PER ANNUM FROM AND INCLUDING THE DATE OF WITHDRAWAL TO BUT
EXCLUDING THE DATE ON WHICH THE REINSURANCE TRUST EXCESS WITHDRAWAL IS RETURNED
TO THE REINSURANCE TRUST.
ANY REINSURANCE TRUST ASSETS WITHDRAWN BY THE CEDING
COMPANY, INCLUDING ANY REINSURANCE TRUST EXCESS WITHDRAWALS, SHALL BE HELD BY
THE CEDING COMPANY OR ANY SUCCESSOR IN INTEREST OF THE CEDING COMPANY IN TRUST
FOR THE BENEFIT OF THE REINSURER AND SHALL AT ALL TIMES BE MAINTAINED SEPARATE
AND APART FROM ANY ASSETS OF THE CEDING COMPANY, FOR THE SOLE PURPOSES DESCRIBED
IN PARAGRAPHS (I) THROUGH (V) IMMEDIATELY ABOVE.
18
(G)
THE REINSURER MAY SEEK THE APPROVAL OF THE
CEDING COMPANY (WHICH APPROVAL SHALL NOT BE UNREASONABLY OR ARBITRARILY WITHHELD
OR DELAYED) TO WITHDRAW FROM THE REINSURANCE TRUST ALL OR ANY PART OF THE ASSETS
CONTAINED THEREIN AND TRANSFER SUCH ASSETS TO THE REINSURER, PROVIDED THAT:
(I)
THE REINSURER SHALL, AT THE TIME OF SUCH
WITHDRAWAL, REPLACE THE WITHDRAWN ASSETS WITH OTHER QUALIFIED ASSETS HAVING A
MARKET VALUE AT LEAST EQUAL TO THE MARKET VALUE OF THE ASSETS WITHDRAWN; OR
(II)
AFTER SUCH WITHDRAWALS AND TRANSFERS, THE
MARKET VALUE OF THE ASSETS HELD IN THE REINSURANCE TRUST IS NO LESS THAN 102% OF
(A) CEDED RESERVES MINUS (B) THE BOOK VALUE OF ASSETS IN THE FUNDS WITHHELD
ACCOUNT, IF ANY, MINUS (C) THE AMOUNT AVAILABLE UNDER LETTERS OF CREDIT PURSUANT
TO SECTION 9.05.
(H)
THE REINSURER SHALL BEAR THE ADMINISTRATIVE
COSTS AND EXPENSES RELATED TO THE ESTABLISHMENT AND MAINTENANCE OF THE
REINSURANCE TRUST, INCLUDING THE FEES OF ANY INVESTMENT MANAGER APPOINTED
PURSUANT TO SECTION 9.07.
SECTION 9.05
LETTERS OF CREDIT.
(A)
EACH LETTER OF CREDIT SHALL BE CLEAN,
IRREVOCABLE, UNCONDITIONAL, "EVERGREEN" AND ISSUED OR CONFIRMED BY A QUALIFIED
UNITED STATES FINANCIAL INSTITUTION FOR THE BENEFIT OF THE CEDING COMPANY.
(B)
NOTWITHSTANDING ANY OTHER PROVISION HEREOF,
ANY LETTERS OF CREDIT MAY BE DRAWN UPON IN FULL OR IN PART 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, THE MARKET VALUE OF ANY ASSETS
HELD IN A REINSURANCE TRUST PURSUANT TO SECTION 9.04 AND ANY UNDRAWN AMOUNTS
AVAILABLE UNDER LETTERS OF CREDIT PURSUANT TO THIS 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)