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.
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
5
(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 AMOUNT OF SURPLUS AT THE INCEPTION
OF THIS AGREEMENT OR 50% OF THE AMOUNT AT THE LATEST ANNIVERSARY, WHICHEVER IS
GREATER, OR HAS LOST ANY PART OF, OR HAS REDUCED ITS PAID-UP CAPITAL, OR
F.
THE COMPANY MAY TERMINATE THIS
AGREEMENT UPON THIRTY (30) DAYS NOTICE IF THE A.M. BEST RATING OF THE REINSURER
FALLS BELOW "A-".
G.
IN THE EVENT OF ANY SUCH TERMINATION
UNDER D., E. OR F., THE LIABILITY OF THE REINSURER SHALL BE TERMINATED IN
ACCORDANCE WITH THE TERMINATION PROVISIONS SET FORTH IN PARAGRAPH C. ABOVE.
HOWEVER, IF THE TERMINATING PARTY IS THE COMPANY, THE COMPANY SHALL HAVE THE
RIGHT, BY THE GIVING OF PRIOR WRITTEN NOTICE, TO TERMINATE