE THOSE RIGHTS.
6.2
THE COMPANY AND THE REINSURER SHALL SHARE IN THE COST AND EXPENSE OF ANY
UNSUCCESSFUL SALVAGE OR SUBROGATION EFFORTS IN THE SAME PROPORTION THAT THE
COMPANY AND THE REINSURER SHARED IN THE LOSS GIVING RISE TO THOSE SALVAGE OR
SUBROGATION EFFORTS.
6.3
THE REINSURER SHALL BE CREDITED WITH SUBROGATION AND SALVAGE (I.E.,
REIMBURSEMENT OBTAINED OR RECOVERY MADE BY THE COMPANY, LESS THE ACTUAL COST,
EXCLUDING SALARIES OF OFFICIALS AND EMPLOYEES OF THE COMPANY AND SUMS PAID TO
ATTORNEYS AS RETAINER, OF OBTAINING SUCH REIMBURSEMENT OR MAKING SUCH RECOVERY)
ON ACCOUNT OF CLAIMS AND SETTLEMENTS INVOLVING REINSURANCE HEREUNDER.
WITH
RESPECT TO ALL EXCESS OF LOSS INTERCOMPANY FACULTATIVE REINSURANCE, SUBROGATION
AND SALVAGE SHALL BE USED TO REIMBURSE THE REINSURER FOR ITS PORTION OF THE LOSS
BEFORE BEING USED TO REIMBURSE THE COMPANY FOR ITS PORTION OF THE LOSS UNDER ITS
RETENTION.
WITH RESPECT TO ALL PROPORTIONAL INTERCOMPANY FACULTATIVE
REINSURANCE, SUBROGATION AND SALVAGE SHALL BE SHARED BETWEEN THE COMPANY AND THE
REINSURER IN ACCORDANCE WITH THEIR PROPORTIONATE SHARES.
ARTICLE VII - ORIGINAL CONDITIONS
7.1
EXCEPT AS OTHERWISE PROVIDED IN A FACULTATIVE CERTIFICATE, ALL INTERCOMPANY
FACULTATIVE REINSURANCE UNDER THIS AGREEMENT SHALL BE SUBJECT TO THE SAME RATES,
TERMS, CONDITIONS AND WAIVERS, AND TO THE SAME MODIFICATIONS AND ALTERATIONS, AS
THE RESPECTIVE POLICIES OF THE COMPANY.
7.2
NOTHING HEREIN SHALL IN ANY MANNER CREATE ANY OBLIGATIONS OR ESTABLISH ANY
RIGHTS AGAINST THE REINSURER IN FAVOR OF ANY THIRD PARTY OR ANY PERSONS NOT
PARTIES TO THIS AGREEMENT.
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ARTICLE VIII - REPORTS AND REMITTANCES