VI. Technical Specifications/Scope of Excess of Loss Treaty
PROPERTY AND ENGINEERING RISK
EXCESS OF LOSS TREATY
For the Period
1600 hours 31 December 2011 to
1600 hours 31 December 2012
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CONTRACTUAL DETAILS
REINSURED:
GOVERNMENT SERVICE INSURANCE SYSTEM
PERIOD:
Losses occurring during the 12 months from 1600 hours 31 st December
2011 to 31st December 2012 both days inclusive, local standard time at
the place where the loss occurs.
TYPE:
Risk Excess of Loss Reinsurance Agreement
CLASS OF BUSINESS:
All Business written directly and/or by way of Facultative Reinsurance in
the Underwriting Department of the Reinsured and retained on net
account.
Business Interruption/ Contingent Business Interruption cover only as a
consequence of property damage
Business Interruption extensions for suppliers and customers on a named
basis only and sub-limited to 25% of Total Sum Insured and excluding
Natural Perils outside Philippines
EXCLUSIONS:
All exclusions are listed in full in the Contractual Wording
TERRITORIAL SCOPE:
Republic of the Philippines.
LIMIT:
1st Layer
To indemnify the Reinsured for all loss or losses up to PHP300,000,000 or
equivalent in other currencies each and every loss each and every risk.
Subject to a maximum recovery in respect of any one event
PHP300,000,000 in accordance with the attached definition of event SRA
460
2nd Layer
To indemnify the Reinsured for all loss or losses up to PHP250,000,000 or
equivalent in other currencies each and every loss each and every risk.
Subject to a maximum recovery in respect of any one event
PHP250,000,000 in accordance with the attached definition of event SRA
460
3rd Layer
To indemnify the Reinsured for all loss or losses up to PHP1,250,000,000 or
equivalent in other currencies each and every loss each and every risk.
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Subject to a maximum recovery in respect of any one event
PHP1,250,000,000 in accordance with the attached definition of event
SRA 460
No higher limit to apply without prior approval of the Reinsurer
DEDUCTIBLE:
1ST Layer
Ultimate Net Loss of PHP200,000,000 or equivalent in other currencies
each and every loss each and every risk
2nd Layer
Ultimate Net Loss of PHP500,000,000 or equivalent in other currencies
each and every loss each and every risk
3rd Layer
Ultimate Net Loss of PHP750,000,000 or equivalent in other currencies
each and every loss each and every risk
REINSTATEMENT
PROVISIONS:
1st Layer
2 Reinstatements each at no additional premium
2nd Layer
2 Reinstatements each at no additional premium
3rd Layer
1 Reinstatement at no additional premium
Limit in All: PHP 2,500,000,000 in respect of each 12 month period
separately
PREMIUM:
For the period 31st December 2011 to 31st December 2012
1st Layer
Minimum and Deposit Premium: (as awarded)
Adjustable at (the awarded rate) of the applicable Gross Net Retained
Premium Income in respect of business protected hereunder and written
by the Reassured during the period hereon
2nd Layer
Minimum and Deposit Premium: (as awarded)
Adjustable at (the awarded rate) of the applicable Gross Net Retained
Premium Income in respect of business protected hereunder and written
by the Reassured during the period hereon
3rd Layer
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Minimum and Deposit Premium: (as awarded)
Adjustable at (the awarded rate) of the applicable Gross Net Retained
Premium Income in respect of business protected hereunder and written
by the Reassured during the period hereon
PREMIUM
PAYMENT TERMS:
First Installment at 50% of the MinDep
Final Payment for the 50% Balance
DEDUCTIONS
FROM
REINSURANCE
PREMIUM:
None
TAXES PAYABLE BY
REINSURED AND
ADMINISTERED
BY REINSURER:
None
TAXES PAYABLE BY
REINSURER AND
ADMINISTERED BY
THE REINSURED:
None
CHOICE OF
LAW AND
JURISDICTION:
SEAT OF
ARBITRATION:
APPOINTOR:
CO-INSURANCE
WARRANTY:
EXPRESS
WARRANTIES:
CONDITIONS
PRESEDENT:
1 March 2012
1 May 2012
(AGREEMENT & ARBITRATION TRIBUNALS)
Law and Jurisdiction of Philippines, as more fully defined within the
attached Contractual Wording
Manila, Philippines
The Appointor shall be the Chairman of the Philippine Insurers and
Reinsurers Association.
None
Unless a term of this Agreement is expressly stated to be warranty it shall
not be construed as such.
None. Unless a term of this Agreement is expressly stated to be a
condition precedent it shall not be construed as such.
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CONDITIONS:
All terms, clauses and conditions applicable to this Agreement, including
those listed below, are more fully defined in the attached Contractual
Wording.
Reinsuring Clause
Property Damage Clarification Clause
Extended Expiration Clause
Limits of Indemnity
Ultimate Net Loss Clause amended to allow Reinsured the benefit of
underlying if applicable
Net Retained Lines Clause
Notification of Loss Clause
Errors and Omissions Clause
Inspection of Records Clause
Settlements Clause
Currency Conversion Clause
Change in Law Clause
Special Cancellation Clause
Amendments and Alterations Clause
Claims Co-operation and Reporting Clause
Event Definition SRA 460
Risk Definition SRA 009
Non-Renewal Clause (at terms to be agreed by the Reinsurer)
Semi-annual reporting of countrywide Earthquake and Typhoon
aggregates in Total Sum Insured basis (if sub-limits apply please provide
Total Sum Insured and aggregated sub-limits)
Semi-annual reporting of countrywide Engineering Aggregates in Total
Sum Insured basis.
The PSALM and Transco-NGCP as well as NPC accounts are included,
except for transmission and distribution lines beyond 1,000 meters of an
insured structure (see Transmission and Distribution Lines Exclusion
Clause), and the Machinery Breakdown / Boiler Explosion Cover Non
Operating Plants.
The above is agreed subject to the following:
1.
deductibles (including aggregate deductibles as applicable)
under current PSALM, Transco-NGCP and NPC programmes to
apply
The PSALM policy is limited to PHP 2,250,000,000 any one occurrence.
Transco-NGCP policy is limited to USD50 million any one occurrence.
NPC policy is limited to PHP 700,000,000 million any one occurrence,
Catastrophe Perils coverage for PSALM policy is sublimited to PHP
2,250,000,000 each and every loss, any one occurrence and in the
aggregate in respect of all insured assets. Transco-NGCP policy is
sublimited to USD50 million each and every loss, any one occurrence
and in the aggregate in respect of all insured assets. NPC policy is
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sublimited to PHP 700,000,000 million any one occurrence, and in the
aggregate in respect of all insured assets
Coverage for BNPP limited to FLEXA only
Coverage for submarine cables limited to USD15 million any one
occurrence, and in the aggregate.
It is further agreed to accept the PSALM, Transco-NGCP and NPC
accounts on a first loss limit (for limits and deductibles see original NPC
slip as per renewal information package). The assets to be ceded into
this Agreement shall not exceed the total value of assets listed in the
“Schedule of Assets” submitted to GSIS on 31 December 2010, or any
later formal valuation / appraisal to be submitted by more than 10%.
SUBJECTIVITIES:
None unless otherwise specified in a schedule attached hereto.
WORDING:
Full contractual wording is incorporated and future amendments to be
agreed by the Reinsurer.
REINSURER
CONTRACT
DOCUMENTATION:
NOTICES:
REINSURER
SHARE HEREON
This Reinsurance Agreement details the Agreement terms entered into
by the Reinsurer(s) and constitutes the Reinsurance Agreement.
For the purposes of construing the meaning of this Agreement, words
and phrases appearing in market registered clauses incorporated into
this Agreement shall bear the same meaning in this Agreement as in
such clause, unless the context requires otherwise.
100% (should be Limit per Layer)
This Agreement has been drawn-up and exchanged between the Parties.
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CONTRACTUAL WORDINGS
RISK EXCESS OF LOSS AGREEMENT
PREAMBLE
This Agreement is to reinsure a portion of the loss sustained by the Reinsured in respect of all
business as specified in the attached Contractual Details under CLASS OF BUSINESS for the
account as detailed under REINSURER, subject to any new Special Acceptances to be agreed
by the Reinsurer.
Subjectivities (if any) shall be as specified in the attached Contractual Details.
ARTICLE 1
REINSURING CLAUSE
1.
In consideration of the payment of premium as provided in the PREMIUM Article and
subject to the other terms and conditions of this Agreement, the Reinsurers shall indemnify
the Reinsured for that portion of the loss sustained by the Reinsured which exceeds the
amount as specified under DEDUCTIBLE in the attached Contractual Details Ultimate Net
Loss in respect of each loss on any one risk.
2.
The liability of the Reinsurers under this Agreement shall not exceed the amount as
specified under LIMIT in the attached Contractual Details Ultimate Net Loss in respect of
each loss on any one risk.
3.
PROPERTY DAMAGE CLARIFICATION CLAUSES
It is understood and agreed that this Agreement shall be subject to the following Property
Damage Clarification Clause:
Property damage covered under this Agreement shall mean physical damage to the
substance of property.
Physical damage to the substance of property shall not include damage to data or
software, in particular any detrimental change in data, software or computer programs
that is caused by a deletion, a corruption or deformation of the original structure.
Consequently, the following excluded from this Agreement:
A.
Loss of or damage to data or software, in particular any detrimental change in
data, software or computer programs that is caused by a deletion, a corruption or
a deformation of the original structure and any business interruption losses resulting
from such loss or damage. Notwithstanding this exclusion, loss of or damage to data
or software which is the direct consequence of insured physical damage to the
substance of property shall be covered.
B.
Loss or damage resulting from an impairment in the function, availability, range of
use or accessibility of data, software or computer programs and any business
interruption losses resulting from such loss or damage.
ARTICLE 2
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EXCLUSIONS
This Agreement shall exclude:1.
Transmission and Distribution Lines in accordance with the following clause:
TRANSMISSION AND DISTRIBUTION LINES EXCLUSION CLAUSE
All transmission and distribution lines, including wires, cables, poles, pylons, standards,
towers and any equipment of any type which may be attendant to such installations,
including substations of any description, unless such substations are specifically declared
as part of the insured assets/locations. However, poles, pylons, standards, towers are not
considered as insured structure.
This exclusion includes but is not limited to transmission or distribution of electrical power,
telephone or telegraph signals, and all communication signals whether audio or visual.
This exclusion applies to both above and below ground equipment, which are more than
1,000 metres radius from an insured structure.
This exclusion applies both to physical loss or damage to the equipment and all business
interruption, consequential loss, and/or other contingent losses related to transmission
and distribution lines.
2.
Nuclear Energy Risks in accordance with the following clause, a copy of which is
attached hereto:
Nuclear Energy Risks Exclusion Clause (Reinsurance) (1994) – (Worldwide Excluding U.S.A.
& Canada) NMA 1975a
In addition, the following exclusion shall apply
Additional Nuclear Exclusion:
This Agreement does not cover loss or damage caused directly or indirectly by any of the
following, regardless of any other cause or event contributing concurrently or in any other
sequence to the loss: Nuclear material; nuclear fission or fusion; nuclear radiation; nuclear
waste from the use of nuclear fuels; nuclear explosives or any nuclear weapon.
3.
War and Civil War Risks in accordance the following clause:
WAR AND CIVIL WAR EXCLUSION CLAUSE (Amended LIRMA G51)
This Agreement does not cover 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 popular rising, military rising, insurrection, rebellion, 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.
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4.
Terrorism Risks in accordance with the following clause:
TERRORISM EXCLUSION ENDORSEMENT (REINSURANCE)
Notwithstanding any provision to the contrary within this Agreement or any endorsement
thereto it is agreed that this Agreement excludes loss, damage, cost or expense of
whatsoever nature directly or indirectly caused by, resulting from or in connection with
any act of terrorism regardless of any other cause or event contributing concurrently or in
any other sequence to the loss.
For the purpose of the endorsement an act of terrorism means an act, including but not
limited to the use of force or violence and/or the threat thereof, of any person or group(s)
of persons, whether acting alone or on behalf of or in connection with any
organization(s) or government(s), committed for political, religious, ideological or similar
purposes including the intention to influence any government and/or to put the public, or
any section of the public, in fear.
This endorsement also excludes loss, damage, cost or expense of whatsoever nature
directly or indirectly caused by, resulting from or in connection with any action taken in
controlling, preventing, suppressing or in any way relating to any act of terrorism.
If the Reinsurer alleges that by reason of this exclusion, any loss, damage, cost or expense
is not covered by this Agreement the burden of proving the contrary shall be upon the
Reinsured.
In the event any portion of this endorsement is found to be invalid or unenforceable, the
remainder shall remain in full force and effect.
NMA2921 – 08110/2001
5.
Political Risks in accordance with the following clause:
POLITICAL RISKS EXCLUSION CLAUSE
The following shall be excluded from this Agreement:
Any loss or damage occasioned by or through or in consequence, directly or indirectly,
of any of the following occurrences, namely:
1.
War, invasion, act of foreign enemy, hostilities or warlike operations (whether war be
declared or not), civil war.
2.
Mutiny, civil commotion assuming the proportions of or amounting to a popular
rising, military rising, insurrection, rebellion, revolution, military or usurped power,
martial law or state of siege or any of the events or causes which determine the
proclamation or maintenance of martial law or stage of siege.
3.
Permanent or temporary dispossession resulting from confiscation, commandeering
or requisition by any lawfully constituted authority.
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4.
Acts of terrorism committed by a person or persons acting on behalf of or in
connection with any organization.
For the purpose of this provision “terrorism” shall mean the use of violence for political
ends and shall include any use of violence for the purpose of putting the public or any
section of the public in fear.
In any action, suit or other proceeding in which the Reinsurer alleges that by reason of
these provisions any loss or damage is not covered by this Agreement, the burden of
proving that such loss or damage is covered shall be upon the Reinsured.
6.
Industries, Seepage, Pollution and Contamination in accordance with the following
clause:
INDUSTRIES, SEEPAGE, POLLUTION AND CONTAMINATION CLAUSE (NMA 1685)
This Agreement does not cover any liability for:
1)
Personal Injury of Bodily Injury or loss of, damage to, or loss of use of property directly
or indirectly caused by seepage, pollution or contamination, provided always that
this paragraph (1) shall not apply to liability for Personal Injury or Bodily Injury or loss
of or physical damage to or destruction of tangible property, or loss of use of such
property damaged or destroyed, where such seepage, pollution or contamination
is caused by a sudden, unintended and unexpected happening during the period
of this Agreement.
2)
The cost of removing, nullifying or cleaning-up seeping, polluting or contaminating
substances unless the seepage, pollution or contamination is caused by a sudden,
unintended and unexpected happening during the period of this Agreement.
3)
Fines, penalties, punitive or exemplary damages.
This Clause shall not extend this Agreement to cover any liability which would not have
been covered under this Agreement had this Clause not been attached.
This Agreement shall further exclude the following:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Obligatory reinsurance and retrocession treaties.
Facultative reinsurance on Excess of Loss basis.
Direct or facultative acceptance of excess policies, layered policies, umbrella policies,
primary policies.
Retroactive covers in respect of known loss occurrences.
Liability transferred to the Reinsured in respect of outstanding losses.
Policies with a financial side and a risk side where the former predominates.
Liability arising out of delegation of underwriting authority to any third party.
Extra Contractual Obligations e.g. punitive, exemplary, compensatory or consequential
damages.
Risks which can be assumed in a pool, including any share allocated to the Reinsured by
the pool.
Oil and gas risks.
Livestock.
Crops.
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13.
14.
15.
16.
17.
18.
19.
20.
Bonds and Financial Guarantees.
Aviation risks.
Marine risks.
Third Party Liability of any kind unless written in conjunction with and forming part of an
Industrial All Risk policy (but maximum 10% of Total Sum Insured)
Any liability arising out of, directly or indirectly resulting from or in consequence of, or any
way involving:
a.
asbestos, or
b.
any actual or alleged asbestos related injury or damage involving the use,
presence, existence, detection, removal, elimination or avoidance of asbestos
or exposure or potential exposure to asbestos
Captive Pools
Offshore Risks
DIC Policies
Fire Exclusions
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Underground Mining
Plantation Risks
Manuscript Wordings are excluded (wordings to be either standard Fire wordings, ABI or
Insurance Commission or PIRA approved wordings for All Risks).
Business Interruption due to Infectious or Contagious Diseases
Space and Space-related risks
Directors and Officers Liability
Employers Liability / Workmen’s Compensation
Products Integrity / Products Tampering
Jewelers Block
Bankers Blanket Bond
Engineering Exclusions
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
Third Party Liability of any kind unless written in conjunction with and forming part of
Contractors All Risks / Engineering All Risks or Boiler Explosion and to be sublimited to USD 4
million (or pesos equivalent)
Liquidated damages.
Workmen’s Compensation and Employers Liability
Space and space-related risks.
Penalties.
Availability, delay, performance, output and resource guarantees.
Judgements, awards, settlements in USA, Canada, Australia.
Contractors All Risks / Engineering All Risks policies having a period of insurance longer
than 60 months (including maintenance or defects liability period).
Contractors All Risks / Engineering All Risks policies having a maintenance or defects
liability period of more than 24 months.
All types of delayed start-up covers, including but not limited to Advance Loss of Profits,
loss of rent / interest.
Latent or inherent defects.
Decennial insurance.
Full design covers.
Marine-cum-erection policies.
Gas turbines above 100 Mega Watts.
Wind turbines above 100 Mega Watts.
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17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
Aircraft engines.
Prototype machinery.
Nuclear power stations.
Tunnels, mines, shafts, water wells.
Oil and gas drilling equipment including the risk of blow out.
Wet risks, i.e. in the vicinity of water (seashore, lakes, rivers, canals) such as breakwaters,
jetties, wharves, harbour construction outfalls-etc.
Captive Pools
Offshore Risks
Cost Overruns
Pollution / Contamination, except liability arising from a sudden accidental, identifiable,
unintended and unexpected event
Transmission and Distribution lines beyond 1000 meters from an Insured structure
ARTICLE 3
TERRITORIAL SCOPE
The territorial scope of this Agreement is as specified under TERRITORIAL SCOPE in the
Contractual Details.
ARTICLE 4
PERIOD
This Agreement applies only to losses occurring during the period as specified under PERIOD in
the attached Contractual Details both days inclusive, local standard time at the place where
the loss occurs.
EXTENDED EXPIRATION CLAUSE
Reinsurer agrees that if this Agreement should expire or be terminated whilst a loss and/or
accident arising out of one event involving a loss to the Reinsured is in progress, then Reinsurer
shall be liable as if the whole loss had occurred during the currency of this Agreement
provided that no part of that loss is claimed against any renewal of this Agreement.
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ARTICLE 5
LIMITS OF INDEMNITY CLAUSE
1.
In consideration of the payment of premium as provided in the PREMIUM Article and
subject to the other terms and conditions of this Agreement, the Reinsurers shall indemnify
the Reinsured for that portion of the loss sustained by the Reinsured which exceeds the
amount as specified under DEDUCTIBLE in the attached Contractual Details Ultimate Net
Loss in respect of each loss on any one risk
2.
The liability of the Reinsurers under this Agreement shall not exceed the amount as
specified under LIMIT in the attached Contractual Details Ultimate Net Loss in respect of
each loss on any one risk
ARTICLE 6
ULTIMATE NET LOSS CLAUSE
The term “Ultimate Net Loss” means the sum which the Reinsured become liable to pay and
pay in settlement of claims and/or suits and/or in satisfaction of judgements, including legal
costs and expenses of litigation and/or all other loss expenses of the Reinsured (except those of
their salaried employees and office expenses) after deduction of salvages and/or recoveries
including recoveries under other Reinsurances which inure to benefit of this Agreement.
All salvages, recoveries and payments recovered or received subsequent to a loss settlement
under this Agreement shall be regarded as if recovered or received prior to the said settlement
and all necessary adjustments shall be undertaken by the parties hereto.
Nothing, however, in this Clause shall be construed to mean that losses are not recoverable
from Reinsurer until the Ultimate Net Loss to the Reinsured has been determined.
ARTICLE 7
BENEFIT OF UNDERLYING
The Reinsured shall have the benefit of any underlying Excess of Loss Reinsurance protecting
the whole of their account and/or of any Excess of Loss Reinsurances, protecting specific
sections of their account and recoveries thereunder shall not be taken into account in
assessing the amount of the Reinsured’s Ultimate Net Loss hereon. However, it is understood
and agreed that recoveries under such specific reinsurances shall only inure to the benefit of
the Reinsured up to an amount which together with the Reinsured’s Net retention on any class
of business whether protected by any such specific Reinsurance or not, does not exceed the
loss retention under this or any underlying layer of this Agreement.
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ARTICLE 8
NET RETAINED LINES CLAUSE
This Agreement applies only to that part of the Original Policies, which the Reinsured retain net
for their own account, and in computing the Ultimate Net Loss, only loss or losses in respect of
such net retained part of the Original Policies shall be included.
The amount of Reinsurer’s liability in respect of any loss or losses shall not be increased by
reason of the inability of the Reinsured to collect from any other reinsurers whether specific or
general, any amounts which may have become due from them whether such inability arises
from the insolvency of such other reinsurers or for any other reason whatsoever.
ARTICLE 9
NOTIFICATION OF LOSS CLAUSE
The Reinsured shall immediately give notice to Reinsurer of any claim which they have reason
to believe could on the basis of the loss sustained be anticipated to involve an amount in
excess of 75% of the Reinsured’s underlying layers including retention, should the Reinsured be
ultimately held legally liable for such loss. Solely for the purpose of reporting claims the
Reinsured shall in all instances consider themselves legally liable for such losses.
ARTICLE 10
ERRORS AND OMISSIONS CLAUSE
Any inadvertent error or omission on the part of either parties hereto shall not relieve the other
party from any liability which would have attached hereunder, provided that such error or
omission is rectified immediately upon discovery, and shall not impose any greater liability on
the Reinsurer than would have attached hereunder if the error or omission had not occurred.
ARTICLE 11
INSPECTION OF RECORDS
1.
The Reinsured shall allow the Reinsurers or representatives duly authorized by them to
inspect at a mutually agreed time and place, any records and documents which relate
to business covered under the Agreement. For such purposes, the Reinsured shall not be
subjected to unreasonable expense and disruption.
2.
The Reinsurers or representatives authorized by them may arrange for copies to be made,
at the Reinsurers’ expense, of any of the records or documents containing such
information that may require.
3.
It is agreed that the Reinsurers’ right of inspection shall continue as long as either party
remains under any liability arising out of this Agreement.
4.
The right of inspection being provided shall not be construed to allow Reinsurers the right
to delay or withhold payment for any losses which fall due under this Agreement in
accordance with terms and conditions as stated herein.
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5.
Any information concerning the business of the Reinsured under this Agreement is the
sole and absolute property of the Reinsured, and the Reinsurer agrees not to use any
information acquired in exercising their right of inspection for any purpose other than that
as contemplated under this Agreement unless the disclosure is required pursuant to
process of law or unless the disclosure is to Reinsurer’s retrocessionaires, financial auditors
or governing regulatory bodies.
ARTICLE 12
SETTLEMENTS CLAUSE
All loss settlements by the Reinsured shall be unconditionally binding upon Reinsurer provided
that such settlements are within the terms and conditions of the Original Policies and within the
terms and conditions of this Agreement and Reinsurer shall pay the amounts due from them
upon presentation of reasonable evidence of the amounts paid by the Reinsured
ARTICLE 13
CURRENCY CONVERSION CLAUSE
a)
Premiums debited or credited to the Reinsured’s original gross premium in the currencies
other than the currency of this Agreement shall be converted into the latter at the rates
of exchange at the date of the record used by the Reinsured in its own books.
b)
In the case of claims which fall within the terms of Agreement and are made in
currencies other than the currency of this Agreement as stated in the attached
Contractual Details, the same shall be converted into the currency of this Agreement at
the rates of exchange used by the Reinsured and ruling on the date or dates of
settlement of such claims by the Reinsured.
Should any salvages, recoveries or payments attaching to such claims be recovered by the
Reinsured, monetary amounts emanating from any exchange rate deviation between the
date or dates of the claim settlement and the date or dates of such recoveries and receipts
shall be share between the Reinsured and the Reinsurer in the proportion to their participation
in the original claim settlement.
ARTICLE 14
REINSTATEMENT CLAUSE
In the event of the whole or any portion of the liability hereunder being exhausted by loss, the
amount so exhausted shall be automatically reinstated from the time of the occurrence of the
loss to the expiry of this Agreement, subject to payment of an additional premium as specified
under REINSTATEMENT PROVISIONS in the attached Contractual Details. Notwithstanding the
foregoing, the liability of the Reinsurers shall never exceed the amount as specified under LIMIT
in the attached Contractual Details ultimate net loss in respect of each loss on any one risk nor
the amount as specified under REINSTATEMENT PROVISIONS, LIMIT IN ALL in the attached
Contractual Details in respect of all losses during the period of this Agreement.
ARTICLE 15
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PREMIUM CLAUSE (applicable to each layer separately as shown under “Premium” within the
Contractual Details)
1.
The premium payable to the Reinsurers shall be calculated at the rate as specified under
PREMIUM in the attached Contractual Details.
2.
The term “Gross Net Premium Income” as used herein, shall be understood to mean the
gross premium accounted for by the Reinsured (less cancellations, returns and premiums
for Reinsurances, recoveries under which inure to the Reinsurer’s benefit) in respect of all
business coming within the scope of this Agreement.
3.
A Minimum and Deposit Premium shall be paid to the Reinsurers by the Reinsured as
specified under PREMIUM in the attached Contractual Details.
4.
As soon as practicable after the expiration of this Agreement the Reinsured shall render a
statement of its Gross Net Premium Income to the Reinsurers and the amount, if any, by
which the premium due to the Reinsurers, computed on the basis set forth in the
paragraph 1 of this Article, exceeds the Minimum and Deposit Premium shall be paid to
the Reinsurers.
5.
Taxes (if any) in respect of this Agreement shall be payable by the Reinsured and/or
Reinsurers as specified in the attached Contractual Details.
6.
Deduction from Reinsurance Premium (if any) shall be as specified in the attached
Contractual Details.
ARTICLE 16
CHANGE IN LAW CLAUSE
In the event of any change in the law by which the Reinsurer’s liability hereunder is materially
increased or extended the parties hereto agree to take up for immediate discussion a suitable
revision in the terms of this Agreement. Failing agreement on a revision this Agreement shall
operate from the effective date of the change law as if the change had not occurred.
ARTICLE 17
LAW AND JURISDICTION CLAUSE
This Agreement shall in all respects be governed by and construed in accordance with the law
as specified under CHOICE OF LAW AND JURISDICTION in the attached Contractual Details
and any court of competent jurisdiction in that country shall have exclusive jurisdiction over all
matters relating to this Agreement.
All matters arising hereunder shall be determined in accordance with the Law and practice of
such court.
ARTICLE 18
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SPECIAL CANCELLATION CLAUSE
Either party shall have the right to terminate this Agreement forthwith by giving the other party
notice any time by Fax or telex or by Letter or by courier and shall be deemed to be served
upon dispatch or where communications between the parties are interrupted upon attempted
dispatch.
i.
If the performance of the whole or any part of this Agreement be prohibited or rendered
impossible de jure or de facto in particular and without prejudice to the generality of the
preceding words in consequence of any law or regulation which is or shall be in force in
any country or territory or if any law or regulation shall prevent directly or indirectly the
remittance of any payments due to or from either party.
ii.
If the other party has become insolvent or unable to pay its debts or has lost the whole or
any part of it’s paid up capital
iii.
If there is any material change in the management or control of the other party.
iv.
If the country or territory in which the other party resides or has its head office or is
incorporated shall be involved in armed hostilities with any other country whether war be
declared or not is partly or wholly occupied by another power or be in a state of civil war.
v.
If the other party shall have failed to comply with any of the terms and conditions of this
Agreement.
All notices of termination served in accordance with any of the provisions of this Clause shall be
addressed to the party concerned at its head office or at any address previously designated
by the party.
The Reinsurer shall remain liable for losses which have occurred or commenced up to and
including the date of termination. Thereafter the liability of the Reinsurer shall cease outright
other than so far as outstanding claims are concerned.
In the event of this Agreement being terminated in accordance with the provisions of this
Clause the exact premium payable hereunder shall be based on the premium income figure
for the period from inception to the effective date of termination and shall be subject to a
minimum premium calculated on the amount specified in Premium Clause pro rata for the
effective period.
ARTICLE 19
AMENDMENTS AND ALTERATIONS CLAUSE
It is hereby understood and agreed that any amendments and/or alterations to this
Agreement that are mutually agreed either by correspondence and/or Brokers’ Slip
Endorsements shall be automatically binding hereon and shall be considered as forming an
integral part hereof.
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ARTICLE 20
ARBITRATION CLAUSE
All matters in difference with the Reinsured and the Reinsurer (herein referred to as “the
parties”) in relation to this Agreement, including its formation and validity, and whether arising
during or after the period of this Agreement, shall be referred to an Arbitration Tribunal in the
manner hereafter set out.
Unless the parties agree upon a single Arbitrator within thirty days of one receiving a written
request from the other for Arbitration, the Claimant (the party requesting Arbitration) shall
appoint his Arbitrator and give written notice thereof to the Respondent. Within thirty days of
receiving such notice the Respondent shall appoint his Arbitrator and give written notice
thereof to the Claimant, failing which the Claimant may apply to the Appointor hereinafter
named to nominate an Arbitrator on behalf of the Respondent.
Should the Arbitrators failed to agree, then they shall within thirty days of such disagreement
appoint an Umpire to whom the matter in difference shall be referred. Should the Arbitrators
fail within such period to appoint an Umpire, then either of them or either of the parties may
apply to the Appointor for the appointment of the Umpire.
Unless the parties otherwise agree, the arbitration tribunal shall consist of persons (including
those who have retired) with not less than ten years’ experience of insurance or reinsurance as
persons engaged in the industry itself.
The Arbitration Tribunal shall have power to fix all procedural rules for the holding of the
Arbitration including discretionary power to make orders as to any matters which it may
consider proper in the circumstances of the case with regard to pleadings, discovery,
inspection of documents, examination of witnesses and any other matter whatsoever relating
to the conduct of the Arbitration and may receive and act upon such evidence whether oral
or written strictly admissible or not as it shall in its discretion think fit.
The Appointor shall be-as specified under APPOINTOR in the attached Contractual Details.
All costs of the Arbitration shall be in the discretion of the Arbitration Tribunal who may direct to
and by whom and in what manner they shall be paid.
The seat of the Arbitration shall be as specified under SEAT OF ARBITRATION in the attached
Contractual Details and the Arbitration Tribunal shall apply the law-as specified under CHOICE
OF LAW AND JURISDICTION in the attached Contractual Details as the proper law of this
Agreement.
The award of the Arbitration Tribunal shall be in writing and binding upon the parties who
covenant to carry out the same. If either of the parties should fail to carry out any 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
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ARTICLE 21
CLAIMS CO-OPERATION AND REPORTING CLAUSE
Notwithstanding anything to the contrary contained in this Agreement it is a condition
precedent to the Reinsurer’s liability under this agreement that:
a)
The Reinsured shall give immediate written notice to the Reinsurer of any individual claim
or aggregation of claims provided for in this Agreement made against the Reinsured in
respect of business reinsured hereunder or of its becoming aware of any circumstances
which could give rise to such a claim or aggregation of claims where the same exceeds
or may possibly exceed 75% of the stipulated excess point (irrespective of any question as
to liability).
b)
The Reinsured shall furnish the Reinsurer with all information known to the Reinsured
respecting claims or possible claims notified in accordance with a) above and shall
thereafter keep the Reinsurer fully informed as regard all developments relating thereto
as soon as they occur.
c)
The Reinsured shall co-operate fully with the Reinsurer and any other person or persons
designated by the Reinsurer in the investigation adjustment and settlement of any claim
notified to the Reinsurer as aforesaid and the Reinsured shall not without consulting the
Reinsurer or its representative litigate any such claim.
ARTICLE 22
EVENT DEFINITION (SRA 460)
1)
For the purposes of this reinsurance agreement, an event shall include all insured losses
which arise directly from the same cause and which occur during the same period of
time and in the same area. Such cause is understood to be the peril which directly
occasions the losses or where there are several perils which, in an unbroken chain of
causation, have occasioned the losses, the peril which triggered the chain of causation.
For example, as long as they are covered by this reinsurance agreement, losses
occasioned by the perils set out below at letter a) to f) shall constitute single events:
a)
b)
c)
d)
e)
f)
2)
storm due to an atmospheric disturbance usually so designated by a
meteorological institute;
hail and/or thunderstorms and/or tornadoes due to an atmospheric disturbance,
earthquake, tsunami, volcanic eruption;
flood by one and the same instance of high water which may have more than one
peak and which may occur in one or more bodies of water;
conflagration;
strike, riot, civil commotion or violent demonstration occurring within the boundaries
of one city, town or village
If the number of events cannot be determined according to paragraph 1), the following
hours clause is then applied. An event shall thus encompass a continuous period of time
starting with the occurrence of the Reinsured’s first individual loss and lasting
24 hours for perils mentioned under 1(b)
72 hours for perils mentioned under 1(a), (e) and (f)
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504 hours perils mentioned under 1(d)
168 hours for perils mentioned under 1(c) as well as those perils not referred to in
paragraph 1 but covered by this reinsurance agreement
In the case of differing perils which are not connected to each other by an unbroken
chain of causation, the applicable number of hours corresponds to those of the peril
which has caused the largest amount of damages.
3)
In the case of more than one event, if it is impossible to allocate any losses, the reinsured
shall allocate them to the event whose cause is most likely to have occasioned them.
In case of uncertainty over scientific issues, the parties agree to seek expert advice from
a neutral and recognized organization.
ARTICLE 23
RISK DEFINITION (SRA 009)
The Reinsured shall be the sole judge of what constituted one risk provided, however, that:
A)
A risk shall never be less than all insurable values within exterior walls and under one roof
regardless of fire divisions, the number of policies involved, and whether there is a single,
multiple or unrelated named insureds involved in such risk
B)
When two or more buildings are situated at the same general location, the Reinsured
shall identify on its records at the time of acceptance by the Reinsured, those individual
buildings and all insurable values contained therein that are considered to constitute
each risk. If such identification is not made, each building and all insurable values
contained therein shall be considered to be a separate risk.
C)
A risk shall be determined from the standpoint of the predominant peril and such peril
shall be noted in the Reinsured’s records
ARTICLE 24
SPECIAL EXTENSION CLAUSE
1
(a)
Should a catastrophic event (as defined below) occur during the last month of
this Agreement and should preparation necessary to effect the renewal of this
Agreement have not been concluded the period of this Agreement shall be
automatically extended for a period of one month, subject to the provisions of
paragraph 2,below.
(b)
If preparation necessary to effect the renewal of this Agreement have not been
concluded by the end of the one-month extension period provided for above then this
Agreement shall be extended for a further period of one month.
(c)
If at the end of the further one-month extension period provided for in 1. (b)
above preparations necessary to effect the renewal of this Agreement have still not been
concluded then this Agreement shall be extended for a third period of one month, after
which there will be no further extension without the express agreement of the parties.
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2.
This agreement will not be extended as provided for in paragraphs 1. (a), (b) or (c)
above if the Reinsured notifies the Reinsurers that an extension, or further extension, is not
required, which the Reinsured will do without unreasonable delay if they are satisfied that
the catastrophic event does not interrupt communications between the parties and does
not affect their ability to access and transmit data necessary to negotiate renewal of this
Agreement, or if such circumstances, having existed, cease to exist.
3.
(a)
As consideration for any extension under this clause there will be an additional
premium which shall be calculated at daily pro rata of the annual premium for this
Agreement and added to the premium for the original 12 month period for this
Agreement.
(b)
Any reinstatement premium will be calculated on 100% of the annual premium
for the original 12 month period of this Agreement, and calculated pro-rata as to the
fraction of the limit of liability reinstated.
4.
(a)
For the purposes of this clause, a catastrophic event shall be considered by the
Reinsured to be circumstances where the Reinsured has no regular or reliable means of
external communication or any reasonable access to office systems and data and is
therefore prevented from engaging in their normal renewal discussions.
(b)
A month is defined as a calendar month.
NUCLEAR ENERGY RISKS EXCLUSION CLAUSE (REINSURANCE) (1994) – (WORLDWIDE EXCLUDING
U.S.A. & CANADA) NMA 1975A
This Agreement shall exclude Nuclear Energy Risks whether such risks are written directly
and/or by way of reinsurance and/or via Pools and/or Associations.
For all purposes of this Agreement Nuclear Energy Risks shall be defined as all first party
and/or third party insurances (other than Workers’ Compensation and/or Employers’
Liability) in respect of:
(i) All Property on the site of a nuclear power station. Nuclear Reactors, reactor
buildings and plant equipment therein on any site other than a nuclear power station.
(ii) All Property, on any site (including but not limited to the sites referred to in (i) above)
used or having been used for:
(a)
The generation of nuclear energy; or
(b)
The production, Use or Storage of Nuclear Material.
(iii) Any other Property eligible for insurance by the relevant local Nuclear Insurance Pool
and/or Association but only to the extent of the requirements of that local Pool
and/or Association.
(iv) The supply of goods and services to any of the sites, described in (i) to (iii) above,
unless such insurances or reinsurances shall exclude the perils of irradiation and
contamination by Nuclear Material.
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Except as under noted, Nuclear Energy Risks shall not include:
(a) Any insurance or reinsurance in respect of the construction or erection or installation
or replacement or repair or maintenance or decommissioning of property as
described in (i) to (iii) above (including contractor’s plant and equipment)
(b) Any Machinery Breakdown or other Engineering insurance or reinsurance not coming
within the scope of (a) above;
Provided always that such insurance or reinsurance shall exclude the perils or irradiation
and contamination by Nuclear Material.
However, the above exemption shall not extend to:
(1) The provision of any insurance or reinsurance whatsoever in respect of:
(a)
Nuclear Material
(b)
Any Property in the High Radioactivity Zone or Area of any Nuclear Installation
as from the introduction of Nuclear Material or - for reactor installations - as from
fuel loading or first criticality where so agreed with the relevant local Nuclear
Insurance Pool and/or Association.
(2) The provision of any insurance or reinsurance for the undernoted perils:-
Fire, lightning, explosion;
Earthquake;
Aircraft and other aerial devices or articles dropped therefrom;
Irradiation and radioactive contamination;
Any other peril insured by the relevant local Nuclear Insurance Pool and/or
Association;
In respect of any other Property not specified in (1) above which directly involves the
Production, Use or Storage of Nuclear Materials as from the introduction of Nuclear
Material into such Property.
Definitions
“Nuclear Material” means:
(i)
Nuclear fuel, other than natural uranium and depleted uranium, capable of producing
energy by a self-sustaining chain process of nuclear fission outside a Nuclear Reactor,
either alone or in combination with some other material; and
(ii)
Radioactive Products or Waste.
“Radioactive Products or Waste “ means any radioactive material produced in, or any
material made radioactive by exposure to the radiation incidental to the production or
utilization of nuclear fuel, but does not include radioisotopes which have reached the final
stage of fabrication so as to be usable for any scientific, medical, agricultural, commercial or
industrial purpose.
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“Nuclear Installations” means:
(i)
Any nuclear Reactor;
(ii)
Any factory using nuclear fuel for the production of Nuclear Material, or any factory for
the processing of Nuclear Material, including any factory for the reprocessing of
irradiated nuclear fuel; and
(iii)
Any facility where Nuclear Material is stored, other than storage incidental to the carriage
of such material.
“Nuclear Reactor” means any structure containing nuclear fuel in such an arrangement that a
self-sustaining chain process of nuclear fission can occur therein without an additional source
of neutrons.
“Production, Use or Storage of Nuclear Material” means the production, manufacture,
enrichment, conditioning, processing, reprocessing, use, storage, handling and disposal of
Nuclear Material.
“Property” shall mean all land, buildings, structures, plant, equipment, vehicles, contents
(including but not limited to liquids and gases) and all materials of whatever description
whether fixed or not.
“High Radioactivity Zone or Area” means:
(i)
For nuclear power stations and Nuclear Reactors, the vessel or structure which
immediately contains the core (including its support and shrouding) and all the contents
thereof, the fuel elements, the control rods and the irradiated fuel store; and
(ii)
For non-reactor Nuclear Installations, any area where the level of radioactivity requires
the provision of biological shield.
INFORMATION
1)
Estimated Premium Income - 2012 PHP1,000,000,000 (Annual) (including PSALM, TranscoNGCP and NPC)
2)
Normal Maximum Net Retention is PHP750million.
3)
No declaration is needed on the third layer of this agreement to cover GSIS’s retention of
risks which amount in excess of PHP750million
4)
Minimum Deposit Premium is 80% of estimated earned premium.
For information and guidance of all concerned.
MA. LOURDES M. CABALLES
Head, Secretariat
GSIS GIBAC
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