EX-10.20 11 ex10-20.txt TREATY #2 EXHIBIT 10.20 Treaty Number: 9870-00-0001-01/02 COVER NOTE ---------- REINSURED: FEDERATED NATIONAL INSURANCE COMPANY Plantation, Florida (hereinafter referred to as the "Company") PERIOD: Effective 12:01 a.m., Eastern Standard Time, July 1, 2001 to 12:01 a.m., Eastern Standard Time, July 1, 2002, as respects all losses occurring (or beginning) during the term of this Contract. TYPE: SECOND PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT CLASS: Inforce, new and renewal business classified by the Company as Property, including Homeowners and Mobilehome. EXCLUSIONS: As per attached. TERRITORY: To follow the Company's original policies. LIMIT: 100% of $5,000,000 each and every loss occurrence excess of $5,500,000 each and every loss occurrence. The Company shall retain a minimum of 5% net. PREMIUM: Rate: 8.0556% Gross Net Earned Premium Income. Deposit Premium: $725,000 annually, payable in equal quarterly installments of $181,250, at each July 1, October 1, January 1, and April 1. Minimum Premium: $580,000 REINSTATEMENT: One full reinstatement with additional premium calculated pro rata as to amount and 100% as to time. CONDITIONS: Ultimate Net Loss Clause (including Loss Adjustment Expenses). Definition of Loss Occurrence Clause- BRMA 27D. No Reinstatement for same event. 72 hours Wind, Hail, Riot. 168 hours Earthquake, Freeze and all other perils. 1 Treaty Number 9870-00-0001-01/02 CONDITIONS: Extra Contractual Obligations Clause @ 80%. (Continued) Losses in Excess of Original Policy Limits Clause @ 80%. Net Retained Lines Clause - BRMA 32D. Currency Clause. Loss Funding Clause - BRMA 55I. Offset Clause. Taxes Clause and Federal Excise Tax Clause - BRMA 50A and BRMA 17B. Errors and Omissions Clause. Access to Records Clause. Notice of Loss and Loss Settlements Clause. Service of Suit Clause. Insolvency Clause. Arbitration Clause - BRMA 6D. Interest Penalty Clause - BRMA 70H. Guy Carpenter & Company, Inc. Intermediary Clause. WORDING: To follow existing wording as far as applicable. INFORMATION: Any recoveries from the Florida Hurricane Catastrophe Fund will inure to the benefit of Reinsurers hereon. Estimated Subject Earned Premium = $9,000,000. 2 Treaty Number 9870-00-0001-01/02
EFFECTED WITH: -------------- FEIN NO.: NAIC NO.: Through Guy Carpenter & Co. - Atlanta --------- --------- ------------------------------------- 13-2997499 38776 Folksamerica Reinsurance Company 5.000% New York, New York 13-2781282 25070 Odyssey Reinsurance Corporation 5.500% Stamford, Connecticut 13-3031176 38636 Partner Reinsurance Corporation of the U.S. 30.000% New York, New York Patriot Re Corporation Skillman, New Jersey For and on behalf of: Various Lloyd's Syndicates 2.500% (Per Schedule B Attached) London, England 23-1641984 10219 QBE Reinsurance Company 8.000% Columbia, Missouri 43-1424791 26557 Shelter Reinsurance Company 5.000% Columbia, Missouri AA-3190757 XL Re Limited 20.000 Hamilton, Bermuda ------ Sub-Total: 76.000% FEIN NO.: NAIC NO.: Through Heath Lambert Limited - London --------- --------- -------------------------------------- AA-1122000 Underwriting Members of Lloyd's 4.000% (Per Schedule A Attached) London, England AA-1120962 St. Paul Reinsurance Company Limited 15.000% London, England Sub Total: 19.000% ------- TOTAL PLACEMENT 95.000%
3 Treaty Number 9870-00-0001-01/02 GUY CARPENTER & COMPANY, INC. /s/ Hartwell C. Dew --------------------------- Hartwell C. Dew Managing Director /s/ Robert A. McKenzie, Jr. --------------------------- Robert A. McKenzie, Jr. Vice President This Cover Note confirms the terms and conditions of the reinsurance negotiated with the listed reinsurers on your behalf. In the event that any of these details do not meet with your approval, or the security of the participating reinsurers does not meet with your requirements, please notify this office immediately. If all is in order, please sign and return one copy of this Cover Note to confirm your approval and complete our files. REGULATION 98: Premium and loss payments made to Guy Carpenter & Company, Inc. shall be deposited in a Premium and Loss Account in accordance with Section 32.3(a)(1) of Regulation 98 of the New York Insurance Department. The parties hereto consent to withdrawals from said account in accordance with Section 32.3(a)(3) of the Regulation, including interest and Federal Excise Tax. ACCEPTED & APPROVED /s/ Richard A. Widdicombe DATE June 29, 2001 -------------------------------- ---------------- 4 Treaty Number 9870-00-0001-01/02 EXCLUSIONS: ----------- 1. Reinsurance assumed by the Company, other than inter-company reinsurance. 2. Hail damage to growing or standing crops. 3. Flood Insurance when written and classified as such. 4. Mortgage Impairment and Difference in Conditions when written as such. 5. Title Insurance and all forms of Financial Guarantee, Credit and Insolvency Insurance. 6. Aviation, Ocean Marine, Boiler and Machinery, Fidelity and Surety, Accident and Health, Animal Mortality and Workers' Compensation and Employer's Liability Insurance. 7. Errors and Omissions, Malpractice and any other type of Professional Liability Insurance. 8. Seepage and Pollution and Seepage Exclusion Clause, BRMA 39A. 9. War as set forth in North America War Exclusion Clause (Reinsurance), BRMA 56A. 10. Nuclear Incident as set forth in the Nuclear Incident Exclusion Clauses, BRMA 35A and 35B. 11. Pools, Associations and Syndicates as set forth in the Pools and Associations and Syndicates Exclusion Clause, BRMA 40C. 12. Insolvency Funds as set forth in the Insolvency Funds Exclusion Clause, BRMA 20A. 13. Transmission and distribution lines. Treaty Number 9870-00-0001-01/02 SCHEDULE A PARTICIPATIONS FOR UNDERWRITING MEMBERS OF LLOYD'S PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE AGREEMENT EFFECTIVE: JULY 1, 2001 Syndicate Number Pseudonym Share NAIC ID Number ---------------- --------- ----- -------------- 1400 DRE 4.000% AA-1127400 ------ Total Participation for Underwriting Members of Lloyd's 4.000% 6 Treaty Number 9870-00-0001-01/02 SCHEDULE B PARTICIPATIONS FOR UNDERWRITING MEMBERS OF LLOYD'S THROUGH PATRIOT RE CORPORATION PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE AGREEMENT EFFECTIVE: JULY 1, 2001 Syndicate Number Pseudonym Share NAIC ID Number ---------------- --------- ----- -------------- 0002 WHS 6.560% AA-1126002 0227 ROS 39.340% AA-1126227 0506 PDA 3.280% AA-1126506 0990 BAR 42.620% AA-1126990 1009 DEH 6.560% AA-1127009 1173 CML 1.640% AA-1127173 Total Participation for Underwriting Members of Lloyd's 100.000% of 2.500% Through Patriot Re Corporation 7