Document:

Exhibit
10.36

 

REINSURANCE POOLING AGREEMENT

 

THIS AGREEMENT (the “Pooling
Agreement”) is made and entered into this 10th day of May, 2001, by and between
AmCOMP Preferred Insurance Company (“APIC”) and AmCOMP Assurance Corporation (“AAC”)
for the purpose of pooling their resources and obligations.

 

RECITALS:

 

A.                                   APIC
is a Florida corporation operating under a certificate of authority, issued by
the Florida Department of Insurance, as a stock insurance company;

 

B:                                     AAC
is a Florida corporation operating under a certificate of authority, issued by
the Florida Department of Insurance, as a stock insurance company;

 

C.                                     APIC
and AAC (sometimes collectively referred to herein as the “Parties”) are
affiliates which desire to pool their respective resources and obligations by
sharing in premiums, losses, and expenses; and

 

D.                                    The
Parties hereto seek to specify the terms of their pooling arrangement in a
written agreement;

 

NOW, THEREFORE, in
consideration of the mutual promises and covenants expressed herein, which consideration
the Parties hereby acknowledges as sufficient, the Parties hereby covenant and
agree as follows:

 

Article One

Definitions

 

As used herein, the
following terms shall have the following meanings:

 

1.1           “Pooled Business” means all insurance
business, direct and assumed, of the Parties which is shared by the Parties
under the Pooling Agreement.

 

1.2           “Participation Percentage” means the
percentage of Pooled Business to be maintained by a party hereto, which
percentage is specified in the Participation Exhibit, attached hereto as Exhibit A
and incorporated by reference herein.

 

1.3           “Pooling Year” means: (a) the
period from January 1, 2001 through December 31, 2001, and each
twelve (12) month period thereafter; (b) any period of less than twelve
(12) months resulting from termination of this Pooling Agreement; or (c) any
other twelve (12) month period upon which the parties may mutually agree.

 

 

Article Two

Reinsurance Agreement

 

2.1           APIC’s Reinsurance Obligation.
AAC hereby obligates itself to cede, and APIC obligates itself to accept, one
hundred percent (100%) of the direct insurance and assumed reinsurance
liability of AAC with regard to business subject to this Pooling
Agreement.  Such insurance liability and
assumed reinsurance liability shall include any and all liability assumed under
all policies, contracts and binders in force at the inception hereof or issued
or renewed thereafter, provided, however, that it shall not include liabilities
assumed under section 2.2 below.  As
premium for the reinsurance thus provided, AAC shall cede and pay to APIC one
hundred percent (100%) of the total premium written by AAC with regard to the
Pooled Business.

 

2.2           AAC’s Reinsurance Obligation.   APIC
hereby obligates itself to cede, and AAC obligates itself to accept the
percentage of the direct insurance and assumed reinsurance liability of APIC
with regard to business subject to this Pooling Agreement equal to the
Participation Percentage assigned to AAC in Exhibit A to this Pooling
Agreement.  Such direct reinsurance and
assumed reinsurance liability shall include any and all liability assumed under
all policies, contracts and binders in force at the inception hereof or issued
or renewed thereafter, including liability assumed under section 2.1
above.  As premium for the reinsurance
thus provided, APIC shall cede and pay to AAC a percentage of the total premium
written by APIC with regard to the Pooled Business, including that written
pursuant to section 2.1 above, equal to AAC’s Participation Percentage.

 

2.3           Claims and Rights of Action.   Each party hereto shall share in all
recoveries made by either of them from all claims, actions, and rights of
action for salvage and subrogation in the same proportion as the Participation
Percentage.

 

2.4           Underwriting Expenses.   All underwriting expenses of either party
related to the acquisition of new business, including underwriting, licenses,
fees, and taxes other than income taxes (defined as expenses recorded on line 4 of the annual statement filed with
state regulatory authorities), but excluding payments by either party to the
other pursuant to this Pooling Agreement, shall be subject to the Pooling
Agreement.  In addition, beginning January 1,
2002, all dividends to policyholders shall be subject to the Pooling Agreement.

 

2.5           Settlement of Losses.   All settlements, including ex gratia
payments, made by each party shall be binding upon the other in proportion to
the Participation Percentages of the parties, and each party shall benefit in
all salvages in that same proportion. 
The Parties do hereby authorize and empower each other to separately or
jointly pay all losses, loss adjustment expenses, and all other underwriting
expenses with respect to the Pooled Business.

 

2.6           Loss Adjustment Expenses.   Each party assuming liability hereunder shall
bear its proportionate share of all expenses incurred by the other in the
investigation,

 

2

 

adjustment, appraisal and
defense of all claims under policies, contracts, and binders which are or
become a part of the Pooled Business, and shall receive its proportionate share
of any recoveries of such expense. Proportionate shares in this section 2.6
shall be equal to the Participation Percentages.

 

Article Three

Other Reinsurance

 

3.1           It is understood and agreed that APIC
and AAC, or either of them, may maintain underlying reinsurance which shall
inure to the sole benefit of APIC or AAC, respectively, and shall be
disregarded for all purposes of this Pooling Agreement.

 

3.2           APIC and AAC, or either of them, may
maintain treaty reinsurance. The premium for such treaty reinsurance that
inures to the benefit of this Pooling Agreement shall be deducted from the
premium for reinsurance set forth in paragraphs 2.1 and 2.2 hereof.  Additionally, either APIC or AAC may purchase
such facultative reinsurance on any risk it deems advisable, and the premium
for such facultative reinsurance shall be deducted from the premium for
reinsurance set forth in paragraphs 2.1 and 2.2 hereof.

 

3.3           Each party’s obligations under Article Two
of this Pooling Agreement shall be subject to the applicability of all other
reinsurance which may inure to the benefit of each party hereto.

 

Article Four

Termination

 

4.1           Effective Date.   This
Pooling Agreement shall be effective as of January 1, 2001.

 

4.2           Termination.   Unless
terminated in accordance with the provisions of this paragraph set forth below,
this Pooling Agreement shall terminate on December 31, 2006. This Pooling
Agreement may be terminated by either party at the end of a Pooling Year by
giving written notice to the other party at least ninety (90) days prior to the
end of the preceding Pooling Year. Such termination shall not affect the rights
and liabilities of the Parties as to Pooled Business accepted or liabilities
assumed prior to such termination, until such policies or liabilities cancel,
non-renew, or expire, but in no event shall any reinsurance liability under
this Pooling Agreement survive for more than twelve (12) months following the
effective date of the termination of this Pooling Agreement.

 

Article Five

Miscellaneous

 

5.1           Amendments.   This
Pooling Agreement may be amended by mutual consent of the parties hereto,
expressed in an addendum; and such addendum, when executed by both parties,
shall be deemed to be an integral part of this Pooling Agreement and binding on
the parties hereto.

 

3

 

5.2           Successors and Assigns.
  This Pooling Agreement shall inure to the
benefit of and bind the parties and their successors and assigns.  Neither this Pooling Agreement nor any right
hereunder or any part hereof may be assigned by either party hereto without the
prior written consent of the other party. Prior to any such assignment, the
consent of all necessary regulatory authorities must be obtained.

 

5.3           Governing Law.   This
Pooling Agreement shall be governed by and construed in accordance with the
laws of the State of Florida without giving effect to the principles of
conflicts of laws.

 

5.4           Entire Agreement.   This Pooling Agreement supercedes all prior
discussions and agreements between, and contains the sole and entire agreement
between, the parties with respect to the subject matter hereof.

 

5.5           Counterparts.   This
Pooling Agreement may be executed simultaneously in any number of counterparts,
each of which will be deemed an original, but all of which will constitute one
and the same instrument.

 

5.6           Headings, etc.   The
headings used in this Pooling Agreement have been inserted for convenience and
do not constitute matter to be construed or interpreted in connection with the
Pooling Agreement. Unless the context of this Pooling Agreement otherwise
requires, (a) words of any gender will be deemed to include each other
gender, (b) words used in the singular or plural number will also include
the plural or singular number, respectively, (c) the terms “hereof,” “herein,”
“hereby,” and derivatives or similar words will refer to this entire Pooling
Agreement, and (d) the conjunction “or” will denote any one or more, or
any combination or all, of the specified items or matters involved in the
respective list.

 

5.7           Severability.   If any provision of this Pooling Agreement
is held to be illegal, invalid, or unenforceable under any present or future
law, and if the rights or obligations of any party under this Pooling Agreement
will not be materially and adversely affected thereby, (a) such provision
will be fully severable, (b) this Pooling Agreement will be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part hereof, (c) the remaining provisions of this Pooling
Agreement will remain in full force and effect and will not be affected by the
illegal, invalid, or unenforceable provision or by its severance here from, and
(d) in lieu of such illegal, invalid, or unenforceable provision, there
will be added automatically as a part of this Pooling Agreement, a legal,
valid, and enforceable provision as similar in terms to such illegal, invalid,
or unenforceable provision as may be possible.

 

5.8           Payments.   The payments provided for herein may be made
in cash or other assets, and the obligations of each party to the other may be
offset by the reciprocal obligation of the other party so that only the net
amount shall be required to be transferred. This right of offset shall include
balances on account of premiums or losses or otherwise.

 

4

 

5.9           Accounts.   Accounts shall be rendered between the
Parties at least quarterly and shall be settled within a reasonable time
thereafter.

 

5.10         Errors and Omissions.   The position of either party to this Pooling
Agreement shall not be prejudiced by any error or omission in reporting
cessions or cancellations of premiums, commissions, losses, loss adjustment
expenses or other underwriting expenses under this Pooling Agreement, or in
claiming payments collectible hereunder for whatever cause.

 

5.11         Access to Records.   Each party shall have the right, at any
reasonable time, to examine all records and documents in the possession of the
other party which relate to Pooled Business or business affected by this
Pooling Agreement.

 

5.12         Insolvency.   In the event of the insolvency of one of the
parties hereto, the receiver, liquidator or statutory successor of that
insolvent party shall give written notice to the other party hereto of any
claim on any policy, bond, or contract under which the solvent party has
assumed any obligation under this Pooling Agreement.

 

5.13         Arbitration.   Should an irreconcilable difference of
opinion between the parties arise as to the interpretation of this Pooling
Agreement, it is hereby mutually agreed that, as a condition precedent to any
right of action hereunder, such difference shall be submitted to arbitration in
accordance with the rules and procedures of the American Arbitration
Association.  The decision of the
arbiters shall be final and binding upon the Parties. The Parties shall jointly
and equally bear the expense of the arbitration.

 

IN WITNESS WHEREOF, the
Parties hereto, by their respective duly authorized officers, have executed
this Pooling Agreement on the date first written above.

 

	
  AmCOMP
  Assurance Corporation

  	
   

  	
  AmCOMP
  Preferred Insurance Company

  
	
   

  	
   

  	
   

  
	
  Signed:

  	
  /s/ Donald Johnson

  	
   

  	
  Signed:

  	
  /s/ Debra
  Cerre-Ruedisili

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Treasurer

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  May 11, 2001

  	
   

  	
  Date:

  	
  May 11, 2001

  
							

 

5

 

EXHIBIT A

 

Participation Exhibit

 

1.             Initial
Participation

 

For purposes of
determining the initial percentage that each party to the Pooling Agreement
shall participate in the Pooled Business contemplated thereby, the following
Participation Percentages shall be used:

 

	
  AmCOMP Assurance
  Corporation

  	
   

  	
  21

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  AmCOMP Preferred
  Insurance Company

  	
   

  	
  79

  	
  %

  

 

2.             Adjusted
Determination of Participation

 

Following the end of year
of each Pooling Year, each party’s Participation Percentage for that just
completed year shall be adjusted to be the percentage derived by dividing (a) each
party’s year-end statutory policyholder’s surplus by (b) the corresponding
year-end total statutory policyholder’s surplus of both parties. For purposes
of calculating statutory surplus, APIC’s surplus will be reduced for and will
not include its investment in AAC. The adjusted participation percentage for
the just completed policy year shall be the initial Participation Percentage
for the then current year. Upon determination, the adjusted participation
percentage shall be applied to the just completed policy year and all required
corresponding adjustment made between the parties.

 

3.             The initial participation percentages listed above may
be adjusted from time to time by mutual consent of the Parties.

 

6

 

ADDENDUM NUMBER 1

to the

REINSURANCE POOLING AGREEMENT

(hereinafter referred to as the “Agreement”)

 

between

 

AMCOMP PREFERRED INSURANCE COMPANY

(hereinafter referred to as “APIC”)

 

and

 

AMCOMP ASSURANCE CORPORATION

(hereinafter referred to as “AAC”)

 

It is hereby understood
and agreed that, effective January 1, 2001, this Agreement is amended as
follows:

 

Article One, Section 2.1 is hereby amended and replaced by the following: APIC’s
Reinsurance Obligation. AAC hereby obligates itself to cede, and APIC
obligates itself to accept, one hundred percent (100%) of the direct insurance
and assumed reinsurance liability of AAC with regard to business subject to
this Pooling Agreement. Such insurance liability and assumed reinsurance
liability shall include any and all liability assumed under all policies,
contracts and binders inforce at the inception hereof or issued or renewed
thereafter; provided, however, that it shall not include liabilities assumed
under section 2.2 below. As premium for the reinsurance thus provided, AAC
shall cede to APIC one hundred percent (100%) of the total premium written by
AAC with regard to the Pooled Business. AAC shall pay to APIC one hundred
percent (100%) of the total premium earned by AAC with regard to the Pooled
Business.

 

Article One, Section 2.2
is hereby amended and replaced by the following: AAC’s Reinsurance
Obligation. APIC hereby obligates itself to cede, and AAC obligates itself
to accept, the percentage of the direct insurance and assumed reinsurance
liability of APIC with regard to business subject to this Pooling Agreement
equal to the Participation Percentage assigned to AAC in Exhibit A to this
Pooling Agreement. Such direct [insurance] and assumed reinsuance liability
shall include any and all liability assumed under all policies, contracts and
binders inforce at the inception hereof or issued or renewed thereafter;
including liability assumed under section 2.1 above. As premium for the
reinsurance thus provided, APIC shall cede to AAC a percentage of the total
premium written by APIC with regard to the Pooled Business, including that
written pursuant to section 2.1 above, equal to AAC’s Participation
Percentage. APIC shall pay to AAC a percentage of the total premium earned by
APIC with regard to the Pooled Business, including that earned pursuant to section 2.1
above, equal to AAC’s Participation Percentage.

 

 

	
  AmCOMP Assurance Corporation

  	
   

  	
  AmCOMP Preferred Insurance Company

  
	
   

  	
   

  	
   

  
	
  Signed:

  	
  /s/ Donald Johnson

  	
   

  	
  Signed:

  	
  /s/ Debra
  Cerre-Ruedisili

  
	
   

  	
   

  	
   

  
	
  Title:   Treasurer

  	
   

  	
  Title:  President

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  9-18-2001

  	
   

  	
  Date:

  	
  9/18/01Exhibit 10.37

 

First Amendment

To

Reinsurance Pooling Agreement

By and Between

AmCOMP Preferred Insurance Company

And

AmCOMP Assurance Corporation

 

December 31, 2003

 

This First Amendment to
Reinsurance Agreement by and between AmCOMP Preferred Insurance Company (“APIC”)
and AmCOMP Assurance Corporation (“AAC”) (collectively the “Pool Participants”
or “Parties”, or individually a “Pool Participant” or “Party”), is made and
entered into this 31st day of December, 2003.

 

Section 1. Amendment
Generally.   The Parties
hereby agree to amend the Reinsurance Pooling Agreement, dated May 10,
2001, by and between APIC and AAC (the “Pooling Agreement”). Except as
otherwise expressly set forth below in Section 1, Section 2, and Section 3,
below, all other terms and conditions of the Pooling Agreement shall remain
unchanged and shall continue to remain in full force and effect.

 

Section 2. Amendment
of Section 1.4.   Section 1.4
is added to the Pooling Agreement to read as follows:

 

1.4           “Net Assumed Liability” means the amount
by which a Pool Participant’s unearned portion of assumed written premium, paid
losses and loss adjustment expenses incurred that have been assumed but not
paid, and the case and IBNR reserves on assumed losses and loss adjustment
expenses incurred (calculated pursuant to the 2002 NAIC Annual Statement Schedule F
– Part 5, Column 17 format of the other Pool Participant) exceeds the
amount due under the Pooling Agreement from the other Pool Participant for the
unearned portion of ceded written premium, paid losses and loss adjustment
expenses incurred that have been ceded but not reimbursed, and the case and
IBNR reserves on ceded losses and loss adjustment expenses incurred which the
Pool Participant has ceded to the other Pool Participant (calculated pursuant
to the 2002 NAIC Annual Statement Schedule F – Part 5, Column 17
format of the Pool Participant). At any given calculation date, only one Pool
Participant will have a Net Assumed Liability to the other Pool Participant
under the Pooling Agreement.

 

Section 2. Addition
of Section 5.14.     Section 5.14 is added to the Pooling
Agreement to read as follows:

 

5.14         Collateralization of Net Assumed
Liability.     If either Pool
Participant is unauthorized or not accredited to transact reinsurance in any
state of the United States of America or the District of Columbia, and the
other Pool Participant will incur a penalty on its statutory financial
statement filed with insurance regulatory authorities as a result of the lack
of such authorization or accreditation, each Pool Participant agrees to fund
its Net Assumed Liability to the other Pool Participant by one or more of the
following methods: (a) a reinsurance trust; (b) cash advances; (c)

 

 

escrow accounts. In the event a reinsurance trust is
established pursuant to this Section 5.14, the Pool Participants shall
execute a separate reinsurance trust agreement under which the Pool Participant
with Net Assumed Liability shall be the “grantor” and the other Pool
Participant shall be the “beneficiary” of the assets placed in trust to secure
the grantor’s Net Assumed Liability. The qualifications and minimum
requirements for any trustee and the eligible assets under such a reinsurance
trust agreement shall comply with the laws and regulations of the beneficiary’s
state of domicile. Any reinsurance trust agreement executed pursuant to this Section 5.14
shall contain such terms and conditions that are acceptable to each Pool
Participant and the trustee, subject to any applicable regulatory approvals
which may be required in connection with the execution of the reinsurance trust
agreement. Any amounts secured pursuant to this Section 5.14 through a
reinsurance trust agreement, cash advance or escrow account, shall be adjusted
as of the end of each calendar quarter.

 

Section 3. Amendment
of Exhibit A of the Pooling Agreement.   Exhibit A (Participation Exhibit) of
the Pooling Agreement is amended to read:

 

EXHIBIT A

 

PARTICIPATION EXHIBIT

 

Following the end of each
Pooling Year, each party’s Participation Percentage shall be adjusted to be the
percentage derived by dividing (a) each respective party’s year-end
statutory surplus as to policyholders by (b) the sum of both party’s
year-end statutory surplus as to policyholders for the same year. The adjusted
participation percentage shall be the Participation Percentage for the then
current year.

 

The Participation
Percentages described above may be adjusted from time to time by mutual consent
of the Parties in accordance with Section 5.1 of the Pooling Agreement.

 

IN WITNESS WHEREOF, the
Parties hereto, by their respective duly authorized officers, have signed this
First Amendment to the Pooling Agreement on the date first written above.

 

	
  AmCOMP
  Assurance-Corporation

  	
   

  	
  AmCOMP Preferred
  Insurance Company

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Treasurer

  	
   

  	
  Title:

  	
  Vice President

  
							

 

2

 

EXHIBIT A

 

Amended Participation Exhibit

 

1.             Initial
Participation

 

For purposes of
determining the initial percentage that each party to the Pooling Agreement
shall participate in the Pooled Business contemplated thereby, the following
Participation Percentages shall be used:

 

	
  AmCOMP Assurance
  Corporation

  	
   

  	
  32

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  AmCOMP Preferred
  Insurance Company

  	
   

  	
  68

  	
  %

  

 

2.             Adjusted
Determination of Participation.

 

Following the end of year
of each Pooling Year, each party’s Participation Percentage shall be adjusted
to be the percentage derived by dividing (a) each party’s year-end
statutory policyholder’s surplus by (b) the corresponding year-end total
statutory policyholder’s surplus of both parties. The adjusted participation
percentage shall be the Participation Percentage for the then current year.

 

3.             The participation percentages listed above may be
adjusted from time to time by mutual consent of the Parties in accordance with Section 5.1
of the Pooling Agreement.

 

3

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