EXHIBIT
10.1.2
100% Quota Share Reinsurance
Retrocessional Agreement
By and Between
Employers Mutual Casualty
Company
And
EMC Reinsurance
Company
This 100% Quota Share Reinsurance Retrocessional
Agreement (the “100% QS Agreement”) is hereby made by
and between Employers Mutual Casualty Company ("EMCC") and EMC
Reinsurance Company ("EMC Re").
WHEREAS , EMCC and EMC Re have been operating under the
terms of a Quota Share Reinsurance Retrocessional Agreement between
the parties, as amended from time to time, since January 1, 1981
(the “Agreement”) and a Restated Quota Share
Reinsurance Retrocessional Agreement between the parties, as
amended from time to time, since January 1, 2006 (the "Restated
Agreement"); and
WHEREAS , the parties now desire to restate the terms
and coverage of the Restated Agreement and to restructure the
reinsurance relationship between the parties, and the written
agreements related thereto, in a manner that which conforms more
closely with industry practices; and
WHEREAS, the respective Inter-Company Committees of the
boards of directors of EMCC and of EMC Insurance Group Inc.
(collectively, the "Inter-Company Committees") have each approved
the restructured reinsurance relationship between the parties and
the reinsurance agreements between the parties necessary to
accomplish the desire of the parties;
NOW THEREFORE, in consideration of the mutual covenants and
conditions contained herein, the parties hereto hereby agree as
follows:
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EMCC shall
cede, and EMC Re shall accept as reinsurance, One Hundred Percent
(100%) of all:
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"Net
Loss" incurred on
"Occurrences" with an "Occurrence" date on
or after January 1, 2011;
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Underwriting
expense on reinsurance contracts;
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Credit risk
exposure on reinsurance contracts in force on or after January 1,
2004; and
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Gain or loss on
foreign currency on reinsurance contracts incepting on or after
January 1, 2006;
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arising out of
"Subject to Cession" reinsurance
contracts (“Contract”).
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All premium,
loss, and expense shall be settled at least quarterly through the
EMCC inter-company closing process, with settlement amounts due to
be completed no later than forty-five (45) days after the end of
the applicable quarter.
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“Allocated Loss Expense”
shall have the same meaning as
ascribed in the Contracts, or, in the absence of any definition in
a Contract, shall mean: (a) expenses sustained in
connection with adjustment, defense, settlement and litigation of
claims and suits, satisfaction of judgments, resistance to or
negotiations concerning a loss (which shall include the expenses
and the pro rata share of the salaries of the insurer's field
employees according to the time occupied in adjusting such loss and
the expenses of the insurer's employees while diverted from their
normal duties to the service of field adjustment but shall not
include any salaries of officers or normal overhead expenses of the
insurer); (b) legal expenses and costs incurred in connection with
coverage questions regarding specific claims and legal actions,
including declaratory judgment actions, connected thereto; (c) all
interest on judgments other than prejudgment interest except when
included in “Net Loss” ; and (d) expenses
sustained to obtain recoveries, salvages or other reimbursements,
or to secure the reversal or reduction of a verdict or
judgment.
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“Extra-contractual
Obligations” means
those liabilities not covered under any other provision of this
100% QS Agreement, including, but not limited to, compensatory,
consequential, punitive or exemplary damages, other than that which
is a “Loss Excess of Contract Limits” , together
with any legal costs and expenses incurred in connection therewith,
paid as damages or in settlement or in judgment by EMCC as a result
of a demand, claim or an action by its insured, its insured's
assignee, or other third party, which demand, claim or action
alleges negligence, gross negligence, fraud, bad faith or other
tortious behavior or conduct on the part of EMCC in the handling,
adjustment, rejection or settlement of a claim under a Contract or
bond covered by this 100% QS Agreement. An
“Extra-contractual Obligation” shall be deemed
to have occurred on the same date as the loss covered or alleged to
be covered under the Contract. Notwithstanding anything
stated herein, this 100% QS Agreement shall not apply to any
“Extra-contractual Obligation” incurred
by EMCC as a result of any fraudulent and/or criminal act directed
against EMCC by any officers or directors of EMCC acting
individually or collectively or in collusion with any individual or
corporation or any other organization or party involved in the
presentation, defense or settlement of any claim covered
hereunder.
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“
Ex-gratia Settlements” shall mean payments made for which EMCC has no
legal obligation under the terms and conditions of any Contract,
but which are made
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