EX-10.17 4 dex1017.txt REINSURANCE PLACEMENT SLIP BETWEEN AMIC LTD. AND PDIC DATED JANUARY 1, 2003. Exhibit 10.17 Guy Carpenter & Company, Inc. Centennial Lakes, Suite 400 GUY CARPENTER 3600 Minnesota Drive Edina, MN 55435 952 920 3300 Fax 952 920 9382 Placement Slip -------------------------------------------------------------------------------- File #: 2557-00-0001-00 Effective Date: January 1, 2003 COMPANY: PROFESSIONALS DIRECT INSURANCE COMPANY Grand Rapids, Michigan (herein called the COMPANY) TITLE: FIRST EXCESS CASUALTY REINSURANCE AGREEMENT BUSINESS COVERED: New and renewal business classified by the Company as Lawyers Professional Liability, including, but not limited to, claims made business written or assumed under the Company's Select and Essentials or Premier Programs. Prior Acts and Extended Reporting Endorsements covered as per original policy. TERRITORY: To follow the Company's policies as respects insureds domiciled in the United States, its territories or possessions. PERIOD: Continuous and to take effect January 1, 2003 as respects new and renewal business. Annual or multi-year renewals thereafter as mutually agreed. Original policy shall be issued for a maximum policy period of 12 months plus odd time (not exceeding 18 months in all), plus any extended reporting period endorsements. Underwriting year account basis. Cancellation at December 31, 2003, or any December 31 thereafter, by either party via 180 days prior notice by certified or registered mail. Run-off for all policies in force at the date of termination until their natural expiration. Page: 2 of 5 GUY CARPENTER File #: 2557-00-0001-00 Effective Date: January 1, 2002 PERIOD CONTINUED: Reinsurers' liability will continue in the event any extended discovery or reporting options are exercised in accordance with the original policies, and/or in the event the Company is bound by statute, regulation, or judicial decision to continue coverage. LIMIT & RETENTION: $500,000 each original insured, each and every claim in excess of $500,000 each original insured, each and every claim. Loss Expenses to be included within and subject to the Reinsurers' limit of liability. It is understood and agreed all ceded policies shall include claims expense within limits of liability or so deemed. EXCLUSIONS: 1. Insolvency Funds Exclusion Clause 2. Pools, Associations, and Syndicates 3. Nuclear Incident Exclusion Clause - Liability - Reinsurance 4. All actual or threatened loss or damage (including all consequential loss or damage of any type) caused by, arising or resulting from, or in connection with, an act or acts of Terrorism, including all costs and expenses of whatever nature, related thereto. For purposes of this exclusion, "Terrorism" shall mean any act(s), attempt(s) or threat(s) thereof, which endangers human life or health, tangible or intangible property or infrastructure, or intimidates, disrupts or coerces a government or a unit of government, business or commercial enterprise, the public, or any segment thereof, in furtherance of political, religious, ideological or social objectives. This Exclusion shall apply regardless of any otherwise covered cause, event or peril contributing concurrently or in any other sequence to the loss. PREMIUM: 85% of the layer net increased limits ceded premium. Within thirty (30) days of the end of each quarter, the Company shall furnish the Reinsurer with a statement of account detailing the ceded premium to be paid to the Reinsurer together with a bordereau of policies ceded under this agreement during the quarter. Page: 3 of 5 GUY CARPENTER File #: 2557-00-0001-00 Effective Date: January 1, 2002 RESERVES: Letters of Credit and/or Trust Agreements required from unauthorized Reinsurers for outstanding losses and expenses, recoverables, IBNR, and unearned premium. GENERAL CONDITIONS: All reinsurance under this Contract shall be subject to the same rates, terms, conditions, deductibles, waivers and interpretations and to the same modifications and alterations as the respective policies of the Company. "Original Insured" shall mean all interests covered under one Policy. "Claim" shall mean any notice received by the Company in writing of an incident, or claim or suit which is sufficient to enable the Company to establish a claim advice file. A Claim, for purposes hereon, shall include each Claim or series of Claims arising out of any one incident as respects any one Insured, such Claim(s) arising due to the same accident, error or omission in providing a professional service, or series of accidents, errors or omissions in providing professional service having a common cause, unless otherwise defined in the Company's original policy. "Increased Limits Net Written Premium" as used herein, shall mean the Company's gross written premium associated by the Company to the limits ceded to this contract. As respects business produced through agents and brokers, it is understood and agreed the Company may gross up their ILF premium for the representative expenses of acquiring the business, with said commission not to exceed 15% of the layer increased limits net written premium. CLAUSES: Access to Records Clause Amendments Arbitration Clause Confidentiality Clause Coverage Currency Clause Definitions (ALAE included within the UNL; DJ expenses covered) ECO 90%, XPL 90% (within UNL on ceded policies) Exclusions Federal Excise Tax Clause Governing Law Clause Indemnification and Errors and Omissions Clause Insolvency Clause, applies severally to each reinsured entity Loss Notices and Settlements Page: 4 of 5 GUY CARPENTER File #: 2557-00-0001-00 Effective Date: January 1, 2002 CLAUSES CONTINUED: Net Retained Lines Offset Clause, this Agreement only Other Reinsurance Reinsurance Follows Original Policies Reinsurance Premium Reserve and Funding Reports and Remittances Retention and Limit Salvage and Subrogation Clause Service of Suit Clause Settlements Clause Several Liability Notice - LSW - 1001 Taxes Clause Term and Cancellation Territory GUY CARPENTER & COMPANY, INC., Intermediary Clause INFORMATION: Estimated 2003 gross ceded premium equals $1,700,000. Page: 5 of 5 GUY CARPENTER File #: 2557-00-0001-00 Effective Date: January 1, 2002 BROKERAGE: 10.00% of net premium ceded to reinsurers. ACCEPTED: First Layer: 15% of $500,000 Ref # 03XL02001 Reinsurer: AmerInst Insurance Company, Ltd. FEIN #: NAIC #: Authorized Signature: /s/ Stuart Grayston Date: February 27, 2003