FAILURE TO COMPLY WITH THE TERMS
OF THIS AGREEMENT WHICH CAN BE SHOWN TO BE THE RESULT OF AN OVERSIGHT OR
CLERICAL ERROR RELATING TO THE ADMINISTRATION OF REINSURANCE BY EITHER PARTY
WILL NOT CONSTITUTE A BREACH OF THIS AGREEMENT.
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UPON DISCOVERY, THE ERROR WILL BE PROMPTLY CORRECTED SO THAT BOTH PARTIES ARE
RESTORED TO THE POSITION THEY WOULD HAVE OCCUPIED HAD THE OVERSIGHT OR CLERICAL
ERROR NOT OCCURRED.
IN THE EVENT A PAYMENT IS CORRECTED, THE PARTY RECEIVING
THE PAYMENT SHALL BE ENTITLED TO INTEREST IN ACCORDANCE WITH SECTION 19.02.
SHOULD IT NOT BE POSSIBLE TO RESTORE BOTH PARTIES TO THIS POSITION, THE PARTY
RESPONSIBLE FOR THE OVERSIGHT OR CLERICAL ERROR WILL BE RESPONSIBLE FOR ANY
RESULTING LIABILITIES AND EXPENSES.
(B)
IF THE CEDING COMPANY HAS FAILED TO CEDE REINSURANCE AS PROVIDED
UNDER THIS AGREEMENT OR HAS FAILED TO COMPLY WITH REPORTING REQUIREMENTS WITH
RESPECT TO BUSINESS CEDED HEREUNDER, THE REINSURER MAY REQUIRE THE CEDING
COMPANY TO AUDIT ITS RECORDS FOR SIMILAR ERRORS AND TAKE REASONABLE ACTIONS
NECESSARY TO CORRECT ERRORS AND AVOID SIMILAR ERRORS.
FAILING PROMPT
CORRECTION, THE REINSURER MAY LIMIT ITS LIABILITY TO THE CORRECTLY REPORTED
REINSURED POLICIES.
ARTICLE XV
DISPUTE RESOLUTION
SECTION 15.01
NEGOTIATION.
(A)
WITHIN FIFTEEN (15) CALENDAR DAYS AFTER THE REINSURER OR THE
CEDING COMPANY HAS GIVEN THE OTHER PARTY WRITTEN NOTIFICATION OF A SPECIFIC
DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT, EACH PARTY WILL APPOINT A
DESIGNATED OFFICER OF ITS COMPANY TO ATTEMPT TO RESOLVE SUCH DISPUTE.
THE
OFFICERS WILL MEET AT A MUTUALLY AGREEABLE LOCATION AS SOON AS REASONABLY
POSSIBLE AND AS OFTEN AS REASONABLY NECESSARY IN ORDER TO GATHER AND FURNISH THE
OTHER WITH ALL APPROPRIATE AND RELEVANT INFORMATION CONCERNING THE DISPUTE.
THE
OFFICERS WILL DISCUSS THE MATTER IN DISPUTE AND WILL NEGOTIATE IN GOOD FAITH
WITHOUT THE NECESSITY OF FORMAL ARBITRATION PROCEEDINGS.
DURING THE NEGOTIATION
PROCESS, ALL REASONABLE REQUESTS MADE BY ONE OFFICER TO THE OTHER FOR
INFORMATION WILL BE HONORED.
THE SPECIFIC FORMAT FOR SUCH DISCUSSIONS WILL BE
DECIDED BY THE DESIGNATED OFFICERS.
(B)
IF THE OFFICERS CANNOT RESOLVE THE DISPUTE WITHIN THIRTY (30)
CALENDAR DAYS OF THEIR FIRST MEETING, THE DISPUTE WILL BE SUBMITTED TO FORMAL
ARBITRATION PURSUANT TO SECTION 15.02, UNLESS THE PARTIES AGREE IN WRITING TO
EXTEND THE NEGOTIATION PERIOD FOR AN ADDITIONAL THIRTY (30) CALENDAR DAYS.
SECTION 15.02
ARBITRATION.
(A)
IT IS THE INTENTION OF THE REINSURER AND THE CEDING COMPANY THAT
THE CUSTOMS AND PRACTICES OF THE INSURANCE AND REINSURANCE INDUSTRY WILL BE
GIVEN FULL EFFECT IN THE OPERATION AND INTERPRETATION OF THIS AGREEMENT.
THE
PARTIES AGREE TO ACT IN ALL MATTERS WITH THE UTMOST GOOD FAITH.
HOWEVER, IF THE
REINSURER AND THE CEDING COMPANY CANNOT MUTUALLY RESOLVE A DISPUTE THAT ARISES
OUT OF OR RELATES TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE VALIDITY
OF THIS AGREEMENT, AND THE DISPUTE CANNOT BE RESOLVED THROUGH THE NEGOTIATION
PROCESS, THEN, EXCEPT AS OTHERWISE PROVIDED IN SECTION 10.03(H) (RELATING TO
STATUTORY IMPAIRMENTS OF ASSETS HELD IN THE FUNDS WITHHELD ACCOUNT), AND
SECTION 12.03(C)