A. Declarations
Issued To:
(hereinafter referred to as the "Reinsured")		 Issued By:
(hereinafter referred to as the "Reinsurer")
Agreement No.
Name of Original Insured
Reinsured Original Policy Umbrella Wording
Coverage/Line of Business Excess Liability
Territorial Scope Worldwide
Limit of Indemnity/
Attachment Point		 $25,000,000 Each Occurrence
$25,000,000 General Aggregate
$25,000,000 Products/Completed Operations Aggregate

Excess of

$49,000,000 Each Occurrence
$49,000,000 General Aggregate
$49,000,000 Products/Completed Operations Aggregate

Excess of

Primary scheduled underlying including Self Insured Retentions as attached.

Defense costs are in addition to the limits and self-insured retention
Reinsured’s Net Retention $1,000,000
Gross Premium $194,750
Reinsurer’s Written Share 100%
Total Deductions 0% broker commission
Currency USD
Commencement and
Termination		 Reinsurance Effective Date: July 1, 2014
Reinsurance Expiration Date: July 1, 2015
Both dates 12:01 a.m. Standard Time at the address of the Original Insured
Other Terms Agreed None
Arbitration US – ARIAS
Applicable Law The laws of the state of New York, without regard to any conflict of laws rules that would cause the application of the laws of any other jurisdiction, shall govern the construction, effect and interpretation of this reinsurance agreement.

REINSURER ATTESTS that the above facultative reinsurance is in effect and that this Certificate has been executed by undersigned duly authorized representatives:


By:


________________________________________________


Sample Reinsurance Corporation

___________, NY this _______ day of____________, 2014

B. Preamble
In consideration of the payment of the premium and subject to the specific terms, conditions, and limits of liability reflected herein and in the Declarations, the facultative reinsurance agreed shall be subject to the following General Conditions, the above Declarations, and any endorsements thereto (“this Agreement”).
C. General Conditions
1. Reinsuring Clause Except as otherwise agreed in this Certificate or where the reinsurance is non-concurrent, the Reinsurer’s liability under this Agreement shall follow that of the Reinsured for losses under all terms, conditions, and limits to the Reinsured Original Policy or Policies specified in the Declarations (“the Policy”).
2. Retention and Limit The Reinsured shall retain for its own account or for that of its treaty reinsurers, if applicable, the liability specified in the Declarations. The Reinsurer shall indemnify the Reinsured against losses or damages the Reinsured is legally obligated to pay under the policy or policies reinsured, subject to the limits and coverage set out in the Declarations.
3. Duty to Furnish Policy The Reinsured shall provide to the Reinsurer promptly after closing a copy of the Policy and any endorsements thereto affecting this Agreement.
4. Inspection of Records The Reinsured shall make available for inspection and place at the disposal of the Reinsurer at the office of the Reinsured any of its records relating to this Agreement or to claims in connection therewith at reasonable times during and after the Agreement period.
5. Changes Any change in the terms and conditions of the Policy subsequent to the effective date of this Agreement shall not increase or extend the Reinsurer’s liability hereunder unless the Reinsurer has provided its written consent to such change.
6. Scope of Indemnity The Reinsurer shall indemnify the Reinsured to the extent of the Reinsurer’s written share set out in the Declarations for any loss, interest or Allocated Expenses (as defined below) paid by the Reinsured and covered by this Agreement. In calculating such amount any salvages, recoveries and payments from third parties, including any recoveries from other Reinsurers, whether collected or not shall be taken into account. “Allocated Expenses” shall mean reasonable expenses incurred by the Reinsured in handling claims covered under this Agreement, excluding salaries of employees, management expenses and other overhead expenses of the Reinsured as well as costs arising from any action for declaratory relief.
7. Third Party Rights This Agreement is solely between the Reinsured and the Reinsurer, and save as provided for in Article 10 (Insolvency) no original insured, claimant or other third party shall have any rights under this Agreement.
8. Premium Payment Terms The Reinsured shall pay the reinsurance premium stated in the Declarations within the time indicated in Special Condition E Premium Payment (or in respect of any additional or installment premium, when due).
9. Notice of Loss; Loss Reporting It is a condition precedent to the Reinsurer’s liability that the Reinsured shall give written notice as soon as practicable as set out below, of any claim under the Policy which is likely to affect this Agreement or of the Reinsured being notified of any circumstance which could give rise to such a claim.
For casualty business, such notice shall contain all information establishing: (i) a brief description of the cause of the damage, the legal basis of liability, any special aspects of the liability, and the original insured’s potential defenses to liability; (ii) the section of the Policy that potentially covers the claim or loss, the trigger of coverage, the applicable policy exclusions, and any other defenses to coverage; and (iii) all actions taken in connection with the investigation, adjustment, defense, or settlement of such claim.
The Reinsured shall also notify the Reinsurer promptly of any occurrence or claim in respect of which the Reinsured has created a loss reserve equal to or greater than fifty (50) percent of the Reinsured’s retention specified in the Declarations; or, if this reinsurance applies on a contributing excess basis, when notice of claim is received by the Reinsured.
10. Claims Handling; Claims Cooperation; Consent to Settlement The Reinsured shall properly and thoroughly investigate any claim. However, the Reinsured shall not without consulting the Reinsurer or its representative litigate any such claim.
11. Loss Payment The Reinsurer shall make any loss payment due hereunder as soon as possible after having received written advice from the Reinsured, provided the Reinsurer has obtained all information (such as legal assessment or adjusting reports) which the Reinsurer deems necessary to determine whether the loss is covered under this Agreement.
12. Currency Claims reports, claims advises as well as payments between the parties shall be in the currency stated in the Declarations.
13. Insolvency In the event of the Insolvency of the Reinsured, the reinsurance provided by this Agreement shall be payable by the Reinsurer directly to the Reinsured or to its liquidator, receiver or statutory successor on the basis of the liability of the Reinsured without diminution because of the insolvency of the Reinsured or because the liquidator, receiver, conservator or statutory successor of the Reinsured has failed to pay all or a portion of any claim. The liquidator, receiver or statutory successor of the Reinsured shall give written notice of the pendency of each claim against the Reinsured within a reasonable time after such claim is filed in the insolvency proceeding. During the pendency of such claim, the Reinsurer may, at its own expense, investigate such claim and interpose in the proceeding where such claim is to be adjudicated, any defense or defenses which it may deem available to the Reinsured, its liquidator or receiver or statutory successor. Subject to court approval, any expense thus incurred by the Reinsurer shall be chargeable against the Reinsured as part of the expense of liquidation to the extent of such proportionate share of the benefit as shall accrue to the Reinsured solely as a result of the defense undertaken by the Reinsurer.
14. Commencement and Termination The effective and expiration dates of the Agreement shall be as specified in the Declarations, at the location(s) specified in the Policy. Should the Policy be cancelled, this Agreement shall terminate automatically to the same extent at the same time and date and the Reinsured shall immediately notify the Reinsurer thereof.
Either party may cancel the Agreement by giving sixty (60) days written notice to the other party and mailing such notice to the address appearing in the Declarations. However, the Reinsurer’s notice shall be provided to the Reinsured no less than sixty (60) days in advance of the latest date it can issue the notice of cancellation to the original insured. Written notice shall be deemed to include telefax and telegram.
Either party may cancel the Agreement at any time by giving the other party fifteen (15) days prior written notice sent to the address appearing in the Declarations in the event that the other party (i) becomes insolvent or is unable to pay its due debts, (ii) transfers control by change in ownership or otherwise, or (iii) fails seriously to comply with the terms and conditions of this Agreement. Written notice shall be deemed to include telefax and telegram.
In the event of this Agreement being terminated before the expiry of the duration period agreed by the parties the Reinsurer shall return reinsurance premium on a pro rate basis less the amount of ceding commission, if any, calculated by reference to the premium due hereunder.
15. Arbitration Any dispute between the parties arising out of or in connection with this Agreement, including its formation and validity, and whether arising during or after the period of this Agreement, shall be finally and fully determined by way of arbitration in the manner set out below.
The arbitration tribunal (tribunal) shall unless the parties agree otherwise consist of persons (including those who have retired) with not less than ten years experience of international insurance or reinsurance business as persons engaged in such business or advising such business in a professional capacity.
Unless the parties agree upon a single arbitrator within thirty (30) days of one receiving a written request from the other for arbitration, the claimant (the party requesting arbitration) shall appoint one arbitrator (the first arbitrator) and shall give written notice thereof to the other party (the respondent). Within thirty (30) days of receiving such notice, the respondent shall appoint another arbitrator (the second arbitrator) and give written notice to the claimant failing which the clamant may apply to the appointer named below to appoint the second arbitrator.
Once appointed, the first and second arbitrators shall within thirty (30) days of the appointment of the second arbitrator appoint a third arbitrator. Should they fail to do so then either of them or of the parties may apply to the appointer for the appointment of the third arbitrator. However appointed the third arbitrator shall be chairman.
Upon acceptance of the appointment by the third arbitrator the tribunal shall be constituted. The three arbitrators shall decide by majority. If a majority cannot be achieved the decision of the third arbitrator shall prevail.
If an arbitrator, subsequent to this appointment, is unwilling or unable to act, a new arbitrator shall be appointed to replace by the procedure set out above.
Unless otherwise extended or ordered by the tribunal within fifteen (15) days of the appointment of the third arbitrator, each party shall submit its case to the tribunal within forty-five (45) days of the appointment of the third arbitrator.
The tribunal shall not be bound by the formal rules of evidence. The tribunal shall have power to fix all procedural rules relating to the conduct of the arbitration.
The tribunal shall within sixty (60) days of reaching its decision in the Arbitration issue to the parties its written and reasoned award. The award shall be final and binding on the parties who covenant to carry out the same. If either of the parties should fail to carry out the award the other may apply for its enforcement to a court of competent jurisdiction in any territory in which the party in default is domiciled or has assets or carries on business.
All cost of the arbitration shall be at the discretion of the tribunal who may direct to and by whom and in what manner they shall be paid. The appointer shall be as stated in the Declarations.
The seat of the arbitration shall be as stated in the Declarations.
This article remains valid, should the Agreement be void.
16. Severability If any provision of this Agreement is held to be illegal, invalid or unenforceable in whole or in part, this Agreement shall continue to be valid as to its other provisions and the remainder of the affected provisions. Any provision declared null or void is in this case to be understood in such way that their intended purpose is still fulfilled as far as possible.
17. Applicable Law This Agreement shall be governed by and construed in accordance with the law set out in the Declarations.
18. Loss Reserve Where the Reinsurer does not qualify for full credit under the laws of the Reinsured’s domicile and, without appropriate security, the Reinsured would incur a penalty on any financial statement it is required to file with the insurance regulatory authorities involved, the Reinsurer shall fund its share of recoverable outstanding losses and loss adjustment expense, IBNR (Incurred But Not Reported) and as appropriate unearned premiums within thirty (30) days of a request from the Reinsured by way of

(i) clean, irrevocable and unconditional letters of credit, meeting the insurance law requirements of the Reinsured’s domicile

(ii) Cash advances to the Reinsured.

(iii) A trust agreement meeting the insurance law requirements of the Reinsured’s domicile for the benefit of the Reinsured, or

(iv) Funds withheld by the Reinsured.

Where funding is by Letter of Credit, such Letter of Credit shall be adjusted quarterly to reflect the Reinsurer’s share of the recoverable losses, loss adjustment expenses and unearned premiums, if any.
Unless any amounts due from the Reinsurer are paid in cash, any Letter of Credit may be drawn upon at any time to reimburse the Reinsured for the Reinsurer’s share of recoverable losses or loss adjustment expenses paid by the Reinsured. Any excess amounts withdrawn from the Letter of Credit shall be refunded to the Reinsured with interest upon determination of the Reinsurer’s ultimate liability.
19. No Known Loss Warranty The Reinsured hereby warrants that, as of the Reinsurance Effective Date of this Agreement, it has disclosed to the Reinsurer all occurrences, claims, or losses of which the Reinsured or the Original Insured is aware or knows or has any reason based on personal knowledge, as of the Reinsurance Effective Date of this Agreement. The Reinsured shall be deemed to be aware of such occurrence, claim, or loss if the Risk Manager of the Original Insured or the Risk Management department of the Original Insured is aware or knows or has any reason based on personal knowledge of any actual or alleged bodily injury or property damage included in such occurrence, claim, or loss, irrespective of whether or not such executive officer believes or expects such occurrence, claim, or loss is likely to involve this Agreement.
Breach of this warranty shall result in a complete forfeiture of all rights of the Reinsured under this Agreement for any occurrence, claim, or loss as to which the warranty was breached.
20. Definitions As used in this Certificate the following terms shall mean:
Non-Concurrent – The reinsurance provided by this Certificate does not apply to any hazards or risks of loss or damage covered under the original policy other than those specifically set forth in the Declarations. The retention of the Reinsured and the liability of the Reinsurer shall be determined as though the original policy applies only to the hazard or risks of loss or damage specifically described in this Certificate’s Declarations.
21. Premium Taxes The Reinsured will be liable for all taxes on premiums ceded to the Reinsurer under this Certificate.
22. Offset The Reinsurer may offset any balance, whether on account of premiums, commissions, claims, losses, adjustment expense, salvage or any other amount due from one party to the other under this Certificate or under any other agreement entered into between the Reinsured and the Reinsurer, whether acting as assuming reinsurer or as a ceding company.
23. Salvage and Subrogation The Reinsured shall pay or credit the Reinsurer with the Reinsurer’s portion of any recovery obtained from the salvage or subrogation. Adjustment expense for recoveries shall be deducted from the amount recovered. If the reinsurance is on an Excess basis, recoveries shall be distributed to the parties in an order inverse to that in which their liabilities accrued.
24. Intermediary The Intermediary, if any, designated herein is hereby recognized as having negotiated the reinsurance provided by this Certificate. All communications (including but not limited to notices, statements, premiums, return premiums, commissions, taxes, losses, loss adjustment expenses, loss settlements, salvages and subrogations) relating hereto shall be transmitted to the Reinsured or the Reinsurer through the office of the Intermediary. Payments by the Reinsured to the Intermediary shall be deemed to constitute payment to the Reinsurer. Payments by the Reinsurer to the Intermediary shall be deemed only to constitute payment to the Reinsured to the extent that such payments are actually received by the Reinsured.
D. Special Conditions and Exclusions
1. Exclusions This Agreement shall not apply to the following:
1.1 War Any liability assumed by the Reinsured for loss or damage directly or indirectly occasioned by, happening through or in consequence of war, invasion, acts of foreign enemies, hostilities or war-like operations (whether war be declared or not), civil war, mutiny, civil commotion assuming the proportions of or amounting to a popular risking, military rising, insurrection, rebellion, revolution, military or usurped power, martial law, confiscation or nationalization or requisition or destruction of or damage to property by or under the order of any Government or public or local authority;
1.2 Nuclear Nuclear energy risks for those applicable classes of business and territories as appropriate in accordance with the provisions set out below:

(i) Nuclear Energy Risks Exclusion Clause (Reinsurance) (1994) –Worldwide Excluding USA and Canada (NMA 1975a);

(ii) Nuclear Incident Exclusion Clause – Physical Damage – Reinsurance – USA (NMA 1119) / Canada (NMA 1980a);

(iii) Nuclear Incident Exclusion Clause – Physical Damage and Liability – (Boiler and Machinery Policies) – Reinsurance – USA (NMA 1166) / Canada (NMA 1251);

(iv) Notwithstanding the provisions of the Nuclear Energy Risks Exclusion Clause (Reinsurance) (1994) certain liabilities the type of which by market practice and custom have not been declared to the Japanese Nuclear Pool shall not fall within the scope of this exclusion.
1.3 ECO / XPL Exclusion (i) Extra contractual obligations, meaning any punitive, exemplary, compensatory, or consequential damages the Reinsured pays or is held liable to pay because of alleged or actual bad faith or negligence on its part in handling a claim under the Policy subject to this Agreement;

(ii) Excess of policy limits loss, meaning any loss which the Reinsured may be legally liable to pay in excess of the limit of its original Policy, such loss in excess of that limit having been incurred because of its failure to settle within the Policy limit or by reason or alleged or actual negligence, fraud, or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against the original insured or in the preparation or prosecution of an appeal consequent upon such action.
1.4 Crisis Response Any Crisis Response or Excess Casualty Crisis Fund segments provided in the underlying policies.
1.5 Anti-Stacking If anyone claim or occurrence gives rise to coverage under both of the Reinsured Original Policies reinsured hereunder, the maximum amount that the Reinsurer shall be required to pay under this Agreement for such claim or occurrence shall not exceed USD 25,000,000 (twenty five million dollars), subject to the applicable aggregate limits provided above.
1.6 Accident Insurance Any sums that the Reinsured becomes liable to pay under the Policy arising from or in any way connected to a benefit to the Covered Person (or, in the event of death, to the Covered Person’s beneficiary) if that Covered Person suffers a loss covered under the Policy and / or Endorsement No 27 thereto, arising from an injury that results from an accident that occurs on or after the Accident Insurance Effective Date and during a Covered Activity.
1.7 Designated Products Any actual or alleged liability of the Reinsured in connection with any claim alleging, arising out of, based upon, attributable to, or in any way related to aircraft products or any part thereof.
1.8 Designated Products Any actual or alleged liability of the Reinsured in connection with any claim alleging, arising out of, based upon, attributable to, or in any way related to aircraft products or any part thereof.
E. Premium Payment It is a condition precedent to any obligation of the Reinsurer under this Agreement that the Reinsurer’s share of the Gross Reinsurance Premium shown in the Declarations shall be paid in full to the Reinsurer within forty five (45) calendar days after the Effective date of the Agreement period (or in respect of any additional or installment premium, when due), time to be of the essence.

If the Reinsurer’s share of the Gross Premium due under this Agreement is not paid to Reinsurer within forty five (45) calendar days after the Effective date of the Agreement period, then the reinsurance contract shall be void and the Reinsured shall forfeit all right of coverage under this Agreement ab Initio. Any premium already paid to the Reinsurer shall be refunded to the Reinsured and any Loss Payments already paid to the Reinsured shall be refunded to Reinsurer.
  1. BASIS OF Agreement. This agreement is based on the underwriting information provided to the Reinsurer.
  2. EXCLUSIONS. Unless agreed otherwise, it is hereby agreed that this Agreement shall not apply to and does not cover the following:
    1. ASBESTOS. Any actual or alleged liability whatsoever for any claim or claims in respect of loss or losses directly or indirectly arising out of, resulting form, or in consequence of asbestos, in whatever form or quantity.
  3. DUTY OF DISCLOSURE; DISCLAIMERS THEREOF VOID. This Agreement is provided on the basis that all information given to Reinsurer by or on behalf of the Reinsured in its underwriting submission and/or in its responses to the underwriter’s requests for information is reliable, truthful, and complete to the best of the Reinsured’s information and knowledge. The Reinsurer relies on the “duty of disclosure” as it exists under applicable law, and rejects any attempt to negate that duty wholly or partially. The Reinsured, by accepting this Agreement, waives the effect of any purported disclaimers of the Reinsured’s duty to disclose to underwriters all material facts to the best of its knowledge that may be contained in such submission or in its responses to questions or requests for information, or in e-mails, CD ROMs, or internet websites used in providing or transmitting underwriting information.
  4. PREMIUM PAYMENT CONDITION PRECEDENT. It shall be a condition precedent to any obligation of the Reinsurer pursuant to this Agreement that the Reinsurer’s share of the Gross Premium quoted shall be paid in full to the Reinsurer within forty five (45) calendar days after the Effective Date of the Agreement period (or in respect of any additional or installment premium, when due), time to be of the essence.
    If the Reinsurer’s share of the Gross Premium due under this Agreement is not paid to Reinsurer in full within forty five (45) calendar days after the Effective Date of the Agreement period, then the Agreement shall be void and the Reinsured shall forfeit all right to coverage under this Agreement ab Initio. Any partial premium already paid to the Reinsurer shall be refunded to the Insured and any Loss Payments already paid to the Reinsured shall be refunded to Reinsurer.
  5. SEVERAL & NOT JOINTLY LIABLE. The liability of the Reinsurer shall be several and not joint and is limited solely to the extent of Reinsurer’s individual share. The Reinsurer is not responsible for the subscription of any co- subscribing insurer or reinsurer who for any reason does not satisfy all or part of its obligations.
  6. LEADING UNDERWRITER DISCLAIMER. If a Leading Underwriter is, has been, or will be appointed to represent underwriters heron, then the following provisions shall apply to the Reinsurer’s participation hereon, notwithstanding the fact that other insurers or reinsurers may accept or acquiesce in such appointment without reservation:
    1. Any such Leading Underwriter shall have no authority to agree, negotiate, stipulate, bind, amend, settle, or litigate on behalf of the Reinsurer for purposes of the Reinsurer’s participation as offered by this Agreement and, if the Reinsured accepts this Agreement, under any contract of insurance formed hereby.
    2. The Reinsurer hereby retains and does not relinquish to any such Leading Underwriter its rights to obtain notice of any loss affecting this insurance directly from the Reinsured.
    3. Any market custom or usage contrary to the above is hereby rejected to the extent of any such conflict.
    4. Notwithstanding the foregoing, if the Leading Underwriter appoints counsel, then the Reinsurer hereon accepts that appointment of counsel until further notice.
  7. FINAL DOCUMENTATION. The Reinsurer and Reinsured agree to use best efforts to ensure that the final reinsurance contract documentation, including the final Original Policy, is completed by the Reinsured or its agent or broker and agreed by the Reinsurer within ninety (90) days after the effective date of the Agreement period. Requests for extensions of this period shall not be unreasonably denied.