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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of report (Date of earliest event reported) APRIL 1, 1998
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ZENITH NATIONAL INSURANCE CORP.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1-9627 95-2702776
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(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
21255 CALIFA STREET, WOODLAND HILLS, CA 91367-5021
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code (818) 713-1000
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Effective April 1, 1998, Zenith Insurance Company, a wholly owned
subsidiary of the Registrant ("Zenith Insurance"), closed its previously
announced transaction with RISCORP, Inc. and certain of its subsidiaries
(collectively, "RISCORP"), pursuant to which Zenith Insurance has acquired
substantially all of the assets and assumed certain liabilities of RISCORP
related to its workers' compensation business, including RISCORP's existing
in-force insurance business as well as the right to all new and renewal
policies. Zenith Insurance also acquired RISCORP's "First Call"(sm) managed
care workers' compensation system. After the closing, RISCORP will no longer
engage in the workers' compensation or managed care businesses. The assets
acquired by Zenith Insurance consist of investments, receivables, reinsurance
recoverables, property, plant and equipment, office leases, certain trade
names and other assets. Real estate acquired by Zenith Insurance was
previously used by RISCORP for its workers' compensation operations and will
be used by Zenith Insurance for its southeast workers' compensation
operations.
The final purchase price, to be paid in cash, will be the difference
between the book value of the assets purchased and the book value of the
liabilities assumed by Zenith Insurance as of April 1, 1998. The final
purchase price is subject to audit and a dispute resolution process, and
cannot be determined at this time. At the closing, Zenith Insurance paid the
minimum cash purchase price of $35 million and in addition repaid $15 million
of indebtedness of RISCORP, Inc. Zenith Insurance will pay any additional
purchase price from internal funds.
As part of the closing, Zenith Insurance entered into Assumption and
Indemnity Reinsurance Agreements with each of the three insurance
subsidiaries of RISCORP, Inc.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. The required financial
statements for the acquired business are not filed at this time and the
Registrant will file such financial statements as soon as practicable, but not
later than 60 days after the date on which this Report on Form 8-K is required
to be filed.
(b) PRO FORMA FINANCIAL INFORMATION. The required financial statements
are not filed at this time and the Registrant will file such financial
statements as soon as practicable, but not later than 60 days after the date on
which this Report on Form 8-K is required to be filed.
(c) EXHIBITS
Number Exhibit
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10.1 Asset Purchase Agreement, dated as of June 17, 1997,
by and among Zenith Insurance Company and RISCORP,
Inc., RISCORP Management Services, Inc., RISCORP of
Illinois, Inc., Independent Association Administrators
Incorporated, RISCORP Insurance
2
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Services, Inc., RISCORP Managed Care Services, Inc.,
CompSource, Inc., RISCORP Real Estate Holdings,
Inc., RISCORP Acquisition, Inc., RISCORP West, Inc.,
RISCORP of Florida, Inc., RISCORP Insurance Company,
RISCORP Property & Casualty Insurance Company,
RISCORP National Insurance Company, RISCORP Services,
Inc., RISCORP Staffing Solutions Holding, Inc.,
RISCORP Staffing Solutions, Inc. I and RISCORP
Staffing Solutions, Inc. II. (Incorporated herein by
reference to Exhibit 10.1 to Zenith's Current Report
on Form 8-K dated June 17, 1997.)
10.2 First Amendment, entered into June 26, 1997, to the
Asset Purchase Agreement dated as of June 17, 1997,
by and among Zenith Insurance Company and RISCORP,
Inc., RISCORP Management Services, Inc., RISCORP of
Illinois, Inc., Independent Association Administrators
Incorporated, RISCORP Insurance Services, Inc.,
RISCORP Managed Care Services, Inc., CompSource, Inc.,
RISCORP Real Estate Holdings, Inc., RISCORP
Acquisition, Inc., RISCORP West, Inc., RISCORP of
Florida, Inc., RISCORP Insurance Company, RISCORP
Property & Casualty Insurance Company, RISCORP
National Insurance Company, RISCORP Services, Inc.,
RISCORP Staffing Solutions Holding, Inc., RISCORP
Staffing Solutions, Inc. I and RISCORP Staffing
Solutions, Inc. II.
10.3 Second Amendment, entered into July 11, 1997, to the
Asset Purchase Agreement dated as of June 17, 1997,
by and among Zenith Insurance Company and RISCORP,
Inc., RISCORP Management Services, Inc., RISCORP of
Illinois, Inc., Independent Association Administrators
Incorporated, RISCORP Insurance Services, Inc.,
RISCORP Managed Care Services, Inc., CompSource, Inc.,
RISCORP Real Estate Holdings, Inc., RISCORP
Acquisition, Inc., RISCORP West, Inc., RISCORP of
Florida, Inc., RISCORP Insurance Company, RISCORP
Property & Casualty Insurance Company, RISCORP
National Insurance Company, RISCORP Services, Inc.,
RISCORP Staffing Solutions Holding, Inc., RISCORP
Staffing Solutions, Inc. I and RISCORP Staffing
Solutions, Inc. II.
10.4 Amendment No. 3 entered into March 30, 1998, to the
Asset Purchase Agreement dated as of June 17, 1997, by
and among Zenith Insurance Company and RISCORP, Inc.,
RISCORP Management Services, Inc., 1390 Main Street
Services, Inc.,
3
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RISCORP of Illinois, Inc., Independent Association
Administrators Incorporated, RISCORP Insurance
Services, Inc., RISCORP Managed Care Services, Inc.,
CompSource, Inc., RISCORP Real Estate Holdings, Inc.,
RISCORP Acquisition, Inc., RISCORP West, Inc., RISCORP
of Florida, Inc., RISCORP Insurance Company, RISCORP
Property & Casualty Insurance Company, RISCORP
National Insurance Company, RISCORP Services, Inc.,
RISCORP Staffing Solutions Holding Company,
RISCORP Staffing Solutions, Inc. I and RISCORP
Staffing Solutions, Inc. II.
10.5 Assumption and Indemnity Reinsurance Agreement, dated
as of April 1, 1998, by and between Zenith Insurance
Company and RISCORP National Insurance Company.
10.6 Assumption and Indemnity Reinsurance Agreement, dated
as of April 1, 1998, by and between Zenith Insurance
Company and RISCORP Insurance Company.
10.7 Assumption and Indemnity Reinsurance Agreement, dated
as of April 1, 1998, by and between Zenith Insurance
Company and RISCORP Property & Casualty Insurance
Company.
99 Press Release of Zenith National Insurance Corp. dated
April 2, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
ZENITH NATIONAL INSURANCE CORP.
Dated: April 16, 1998 By: /s/ FREDRICKA TAUBITZ
---------------------------
Name: Fredricka Taubitz
Title: Executive Vice President
& Chief Financial Officer
4
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EXHIBIT 10.2
FIRST AMENDMENT TO
ASSET PURCHASE AGREEMENT
THIS FIRST AMENDMENT (this "Amendment") is entered into this 26th day of
June, 1997 by and among Zenith Insurance Company, a California corporation
(the "Purchaser") and RISCORP, Inc., a Florida corporation ("RISCORP"),
RISCORP Management Services, Inc., a Florida corporation ("RMS"), RISCORP of
Illinois, Inc., an Illinois corporation ("RI"), Independent Association
Administrators Incorporated, an Alabama corporation ("IAA"), RISCORP
Insurance Services, Inc., a Florida corporation ("RIS"), RISCORP Managed Care
Services, Inc., a Florida corporation ("RMCS"), CompSource, Inc., a North
Carolina corporation ("CompSource"), RISCORP Real Estate Holdings, Inc., a
Florida corporation ("RRE"), RISCORP Acquisition, Inc., a Florida corporation
("RA"), RISCORP West, Inc., an Oklahoma corporation ("RW"), RISCORP of
Florida, Inc., a Florida corporation ("RF"), RISCORP Insurance Company, a
Florida corporation ("RIC"), RISCORP Property & Casualty Insurance Company, a
Florida corporation ("RP&C"), RISCORP National Insurance Company, a Missouri
corporation ("RNIC"), RISCORP Services, Inc., a Florida corporation ("RS"),
RISCORP Staffing Solutions Holding, Inc., a Florida corporation ("RSS
Holding"), RISCORP Staffing Solutions, Inc. I, a Florida corporation
("RSSI"), and RISCORP Staffing Solutions, Inc. II, a Florida corporation
("RSSII"). RISCORP, RMS, RI, IAA, RIS, RMCS, CompSource, RRE, RA, RW, RF,
RIC, RP&C, RNIC, RS, RSS Holding, RSSI and RSSII are referred to herein
collectively as the "Sellers."
WITNESSETH:
WHEREAS, on June 17, 1997, the Purchaser and the Sellers entered into an
Asset Purchase Agreement (the "Agreement") which contemplates the acquisition
of certain assets and the assumption of certain liabilities of the Sellers by
the Purchaser:
WHEREAS, the Purchaser and Sellers desire to amend the Agreement as
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. SECTION 5.18(a). Section 5.18(a) of the Agreement is hereby
deleted in its entirety and, in lieu thereof, the following new Section
5.18(a) is hereby inserted:
"(a) Within twenty four days following the date of execution of this
Agreement, the Sellers' Representative on behalf of the Sellers shall
deliver to Purchaser schedules prepared in consultation with the Purchaser
and reasonably satisfactory to the parties ("Disclosure Schedules"), which
shall be accompanied by a certificate signed by the chief executive officer
of RISCORP stating that the Disclosure Schedules are being delivered
pursuant to this Section 5.18. The Disclosure Schedules, when so
delivered, shall be deemed to constitute an integral part of this Agreement
and to modify the respective representations, warranties, covenants or
agreements of the parties hereto contained herein to the extent that such
representations, warranties, covenants or agreements expressly refer to
schedules. Anything to the contrary contained herein or in
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the Disclosure Schedules notwithstanding, any and all statements,
representations, warranties or disclosures set forth in the Disclosure
Schedules shall be deemed to have been made on and as of the date hereof.
2. OTHER TERMS AND CONDITIONS RATIFIED AND CONFIRMED. All other terms
and conditions of the Agreement are hereby ratified and confirmed by the parties
and shall remain in full force and effect.
3. COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned parties have executed this Amendment as
of the day and year set forth above.
ZENITH INSURANCE COMPANY
By: /s/ STANLEY R. ZAX
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Name: Stanley R. Zax
Title: Chairman and President
RISCORP, INC.
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
RISCORP MANAGEMENT SERVICES, INC.
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
RISCORP OF ILLINOIS, INC.
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
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INDEPENDENT ASSOCIATION ADMINISTRATORS
INCORPORATED
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
RISCORP INSURANCE SERVICES, INC.
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
RISCORP MANAGED CARE SERVICES, INC.
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
COMPSOURCE, INC.
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
RISCORP REAL ESTATE HOLDINGS, INC.
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
RISCORP ACQUISITION, INC.
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
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RISCORP WEST, INC.
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
RISCORP OF FLORIDA, INC.
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
RISCORP INSURANCE COMPANY
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
RISCORP PROPERTY & CASUALTY INSURANCE
COMPANY
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
RISCORP NATIONAL INSURANCE COMPANY
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
RISCORP SERVICES, INC.
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
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RISCORP STAFFING SOLUTIONS HOLDING, INC.
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
RISCORP STAFFING SOLUTIONS HOLDING, INC. I
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
RISCORP STAFFING SOLUTIONS HOLDING, INC. II
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
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EXHIBIT 10.3
SECOND AMENDMENT TO
ASSET PURCHASE AGREEMENT
THIS SECOND AMENDMENT (this "Amendment") is entered into this 11th day
of July, 1997 by and among Zenith Insurance Company, a California corporation
(the "Purchaser") and RISCORP, Inc., a Florida corporation ("RISCORP"),
RISCORP Management Services, Inc., a Florida corporation ("RMS"), RISCORP of
Illinois, Inc., an Illinois corporation ("RI"), Independent Association
Administrators Incorporated, an Alabama corporation ("IAA"), RISCORP
Insurance Services, Inc., a Florida corporation ("RIS"), RISCORP Managed Care
Services, Inc., a Florida corporation ("RMCS"), CompSource, Inc., a North
Carolina corporation ("CompSource"), RISCORP Real Estate Holdings, Inc., a
Florida corporation ("RRE"), RISCORP Acquisition, Inc., a Florida corporation
("RA"), RISCORP West Inc., an Oklahoma corporation ("RW"), RISCORP of
Florida, Inc., a Florida corporation ("RF"), RISCORP Insurance Company, a
Florida corporation ("RIC"), RISCORP Property & Casualty Insurance Company, a
Florida corporation ("RP&C"), RISCORP National Insurance Company, a Missouri
corporation ("RNIC"), RISCORP Services, Inc., a Florida corporation ("RS"),
RISCORP Staffing Solutions Holding, Inc., a Florida corporation ("RSS
Holding"), RISCORP Staffing Solutions, Inc. I, a Florida corporation ("RSSI")
and RISCORP Staffing Solutions, Inc. II, a Florida corporation ("RSSII").
RISCORP, RMS, RI, IAA, RIS, RMCS, CompSource, RRE, RA, RW, RF, RIC, RP&C,
RNIC, RS, RSS Holding, RSSI and RSSII are referred to herein collectively as
the "Sellers."
W I T N E S S E T H:
WHEREAS, on June 17, 1997, the Purchaser and the Sellers entered into an
Asset Purchase Agreement (the "Agreement") which contemplates the acquisition
of certain assets and the assumption of certain liabilities of the Sellers by
the Purchaser;
WHEREAS, the Purchaser and Sellers desire to amend the Agreement as
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. SECTION 5.18. Section 5.18 of the Agreement is hereby deleted in
its entirety and, in lieu thereof, the following new Section 5.18 is hereby
inserted:
"(a) Within thirty one days following the date of execution of this
Agreement, the Sellers' Representative on behalf of the Sellers shall
deliver to Purchaser schedules prepared in consultation with the Purchaser
and reasonably satisfactory to the parties ("Disclosure Schedules"), which
shall be accompanied by a certificate signed by the chief executive officer
of RISCORP stating that the Disclosure Schedules are being delivered
pursuant to this Section 5.18. The Disclosure Schedules, when so
delivered, shall be deemed to constitute an integral part of this Agreement
and to modify the respective representations, warranties, covenants or
agreements of the parties hereto contained herein to the extent that such
representations, warranties, covenants or agreements expressly refer to
schedules. Anything to the contrary contained herein or in the Disclosure
Schedules
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notwithstanding, any and all statements, representations, warranties or
disclosures set forth in the Disclosure Schedules shall be deemed to have
been made on and as of the date hereof.
(b) The parties hereby agree to cooperate in good faith to complete
within forty one days from the date hereof the schedules to the Purchase
Agreement pertaining to Assigned and Assumed Contracts, Included Affiliate
Agreements, Included Employment Contracts, Insurance Contracts and other
Transferred Assets and Other Assumed Liabilities."
2. OTHER TERMS AND CONDITIONS RATIFIED AND CONFIRMED. All other terms
and conditions of the Agreement are hereby ratified and confirmed by the parties
and shall remain in full force and effect.
3. COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned parties have executed this Amendment as
of the day and year set forth above.
ZENITH INSURANCE COMPANY
By: /s/ STANLEY R. ZAX
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Name: Stanley R. Zax
Title: Chairman & President
RISCORP, INC.
By: /s/ FREDERICK M. DAWSON
---------------------------
Name: Frederick M. Dawson
Title: President
RISCORP MANAGEMENT SERVICES, INC.
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
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RISCORP OF ILLINOIS, INC.
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
INDEPENDENT ASSOCIATION ADMINISTRATORS
INCORPORATED
By: /s/ FREDERICK M. DAWSON
---------------------------
Name: Frederick M. Dawson
Title: President
RISCORP INSURANCE SERVICES, INC.
By: /s/ FREDERICK M. DAWSON
---------------------------
Name: Frederick M. Dawson
Title: President
RISCORP MANAGED CARE SERVICES, INC.
By: /s/ FREDERICK M. DAWSON
---------------------------
Name: Frederick M. Dawson
Title: President
COMPSOURCE, INC.
By: /s/ FREDERICK M. DAWSON
---------------------------
Name: Frederick M. Dawson
Title: President
RISCORP REAL ESTATE HOLDINGS, INC.
By: /s/ FREDERICK M. DAWSON
---------------------------
Name: Frederick M. Dawson
Title: President
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RISCORP ACQUISITION, INC.
By: /s/ FREDERICK M. DAWSON
---------------------------
Name: Frederick M. Dawson
Title: President
RISCORP WEST, INC.
By: /s/ FREDERICK M. DAWSON
---------------------------
Name: Frederick M. Dawson
Title: President
RISCORP OF FLORIDA, INC.
By: /s/ FREDERICK M. DAWSON
---------------------------
Name: Frederick M. Dawson
Title: President
RISCORP INSURANCE COMPANY
By: /s/ FREDERICK M. DAWSON
---------------------------
Name: Frederick M. Dawson
Title: President
RISCORP PROPERTY & CASUALTY INSURANCE
COMPANY
By: /s/ FREDERICK M. DAWSON
---------------------------
Name: Frederick M. Dawson
Title: President
RISCORP NATIONAL INSURANCE COMPANY
By: /s/ FREDERICK M. DAWSON
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Name: Frederick M. Dawson
Title: President
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RISCORP SERVICES, INC.
By: /s/ FREDERICK M. DAWSON
---------------------------
Name: Frederick M. Dawson
Title: President
RISCORP STAFFING SOLUTIONS HOLDING, INC.
By: /s/ FREDERICK M. DAWSON
---------------------------
Name: Frederick M. Dawson
Title: President
RISCORP STAFFING SOLUTIONS HOLDING, INC. I
By: /s/ FREDERICK M. DAWSON
---------------------------
Name: Frederick M. Dawson
Title: President
RISCORP STAFFING SOLUTIONS HOLDING, INC. II
By: /s/ FREDERICK M. DAWSON
---------------------------
Name: Frederick M. Dawson
Title: President
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<PAGE>
EXHIBIT 10.4
AMENDMENT NO. 3 TO
ASSET PURCHASE AGREEMENT
THIS AMENDMENT (the "Amendment") is entered into this 30th day of March,
1998 by and among Zenith Insurance Company, a California corporation (the
"Purchaser"), and RISCORP, Inc., a Florida corporation ("RISCORP"), RISCORP
Management Services, Inc., a Florida corporation ("RMS"), 1390 Main Street
Services, Inc., a Florida Corporation ("1390 Main Street"), RISCORP of
Illinois, Inc., an Illinois corporation ("RI"), Independent Association
Administrators Incorporated, an Alabama corporation ("IAA"), RISCORP
Insurance Services, Inc., a Florida corporation ("RIS"), RISCORP Managed Care
Services, Inc., a Florida corporation ("RMCS"), CompSource, Inc., a North
Carolina corporation ("CompSource"), RISCORP Real Estate Holdings, Inc., a
Florida corporation ("RRE"), RISCORP Acquisition, Inc., a Florida corporation
("RA"), RISCORP West, Inc., an Oklahoma corporation ("RW"), RISCORP of
Florida, Inc., a Florida corporation ("RF"), RISCORP Insurance Company, a
Florida corporation ("RIC"), RISCORP Property & Casualty Insurance Company, a
Florida corporation (RP&C"), RISCORP National Insurance Company, a Missouri
corporation ("RNIC"), RISCORP Services, Inc., a Florida corporation ("RS"),
RISCORP Staffing Solutions Holding Company, a Florida corporation ("RSS
Holding"), RISCORP Staffing Solutions, Inc. I, a Florida corporation ("RSSI")
and RISCORP Staffing Solutions, Inc. II, a Florida corporation ("RSSII").
RISCORP, RMS, 1390 Main Street, RI, IAA, RIS, RMCS, CompSource, RRE, RA, RW,
RF, RIC, RP&C, RNIC, RS, RSS Holding, RSSI and RSSII are referred to herein
collectively as the "Sellers."
WITNESSETH:
WHEREAS, the Purchaser and the Sellers, other than 1390 Main Street, are
parties to an Asset Purchase Agreement dated as of June 17, 1997, as amended
(the "Agreement"), which contemplates the acquisition of certain assets and
the assumption of certain liabilities of the Sellers by the Purchaser; and
WHEREAS, the Purchaser and Sellers desire to amend the Agreement as
hereinafter set forth, including without limitation, by the addition of 1390
Main Street as a party thereto and signatory thereof.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
<PAGE>
1. The preamble of the Agreement is amended by substituting the name
"RISCORP Staffing Solutions Holding Company" for the name "RISCORP
Staffing Solutions Holdings, Inc." in the nineteenth line thereof.
2. Section 1.01 of the Agreement is amended as follows:
(a) by substituting the term "Schedule 1.01(a)" for the term
"Schedule 1.10(a)" in the fourth line of the definition of
"ASSIGNED AND ASSUMED CONTRACTS";
(b) by substituting the term "Exhibit C" for the term "Exhibit D" in
the second line of the definition of "ASSUMPTION AGREEMENT";
(c) by substituting the term "Exhibit B" for the term "Exhibit C" in
the third line of the definition of the term "BILL OF SALE AND
GENERAL ASSIGNMENT";
(d) by amending subsection (d) of the definition of "OTHER ASSUMED
LIABILITIES" in its entirety to read as follows:
"(d) any contingent liability (other than Insurance
Liabilities)", whether known or unknown, on the date hereof and
any contingent liability (other than Insurance Liabilities),
whether known or unknown, to the extent such contingent
liabilities not accrued or reserved for on the Final Balance
Sheet";
(e) by amending the definition of "REINSURANCE AGREEMENT" by adding
the words "Assumption and Indemnity" after the word "the" in the
first line thereof;
3. Section 2.04(a) of the Agreement shall be amended by deleting the
words "(ii) the Insurance Administration Agreement" therefrom and renumbering
each item in Section 2.04(a) thereafter.
4. Section 2.04(b) of the Agreement is amended by (a) deleting the
apostrophe after the word "Sellers" in the second line thereof and (b) deleting
the words "(ii) the Insurance Administration Agreement" and renumbering each
item in Section 2.04(b) thereafter.
5. Section 2.05 of the Agreement is amended by deleting the comma and
adding the word "or" after the word "Contracts" in the twenty-first line
thereof.
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6. Section 3.08 of the Agreement is amended by deleting the word
"Assignable" in the third line thereof and the word "Owned" in the fourth line
thereof.
7. Section 3.09 of the Agreement is amended by substituting the term
"Schedule 3.09" for the term "Schedule 3.10" in the last line thereof.
8. Section 3.14 of the Agreement is amended in its entirety to read as
follows:
Section 3.14. DISPUTED CLAIMS. Schedule 3.14 sets forth a
complete and accurate list of all claims where payment is in
dispute pursuant to any Insurance Contract that were unpaid
as of June 16, 1997, where the aggregate amount of such
payment is not determinable and there is a specific reserve
established with respect to such claim which exceeds
$50,000.
9. Section 3.15(e) of the Agreement is amended by (a) adding the word
"license," after the word "to" in the fourth line thereof and (b) by
substituting the term "trade secret rights" for the term "trade secrets" in the
tenth line thereof.
10. Section 3.15A(e) of the Agreement is amended by substituting the term
"trade secret rights" for the term "trade secrets" in the tenth line thereof.
11. Section 3.17(a)(xvi) of the Agreement is amended by substituting the
term "Schedule 3.17" for the term "Schedule 3.1(h)."
12. Section 3.17(a)(xvii) of the Agreement is amended by substituting the
term "Schedule 3.17" for the term "Schedule 3.1(h)."
13. Section 3.17(a)(xviii) of the Agreement is amended by substituting the
term "Schedule 3.17" for the term "Schedule 3.1(h)."
14. Section 3.17(a)(xix) of the Agreement is amended by substituting the
term "Schedule 3.17" for the term "Schedule 3.1(h)."
15. Section 3.22(h) of the Agreement is amended by adding a letter "s" to
the word "Lease" in the second line thereof.
16. Section 5.01(xii) of the Agreement shall be amended by substituting
the word "compromise" for the word "comprise" in the second line thereof.
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17. Section 5.16 of the Agreement is amended by substituting the word
"Purchaser" for the word "Purchase" in the sixth line thereof.
18. Section 6.01(a) of the Agreement is amended in its entirety to read as
follows:
Section 6.01. REPRESENTATIONS AND COVENANTS. (a) The
representations and warranties of the Sellers contained in
Sections 3.01, 3.02, 3.03, 3.04, 3.08 and 3.21 of the
Agreement that are qualified as to materiality shall be true
and correct in all respects as of the date of this Agreement
and as of the Closing Date, except to the extent that any
such representation and warranty is made as of a particular
date, in which case such representation and warranty shall
have been true and correct in all respects as of such date.
The representations and warranties of the Sellers contained
in Sections 3.01, 3.02, 3.03, 3.04, 3.08 and 3.21 of the
Agreement that are not qualified as to materiality shall be
true and correct in all material respects as of the date of
this Agreement and as of the Closing Date, except to the
extent that any such representation and warranty is made as
of a particular date, in which case such representation and
warranty shall have been true and correct in all material
respects as of such date.
19. Section 9.01(a)(ii) of the Agreement is amended by changing the word
"or" to the word "of" after the word "breach" in the first line thereof.
20. Section 9.06 of the Agreement is amended by substituting the term
Section 9.01 for the term "Section 9.06" in the third line thereof.
21. Section 11.06 of the Agreement is amended by substituting the word
"Florida" for the word "New York" in the third line thereof.
22. The parties hereto acknowledge that, by executing this Amendment, 1390
Main Street (i) shall become a party to the Agreement as of the date hereof, and
(ii) shall be bound by all the terms of the Agreement as amended hereby. In
addition, 1390 Main Street shall be included in the definition of the term
"Sellers" as defined on the first page of the Agreement.
23. Exhibit A to the Agreement is to be deleted and replaced in its
entirety by the Form of Assumption and Indemnity Reinsurance Agreement attached
hereto as Exhibit A.
-4-
<PAGE>
24. Exhibit B to the Agreement is amended by substituting the word
"Florida" for the word "New York" in Section 7 thereof.
25. Exhibit C to the Agreement is amended by substituting the word
"Florida" for the word "New York" in Section 9 thereof.
26. Exhibit D to the Agreement is amended by substituting the word
"Florida" for the word "New York" in Section 8 thereof.
27. Exhibit E to the Agreement is amended by substituting the word
"Florida" for the word "New York" in Section 5(e) thereof.
28. Section 1.01(a) of the Disclosure Schedules to the Agreement is
amended in its entirety to read as set forth in Exhibit B attached hereto and
made a part hereof.
29. Section 1.01(c) of the Disclosure Schedule to the Agreement is amended
in its entirety to read as set forth in Exhibit C attached hereto and made a
part hereof.
30. All other terms and conditions of the Agreement are hereby ratified
and confirmed by the parties hereto and shall remain in full force and effect.
31. All capitalized terms uses herein and not otherwise defined herein
shall have the respective meanings provided such terms in the Agreement.
32. This Amendment shall be governed by and construed in accordance with
the laws of the State of Florida without regard to principles of conflicts of
laws.
33. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the undersigned parties have executed this Amendment as
of the day and year set forth above.
ZENITH INSURANCE COMPANY
By: /s/ JOHN J. TICKNER
-------------------------
John J. Tickner
Senior Vice President
RISCORP, INC.
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
RISCORP MANAGEMENT SERVICES, INC.
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
1390 MAIN STREET SERVICES, INC.
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
RISCORP OF ILLINOIS, INC.
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
INDEPENDENT ASSOCIATION
ADMINISTRATORS INCORPORATED
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
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<PAGE>
RISCORP INSURANCE SERVICES, INC.
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
RISCORP MANAGED CARE SERVICES, INC.
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
COMPSOURCE, INC.
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
RISCORP REAL ESTATE HOLDINGS, INC.
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
RISCORP ACQUISITION, INC.
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
RISCORP WEST, INC.
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
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<PAGE>
RISCORP OF FLORIDA, INC.
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
RISCORP INSURANCE COMPANY
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
RISCORP PROPERTY & CASUALTY
INSURANCE COMPANY
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
RISCORP NATIONAL INSURANCE COMPANY
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
RISCORP SERVICES, INC.
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
RISCORP STAFFING SOLUTIONS
HOLDING COMPANY
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
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<PAGE>
RISCORP STAFFING SOLUTIONS, INC. I
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
RISCORP STAFFING SOLUTIONS, INC. II
By: /s/ FREDERICK M. DAWSON
-------------------------
Frederick M. Dawson
President
-9-
<PAGE>
Exhibits not included.
<PAGE>
EXHIBIT 10.5
EXECUTION COPY
ASSUMPTION AND INDEMNITY
REINSURANCE AGREEMENT
by and between
ZENITH INSURANCE COMPANY
and
RISCORP NATIONAL INSURANCE COMPANY
Dated as of April 1, 1998
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
BUSINESS REINSURED. . . . . . . . . . . . . . . . . . . . . . . . . . . .3
ARTICLE III
ASSUMPTION CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE IV
POLICY ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . .5
ARTICLE V
CONSIDERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
ARTICLE VI
RESERVES; CREDIT FOR REINSURANCE . . . . . . . . . . . . . . . . . . . .6
ARTICLE VII
ASSIGNMENT OF CEDED REINSURANCE AGREEMENTS. . . . . . . . . . . . . . . .7
ARTICLE VIII
INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IX
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE X
ACCOUNTING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE XI
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE XII
INSOLVENCY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE XIII
OFFSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
ARTICLE XIV
RIGHTS WITH RESPECT TO QUOTA SHARE POLICIES . . . . . . . . . . . . . . 12
ARTICLE XV
ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE XVI
TERRITORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
<PAGE>
ARTICLE XVII
TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE XVIII
MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . 14
SCHEDULE 3.2. - STATE REQUIREMENTS FOR TRANSFER AND NOVATION OF INSURANCE
CONTRACTS
SCHEDULE 7.1-A ASSIGNED REINSURANCE CONTRACTS
SCHEDULE 7.1-B ASSUMED REINSURANCE CONTRACTS
EXHIBIT A POLICYHOLDER NOTICE
EXHIBIT B EXPIRED POLICY NOTICE
EXHIBIT C CLAIMANT NOTICE
<PAGE>
ASSUMPTION AND INDEMNITY REINSURANCE AGREEMENT
THIS ASSUMPTION AND INDEMNITY REINSURANCE AGREEMENT (this
"Agreement"), dated as of 12:01 a.m. New York City Time on April 1, 1998 (the
"Effective Date"), is made by and between ZENITH INSURANCE COMPANY, a stock
insurance company organized under the laws of the State of California
("Zenith"), and RISCORP NATIONAL INSURANCE COMPANY, a stock insurance company
organized under the laws of the State of Missouri (the "Company").
WHEREAS, Zenith and the Company have entered into the Purchase
Agreement (as defined below); and
WHEREAS, the Purchase Agreement provided for Zenith and the Company to
enter into an indemnity reinsurance agreement;
WHEREAS, the parties have agreed to amend the Purchase Agreement to
provide for Zenith and the Company to enter into an assumption reinsurance
agreement;
WHEREAS, Zenith and the Company are entering into this Agreement
pursuant to the Purchase Agreement, as so amended;
WHEREAS, the Company has agreed to cede to Zenith, and Zenith has
agreed to assume certain liabilities and obligations of the Company under the
Insurance Contracts (as defined in the Purchase Agreement).
NOW, THEREFORE, in consideration of the mutual covenants and promises
and upon the terms and conditions set forth herein, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1. DEFINITIONS. Capitalized terms used herein and not
otherwise defined in this Agreement shall have the meanings given to them in the
Purchase Agreement. As used in this Agreement, the following terms shall have
the following meanings:
"CLAIMANT" means any claimant under any Insurance Contract who (a) has
an open claim on the Effective Date, or (b) files a claim after the Effective
Date.
"EFFECTIVE DATE" means the date specified in the first paragraph
hereof.
"INSURANCE CONTRACTS" shall mean those Insurance Contracts (as defined
in the Purchase Agreement) issued by the Company.
<PAGE>
"INSURANCE LIABILITIES" shall mean those Insurance Liabilities (as
defined in the Purchase Agreement) arising under or in connection with the
Insurance Contracts.
"NOVATED POLICIES" means those Insurance Contracts for which: (a) the
Company or Zenith has received a written acceptance by the Policyholder of the
transfer and assumption under this Agreement; or (b) with respect to any
Insurance Contract that was issued or issued for delivery in a state where
written acceptance by the Policyholder is not required by law or the appropriate
regulatory authority to effect an assumption and novation, (i) the Policyholder
is deemed to have accepted the transfer and assumption under this Agreement by
paying premiums directly to Zenith or taking such other action as may be
recognized under applicable state law as evidence of the Policyholder's
acceptance of the transfer and assumption, or (ii) the Policyholder has,
following the mailing to the Policyholder of such notices as may be prescribed
by applicable state law, neither accepted nor rejected the transfer and
assumption within a timeframe under which applicable state law or appropriate
regulatory authority permits the policyholder to be deemed to have accepted the
transfer and assumption. Any claim made by any Claimant under an Insurance
Contract which expired prior to the Effective Date shall, subject to the last
sentence of this paragraph, be deemed to be a claim under a Novated Policy. If
an Insurance Contract defined herein as a Novated Policy is determined by law or
an appropriate regulatory authority, by judicial decision or otherwise to be not
novated, such Insurance Contract shall for all purposes of this Agreement be
deemed retroactive to the Effective Date to be a Quota Share Policy.
"POLICYHOLDER" means each holder of an Insurance Contract that is in
force on the Effective Date.
"PURCHASE AGREEMENT" means the Asset Purchase Agreement, dated as of
June 17, 1997, as amended, among Zenith, the Company, RISCORP Insurance Company,
RISCORP Property Casualty Insurance Company, RISCORP, Inc., RISCORP of Florida,
Inc., RISCORP Management Services, Inc., RISCORP Managed Care Services, Inc.,
RISCORP Insurance Services, Inc., CompSource, Inc., RISCORP of Illinois, Inc.,
Independent Association Administrators Incorporated, RISCORP Real Estate
Holdings, Inc., RISCORP Acquisition, Inc., RISCORP West, Inc., RISCORP Services,
Inc., RISCORP Staffing Solutions Holdings, Inc., RISCORP Staffing Solutions,
Inc. I and RISCORP Staffing Solutions, Inc. II.
"QUOTA SHARE POLICIES" shall have the meaning set forth in Section 2.3
hereof.
-2-
<PAGE>
ARTICLE II
BUSINESS REINSURED
Section 2.1. BUSINESS REINSURED. Subject to all of the terms and
conditions contained herein, the Company hereby cedes to Zenith, and Zenith
hereby assumes as reinsurance from the Company, all of the rights and
obligations of the Company under each of the Insurance Contracts.
Section 2.2. NOVATED POLICIES. Zenith shall be the successor to the
Company under the Novated Policies that it assumes as if the Novated Policies
were direct obligations originally issued by Zenith. Zenith shall be
substituted in the place and stead of the Company so as to effect a novation of
the respective Insurance Contracts and release the Company from any and all
rights and obligations thereunder. Each insured under a Novated Policy shall
disregard the Company as a party thereto and treat Zenith as if it had been
originally obligated thereunder except as otherwise provided herein. The
insureds shall file claims arising under the Novated Policies on or after the
effective date of such novation directly with Zenith. The insureds under the
Novated Policies shall also have a right to assert claims related to such
Novated Policies directly against Zenith and Zenith hereby consents to be
subject to such claims by any insured under the Novated Policy; PROVIDED,
HOWEVER, that the rights of any insured under any Insurance Contract shall be
limited to and consist of those rights set forth in such Insurance Contract
(including any rider or endorsement thereto), and no insured shall have the
right to receive any greater amount under any Insurance Contract than such
insured would have had in the absence of this Agreement (except that in
assessing such right no effect shall be given to any bankruptcy, liquidation,
insolvency, reorganization or moratorium of the Company, or the effect of laws
or legal procedures affecting enforcement of creditors' rights against the
Company generally). Payments made to insureds in discharge of obligations on
Novated Policies to provide direct coverage to insureds will diminish any
obligation in respect to those Novated Policies which Zenith may have to the
estate of the Company if it shall be in receivership, liquidation or
rehabilitation proceedings.
Section 2.3. QUOTA SHARE POLICIES. To the extent Zenith has not for
any reason assumed by novation any Insurance Contracts or Insurance Liabilities,
Zenith shall accept and reinsure, on a quota share basis, 100% of Insurance
Liabilities under such Insurance Contracts (the "Quota Share Policies"), in
accordance with the terms and conditions of this Agreement, and hereby agrees to
pay directly, on behalf of the Company, any claims or losses reinsured under
this Agreement which arise under such Quota Share Policies; PROVIDED, HOWEVER,
that the insureds under such Quota Share Policies shall not have the right to
assert claims related to such Quota Share Policies directly against Zenith. A
payment made to an insured in discharge of bligations of RISCORP to provide
direct coverage to the insured
-3-
<PAGE>
will diminish the obligation in respect thereof which Zenith may have to the
estate of the Company if it shall be in receivership, liquidation or
rehabilitation proceedings.
Section 2.4. TERMS; CONDITIONS. All Insurance Liabilities for which
Zenith shall assume liability hereunder, either as Novated Policies or Quota
Share Policies, are subject in all respects to the same written terms,
conditions, waivers, modifications, alterations and cancellations as the
Insurance Contracts. Zenith accepts and assumes the Insurance Liabilities
subject to all defenses, setoffs and counterclaims to which the Company would be
entitled with respect to the Insurance Contracts. The parties agree that no
such defenses, setoffs or counterclaims are waived under this Agreement and that
as of the Effective Date, Zenith shall be fully subrogated to all such defenses,
setoffs and counterclaims and be entitled to the full benefits thereof.
ARTICLE III
ASSUMPTION CERTIFICATES
Section 3.1. NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION. (a)
Zenith, with the cooperation and assistance of the Company, shall prepare for
mailing to every Policyholder a Notice of Transfer and Certificate of
Assumption, including a form for rejection or acceptance and a self-addressed
return envelope, substantially in the form attached hereto as EXHIBIT A
(collectively, the "Policyholder Notices"), subject to changes required by state
law or required by any state insurance regulator as a condition for approval of
the mailing of such Policyholder Notices to Policyholders. The Company shall
cooperate and assist Zenith in the preparation and mailing of the Policyholder
Notices as provided herein. Zenith shall mail Policyholder Notices by certified
mail, return receipt requested, to the Policyholders located in a particular
state within thirty days of receipt of all regulatory approvals necessary for
such mailing.
(b) Zenith, with the cooperation and assistance of the Company, shall
prepare for mailing and mail, within thirty days of receipt of all regulatory
approvals necessary for such mailing, to each holder of an Insurance Contract
which expired without renewal during the two year period immediately prececeding
the Effective Date a Notice of Transfer and Assumption substantially in the form
attached hereto as EXHIBIT B (collectively, the "Expired Policy Notices"),
subject to changes required by state law or required by any state insurance
regulator as a condition for approval of the mailing of such Expired Policy
Notices to said holders of Insurance Contracts and Claimants.
(c) Zenith, with the cooperation and assistance of the Company, shall
prepare for mailing and mail, within thirty days
-4-
<PAGE>
of the Effective Date, to each Claimant who has an open claim on the
Effective Date, a Notice substantially in the form attached hereto as EXHIBIT
C (collectively, the "Claimant Notices"), subject to changes required by
state law or required by any state insurance regulator as a condition for
approval of the mailing of such Claimant Notices to said holders of Insurance
Contracts and Claimants. In addition, Zenith, with the cooperation and
assistance of the Company, shall prepare and mail a Claimant Notice to each
Claimant who is not a Policyholder (as defined herein), but who, after the
Effective Date, files a claim under any Insurance Contract.
Section 3.2. EFFECT OF NOTICE. A Policyholder shall be deemed to
have accepted the transfer and assumption under this Agreement(1) upon receipt
by Zenith of the Policyholder's written acceptance of the transfer and
assumption, or (2) with respect to any Insurance Contract issued or issued for
delivery in a state where written acceptance by the Policyholder is not required
by the appropriate regulatory authority to effect an assumption and novation,
upon taking such action, or failing to take any action following the mailing of
the Policyholder Notice, as specified in Schedule 3.2. attached hereto.
ARTICLE IV
POLICY ADMINISTRATION
Section 4.1. POLICY ADMINISTRATION BY ZENITH. The Company grants to
Zenith authority in all matters relating to the administration of the Insurance
Contracts assumed by Zenith to the extent such authority may be granted pursuant
to applicable law and agrees to cooperate fully with Zenith in the transfer of
such administration. Zenith agrees, at its expense, to be responsible for such
administration. In order to assist and to evidence more fully the substitution
of Zenith in the place and stead of the Company, the Company hereby nominates,
constitutes and appoints Zenith as its attorney-in-fact with respect to the
rights, duties, privileges and obligations of the Company in and to the
Insurance Contracts assumed by Zenith, with full power and authority to act in
the name, place and stead of the Company with respect to such Insurance
Contracts including, without limitation, the power without reservation, to
service all such Insurance Contracts, to adjust, to defend, to settle and to pay
all claims, to recover salvage and subrogation for any losses incurred and to
take such other and further actions as may be necessary or desirable to effect
the transactions contemplated by this Agreement. In addition to other
responsibilities set forth in this Agreement, Zenith shall also issue on the
Company's behalf, but wherever possible in the name of Zenith, all Insurance
Contracts assumed by Zenith which the Company is contractually or otherwise
obligated to issue on and after the Effective Date.
-5-
<PAGE>
Section 4.2. FORWARDING OF NOTICES AND OTHER COMMUNICATIONS. The
Company agrees that, after the Effective Date, it will forward to Zenith, within
forty-five (45) days of receipt, all notices and other written communications
received by it relating to the Insurance Contracts assumed by Zenith (including,
without limitation, all inquiries or complaints from state insurance regulators,
agents, brokers and insureds and all notices of claims, suits and actions for
which it receives services of process).
ARTICLE V
CONSIDERATION
Section 5.1. INITIAL CONSIDERATION. In consideration of Zenith's
assumption of the Insurance Liabilities hereunder the Company shall transfer to
Zenith the Transferred Assets pursuant to Section 2.01 of the Purchase Agreement
related to the Company's Insurance Liabilities.
Section 5.2. FUTURE PREMIUMS. Zenith is entitled to receive all
premiums and other consideration paid on or after the Effective Date with
respect to the Insurance Contracts. In the event that the Company receives any
premiums or other consideration with respect to an Insurance Contract on or
after the Effective Date, it shall promptly remit such premiums or other
consideration to Zenith, along with pertinent information in its possession
relating to such premiums, including information as to the Insurance Contract
and period to which such premium relates. Zenith shall assume all responsibility
for billing and collection of premiums. The Company shall reasonably cooperate
with Zenith in causing insureds under the Insurance Contracts to pay premiums to
Zenith after the Effective Date.
ARTICLE VI
RESERVES; CREDIT FOR REINSURANCE
Section 6.1. RESERVES; CREDIT FOR REINSURANCE. Zenith shall maintain
all insurance licenses necessary to permit the Company to obtain full financial
statement credit in all applicable jurisdictions for the reinsurance provided to
it by Zenith pursuant to this Agreement, PROVIDED that if Zenith shall fail to
maintain such licenses, it shall provide the Company with collateral security
permitted under applicable law for purposes of obtaining financial statement
credit for the reinsurance provided under this Agreement. Any unearned premium,
loss and loss adjustment expense reserves required by the foregoing in no event
shall be less than the amounts required under the law of any jurisdiction having
regulatory authority with respect to the establishment of reserves relating to
the Insurance Contracts.
-6-
<PAGE>
ARTICLE VII
ASSIGNMENT OF CEDED REINSURANCE AGREEMENTS
Section 7.1. ASSIGNMENT. (a) As of the Effective Date, the Company
shall transfer, set over, assign and convey to Zenith all of its right, title
and interest in any amount held by or due from the assuming reinsurers under the
reinsurance agreements listed in SCHEDULE 7.1-A ("Schedule 7.1-A Reinsurance"),
including (i) amounts held by or which may become due from the assuming
reinsurers thereunder for losses or loss adjustment expenses on Insurance
Contracts for which the Reinsurer has assumed liability or for losses paid by
the Company prior to the Effective Date, and (ii) letters of credit, trust funds
and other security mechanisms outstanding for the benefit of the Company
pursuant to the terms of any of the Schedule 7.1-A Reinsurance. The Company
hereby authorizes Zenith, as of the Effective Date, to prepare and submit, on
the Company's behalf and in the Company's name, all statements and reports
required of the Company under the Schedule 7.1-A Reinsurance, and further
authorizes Zenith to take all other actions required of the Company under the
Schedule 7.1-A Reinsurance or otherwise permitted thereunder, and Zenith agrees
to prepare and submit such reports and take all such actions, except that Zenith
shall not undertake to pay on behalf of the Company, and shall not be obligated
hereunder to pay, any amount due to the reinsurers under the Schedule 7.1-A
Reinsurance unless the Company's obligation to pay such amount shall have been
accrued as a liability on the Final Business Balance Sheet.
(b) As of the Effective Date, the Reinsurer shall be substituted for
and succeed to all of the rights and liabilities of the Company, under the
reinsurance agreements listed in SCHEDULE 7.1-B (the "Schedule 7.1-B
Reinsurance" and, together with the Schedule 7.1-A Reinsurance, the "Ceded
Reinsurance") and shall be recognized for all purposes as the "Company"
thereunder in substitution for the Company. The Company shall transfer, set
over, assign and convey to Zenith all of its rights and obligations of any
nature whatsoever under the Schedule 7.1-B Reinsurance, including (i) amounts
held by or which may become due from assuming reinsurers with respect to any
reinsurance ceded by the Company to the reinsurer thereunder, and (ii) letters
of credit, trust funds and other security mechanisms outstanding for the benefit
of the Company pursuant to the terms of any of the Ceded Reinsurance. Zenith
shall accept such conveyance, transfer and assignment of the Company's rights
under the Schedule 7.1-B Reinsurance and assumes all of the Company's
obligations under the Schedule 7.1-B Reinsurance existing on or arising after
the Effective Date. The assignment and assumption of the Schedule 7.1-B
Reinsurance effected by this Section 7.1 shall be effective only if such
assignment (i) is permitted under the terms of such Schedule 7.1-B Reinsurance
or as otherwise consented to by the reinsurer thereunder, and (ii) shall
preserve fully the obligations of the reinsurers thereunder in respect of the
Insurance Contracts. If the Company's rights and obligations
-7-
<PAGE>
under any such Schedule 7.1-B Reinsurance are not assigned to and assumed by
Zenith, (i) after the Effective Date, Zenith shall be responsible for the
payment of all premiums and other considerations required to be paid by the
Company in respect of any of the Schedule 7.1-B Reinsurance, (ii) all
reinsurance recoveries attributable to any of the Schedule 7.1-B Reinsurance
are assigned and shall accrue to the benefit of Zenith hereunder by operation
of this Section 7.1 and shall, upon receipt thereof by the Company, be paid
promptly thereby to Zenith upon and in accordance with its direction, and
(iii) such assignment shall be effective at such time as the assignment may
be effected while preserving fully the obligations of the reinsurer under the
respective Schedule 7.1-B Reinsurance.
(c) The Company shall reasonably cooperate with Zenith in causing
reinsurers under the Ceded Reinsurance to pay reinsurance recoveries to Zenith
after the Effective Date.
Section 7.2. CEDED REINSURANCE COLLATERAL. To the extent necessary
to effect any transfer or assignment pursuant to this Section 7.1 of any assumed
reinsurance, the Company hereby appoints Zenith as attorney-in-fact for the
Company to act for and on behalf of it with respect to letters of credit, trust
funds and other security mechanisms outstanding for the benefit of the Company
pursuant to the terms of any of the Ceded Reinsurance, and the Company shall
execute and deliver to Zenith such additional instruments as Zenith may
reasonably request to give effect to such appointment as attorney-in-fact, and
to provide appropriate evidence that the Company has assigned to Zenith all of
its rights under the Ceded Reinsurance with respect to any such letters of
credit, trust funds or other accounting mechanism. Zenith shall use its
reasonable best efforts to the extent deemed reasonably necessary by Zenith, to
cause the reinsurers under the Ceded Reinsurance to provide replacement letters
of credit, trust funds or other security mechanisms, as applicable, naming
Zenith as the beneficiary thereof in amounts and with terms substantially
similar to those currently provided by such reinsurers for the benefit of the
Company.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. SOLE REMEDY. Notwithstanding anything to the contrary
in this Agreement, the Company shall not settle any claim, waive any right,
defense, setoff or counterclaim with respect to, or amend, commute or terminate,
any Insurance Contract or Ceded Reinsurance without the prior written consent of
Zenith, except in accordance with the provisions of the indemnities referred to
in the following sentence. The Company's sole and exclusive remedy with respect
to a breach of this Agreement shall be the indemnities provided by Section 9.02
of the Purchase Agreement, except that any dispute between the
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<PAGE>
parties arising hereunder for which such indemnities are being sought shall
be subject to arbitration pursuant to Article XV hereof.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1. INSPECTION. Zenith and the Company, or their
designated representatives, may inspect, at the place where such records are
located, any and all books and records of the other parties hereto reasonably
relating to this Agreement, during normal business hours and upon reasonable
notice. The rights of the parties under this Section 9.1 shall survive
termination of this Agreement.
Section 9.2. MISUNDERSTANDINGS AND OVERSIGHTS. Any delay, omission,
error or failure to pay amounts due or to perform any other act required by this
Agreement that is unintentional and caused by misunderstanding or oversight
shall not be held to relieve either party to this Agreement from any obligation
hereunder if such delay, omission, error or failure is corrected within 20
Business Days of receipt of notice of such delay, omission, error or failure and
neither party shall have been prejudiced.
Section 9.3. ADJUSTMENTS. If the liability of the Company under any
of the Insurance Contracts is changed as a result of a change required by law or
regulation or any other reason, Zenith will share in the change proportionately
(100%) to the amount reinsured hereunder.
Section 9.4. COMMUNICATIONS RELATING TO THE INSURANCE CONTRACTS.
After the Effective Date, the Company and Zenith each shall forward promptly to
the other copies of all notices and other written communications it receives
relating to the Insurance Contracts (including without limitation, all inquiries
and complaints from state insurance regulators, brokers and other service
providers and reinsureds, all policyholder complaints and complaints received
from other claimants under the Insurance Contracts and all notices of claims,
suits and actions for which it receives service of process). As used in this
Section, "complaint" means any written communication primarily expressing a
grievance against the Company or Zenith.
Section 9.5. DUTY OF COOPERATION. The Company and Zenith shall
cooperate fully with the other in all reasonable respects in order to accomplish
the objectives of this Agreement.
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<PAGE>
ARTICLE X
ACCOUNTING
Section 10.1. ACCOUNTING REPORTS. On or before the last Business Day
of each month, Zenith will provide the Company with reports of activities under
this Agreement for the preceding month. Such reports shall show any amounts due
the Company or Zenith, as the case may be, as reimbursement for paid claims,
premiums or other amounts due with respect to the Insurance Contracts. The net
balance due either party, as indicated in the monthly report, shall be remitted
to the other party within 15 days of the delivery of said monthly report. The
requirements of this Section 10.1 shall terminate if, for twelve consecutive
months, no amounts are reported as due either party with respect to the
Insurance Contracts; PROVIDED, such requirements shall be reinstated and shall
continue in effect for an additional twelve months if at any time following such
termination, any balance or amount becomes due either party under this
Agreement.
Section 10.2. FINANCIAL STATEMENT INFORMATION. On or before the last
business day of each January, April, July and October, Zenith shall provide the
Company with a quarterly or annual report containing the financial, accounting
and actuarial information necessary to prepare regulatory, tax and GAAP monthly,
quarterly and annual financial statements and returns and satisfy other related
requirements, including reserve and related calculations respecting the
Insurance Contracts in the form reasonably required by the Company, and will
maintain or cause to be maintained the data processing systems that will enable
Zenith to provide such information. The Company shall cooperate with Zenith in
preparing such reports and shall supply such information as Zenith requires to
prepare such statements and returns and satisfy such requirements. The
requirements of this Section shall terminate automatically upon the termination
of the reporting requirements of Section 10.1 and shall be reinstated
automatically upon the reinstatement of such reporting requirements.
Section 10.3. REPORTS TO INSURANCE DEPARTMENTS. Zenith and the
Company will promptly furnish to the other, copies of any and all filings with,
and reports or communications received from, any regulatory authority which
relate directly and materially to the Insurance Contracts, including, without
limitation, each annual statement, each quarterly financial report to the
insurance department of the party's domicile and each report on periodic
examination issued by the insurance department of the party's domicile to the
extent it relates to the Insurance Contracts. The requirements of this Section
shall terminate automatically upon the termination of the reporting requirements
of Section 10.1 and shall be reinstated automatically upon the reinstatement of
such reporting requirements.
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<PAGE>
ARTICLE XI
TERMINATION
Section 11.1. TERMINATION. Except as mutually agreed by the Company
and Zenith, this Agreement shall be unlimited in duration.
ARTICLE XII
INSOLVENCY
Section 12.1. PAYMENTS BY ZENITH. Zenith hereby agrees that all
amounts due under this Agreement with respect to all Quota Share Policies shall
be payable by Zenith on the basis of the liability of the Company under such
contracts, without diminution because of the insolvency, liquidation or
rehabilitation of the Company Insurance Subsidiary. Zenith shall make payments
due hereunder with respect to Quota Share Policies directly to the Company or to
its conservator, receiver, liquidator or other statutory successor.
Section 12.2. CLAIMS. It is agreed that any conservator, receiver,
liquidator or statutory successor of the Company shall give prompt written
notice to Zenith of the pendency or submission of a claim under any Insurance
Contract. With respect to any Insurance Contract, during the pendency of such
claim, Zenith may investigate such claim and interpose, at its own expense, in
the proceeding where such claim is to be adjudicated, any defense available to
the Company or its conservator, receiver, liquidator or statutory successor.
The expense thus incurred by Zenith is chargeable against the Company as a part
of the expense of insolvency, liquidation or rehabilitation to the extent of a
proportionate share of the benefit which accrues to the Company solely as a
result of the defense undertaken by Zenith. Where Zenith and other assuming
companies are involved in the same claim and a majority in interest elect to
interpose a defense to such claim, the expense shall be apportioned in
accordance with the terms of the insurance agreement as though such expense had
been incurred by the Company.
ARTICLE XIII
OFFSET
Section 13.1. OFFSET. Notwithstanding any provisions of this
Agreement to the contrary, any balances or amounts due from one party to the
other under this Agreement are deemed mutual debts or credits, as the case may
be, and shall be set off, and only the balance shall be allowed or paid.
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<PAGE>
ARTICLE XIV
RIGHTS WITH RESPECT TO QUOTA SHARE POLICIES
Section 14.1. SOLE BENEFICIARY. Zenith's quota share reinsurance
of 100% of the Insurance Liabilities of the Company with respect to any of
the Quota Share Policies is intended for the sole benefit of the parties to
this Agreement and shall not create any right on the part of any
Policyholder, insured, claimant or beneficiary under such Quota Share
Policies against Zenith or any legal relation between such Policyholders,
insureds, claimants or beneficiaries and Zenith.
ARTICLE XV
ARBITRATION
Section 15.1. APPOINTMENT OF ARBITRATORS. Any dispute or
difference arising under this Agreement that cannot be resolved by agreement
among the parties hereto shall be decided by arbitration in accordance with
this Article XV. Any such arbitration shall be conducted expeditiously and
confidentially in accordance with the Commercial Arbitration Rules of the
American Arbitration Association ("AAA") as such rules shall be in effect on
the date of delivery of demand for arbitration. Any such arbitration shall
be heard and conducted in New York, New York. Notwithstanding the rules of
the AAA, the arbitration panel in any such arbitration shall consist of three
persons who must be disinterested current or retired officers of insurance or
reinsurance companies other than the parties to this Agreement or their
Affiliates. Within twenty days of delivery of any demand for arbitration
hereunder, the Company and Zenith shall each appoint one arbitrator, and the
two arbitrators so selected shall appoint the third arbitrator within twenty
days of their appointment. In the event the two selected arbitrators are
unable to agree upon the selection of a third arbitrator after reasonable
efforts, a panel of seven qualified persons shall be requested from the AAA.
The parties shall alternately strike one person with the last remaining
person being the third designated arbitrator; the party responding to the
initial demand for arbitration shall have the first turn. Each party shall
pay the fees of its own attorneys, expenses of witnesses and all other
expenses connected with the presentation of such party's case. One-half of
any remaining costs of any arbitration, including the cost of the record or
transcripts thereof, if any, administrative fees and all other fees involved
shall be paid by Zenith, and the remaining one-half shall be paid by the
Company.
Section 15.2. DECISION. The arbitrators shall render a decision
within 60 days of the end of the arbitration hearing. The arbitrators shall
consider customary and standard practices in the insurance business. They
shall decide by a majority vote of the arbitrators. All conclusions of law
reached by the
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<PAGE>
arbitrators shall be made in accordance with the internal substantive laws of
the State of New York without regard to conflict of laws principles. Any
award rendered by the arbitrators shall be accompanied by a written opinion
setting forth the findings of fact and conclusions of law relied upon in
reaching their decision. There shall be no appeal from their written
decision. Judgment may be entered on the decision of the arbitrators by any
court having jurisdiction.
Section 15.3. CONFIDENTIALITY. Zenith and the Company agree that
the existence, conduct and content of any arbitration shall be kept
confidential and no party shall disclose to any person any information about
such arbitration, except as may be required by law or for financial reporting
purposes in each party's financial statements.
Section 15.4. SURVIVAL OF ARTICLE. This Article XV shall survive
termination of this Agreement.
Section 15.5. OTHER ACTIONS. Submission of a matter to
arbitration shall be a condition precedent to any right to institute a
proceeding at law or in equity concerning such matter, except for injunctive
or other provisional relief pending the arbitration of a matter subject to
arbitration pursuant to this Agreement. Subject to the foregoing, each party
hereto consents to the non exclusive jurisdiction of the United States
District Court for the Southern District of New York (the "Chosen Court") in
respect of any claim arising out of, related to or contemplated by this
Agreement, (i) waives any objection to laying venue in any such action or
proceeding in the Chosen Court, (ii) waives any objection that at the Chosen
Court is an inconvenient forum or does not have jurisdiction over any party
hereto and (iii) agrees that service of process upon such party in any such
action or proceeding shall be effective if notice is given in accordance with
Section 16.02 of this Agreement.
ARTICLE XVI
TERRITORY
Section 16.1. TERRITORY. This Agreement shall apply to all
Insurance Contracts issued by the Company without territorial limitation.
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<PAGE>
ARTICLE XVII
TAXES
Section 17.1. TAXES. Zenith shall be responsible for and shall
pay all premium taxes which shall accrue on or after the Effective Date with
respect to the Insurance Contracts; the Company shall remain responsible for
the payment of, and Zenith shall have no obligation to pay, any premium taxes
which shall accrue prior to the Effective Date which have not otherwise been
accrued on the Final Business Balance Sheet.
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
Section 18.1. HEADINGS. Headings used herein are not a part of
this Agreement and shall not affect the terms hereof.
Section 18.2. NOTICES. All notices and communications hereunder
shall be in writing and shall be deemed given if delivered personally or sent
by overnight delivery service (providing for proof of delivery). All notices
or communications with Zenith under this Agreement shall be directed to:
Zenith Insurance Company
21255 Califa Street
Woodland Hills, CA 91367-5021
Attention: Stanley R. Zax
with copies to:
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019
Attention: Alexander M. Dye, Esq.
All notices and communications with the Company under this Agreement shall be
directed to:
RISCORP, Inc.
1390 Main Street
Sarasota, Florida 34236
Attention: Walter E. Riehemann, Esq.
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<PAGE>
with copies to:
Polsinelli, White, Bardman & Shalton, P.C.
700 West 47th Street
Kansas City, MO 64112
Attention: Robert B. Sullivan, Esq.
Alston & Bird
One Atlantic Center
1201 West Peachtree Street
Atlanta, GA 30309-3424
Attention: J. Vaughan Curtis, Esq.
Section 18.3. SEVERABILITY. If any term or provision of this
Agreement shall be held void, illegal or unenforceable, the validity of the
remaining portions or provisions shall not be affected thereby.
Section 18.4. SUCCESSORS AND ASSIGNS. This Agreement may not be
assigned by either party without the prior written consent of the other. The
provisions of this Agreement shall be binding upon and inure to the benefit
of and be enforceable by the parties hereto and their respective successors
and assigns as permitted herein.
Section 18.5. NO THIRD PARTY BENEFICIARIES. Except as otherwise
specifically provided for in Article X of this Agreement, nothing in this
Agreement is intended or shall be construed to give any person, other than
the parties hereto, their successors and permitted assigns, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein, and Zenith shall not be directly liable hereunder
to any reinsured under any Insurance Contract.
Section 18.6. INTERPRETATION. For purposes of this Agreement,
the words "hereof," "herein," "hereby" and other words of similar import
refer to this Agreement as a whole unless otherwise indicated. Whenever the
words "include", "includes", or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation". Whenever
the singular is used herein, the same shall include the plural, and whenever
the plural is used herein, the same shall include the singular, where
appropriate.
Section 18.7. EXECUTION IN COUNTERPARTS. This Agreement may be
executed by the parties hereto in any number of counterparts and by each of
the parties hereto in separate counterparts, each of which counterparts, when
so executed and delivered, shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Section 18.8. AMENDMENTS; ENTIRE AGREEMENT. This Agreement may be
amended only by written agreement of the parties. This Agreement, together
with the Purchase Agreement
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<PAGE>
and the Ancillary Agreements, supersedes all prior discussions and written
and oral agreements and constitutes the sole and entire agreement between the
parties with respect to the subject matter hereof.
-16-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized representatives as of the date first
above written.
ZENITH INSURANCE COMPANY
By /s/ JOHN J. TICKNER
----------------------------
John J. Tickner
Senior Vice President
RISCORP NATIONAL INSURANCE COMPANY
By: /s/ FREDERICK M. DAWSON
----------------------------
Frederick M. Dawson
President
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<PAGE>
SCHEDULE 3.2
STATE REQUIREMENTS FOR TRANSFER
AND NOVATION OF INSURANCE CONTRACTS
ALABAMA Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the second, to be sent 30
days after the first, requesting affirmative consent; the
third, to be sent 30 days after the second, stating that the
Policyholder will be deemed to have accepted if no response
is received within 30 days.
ARKANSAS Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the second, to be sent 30
days after the first, requesting affirmative consent; the
third, to be sent 30 days after the second, stating that the
Policyholder will be deemed to have accepted if no response
is received within 30 days.
FLORIDA Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the second, to be sent 30
days after the first, requesting affirmative consent; the
third, to be sent 30 days after the second, stating that the
Policyholder will be deemed to have accepted if no response
is received within 30 days.
GEORGIA Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the second, to be sent 30
days after the first, requesting affirmative consent; the
third, to be sent 30 days after the second, stating that the
Policyholder will be deemed to have accepted if no response
is received within 30 days.
ILLINOIS Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the second, to be sent 30
days after the first, requesting affirmative consent; the
third, to be sent 30 days after the second, stating that the
<PAGE>
Policyholder will be deemed to have accepted if no response
is received within 30 days.
INDIANA Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the second, to be sent 30
days after the first, requesting affirmative consent; the
third, to be sent 30 days after the second, stating that the
Policyholder will be deemed to have accepted if no response
is received within 30 days.
IOWA Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the second, to be sent 30
days after the first, requesting affirmative consent; the
third, to be sent 30 days after the second, stating that the
Policyholder will be deemed to have accepted if no response
is received within 30 days.
KANSAS Affirmative written consent of the Policyholder.
LOUISIANA Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the second, to be sent 30
days after the first, requesting affirmative consent; the
third, to be sent 30 days after the second, stating that the
Policyholder will be deemed to have accepted if no response
is received within 30 days.
MINNESOTA Affirmative written consent of the Policyholder.
MISSISSIPPI Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the second, to be sent 30
days after the first, requesting affirmative consent; the
third, to be sent 30 days after the second, stating that the
Policyholder will be deemed to have accepted if no response
is received within 30 days.
MISSOURI Affirmative consent of Policyholder OR payment of premiums
without objection OR failure by Policyholder to object after
receipt of 3 letters, the first requesting affirmative
consent; the second, to be sent twelve months after the
first, requesting
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<PAGE>
affirmative consent; the third, to be sent twelve months
after the second, stating that the Policyholder will be
deemed to have accepted if no response is received within
six months.
NEBRASKA Affirmative consent of Policyholder or failure by
Policyholder to object after receipt of 2 letters, the first
requesting affirmative consent; the second, to be sent
twelve months after the first, stating that the Policyholder
will be deemed to have accepted if no response is received
within two months.
NORTH CAROLINA Affirmative consent of Policyholder or failure by
Policyholder to object after receipt of 2 letters, the first
requesting affirmative consent; the second, to be sent
twenty-four months after the first, stating that the
Policyholder will be deemed to have accepted if no response
is received within one month.
OKLAHOMA Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the second, to be sent 30
days after the first, requesting affirmative consent; the
third, to be sent 30 days after the second, stating that the
Policyholder will be deemed to have accepted if no response
is received within 30 days.
SOUTH CAROLINA Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the second, to be sent 30
days after the first, requesting affirmative consent; the
third, to be sent 30 days after the second, stating that the
Policyholder will be deemed to have accepted if no response
is received within 30 days.
TENNESSEE Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the second, to be sent 30
days after the first, requesting affirmative consent; the
third, to be sent 30 days after the second, stating that the
Policyholder will be deemed to have accepted if no response
is received within 30 days.
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<PAGE>
TEXAS Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the second, to be sent 30
days after the first, requesting affirmative consent; the
third, to be sent 30 days after the second, stating that the
Policyholder will be deemed to have accepted if no response
is received within 30 days.
VIRGINIA Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the second, to be sent 30
days after the first, requesting affirmative consent; the
third, to be sent 30 days after the second, stating that the
Policyholder will be deemed to have accepted if no response
is received within 30 days.
WISCONSIN Affirmative written consent of the Policyholder.
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<PAGE>
SCHEDULE 7.1-A REINSURANCE AGREEMENTS
1. Workers' Compensation Quota Share Reinsurance Agreement between RISCORP
Insurance Company, RISCORP Property and Casualty Insurance Company and
American Re-Insurance Company effective January 1, 1995 including
Endorsement Nos. E001 through E004 and Indemnity Agreements dated February
7, 1995.
2. RISCORP National Insurance Company Workers Compensation Quota Share
Agreement by and between RISCORP National Insurance Company and Chartwell
Reinsurance Company (50%), Swiss Reinsurance America Corp. (25%), and
Trenwick America Reinsurance Corp. (25%) effective October 1, 1996.
3. Workers Compensation Excess of Loss Reinsurance Agreement between RISCORP
Property and Casualty Insurance Company, RISCORP Insurance Company, and
RISCORP National Insurance Company and Continental Casualty Company
effective January 1, 1997.
4. Workers Compensation and Employers Liability Excess of Loss Reinsurance
Agreement between RISCORP Property & Casualty Insurance Company, RISCORP
Insurance Company and RISCORP National Insurance Company and Continental
PTO Casualty Company, effective January 1, 1997.
<PAGE>
SCHEDULE 7.1-B REINSURANCE AGREEMENTS
1. Medical Excess of Loss Reinsurance Agreement between RISCORP Property &
Casualty Insurance Company and The Cologne Life Reinsurance Company
effective September 1, 1995.
2. Property Quota Share Agreement between RISCORP Property & Casualty
Insurance Company and Scor Reinsurance Company, Signet Star Reinsurance
Company, Hartford Fire Insurance Company, Chartwell Reinsurance Company and
Great Lakes American Reinsurance Company effective January 1, 1996.
3. Casualty Excess of Loss Agreement between RISCORP Property & Casualty
Insurance Company and Scor Reinsurance Company, Signet Star Reinsurance
Company, Hartford Fire Insurance Company, and Chartwell Reinsurance Company
effective January 1, 1996.
4. Commercial Umbrella Quota Share Treaty between RISCORP Property & Casualty
Insurance Company and Scor Reinsurance Company, Signet Star Reinsurance
Company, Hartford Fire Insurance Company, and Chartwell Reinsurance Company
effective January 1, 1996.
5. Workers Compensation Quota Share Retrocessional Treaty Agreement between
Chartwell Reinsurance Company and RISCORP Insurance Company effective
September 1, 1995.
<PAGE>
MISSOURI EXHIBIT A
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
NOTICE OF TRANSFER
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT
CAREFULLY.
TRANSFER OF POLICY
Zenith Insurance Company has agreed to replace RISCORP National
Insurance Company as your insurer under [insert policy/certificate name
and number]effective [insert date]. Zenith Insurance Company's principal
place of business is 21255 Califa Street, Woodland Hills, California,
91367-5021; however, all correspondence with Zenith Insurance Company
concerning your policy should be sent to 1390 Main Street, Sarasota, Florida
34236. Certain financial information concerning both companies is attached,
including: (1) ratings for the last five years if available or for such
lesser period as is available from two nationally recognized insurance rating
services; (2) balance sheets for the previous three years if available or for
such lesser period as is available and as of a date no later than ninety days
prior to the current date; (3) a copy of the management's discussion and
analysis that was filed as a supplement to the previous year's annual
statement; and (4) an explanation of the reason for the transfer. You may
obtain additional information concerning Zenith Insurance Company from
reference materials in your local library or by contacting your Insurance
Commissioner at [insert address and phone number]. Zenith Insurance Company
is licensed in your state.
YOUR RIGHTS
You may choose to consent to or reject the transfer of your policy to
Zenith Insurance Company. If you want your policy transferred, you may notify
us in writing by signing and returning the enclosed pre-addressed, postage-paid
card or by writing to us at:
RISCORP National Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
913-262-2953
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN [THIRTY MONTHS] OF THIS
NOTICE OF TRANSFER, YOU WILL, AS A MATTER OF LAW, HAVE CONSENTED TO THE
TRANSFER. HOWEVER, BEFORE THIS CONSENT IS FINAL, YOU WILL BE SENT A SECOND
NOTICE, TWELVE MONTHS AFTER OUR FIRST NOTICE, AND A THIRD AND FINAL NOTICE
TWENTY-FOUR MONTHS AFTER OUR FIRST NOTICE. AFTER THE THIRD AND FINAL NOTICE
IS PROVIDED, YOU WILL HAVE ONLY SIX MONTHS TO REPLY.
<PAGE>
If you reject the transfer, you may keep your policy with RISCORP
Insurance Company or exercise any option under your policy.
EFFECT OF TRANSFER
If you accept this transfer, Zenith Insurance Company will be your
insurer. It will have direct responsibility to you for the payment of all
claims, benefits and for all other policy obligations. RISCORP National
Insurance Company will no longer have any obligations to you.
If you accept this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
If you have any further questions about this agreement, you may contact
RISCORP National Insurance Company or Zenith Insurance Company.
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
Sincerely,
- ---------------------------------- -------------------------------
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
One Sarasota Tower 1390 Main Street
Suite 608 Van Nuys, California 91367-5021
Sarasota, Florida 34236
<PAGE>
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
SECOND NOTICE
NOTICE OF TRANSFER
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT
CAREFULLY.
TRANSFER OF POLICY
You were previously sent a Notice of Transfer notifying you that Zenith
Insurance Company has agreed to replace RISCORP National Insurance Company as
your insurer under [insert policy/certificate name and number] effective
[insert date]. Zenith Insurance Company's principal place of business is
21255 Califa Street, Woodland Hills, California, 91367-5021; however, all
correspondence with Zenith Insurance Company concerning your policy should be
sent to 1390 Main Street, Sarasota, Florida 34236. Certain financial
information concerning both companies was attached to the First Notice of
Transfer previously sent to you, including: (1) ratings for the last five
years if available or for such lesser period as is available from two
nationally recognized insurance rating services; (2) balance sheets for the
previous three years if available or for such lesser period as is available
and as of a date no later than ninety days prior to the current date; (3) a
copy of the management's discussion and analysis that was filed as a
supplement to the previous year's annual statement; and (4) an explanation of
the reason for the transfer. If you would like additional copies of this
information, please contact Zenith Insurance Company at the addresses
supplied above. You may obtain additional information concerning Zenith
Insurance Company from reference materials in your local library or by
contacting your Insurance Commissioner at [insert address and phone number].
Zenith Insurance Company is licensed in your state.
YOUR RIGHTS
We are sending you a second notice because we did not receive the
pre-addressed response card or other written notice from you indicating your
rejection of the proposed transfer. If you want your policy transferred to
Zenith Insurance Company, you may notify us in writing by signing and
returning the enclosed pre-addressed, postage-paid card or by writing to us
at:
RISCORP National Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
913-262-2953
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN TWELVE MONTHS, YOU WILL BE
SENT A THIRD AND FINAL NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION
WITHIN SIX MONTHS AFTER THE DATE OF THE THIRD NOTICE, YOU WILL BE DEEMED TO
HAVE ACCEPTED THE TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP
National Insurance Company or exercise any option under your policy.
<PAGE>
EFFECT OF TRANSFER
If you accept this transfer, Zenith Insurance Company will be your
insurer. It will have direct responsibility to you for the payment of all
claims, benefits and for all other policy obligations. RISCORP National
Insurance Company will no longer have any obligations to you.
If you accept this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
If you have any further questions about this agreement, you may contact
RISCORP National Insurance Company or Zenith Insurance Company.
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
Sincerely,
- ---------------------------------- --------------------------------
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
One Sarasota Tower 1390 Main Street
Suite 608 Sarasota, Florida 34236
Sarasota, Florida 34236
<PAGE>
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
THIRD AND FINAL NOTICE
NOTICE OF TRANSFER
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT
CAREFULLY.
TRANSFER OF POLICY
You were previously sent a Notice of Transfer notifying you that Zenith
Insurance Company has agreed to replace RISCORP National Insurance Company as
your insurer under [insert policy/certificate name and number] effective
[insert date]. Zenith Insurance Company's principal place of business is
21255 Califa Street, Woodland Hills, California, 91367-5021; however, all
correspondence with Zenith Insurance Company concerning your policy should be
sent to 1390 Main Street, Sarasota, Florida 34236. Certain financial
information concerning both companies was attached to the First Notice of
Transfer previously sent to you, including: (1) ratings for the last five
years if available or for such lesser period as is available from two
nationally recognized insurance rating services; (2) balance sheets for the
previous three years if available or for such lesser period as is available
and as of a date no later than ninety days prior to the current date; (3) a
copy of the management's discussion and analysis that was filed as a
supplement to the previous year's annual statement; and (4) an explanation of
the reason for the transfer. If you would like additional copies of this
information, please contact Zenith Insurance Company at the addresses
supplied above. You may obtain additional information concerning Zenith
Insurance Company from reference materials in your local library or by
contacting your Insurance Commissioner at [insert address and phone number].
Zenith Insurance Company is licensed in your state.
YOUR RIGHTS
We are sending you a third notice because we did not receive the
pre-addressed response card or other written notice from you indicating your
rejection of the proposed transfer. If you want your policy transferred to
Zenith Insurance Company, you may notify us in writing by signing and
returning the enclosed pre-addressed, postage-paid card or by writing to us
at:
RISCORP National Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
913-262-2953
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN SIX MONTHS OF THE DATE OF
THIS THIRD AND FINAL NOTICE, YOU WILL BE DEEMED TO HAVE ACCEPTED THE
TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP
National Insurance Company or exercise any option under your policy.
<PAGE>
EFFECT OF TRANSFER
If you accept this transfer, Zenith Insurance Company will be your
insurer. It will have direct responsibility to you for the payment of all
claims, benefits and for all other policy obligations. RISCORP National
Insurance Company will no longer have any obligations to you.
If you accept this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
If you have any further questions about this agreement, you may contact
RISCORP National Insurance Company or Zenith Insurance Company.
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
Sincerely,
- ---------------------------------- --------------------------------
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
One Sarasota Tower 1390 Main Street
Suite 608 Sarasota, Florida 34236
Sarasota, Florida 34236
<PAGE>
RESPONSE CARD
--------- YES, I accept the transfer of my policy
from RISCORP National Insurance Company to
Zenith Insurance Company.
--------- NO, I reject the proposed transfer of
my policy from RISCORP National Insurance Company
to Zenith Insurance Company and wish
to retain my policy with RISCORP National
Insurance Company.
- ------------------ -------------------------------------
DATE SIGNATURE
NAME:
---------------------------------------------------------------------
STREET ADDRESS:
-----------------------------------------------------------
CITY, STATE, ZIP:
---------------------------------------------------------
<PAGE>
RISCORP NATIONAL INSURANCE COMPANY
INSURANCE RATINGS
<TABLE>
<CAPTION>
YEAR A.M. BEST STANDARD & POORS
<S> <C> <C>
1997 NR-2 not rated*
1996 B+
1995 B+
1994 B+
1993 B
</TABLE>
* Standard & Poors' ratings are not available for this company.
ZENITH INSURANCE COMPANY
INSURANCE RATINGS
<TABLE>
<CAPTION>
YEAR A.M. BEST STANDARD & POORS
<S> <C> <C>
1997 A+** AA-***
1996 A+ AA-
1995 A+ AA-
1994 A+ AA-
1993 A+ AA-
</TABLE>
** The A.M. Best rating for all five years is for the Zenith National
Insurance Group, and applies to all four intercompany pool members,
including Zenith Insurance Company.
*** Zenith Insurance Company was previously rated by Standard and Poors as
part of an intercompany pool of members. Beginning in 1997, Standard &
Poors began rating the individual pool members separately.
A.M. BEST COMPANY DEFINITIONS:
A+ Company has superior overall financial strength and operating performance
and has a very strong ability to meet its ongoing obligations to
policyholders.
B+ Company has very good financial strength and operating performance and has
a good ability to meet its ongoing obligations to policyholders.
B Company has fair financial strength and operating performance and has an
ability to meet current obligations to policyholders, but its financial
strength is vulnerable to adverse changes in underwriting and economic
conditions.
NR-2 Company is not rated due to insufficient size (in terms of capital and
surplus) and/or operating experience.
STANDARD & POOR'S DEFINITIONS:
AA- Company has excellent financial security and has a strong capacity to meet
policyholder obligations under a variety of economic and underwriting
conditions.
<PAGE>
REASONS FOR THE TRANSFER OF YOUR POLICY
The transfer of your policy is being made pursuant to an Assumption
and Indemnity Reinsurance Agreement between Zenith Insurance Company and
Riscorp National Insurance Company, dated as of [effective date], whereby
Zenith Insurance Company agreed to assume Riscorp National Insurance
Company's obligations under certain insurance policies, including your policy.
<PAGE>
AL, AR, IL, IN, IA, LA, MS, OK, SC, TN, TX, VA EXHIBIT A
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
Zenith Insurance Company has agreed to replace RISCORP National Insurance
Company as your insurer under [insert policy/certificate name and number]
effective [insert date]. Zenith Insurance Company's principal place of business
is 21255 Califa Street, Woodland Hills, California, 91367-5021; however, all
correspondence with Zenith Insurance Company concerning your policy should be
sent to 1390 Main Street, Sarasota, Florida 34236. You may obtain additional
information concerning Zenith Insurance Company from reference materials in your
local library or by contacting your Insurance Commissioner at [insert address
and phone number].
YOUR RIGHTS
You may choose to consent to or reject the transfer of your policy to
Zenith Insurance Company. If you want your policy transferred, you may notify
us in writing by signing and returning the enclosed pre-addressed, postage-paid
card or by writing to us at:
RISCORP National Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS, YOU WILL BE SENT
A SECOND NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY(30)
DAYS AFTER THE DATE OF THE SECOND NOTICE, YOU WILL BE SENT A THIRD NOTICE. IF
WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY (30) DAYS AFTER THE DATE
OF THE THIRD NOTICE, YOU WILL BE DEEMED TO HAVE ACCEPTED THE TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP National
Insurance Company or exercise any option under your policy.
EFFECT OF TRANSFER
If you accept this transfer, Zenith Insurance Company will be your
insurer. It will have direct responsibility to you for the payment of all
claims, benefits and for all other policy obligations. RISCORP National
Insurance Company will no longer have any obligations to you.
If you accept this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
<PAGE>
If you have any further questions about this agreement, you may contact
RISCORP National Insurance Company or Zenith Insurance Company.
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
Sincerely,
___________________ _____________________
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
One Sarasota Tower 1390 Main Street
Suite 608 Sarasota, FL 34236
Sarasota, FL 34236
-2-
<PAGE>
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
SECOND NOTICE
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
You were previously sent a Notice of Transfer and Certificate of Assumption
notifying you that Zenith Insurance Company has agreed to replace RISCORP
National Insurance Company as your insurer under [insert policy/certificate name
and number] effective [insert date]. Zenith Insurance Company's principal place
of business is 21255 Califa Street, Woodland Hills, California, 91367-5021;
however, all correspondence with Zenith Insurance Company concerning your policy
should be sent to 1390 Main Street, Sarasota, Florida 34236. You may obtain
additional information concerning Zenith Insurance Company from reference
materials in your local library or by contacting your Insurance Commissioner at
[insert address and phone number].
YOUR RIGHTS
We are sending you a second notice because we did not receive the
pre-addressed response card or other written notice from you indicating your
rejection of the proposed transfer. If you want your policy transferred to
Zenith Insurance Company, you may notify us in writing by signing and
returning the enclosed pre-addressed, postage-paid card or by writing to us
at:
RISCORP National Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS, YOU WILL BE SENT
A THIRD NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY (30)
DAYS AFTER THE DATE OF THE THIRD NOTICE, YOU WILL BE DEEMED TO HAVE ACCEPTED THE
TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP National
Insurance Company or exercise any option under your policy.
EFFECT OF TRANSFER
If you accept this transfer, Zenith Insurance Company will be your
insurer. It will have direct responsibility to you for the payment of all
claims, benefits and for all other policy obligations. RISCORP National
Insurance Company will no longer have any obligations to you.
If you accept this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
-3-
<PAGE>
If you have any further questions about this agreement, you may contact
RISCORP National Insurance Company or Zenith Insurance Company.
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
Sincerely,
___________________ _____________________
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
One Sarasota Tower 1390 Main Street
Suite 608 Sarasota, FL 34236
Sarasota, FL 34236
-4-
<PAGE>
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
THIRD AND FINAL NOTICE
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
You were previously sent a Notice of Transfer and Certificate of Assumption
notifying you that Zenith Insurance Company has agreed to replace RISCORP
National Insurance Company as your insurer under [insert policy/certificate name
and number] effective [insert date]. Zenith Insurance Company's principal place
of business is 21255 Califa Street, Woodland Hills, California, 91367-5021;
however, all correspondence with Zenith Insurance Company concerning your policy
should be sent to 1390 Main Street, Sarasota, Florida 34236. You may obtain
additional information concerning Zenith Insurance Company from reference
materials in your local library or by contacting your Insurance Commissioner at
[insert address and phone number].
YOUR RIGHTS
We are sending you a third notice because we did not receive the
pre-addressed response card or other written notice from you indicating your
rejection of the proposed transfer. If you want your policy transferred to
Zenith Insurance Company, you may notify us in writing by signing and
returning the enclosed pre-addressed, postage-paid card or by writing to us
at:
RISCORP National Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS OF THE DATE OF
THIS THIRD AND FINAL NOTICE, YOU WILL BE DEEMED TO HAVE ACCEPTED THE TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP National
Insurance Company or exercise any option under your policy.
EFFECT OF TRANSFER
If you accept this transfer, Zenith Insurance Company will be your
insurer. It will have direct responsibility to you for the payment of all
claims, benefits and for all other policy obligations. RISCORP National
Insurance Company will no longer have any obligations to you.
If you accept this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
-5-
<PAGE>
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
If you have any further questions about this agreement, you may contact
RISCORP National Insurance Company or Zenith Insurance Company.
Sincerely,
___________________ _____________________
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
One Sarasota Tower 1390 Main Street
Suite 608 Sarasota, FL 34236
Sarasota, FL 34236
-6-
<PAGE>
- -----------------------------------------------------------------
RESPONSE CARD
_________ YES, I accept the transfer of my policy
from RISCORP National Insurance Company to
Zenith Insurance Company.
_________ NO, I reject the proposed transfer of
my policy from RISCORP National Insurance Company
to Zenith Insurance Company and wish
to retain my policy with RISCORP National
Insurance Company.
_____________ ______________________________
DATE SIGNATURE
NAME:
_______________________________________________________________________
STREET ADDRESS:
_______________________________________________________________________
CITY, STATE, ZIP:
_______________________________________________________________________
-7-
<PAGE>
GEORGIA EXHIBIT A
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FLORIDA 34236
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
Zenith Insurance Company has agreed to replace RISCORP National Insurance
Company as your insurer under [insert policy/certificate name and number]
effective [insert date]. Zenith Insurance Company's principal place of business
is 21255 Califa Street, Woodland Hills, California, 91367-5021; however, all
correspondence with Zenith Insurance Company concerning your policy should be
sent to 1390 Main Street, Sarasota, Florida 34236. Attached to this notice is
an explanation of the reason for the transfer.
Zenith Insurance Company is licensed in the following states: Alabama,
Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of
Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas,
Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota,
Mississippi, Missouri, Nebraska, New Jersey, New Mexico, New York, North
Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South
Dakota, Tennessee, Texas, Utah, Vermont, Virginia and Wisconsin.
If Zenith Insurance Company is not licensed in the state where you reside,
this transfer may affect your guarantee fund protection or your Insurance
Commissioner's ability to assist you with any matters concerning the company.
YOUR RIGHTS
You may choose to consent to or reject the transfer of your policy to
Zenith Insurance Company. If you want your policy transferred, you may notify
us in writing by signing and returning the enclosed pre-addressed, postage-paid
card or by writing to us at:
RISCORP National Insurance Company
One Sarasota Tower
Suite 608
Sarasota, Florida 34236
941-366-5015
You may obtain additional information concerning Zenith from reference
materials in your local library or by contacting John W. Oxendine, Insurance and
Safety Fire Commissioner, Regulatory Services Division, Georgia Department of
Insurance, Suite 604, West Tower, Floyd Building, 2 Martin Luther King, Jr.
Drive, Atlanta, Georgia 30334 (tel. (404) 656-2074).
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY, YOU WILL BE SENT A
SECOND NOTICE. IF WE DO NOT RECEIVE YOUR WRITEN REJECTION WITHIN THIRTY DAYS
AFTER THE DATE OF THE SECOND NOTICE YOU WILL BE SENT A THIRD NOTICE. IF WE DO
NOT RECEIVE YOUR
<PAGE>
WRITTEN REJECTION WITHIN THIRTY DAYS AFTER THE DATE OF THE THIRD NOTICE, YOU
WILL BE DEEMED TO HAVE ACCEPTED THE TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP
Insurance Company or exercise any option under your policy.
EFFECT OF TRANSFER
If you accept this transfer, Zenith Insurance Company will be your
insurer. It will have direct responsibility to you for the payment of all
claims, benefits and for all other policy obligations. RISCORP National
Insurance Company will no longer have any obligations to you.
If you accept this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
If you have any further questions about this agreement, you may contact
RISCORP National Insurance Company or Zenith Insurance Company.
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
Sincerely,
___________________ _____________________
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
One Sarasota Tower 1390 Main Street
Suite 608 Sarasota, Florida 34236
Sarasota, FL 34236
<PAGE>
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FLORIDA 34236
SECOND NOTICE
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
You were previously sent a Notice of Transfer and Certificate of Assumption
notifying you that Zenith Insurance Company has agreed to replace RISCORP
National Insurance Company as your insurer under [insert policy/certificate name
and number] effective [insert date]. Zenith Insurance Company's principal place
of business is 21255 Califa Street, Woodland Hills, California, 91367-5021;
however, all correspondence with Zenith Insurance Company concerning your policy
should be sent to 1390 Main Street, Sarasota, Florida 34236.
Zenith Insurance Company is licensed in the following states: Alabama,
Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of
Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas,
Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota,
Mississippi, Missouri, Nebraska, New Jersey, New Mexico, New York, North
Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South
Dakota, Tennessee, Texas, Utah, Vermont, Virginia and Wisconsin.
If Zenith Insurance Company is not licensed in the state where you reside,
this transfer may affect your guarantee fund protection or your Insurance
Commissioner's ability to assist you with any matters concerning the company.
YOUR RIGHTS
We are sending you a second notice because we did not receive the
pre-addressed response card or other written notice from you indicating your
rejection of the proposed transfer. If you want your policy transferred to
Zenith Insurance Company, you may notify us in writing by signing and
returning the enclosed pre-addressed, postage-paid card or by writing to us
at:
RISCORP National Insurance Company
One Sarasota Tower
Suite 608
Sarasota, Florida 34236
941-366-5015
You may obtain additional information concerning Zenith from reference
materials in your local library or by contacting John W. Oxendine, Insurance and
Safety Fire Commissioner, Regulatory Services Division, Georgia Department of
Insurance, Suite 604, West Tower, Floyd Building, 2 Martin Luther King, Jr.
Drive, Atlanta, Georgia 30334 (tel. (404) 656-2074).
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
<PAGE>
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS, YOU WILL BE SENT
A THIRD AND FINAL NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN
THIRTY DAYS OF THE THIRD NOTICE, YOU WILL BE DEEMED TO HAVE ACCEPTED THE
TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP National
Insurance Company or exercise any option under your policy.
EFFECT OF TRANSFER
If you accept this transfer, Zenith Insurance Company will be your
insurer. It will have direct responsibility to you for the payment of all
claims, benefits and for all other policy obligations. RISCORP National
Insurance Company will no longer have any obligations to you.
If you accept this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
If you have any further questions about this agreement, you may contact
RISCORP National Insurance Company or Zenith Insurance Company.
Sincerely,
___________________ _____________________
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
One Sarasota Tower 1390 Main Street
Suite 608 Sarasota, Florida 34236
Sarasota, FL 34236
<PAGE>
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FLORIDA 34236
THIRD AND FINAL NOTICE
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
You were previously sent a Notice of Transfer and Certificate of
Assumption notifying you that Zenith Insurance Company has agreed to
replace RISCORP National Insurance Company as your insurer under [insert
policy/certificate name and number] effective [insert date]. Zenith
Insurance Company's principal place of business is 21255 Califa Street,
Woodland Hills, California, 91367-5021; however, all correspondence with
Zenith Insurance Company concerning your policy should be sent to 1390 Main
Street, Sarasota, Florida 34236.
Zenith Insurance Company is licensed in the following states: Alabama,
Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District
of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa,
Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New Mexico, New York,
North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina,
South Dakota, Tennessee, Texas, Utah, Vermont, Virginia and Wisconsin.
If Zenith Insurance Company is not licensed in the state where you
reside, this transfer may affect your guarantee fund protection or your
Insurance Commissioner's ability to assist you with any matters concerning
the company.
YOUR RIGHTS
We are sending you a third and final notice because we did not receive
the pre-addressed response card or other written notice from you indicating
your rejection of the proposed transfer. If you want your policy transferred
to Zenith Insurance Company, you may notify us in writing by signing and
returning the enclosed pre-addressed, postage-paid card or by writing to us
at:
RISCORP National Insurance Company
One Sarasota Tower
Suite 608
Sarasota, Florida 34236
941-366-5015
You may obtain additional information concerning Zenith from reference
materials in your local library or by contacting John W. Oxendine, Insurance
and Safety Fire Commissioner, Regulatory Services Division, Georgia
Department of Insurance, Suite 604, West Tower, Floyd Building, 2 Martin
Luther King, Jr. Drive, Atlanta, Georgia 30334 (tel. (404) 656-2074).
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS, YOU WILL BE
DEEMED TO HAVE ACCEPTED THE TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP
National Insurance Company or exercise any option under your policy.
<PAGE>
EFFECT OF TRANSFER
If you accept this transfer, Zenith Insurance Company will be your
insurer. It will have direct responsibility to you for the payment of all
claims, benefits and for all other policy obligations. RISCORP National
Insurance Company will no longer have any obligations to you.
If you accept this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
If you have any further questions about this agreement, you may contact
RISCORP National Insurance Company or Zenith Insurance Company.
Sincerely,
__________________________________ ________________________
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
One Sarasota Tower 1390 Main Street
Suite 608 Sarasota, Florida 34236
Sarasota, FL 34236
<PAGE>
- -----------------------------------------------------------------
RESPONSE CARD
_________ YES, I accept the transfer of my policy
from RISCORP National Insurance Company to
Zenith Insurance Company.
_________ NO, I reject the proposed transfer of
my policy from RISCORP National Insurance Company
to Zenith Insurance Company and wish
to retain my policy with RISCORP National
Insurance Company.
____________ ____________________________
DATE SIGNATURE
NAME:_________________________________________________________________________
STREET ADDRESS:_______________________________________________________________
CITY, STATE, ZIP:_____________________________________________________________
<PAGE>
KS, MN, WI EXHIBIT A
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
Zenith Insurance Company has agreed to replace RISCORP National
Insurance Company as your insurer under [insert policy/certificate name
and number]effective [insert date]. Zenith Insurance Company's principal
place of business is 21255 Califa Street, Woodland Hills, California,
91367-5021; however, all correspondence with Zenith Insurance Company
concerning your policy should be sent to 1390 Main Street, Sarasota,
Florida 34236. You may obtain additional information concerning Zenith
Insurance Company from reference materials in your local library or by
contacting your Insurance Commissioner at [insert address and phone number].
YOUR RIGHTS
You may choose to consent to or reject the transfer of your policy to
Zenith Insurance Company. THIS CHANGE IN INSURANCE COMPANIES IS CONTINGENT
UPON YOUR EXPRESS AFFIRMATIVE CONSENT, GIVEN BY SENDING THE ATTACHED FORM TO
RISCORP AT THE ADDRESS BELOW:
RISCORP National Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
If you do not want your policy transferred, you may notify us in writing
by signing and returning the enclosed pre-addressed, postage-paid card or by
writing to us at the above address.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS, YOU WILL
BE SENT A SECOND NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN
THIRTY(30) DAYS AFTER THE DATE OF THE SECOND NOTICE, YOU WILL BE SENT A THIRD
NOTICE.
If you reject the transfer, you may keep your policy with RISCORP
National Insurance Company or exercise any option under your policy.
EFFECT OF TRANSFER
If you consent to this transfer, ONLY Zenith Insurance Company shall
have obligations or be liable to you in the future and RISCORP National
Insurance Company shall be released from all future obligations or liability.
If you consent to this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
If you do NOT consent to this tranfer, ONLY RISCORP National Insurance
Company shall have obligations or be liable to you in the future and you
shall have no rights against Zenith Insurance Company. It will have direct
responsibility to you for the payment of all claims, benefits and for all
other policy obligations. RISCORP National Insurance Company will no longer
have any obligations to you.
<PAGE>
If you have any further questions about this agreement, you may contact
RISCORP National Insurance Company or Zenith Insurance Company.
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
Sincerely,
__________________________________ ________________________
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
One Sarasota Tower 1390 Main Street
Suite 608 Sarasota, FL 34236
Sarasota, FL 34236
-2-
<PAGE>
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
SECOND NOTICE
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
You were previously sent a Notice of Transfer and Certificate of
Assumption notifying you that Zenith Insurance Company has agreed to
replace RISCORP National Insurance Company as your insurer under [insert
policy/certificate name and number] effective [insert date]. Zenith
Insurance Company's principal place of business is 21255 Califa Street,
Woodland Hills, California, 91367-5021; however, all correspondence with
Zenith Insurance Company concerning your policy should be sent to 1390 Main
Street, Sarasota, Florida 34236. You may obtain additional information
concerning Zenith Insurance Company from reference materials in your local
library or by contacting your Insurance Commissioner at
[insert address and phone number].
YOUR RIGHTS
We are sending you a second notice because we did not receive the
pre-addressed response card or other written notice from you indicating your
rejection of the proposed transfer. You may choose to consent to or reject
the transfer of your policy to Zenith Insurance Company. THIS CHANGE IN
INSURANCE COMPANIES IS CONTINGENT UPON YOUR EXPRESS AFFIRMATIVE CONSENT,
GIVEN BY SENDING THE ATTACHED FORM TO RISCORP AT THE ADDRESS BELOW:
RISCORP National Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
If you do not want your policy transferred, you may notify us in writing
by signing and returning the enclosed pre-addressed, postage-paid card or by
writing to us at the above address.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS, YOU WILL BE
SENT A THIRD NOTICE.
If you reject the transfer, you may keep your policy with RISCORP
National Insurance Company or exercise any option under your policy.
EFFECT OF TRANSFER
If you consent to this transfer, ONLY Zenith Insurance Company shall
have obligations or be liable to you in the future and RISCORP National
Insurance Company shall be released from all future obligations or liability.
If you consent to this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
If you do NOT consent to this tranfer, ONLY RISCORP National Insurance
Company shall have obligations or be liable to you in the future and you
shall have no rights against Zenith Insurance Company.
-3-
<PAGE>
It will have direct responsibility to you for the payment of all claims,
benefits and for all other policy obligations. RISCORP National Insurance
Company will no longer have any obligations to you.
If you have any further questions about this agreement, you may contact
RISCORP National Insurance Company or Zenith Insurance Company.
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
Sincerely,
__________________________________ ________________________
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
One Sarasota Tower 1390 Main Street
Suite 608 Sarasota, FL 34236
Sarasota, FL 34236
-4-
<PAGE>
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
THIRD AND FINAL NOTICE
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
You were previously sent a Notice of Transfer and Certificate of
Assumption notifying you that Zenith Insurance Company has agreed to
replace RISCORP National Insurance Company as your insurer under [insert
policy/certificate name and number] effective [insert date]. Zenith
Insurance Company's principal place of business is 21255 Califa Street,
Woodland Hills, California, 91367-5021; however, all correspondence with
Zenith Insurance Company concerning your policy should be sent to 1390 Main
Street, Sarasota, Florida 34236. You may obtain additional information
concerning Zenith Insurance Company from reference materials in your local
library or by contacting your Insurance Commissioner at
[insert address and phone number].
YOUR RIGHTS
We are sending you a third notice because we did not receive the
pre-addressed response card or other written notice from you indicating your
rejection of the proposed transfer. You may choose to consent to or reject
the transfer of your policy to Zenith Insurance Company. THIS CHANGE IN
INSURANCE COMPANIES IS CONTINGENT UPON YOUR EXPRESS AFFIRMATIVE CONSENT,
GIVEN BY SENDING THE ATTACHED FORM TO RISCORP AT THE ADDRESS BELOW:
RISCORP National Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
If you do not want your policy transferred, you may notify us in writing
by signing and returning the enclosed pre-addressed, postage-paid card or by
writing to us at the above address.
THIS IS YOU THIRD AND FINAL NOTICE OF TRANSFER. IF WE DO NOT RECEIVE
YOUR WRITTEN CONSENT, GIVEN BY SENDING THE ATTACHED FORM TO RISCORP AT THE
ADDRESS ABOVE, YOUR POLICY WILL REMAIN WITH RISCORP NATIONAL INSURANCE
COMPANY AND YOU SHALL HAVE NO RIGHTS AGAINST ZENITH INSURANCE COMPANY.
EFFECT OF TRANSFER
If you consent to this transfer, ONLY Zenith Insurance Company shall
have obligations or be liable to you in the future and RISCORP National
Insurance Company shall be released from all future obligations or liability.
If you consent to this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
If you do NOT consent to this tranfer, ONLY RISCORP National Insurance
Company shall have obligations or be liable to you in the future and you
shall have no rights against Zenith Insurance Company. It will have direct
responsibility to you for the payment of all claims, benefits and for all
other policy obligations. RISCORP National Insurance Company will no longer
have any obligations to you.
-5-
<PAGE>
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
If you have any further questions about this agreement, you may contact
RISCORP National Insurance Company or Zenith Insurance Company.
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
Sincerely,
__________________________________ ________________________
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
One Sarasota Tower 1390 Main Street
Suite 608 Sarasota, FL 34236
Sarasota, FL 34236
-6-
<PAGE>
- -----------------------------------------------------------------
RESPONSE CARD
_________ YES, I accept the transfer of my policy
from RISCORP National Insurance Company to
Zenith Insurance Company.
_________ NO, I reject the proposed transfer of
my policy from RISCORP National Insurance Company
to Zenith Insurance Company and wish
to retain my policy with RISCORP National
Insurance Company.
_____________ ______________________________
DATE SIGNATURE
NAME:
_______________________________________________________________________
STREET ADDRESS:
_______________________________________________________________________
CITY, STATE, ZIP:
_______________________________________________________________________
-7-
<PAGE>
NEBRASKA EXHIBIT A
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
Zenith Insurance Company has agreed to replace RISCORP National
Insurance Company as your insurer under [insert policy/certificate name
and number]effective [insert date]. Zenith Insurance Company's principal
place of business is 21255 Califa Street, Woodland Hills, California,
91367-5021; however all correspondence with Zenith Insurance Company concerning
your policy should be sent to 1390 Main Street, Sarasota, Florida 34236.
Certain financial information concerning both companies is attached, including:
(1) ratings for the last five years if available or for such lesser period as
is available from two nationally recognized insurance rating services;
(2) balance sheets for the previous three years if available or for such
lesser period as is available and as of a date no later than ninety days prior
to the current date; and (3) an explanation of the reason for the transfer.
If you request it, a copy of the Management's Discussion and Analysis which was
filed as a supplement to the previous year's annual statement will be sent to
you at no additional expense to you. You may obtain additional information
concerning Zenith Insurance Company from reference materials in your local
library or by contacting your Insurance Commissioner at [insert address and
phone number]. Zenith Insurance Company is licensed in your state.
YOUR RIGHTS
You may choose to consent to or reject the transfer of your policy to
Zenith Insurance Company. If you want your policy transferred, you may
notify us in writing by signing and returning the enclosed pre-addressed,
postage-paid card or by writing to us at:
RISCORP National Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING NO
LATER THAN [24 MONTHS] AFTER THE DATE THIS NOTICE BY SIGNING AND RETURNING THE
ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY WRITING TO US AT THE ABOVE
ADDRESS. IF WE DO NOT RECEIVE A WRITTEN REJECTION YOU, AS A MATTER OF LAW,
WILL HAVE CONSENTED TO THE TRANSFER. HOWEVER, BEFORE THIS CONSENT IS FINAL, YOU
WILL BE PROVIDED A FINAL NOTICE OF THE TRANSFER [TWELVE MONTHS] FROM NOW. IF WE
DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN TWO MONTHS AFTER THE DATE OF THE
FINAL NOTICE, YOU SHALL BE DEEMED TO HAVE ACCEPTED THE TRANSFER.
<PAGE>
If you reject the transfer, you may keep your policy with RISCORP
Insurance Company or exercise any option under your policy.
EFFECT OF TRANSFER
If you accept this transfer, Zenith Insurance Company will be your
insurer. It will have direct responsibility to you for the payment of all
claims, benefits and for all other policy obligations. RISCORP National
Insurance Company will no longer have any obligations to you.
If you accept this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
If you have any further questions about this agreement, you may contact
RISCORP National Insurance Company or Zenith Insurance Company.
Sincerely,
__________________________________ ________________________
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
One Sarasota Tower 1390 Main Street
Suite 608 Sarasota, FL 34236
Sarasota, FL 34236
<PAGE>
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
FINAL NOTICE
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
You were previously sent a Notice of Transfer and Certificate of Assumption
notifying you that Zenith Insurance Company has agreed to replace RISCORP
National Insurance Company as your insurer under [insert policy/certificate name
and number] effective [insert date]. Zenith Insurance Company's principal place
of business is 21255 Califa Street, Woodland Hills, California, 91367-5021;
however, all correspondence with Zenith Insurance Company concerning your policy
should be sent to 1390 Main Street, Sarasota, Florida 34236. Certain financial
information concerning both companies was attached to the First Notice of
Transfer and Certificate of Assumption previously sent to you, including: (1)
ratings for the last five years if available or for such lesser period as is
available from two nationally recognized insurance rating services; (2) balance
sheets for the previous three years if available or for such lesser period as is
available and as of a date no later than ninety days prior to the current date;
and (3) an explanation of the reason for the transfer. If you would like
additional copies of this financial information, please contact Zenith Insurance
Company at the addresses supplied above. You may obtain additional information
concerning Zenith Insurance Company from reference materials in your local
library or by contacting your Insurance Commissioner at [insert address and
phone number]. Zenith Insurance Company is licensed in your state.
YOUR RIGHTS
We are sending you a final notice because we did not receive the
pre-addressed response card or other written notice from you indicating your
rejection of the proposed transfer. If you want your policy transferred to
Zenith Insurance Company, you may notify us in writing by signing and
returning the enclosed pre-addressed, postage-paid card or by writing to us
at:
RISCORP National Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS. IF WE DO NOT RECEIVE YOUR WRITTEN
REJECTION WITHIN TWO MONTHS, YOU WILL BE DEEMED TO HAVE ACCEPTED THE TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP National
Insurance Company or exercise any option under your policy.
EFFECT OF TRANSFER
If you accept this transfer, Zenith Insurance Company will be your insurer.
It will have direct responsibility to you for the payment of all claims,
benefits and for all other policy obligations. RISCORP National Insurance
Company will no longer have any obligations to you.
<PAGE>
If you accept this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
If you have any further questions about this agreement, you may contact
RISCORP National Insurance Company or Zenith Insurance Company.
Sincerely,
__________________________________ ________________________
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
One Sarasota Tower 1390 Main Street
Suite 608 Sarasota, FL 34236
Sarasota, FL 34236
<PAGE>
- -----------------------------------------------------------------
[NOTICE DATE]
RESPONSE CARD
_________ YES, I accept the transfer of my policy
from RISCORP National Insurance Company to
Zenith Insurance Company.
_________ NO, I reject the proposed transfer of
my policy from RISCORP National Insurance Company
to Zenith Insurance Company and wish
to retain my policy with RISCORP National
Insurance Company.
_____________ ____________________________________
DATE SIGNATURE
NAME:__________________________________________________________________
STREET ADDRESS:________________________________________________________
CITY, STATE, ZIP:______________________________________________________
<PAGE>
NORTH CAROLINA EXHIBIT A
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
Zenith Insurance Company has agreed to replace RISCORP National Insurance
Company as your insurer under [insert policy/certificate name and number]
effective [insert date]. Zenith Insurance Company's principal place of business
is 21255 Califa Street, Woodland Hills, California, 91367-5021; however, all
correspondence with Zenith Insurance Company concerning your policy should be
sent to 1390 Main Street, Sarasota, Florida 34236. Certain financial
information concerning both companies are attached, including: (1) ratings for
the last five years if available or for such lesser period as is available from
two nationally recognized insurance rating services; (2) balance sheets for the
previous three years if available or for such lesser period as is available and
as of a date no later than ninety days prior to the current date; (3) a copy of
the Management Discussion and Analysis filed as a supplement to the previous
year's annual statement; and (4) an explanation of the reason for the transfer.
You may obtain additional information concerning Zenith Insurance Company from
reference materials in your local library or by contacting your Insurance
Commissioner at [insert address and phone number]. Zenith Insurance Company is
licensed in your state.
YOUR RIGHTS
You may choose to consent to or reject the transfer of your policy to
Zenith Insurance Company. If you want your policy transferred, you may notify
us in writing by signing and returning the enclosed pre-addressed, postage-paid
card or by writing to us at:
RISCORP National Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN [TWENTY FIVE] MONTHS OF THIS
NOTICE OF TRANSFER, YOU WILL, AS A MATTER OF LAW HAVE CONSENTED TO THE TRANSFER.
HOWEVER, BEFORE THIS CONSENT IS FINAL, YOU WILL BE SENT A SECOND NOTICE,
TWENTY-FOUR MONTHS AFTER OUR FIRST NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN
REJECTION WITHIN ONE MONTH AFTER THE DATE OF THE SECOND NOTICE, YOU WILL BE
DEEMED TO HAVE ACCEPTED THE TRANSFER.
<PAGE>
If you reject the transfer, you may keep your policy with RISCORP
Insurance Company or exercise any option under your policy.
EFFECT OF TRANSFER
If you accept this transfer, Zenith Insurance Company will be your insurer.
It will have direct responsibility to you for the payment of all claims,
benefits and for all other policy obligations. RISCORP National Insurance
Company will no longer have any obligations to you.
If you accept this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
If you have any further questions about this agreement, you may contact
RISCORP National Insurance Company or Zenith Insurance Company.
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
Sincerely,
__________________________________ ________________________
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
One Sarasota Tower 1390 Main Street
Suite 608 Sarasota, FL 34236
Sarasota, FL 34236
<PAGE>
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
SECOND NOTICE
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
You were previously sent a Notice of Transfer and Certificate of
Assumption notifying you that Zenith Insurance Company has agreed to replace
RISCORP National Insurance Company as your insurer under [insert policy/
certificate name and number] effective [insert date]. Zenith Insurance
Company's principal place of business is 21255 Califa Street, Woodland Hills,
California, 91367-5021; however, all correspondence with Zenith Insurance
Company concerning your policy should be sent to 1390 Main Street, Sarasota,
Florida 34236. Certain financial information concerning both companies was
attached to the First Notice of Transfer and Certificate of Assumption
previously sent to you, including: (1) ratings for the last five years if
available or for such lesser period as is available from two nationally
recognized insurance rating services; (2) balance sheets for the previous
three years if available or for such lesser period as is available and as of a
date no later than ninety days prior to the current date; (3) a copy of the
Management Discussion and Analysis filed as a supplement to the previous year's
annual statement; and (4) an explanation of the reason for the transfer.
If you would like additional copies of this financial information, please
contact Zenith Insurance Company at the addresses supplied above. You may
obtain additional information concerning Zenith Insurance Company from reference
materials in your local library or by contacting your Insurance Commissioner at
[insert address and phone number]. Zenith Insurance Company is licensed in your
state.
YOUR RIGHTS
We are sending you a second notice because we did not receive the
pre-addressed response card or other written notice from you indicating your
rejection of the proposed transfer. If you want your policy transferred to
Zenith Insurance Company, you may notify us in writing by signing and
returning the enclosed pre-addressed, postage-paid card or by writing to us
at:
RISCORP National Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN ONE MONTH YOU WILL BE DEEMED
TO HAVE ACCEPTED THE TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP National
Insurance Company or exercise any option under your policy.
<PAGE>
EFFECT OF TRANSFER
If you accept this transfer, Zenith Insurance Company will be your
insurer. It will have direct responsibility to you for the payment of all
claims, benefits and for all other policy obligations. RISCORP National
Insurance Company will no longer have any obligations to you.
If you accept this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
If you have any further questions about this agreement, you may contact
RISCORP National Insurance Company or Zenith Insurance Company.
Sincerely,
__________________________________ ________________________
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
One Sarasota Tower 1390 Main Street
Suite 608 Sarasota, FL 34236
Sarasota, FL 34236
<PAGE>
- -----------------------------------------------------------------
RESPONSE CARD
_________ YES, I accept the transfer of my policy
from RISCORP National Insurance Company to
Zenith Insurance Company.
_________ NO, I reject the proposed transfer of
my policy from RISCORP National Insurance Company
to Zenith Insurance Company and wish
to retain my policy with RISCORP National
Insurance Company.
_____________ ____________________________________
DATE SIGNATURE
NAME:__________________________________________________________________
STREET ADDRESS:________________________________________________________
CITY, STATE, ZIP:______________________________________________________
<PAGE>
EXHIBIT B
RISCORP NATIONAL INSURANCE ZENITH INSURANCE COMPANY
COMPANY 1390 MAIN STREET
ONE SARASOTA TOWER SARASOTA, FLORIDA 34236
SUITE 608
SARASOTA, FLORIDA 34236
NOTICE AND CERTIFICATE OF ASSUMPTION
Policy No: ____________
Issued to: ____________
THIS CERTIFICATE certifies and you are hereby notified that, pursuant to the
terms of an Assumption and Indemnity Reinsurance Agreement, the above policy and
all of its endorsements (the "Policy") issued by RISCORP Insurance Company have
been assumed by Zenith Insurance Company. This change is effective as of 12:01
a.m. Eastern Standard Time on [Effective Date].
All terms and conditions of the Policy remain unchanged, except that Zenith
Insurance Company shall be the insurer. Zenith Insurance Company shall have all
of the rights and obligations of RISCORP Insurance Company under the Policy as
though it had issued the Policy originally. All payments, correspondence and
inquiries such as policy changes, notices, claims or suits or actions on the
Policy shall in the future be submitted directly to Zenith Insurance Company at
the address indicated above.
This Notice and Certificate of Assumption forms a part of and should be attached
to the Policy issued by RISCORP Insurance Company.
IN WITNESS WHEREOF, RISCORP Insurance Company and Zenith Insurance
Company have each caused this Notice and Certificate of Assumption to be signed
by their duly authorized officers in facsimile to become effective as their
original signatures.
___________________ ________________________
RISCORP NATIONAL INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FLORIDA 34236
SARASOTA, FLORIDA 34236
-3-
<PAGE>
EXHIBIT C
ZENITH INSURANCE COMPANY
1390 MAIN STREET
SARASOTA, FLORIDA 34236
[ADDRESSEE]
Reference: RISCORP Insurance Company
Policy No: ____________
Issued to: ____________
Claim No: _____________
Dear Claimant:
This notice is sent to you in connection with your pending claim.
Please be advised that the captioned insurance policy (the "Policy") has been
assumed by Zenith Insurance Company, effective as of 12:01 a.m. Eastern Standard
Time on [Effective Date].
All correspondence and inquiries relating to your claim or suits or
actions on the Policy shall in the future be submitted directly to Zenith
Insurance Company at the address indicated above.
________________________
ZENITH INSURANCE COMPANY
1390 MAIN STREET
SARASOTA, FLORIDA 34236
<PAGE>
EXHIBIT 10.6
EXECUTION COPY
ASSUMPTION AND INDEMNITY
REINSURANCE AGREEMENT
by and between
ZENITH INSURANCE COMPANY
and
RISCORP INSURANCE COMPANY
Dated as of April 1, 1998
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
BUSINESS REINSURED. . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III
ASSUMPTION CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE IV
POLICY ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE V
CONSIDERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE VI
RESERVES; CREDIT FOR REINSURANCE. . . . . . . . . . . . . . . . . . . 6
ARTICLE VII
ASSIGNMENT OF CEDED REINSURANCE AGREEMENTS. . . . . . . . . . . . . . 7
ARTICLE VIII
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IX
GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE X
ACCOUNTING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE XI
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE XII
INSOLVENCY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE XIII
OFFSET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE XIV
RIGHTS WITH RESPECT TO QUOTA SHARE POLICIES . . . . . . . . . . . . . 12
ARTICLE XV
ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE XVI
TERRITORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
<PAGE>
ARTICLE XVII
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE XVIII
MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . 14
SCHEDULE 3.2 STATE REQUIREMENTS FOR TRANSFER AND NOVATION OF INSURANCE
CONTRACTS
SCHEDULE 7.1-A ASSIGNED REINSURANCE CONTRACTS
SCHEDULE 7.1-B ASSUMED REINSURANCE CONTRACTS
EXHIBIT A POLICYHOLDER NOTICE
EXHIBIT B EXPIRED POLICY NOTICE
EXHIBIT C CLAIMANT NOTICE
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ASSUMPTION AND INDEMNITY REINSURANCE AGREEMENT
THIS ASSUMPTION AND INDEMNITY REINSURANCE AGREEMENT (this
"Agreement"), dated as of 12:01 a.m. New York City Time on April 1, 1998 (the
"Effective Date"), is made by and between ZENITH INSURANCE COMPANY, a stock
insurance company organized under the laws of the State of California
("Zenith"), and RISCORP INSURANCE COMPANY, a stock insurance company
organized under the laws of the State of Florida (the "Company").
WHEREAS, Zenith and the Company have entered into the Purchase
Agreement (as defined below); and
WHEREAS, the Purchase Agreement provided for Zenith and the Company
to enter into an indemnity reinsurance agreement;
WHEREAS, the parties have agreed to amend the Purchase Agreement to
provide for Zenith and the Company to enter into an assumption reinsurance
agreement;
WHEREAS, Zenith and the Company are entering into this Agreement
pursuant to the Purchase Agreement, as so amended;
WHEREAS, the Company has agreed to cede to Zenith, and Zenith has
agreed to assume certain liabilities and obligations of the Company under the
Insurance Contracts (as defined in the Purchase Agreement).
NOW, THEREFORE, in consideration of the mutual covenants and
promises and upon the terms and conditions set forth herein, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. DEFINITIONS. Capitalized terms used herein and not
otherwise defined in this Agreement shall have the meanings given to them in
the Purchase Agreement. As used in this Agreement, the following terms shall
have the following meanings:
"CLAIMANT" means any claimant under any Insurance Contract who (a)
has an open claim on the Effective Date, or (b) files a claim after the
Effective Date.
"EFFECTIVE DATE" means the date specified in the first paragraph
hereof.
"INSURANCE CONTRACTS" shall mean those Insurance Contracts (as
defined in the Purchase Agreement) issued by the Company.
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"INSURANCE LIABILITIES" shall mean those Insurance Liabilities (as
defined in the Purchase Agreement) arising under or in connection with the
Insurance Contracts.
"NOVATED POLICIES" means those Insurance Contracts for which: (a)
the Company or Zenith has received a written acceptance by the Policyholder
of the transfer and assumption under this Agreement; and (b) with respect to
any Insurance Contract that was issued or issued for delivery in a state
where written acceptance by the Policyholder is not required by law or the
appropriate regulatory authority to effect an assumption and novation, (i)
the Policyholder is deemed to have accepted the transfer and assumption under
this Agreement by paying premiums directly to Zenith or taking such other
action as may be recognized under applicable state law as evidence of the
Policyholder's acceptance of the transfer and assumption, or (ii) the
Policyholder has, following the mailing to the Policyholder of such notices
as may be prescribed by applicable state law, neither accepted nor rejected
the transfer and assumption within a timeframe under which applicable state
law or appropriate regulatory authority permits the policyholder to be deemed
to have accepted the transfer and assumption. Any claim made by any Claimant
under an Insurance Contract which expired prior to the Effective Date shall,
subject to the last sentence of this paragraph, be deemed to be a claim under
a Novated Policy. If an Insurance Contract defined herein as a Novated
Policy is determined by law or an appropriate regulatory authority, by
judicial decision or otherwise to be not novated, such Insurance Contract
shall for all purposes of this Agreement be deemed retroactive to the
Effective Date to be a Quota Share Policy.
"POLICYHOLDER" means each holder of an Insurance Contract that is
in force on the Effective Date.
"PURCHASE AGREEMENT" means the Asset Purchase Agreement, dated as
of June 17, 1997, as amended, among Zenith, RISCORP National Insurance
Company, the Company, RISCORP Property Casualty Insurance Company, RISCORP,
Inc., RISCORP of Florida, Inc., RISCORP Management Services, Inc., RISCORP
Managed Care Services, Inc., RISCORP Insurance Services, Inc., CompSource,
Inc., RISCORP of Illinois, Inc., Independent Association Administrators
Incorporated, RISCORP Real Estate Holdings, Inc., RISCORP Acquisition, Inc.,
RISCORP West, Inc., RISCORP Services, Inc., RISCORP Staffing Solutions
Holdings, Inc., RISCORP Staffing Solutions, Inc. I and RISCORP Staffing
Solutions, Inc. II.
"QUOTA SHARE POLICIES" shall have the meaning set forth in Section 2.3
hereof.
ARTICLE II
BUSINESS REINSURED
Section 2.1. BUSINESS REINSURED. Subject to all of the terms and
conditions contained herein, the Company hereby
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cedes to Zenith, and Zenith hereby assumes as reinsurance from the Company,
all of the rights and obligations of the Company under each of the Insurance
Contracts.
Section 2.2. NOVATED POLICIES. Zenith shall be the successor to
the Company under the Novated Policies that it assumes as if the Novated
Policies were direct obligations originally issued by Zenith. Zenith shall
be substituted in the place and stead of the Company so as to effect a
novation of the respective Insurance Contracts and release the Company from
any and all rights and obligations thereunder. Each insured under a Novated
Policy shall disregard the Company as a party thereto and treat Zenith as if
it had been originally obligated thereunder except as otherwise provided
herein. The insureds shall file claims arising under the Novated Policies on
or after the effective date of such novation directly with Zenith. The
insureds under the Novated Policies shall also have a right to assert claims
related to such Novated Policies directly against Zenith and Zenith hereby
consents to be subject to such claims by any insured under the Novated
Policy; PROVIDED, HOWEVER, that the rights of any insured under any Insurance
Contract shall be limited to and consist of those rights set forth in such
Insurance Contract (including any rider or endorsement thereto), and no
insured shall have the right to receive any greater amount under any
Insurance Contract than such insured would have had in the absence of this
Agreement (except that in assessing such right no effect shall be given to
any bankruptcy, liquidation, insolvency, reorganization or moratorium of the
Company, or the effect of laws or legal procedures affecting enforcement of
creditors' rights against the Company generally). Payments made to insureds
in discharge of obligations on Novated Policies to provide direct coverage to
insureds will diminish any obligation in respect to those Novated Policies
which Zenith may have to the estate of the Company if it shall be in
receivership, liquidation or rehabilitation proceedings.
Section 2.3. QUOTA SHARE POLICIES. To the extent Zenith has not
for any reason assumed by novation any Insurance Contracts or Insurance
Liabilities, Zenith shall accept and reinsure, on a quota share basis, 100%
of Insurance Liabilities under such Insurance Contracts (the "Quota Share
Policies"), in accordance with the terms and conditions of this Agreement,
and hereby agrees to pay directly, on behalf of the Company, any claims or
losses reinsured under this Agreement which arise under such Quota Share
Policies; PROVIDED, HOWEVER, that the insureds under such Quota Share
Policies shall not have the right to assert claims related to such Quota
Share Policies directly against Zenith. A payment made to an insured in
discharge of obligations of RISCORP to provide direct coverage to the insured
will diminish the obligation in respect thereof which Zenith may have to the
estate of the Company if it shall be in receivership, liquidation or
rehabilitation proceedings.
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Section 2.4. TERMS; CONDITIONS. All Insurance Liabilities for
which Zenith shall assume liability hereunder, either as Novated Policies or
Quota Share Policies, are subject in all respects to the same written terms,
conditions, waivers, modifications, alterations and cancellations as the
Insurance Contracts. Zenith accepts and assumes the Insurance Liabilities
subject to all defenses, setoffs and counterclaims to which the Company would
be entitled with respect to the Insurance Contracts. The parties agree that
no such defenses, setoffs or counterclaims are waived under this Agreement
and that as of the Effective Date, Zenith shall be fully subrogated to all
such defenses, setoffs and counterclaims and be entitled to the full benefits
thereof.
ARTICLE III
ASSUMPTION CERTIFICATES
Section 3.1. NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION.(a)
Zenith, with the cooperation and assistance of the Company, shall prepare for
mailing to every Policyholder a Notice of Transfer and Certificate of
Assumption, including a form for rejection or acceptance and a self-addressed
return envelope, substantially in the form attached hereto as EXHIBIT A
(collectively, the "Policyholder Notices"), subject to changes required by
state law or required by any state insurance regulator as a condition for
approval of the mailing of such Policyholder Notices to Policyholders. The
Company shall cooperate and assist Zenith in the preparation and mailing of
the Policyholder Notices as provided herein. Zenith shall mail Policyholder
Notices by certified mail, return receipt requested, to the Policyholders
located in a particular state within thirty days of receipt of all regulatory
approvals necessary for such mailing.
(b) Zenith, with the cooperation and assistance of the Company, shall
prepare for mailing and mail, within thirty days of receipt of all regulatory
approvals necessary for such mailing, to each holder of an Insurance Contract
which expired without renewal during the two year period immediately
prececeding the Effective Date a Notice of Transfer and Assumption
substantially in the form attached hereto as EXHIBIT B (collectively, the
"Expired Policy Notices"), subject to changes required by state law or
required by any state insurance regulator as a condition for approval of the
mailing of such Expired Policy Notices to said holders of Insurance Contracts
and Claimants.
(c) Zenith, with the cooperation and assistance of the Company, shall
prepare for mailing and mail, within thirty days of the Effective Date, to
each Claimant who has an open claim on the Effective Date, a Notice
substantially in the form attached hereto as EXHIBIT C (collectively, the
"Claimant Notices"), subject to changes required by state law or required by
any state
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insurance regulator as a condition for approval of the mailing of such
Claimant Notices to said holders of Insurance Contracts and Claimants. In
addition, Zenith, with the cooperation and assistance of the Company, shall
prepare and mail a Claimant Notice to each Claimant who is not a Policyholder
(as defined herein), but who, after the Effective Date, files a claim under
any Insurance Contract.
Section 3.2. EFFECT OF NOTICE. A Policyholder shall be deemed to
have accepted the transfer and assumption under this Agreement (1) upon
receipt by Zenith of the Policyholder's written acceptance of the transfer
and assumption, or (2) with respect to any Insurance Contract issued or
issued for delivery in a state where written acceptance by the Policyholder
is not required by the appropriate regulatory authority to effect an
assumption and novation, upon taking such action, or failing to take any
action following the mailing of the Policyholder Notice, as specified in
Schedule 3.2. attached hereto.
ARTICLE IV
POLICY ADMINISTRATION
Section 4.1. POLICY ADMINISTRATION BY ZENITH. The Company grants
to Zenith authority in all matters relating to the administration of the
Insurance Contracts assumed by Zenith to the extent such authority may be
granted pursuant to applicable law and agrees to cooperate fully with Zenith
in the transfer of such administration. Zenith agrees, at its expense, to be
responsible for such administration. In order to assist and to evidence more
fully the substitution of Zenith in the place and stead of the Company, the
Company hereby nominates, constitutes and appoints Zenith as its
attorney-in-fact with respect to the rights, duties, privileges and
obligations of the Company in and to the Insurance Contracts assumed by
Zenith, with full power and authority to act in the name, place and stead of
the Company with respect to such Insurance Contracts including, without
limitation, the power without reservation, to service all such Insurance
Contracts, to adjust, to defend, to settle and to pay all claims, to recover
salvage and subrogation for any losses incurred and to take such other and
further actions as may be necessary or desirable to effect the transactions
contemplated by this Agreement. In addition to other responsibilities set
forth in this Agreement, Zenith shall also issue on the Company's behalf, but
wherever possible in the name of Zenith, all Insurance Contracts assumed by
Zenith which the Company is contractually or otherwise obligated to issue on
and after the Effective Date.
Section 4.2. FORWARDING OF NOTICES AND OTHER COMMUNICATIONS. The
Company agrees that, after the Effective Date, it will forward to Zenith,
within forty-five (45) days of receipt, all notices and other written
communications received by it relating to the Insurance Contracts assumed by
Zenith
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(including, without limitation, all inquiries or complaints from state
insurance regulators, agents, brokers and insureds and all notices of claims,
suits and actions for which it receives services of process).
ARTICLE V
CONSIDERATION
Section 5.1. INITIAL CONSIDERATION. In consideration of Zenith's
assumption of the Insurance Liabilities hereunder, the Company shall transfer
to Zenith the Transferred Assets pursuant to Section 2.01 of the Purchase
Agreement related to the Company's Insurance Liabilities.
Section 5.2. FUTURE PREMIUMS. Zenith is entitled to receive all
premiums and other consideration paid on or after the Effective Date with
respect to the Insurance Contracts. In the event that the Company receives
any premiums or other consideration with respect to an Insurance Contract on
or after the Effective Date, it shall promptly remit such premiums or other
consideration to Zenith, along with pertinent information in its possession
relating to such premiums, including information as to the Insurance Contract
and period to which such premium relates. Zenith shall assume all
responsibility for billing and collection of premiums. The Company shall
reasonably cooperate with Zenith in causing insureds under the Insurance
Contracts to pay premiums to Zenith after the Effective Date.
ARTICLE VI
RESERVES; CREDIT FOR REINSURANCE
Section 6.1. RESERVES; CREDIT FOR REINSURANCE. Zenith shall
maintain all insurance licenses necessary to permit the Company to obtain
full financial statement credit in all applicable jurisdictions for the
reinsurance provided to it by Zenith pursuant to this Agreement, PROVIDED
that if Zenith shall fail to maintain such licenses, it shall provide the
Company with collateral security permitted under applicable law for purposes
of obtaining financial statement credit for the reinsurance provided under
this Agreement. Any unearned premium, loss and loss adjustment expense
reserves required by the foregoing in no event shall be less than the amounts
required under the law of any jurisdiction having regulatory authority with
respect to the establishment of reserves relating to the Insurance Contracts.
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ARTICLE VII
ASSIGNMENT OF CEDED REINSURANCE AGREEMENTS
Section 7.1. ASSIGNMENT. (a) As of the Effective Date, the
Company shall transfer, set over, assign and convey to Zenith all of its
right, title and interest in any amount held by or due from the assuming
reinsurers under the reinsurance agreements listed in SCHEDULE 7.1-A
("Schedule 7.1-A Reinsurance"), including (i) amounts held by or which may
become due from the assuming reinsurers thereunder for losses or loss
adjustment expenses on Insurance Contracts for which the Reinsurer has
assumed liability or for losses paid by the Company prior to the Effective
Date, and (ii) letters of credit, trust funds and other security mechanisms
outstanding for the benefit of the Company pursuant to the terms of any of
the Schedule 7.1-A Reinsurance. The Company hereby authorizes Zenith, as of
the Effective Date, to prepare and submit, on the Company's behalf and in the
Company's name, all statements and reports required of the Company under the
Schedule 7.1-A Reinsurance, and further authorizes Zenith to take all other
actions required of the Company under the Schedule 7.1-A Reinsurance or
otherwise permitted thereunder, and Zenith agrees to prepare and submit such
reports and take all such actions, except that Zenith shall not undertake to
pay on behalf of the Company, and shall not be obligated hereunder to pay,
any amount due to the reinsurers under the Schedule 7.1-A Reinsurance unless
the Company's obligation to pay such amount shall have been accrued as a
liability on the Final Business Balance Sheet.
(b) As of the Effective Date, the Reinsurer shall be substituted
for and succeed to all of the rights and liabilities of the Company, under
the reinsurance agreements listed in SCHEDULE 7.1-B (the "Schedule 7.1-B
Reinsurance" and, together with the Schedule 7.1-A Reinsurance, the "Ceded
Reinsurance") and shall be recognized for all purposes as the "Company"
thereunder in substitution for the Company. The Company shall transfer, set
over, assign and convey to Zenith all of its rights and obligations of any
nature whatsoever under the Schedule 7.1-B Reinsurance, including (i) amounts
held by or which may become due from assuming reinsurers with respect to any
reinsurance ceded by the Company to the reinsurer thereunder, and (ii)
letters of credit, trust funds and other security mechanisms outstanding for
the benefit of the Company pursuant to the terms of any of the Ceded
Reinsurance. Zenith shall accept such conveyance, transfer and assignment of
the Company's rights under the Schedule 7.1-B Reinsurance and assumes all of
the Company's obligations under the Schedule 7.1-B Reinsurance existing on or
arising after the Effective Date. The assignment and assumption of the
Schedule 7.1-B Reinsurance effected by this Section 7.1 shall be effective
only if such assignment (i) is permitted under the terms of such Schedule
7.1-B Reinsurance or as otherwise consented to by the reinsurer thereunder,
and (ii) shall preserve fully the obligations of the reinsurers thereunder in
respect of
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the Insurance Contracts. If the Company's rights and obligations under any
such Schedule 7.1-B Reinsurance are not assigned to and assumed by Zenith,
(i) after the Effective Date, Zenith shall be responsible for the payment of
all premiums and other considerations required to be paid by the Company in
respect of any of the Schedule 7.1-B Reinsurance, (ii) all reinsurance
recoveries attributable to any of the Schedule 7.1-B Reinsurance are assigned
and shall accrue to the benefit of Zenith hereunder by operation of this
Section 7.1 and shall, upon receipt thereof by the Company, be paid promptly
thereby to Zenith upon and in accordance with its direction, and (iii) such
assignment shall be effective at such time as the assignment may be effected
while preserving fully the obligations of the reinsurer under the respective
Schedule 7.1-B Reinsurance.
(c) The Company shall reasonably cooperate with Zenith in causing
reinsurers under the Ceded Reinsurance to pay reinsurance recoveries to
Zenith after the Effective Date.
Section 7.2. CEDED REINSURANCE COLLATERAL. To the extent
necessary to effect any transfer or assignment pursuant to this Section 7.1
of any assumed reinsurance, the Company hereby appoints Zenith as
attorney-in-fact for the Company to act for and on behalf of it with respect
to letters of credit, trust funds and other security mechanisms outstanding
for the benefit of the Company pursuant to the terms of any of the Ceded
Reinsurance, and the Company shall execute and deliver to Zenith such
additional instruments as Zenith may reasonably request to give effect to
such appointment as attorney-in-fact, and to provide appropriate evidence
that the Company has assigned to Zenith all of its rights under the Ceded
Reinsurance with respect to any such letters of credit, trust funds or other
accounting mechanism. Zenith shall use its reasonable best efforts to the
extent deemed reasonably necessary by Zenith, to cause the reinsurers under
the Ceded Reinsurance to provide replacement letters of credit, trust funds
or other security mechanisms, as applicable, naming Zenith as the beneficiary
thereof in amounts and with terms substantially similar to those currently
provided by such reinsurers for the benefit of the Company.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. SOLE REMEDY. Notwithstanding anything to the
contrary in this Agreement, the Company shall not settle any claim, waive any
right, defense, setoff or counterclaim with respect to, or amend, commute or
terminate, any Insurance Contract or Ceded Reinsurance without the prior
written consent of Zenith, except in accordance with the provisions of the
indemnities referred to in the following sentence. The Company's sole and
exclusive remedy with respect to a breach of this Agreement shall be the
indemnities provided by Section 9.02 of
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the Purchase Agreement, except that any dispute between the parties arising
hereunder for which such indemnities are being sought shall be subject to
arbitration pursuant to Article XV hereof.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1. INSPECTION. Zenith and the Company, or their
designated representatives, may inspect, at the place where such records are
located, any and all books and records of the other parties hereto reasonably
relating to this Agreement, during normal business hours and upon reasonable
notice. The rights of the parties under this Section 9.1 shall survive
termination of this Agreement.
Section 9.2. MISUNDERSTANDINGS AND OVERSIGHTS. Any delay,
omission, error or failure to pay amounts due or to perform any other act
required by this Agreement that is unintentional and caused by
misunderstanding or oversight shall not be held to relieve either party to
this Agreement from any obligation hereunder if such delay, omission, error
or failure is corrected within 20 Business Days of receipt of notice of such
delay, omission, error or failure and neither party shall have been
prejudiced.
Section 9.3. ADJUSTMENTS. If the liability of the Company under
any of the Insurance Contracts is changed as a result of a change required by
law or regulation or any other reason, Zenith will share in the change
proportionately (100%) to the amount reinsured hereunder.
Section 9.4. COMMUNICATIONS RELATING TO THE INSURANCE CONTRACTS.
After the Effective Date, the Company and Zenith each shall forward promptly
to the other copies of all notices and other written communications it
receives relating to the Insurance Contracts (including without limitation,
all inquiries and complaints from state insurance regulators, brokers and
other service providers and reinsureds, all policyholder complaints and
complaints received from other claimants under the Insurance Contracts and
all notices of claims, suits and actions for which it receives service of
process). As used in this Section, "complaint" means any written
communication primarily expressing a grievance against the Company or Zenith.
Section 9.5. DUTY OF COOPERATION. The Company and Zenith shall
cooperate fully with the other in all reasonable respects in order to
accomplish the objectives of this Agreement.
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ARTICLE X
ACCOUNTING
Section 10.1. ACCOUNTING REPORTS. On or before the last Business
Day of each month, Zenith will provide the Company with reports of activities
under this Agreement for the preceding month. Such reports shall show any
amounts due the Company or Zenith, as the case may be, as reimbursement for
paid claims, premiums or other amounts due with respect to the Insurance
Contracts. The net balance due either party, as indicated in the monthly
report, shall be remitted to the other party within 15 days of the delivery
of said monthly report. The requirements of this Section 10.1 shall
terminate if, for twelve consecutive months, no amounts are reported as due
either party with respect to the Insurance Contracts; PROVIDED, such
requirements shall be reinstated and shall continue in effect for an
additional twelve months if at any time following such termination, any
balance or amount becomes due either party under this Agreement.
Section 10.2. FINANCIAL STATEMENT INFORMATION. On or before the
last business day of each January, April, July and October, Zenith shall
provide the Company with a quarterly or annual report containing the
financial, accounting and actuarial information necessary to prepare
regulatory, tax and GAAP monthly, quarterly and annual financial statements
and returns and satisfy other related requirements, including reserve and
related calculations respecting the Insurance Contracts in the form
reasonably required by the Company, and will maintain or cause to be
maintained the data processing systems that will enable Zenith to provide
such information. The Company shall cooperate with Zenith in preparing such
reports and shall supply such information as Zenith requires to prepare such
statements and returns and satisfy such requirements. The requirements of
this Section shall terminate automatically upon the termination of the
reporting requirements of Section 10.1 and shall be reinstated automatically
upon the reinstatement of such reporting requirements.
Section 10.3. REPORTS TO INSURANCE DEPARTMENTS. Zenith and the
Company will promptly furnish to the other, copies of any and all filings
with, and reports or communications received from, any regulatory authority
which relate directly and materially to the Insurance Contracts, including,
without limitation, each annual statement, each quarterly financial report to
the insurance department of the party's domicile and each report on periodic
examination issued by the insurance department of the party's domicile to the
extent it relates to the Insurance Contracts. The requirements of this
Section shall terminate automatically upon the termination of the reporting
requirements of Section 10.1 and shall be reinstated automatically upon the
reinstatement of such reporting requirements.
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ARTICLE XI
TERMINATION
Section 11.1. TERMINATION. Except as mutually agreed by the
Company and Zenith, this Agreement shall be unlimited in duration.
ARTICLE XII
INSOLVENCY
Section 12.1. PAYMENTS BY ZENITH. Zenith hereby agrees that all
amounts due under this Agreement with respect to all Quota Share Policies
shall be payable by Zenith on the basis of the liability of the Company under
such contracts, without diminution because of the insolvency, liquidation or
rehabilitation of the Company Insurance Subsidiary. Zenith shall make
payments due hereunder with respect to Quota Share Policies directly to the
Company or to its conservator, receiver, liquidator or other statutory
successor.
Section 12.2. CLAIMS. It is agreed that any conservator,
receiver, liquidator or statutory successor of the Company shall give prompt
written notice to Zenith of the pendency or submission of a claim under any
Insurance Contract. With respect to any Insurance Contract, during the
pendency of such claim, Zenith may investigate such claim and interpose, at
its own expense, in the proceeding where such claim is to be adjudicated, any
defense available to the Company or its conservator, receiver, liquidator or
statutory successor. The expense thus incurred by Zenith is chargeable
against the Company as a part of the expense of insolvency, liquidation or
rehabilitation to the extent of a proportionate share of the benefit which
accrues to the Company solely as a result of the defense undertaken by
Zenith. Where Zenith and other assuming companies are involved in the same
claim and a majority in interest elect to interpose a defense to such claim,
the expense shall be apportioned in accordance with the terms of the
insurance agreement as though such expense had been incurred by the Company.
ARTICLE XIII
OFFSET
Section 13.1. OFFSET. Notwithstanding any provisions of this
Agreement to the contrary, any balances or amounts due from one party to the
other under this Agreement are deemed mutual debts or credits, as the case
may be, and shall be set off, and only the balance shall be allowed or paid.
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ARTICLE XIV
RIGHTS WITH RESPECT TO QUOTA SHARE POLICIES
Section 14.1. SOLE BENEFICIARY. Zenith's quota share reinsurance
of 100% of the Insurance Liabilities of the Company with respect to any of
the Quota Share Policies is intended for the sole benefit of the parties to
this Agreement and shall not create any right on the part of any
Policyholder, insured, claimant or beneficiary under such Quota Share
Policies against Zenith or any legal relation between such Policyholders,
insureds, claimants or beneficiaries and Zenith.
ARTICLE XV
ARBITRATION
Section 15.1. APPOINTMENT OF ARBITRATORS. Any dispute or
difference arising under this Agreement that cannot be resolved by agreement
among the parties hereto shall be decided by arbitration in accordance with
this Article XV. Any such arbitration shall be conducted expeditiously and
confidentially in accordance with the Commercial Arbitration Rules of the
American Arbitration Association ("AAA") as such rules shall be in effect on
the date of delivery of demand for arbitration. Any such arbitration shall
be heard and conducted in New York, New York. Notwithstanding the rules of
the AAA, the arbitration panel in any such arbitration shall consist of three
persons who must be disinterested current or retired officers of insurance or
reinsurance companies other than the parties to this Agreement or their
Affiliates. Within twenty days of delivery of any demand for arbitration
hereunder, the Company and Zenith shall each appoint one arbitrator, and the
two arbitrators so selected shall appoint the third arbitrator within twenty
days of their appointment. In the event the two selected arbitrators are
unable to agree upon the selection of a third arbitrator after reasonable
efforts, a panel of seven qualified persons shall be requested from the AAA.
The parties shall alternately strike one person with the last remaining
person being the third designated arbitrator; the party responding to the
initial demand for arbitration shall have the first turn. Each party shall
pay the fees of its own attorneys, expenses of witnesses and all other
expenses connected with the presentation of such party's case. One-half of
any remaining costs of any arbitration, including the cost of the record or
transcripts thereof, if any, administrative fees and all other fees involved
shall be paid by Zenith, and the remaining one-half shall be paid by the
Company.
Section 15.2. DECISION. The arbitrators shall render a decision
within 60 days of the end of the arbitration hearing. The arbitrators shall
consider customary and standard practices in the insurance business. They
shall decide by a majority vote of the arbitrators. All conclusions of law
reached by the
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arbitrators shall be made in accordance with the internal substantive laws of
the State of New York without regard to conflict of laws principles. Any
award rendered by the arbitrators shall be accompanied by a written opinion
setting forth the findings of fact and conclusions of law relied upon in
reaching their decision. There shall be no appeal from their written
decision. Judgment may be entered on the decision of the arbitrators by any
court having jurisdiction.
Section 15.3. CONFIDENTIALITY. Zenith and the Company agree that
the existence, conduct and content of any arbitration shall be kept
confidential and no party shall disclose to any person any information about
such arbitration, except as may be required by law or for financial reporting
purposes in each party's financial statements.
Section 15.4. SURVIVAL OF ARTICLE. This Article XV shall survive
termination of this Agreement.
Section 15.5. OTHER ACTIONS. Submission of a matter to
arbitration shall be a condition precedent to any right to institute a
proceeding at law or in equity concerning such matter, except for injunctive
or other provisional relief pending the arbitration of a matter subject to
arbitration pursuant to this Agreement. Subject to the foregoing, each party
hereto consents to the non exclusive jurisdiction of the United States
District Court for the Southern District of New York (the "Chosen Court") in
respect of any claim arising out of, related to or contemplated by this
Agreement, (i) waives any objection to laying venue in any such action or
proceeding in the Chosen Court, (ii) waives any objection that at the Chosen
Court is an inconvenient forum or does not have jurisdiction over any party
hereto and (iii) agrees that service of process upon such party in any such
action or proceeding shall be effective if notice is given in accordance with
Section 16.02 of this Agreement.
ARTICLE XVI
TERRITORY
Section 16.1. TERRITORY. This Agreement shall apply to all
Insurance Contracts issued by the Company without territorial limitation.
ARTICLE XVII
TAXES
Section 17.1. TAXES. Zenith shall be responsible for and shall
pay all premium taxes which shall accrue on or after the Effective Date with
respect to the Insurance Contracts; the Company shall remain responsible for
the payment of, and Zenith
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<PAGE>
shall have no obligation to pay, any premium taxes which shall accrue prior
to the Effective Date which have not otherwise been accrued on the Final
Business Balance Sheet.
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
Section 18.1. HEADINGS. Headings used herein are not a part of
this Agreement and shall not affect the terms hereof.
Section 18.2. NOTICES. All notices and communications hereunder
shall be in writing and shall be deemed given if delivered personally or sent
by overnight delivery service (providing for proof of delivery). All notices
or communications with Zenith under this Agreement shall be directed to:
Zenith Insurance Company
21255 Califa Street
Woodland Hills, CA 91367-5021
Attention: Stanley R. Zax
with copies to:
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019
Attention: Alexander M. Dye, Esq.
All notices and communications with the Company under this Agreement shall be
directed to:
RISCORP, Inc.
1390 Main Street
Sarasota, Florida 34236
Attention: Walter E. Riehemann, Esq.
with copies to:
Polsinelli, White, Bardman & Shalton, P.C.
700 West 47th Street
Kansas City, MO 64112
Attention: Robert B. Sullivan, Esq.
Alston & Bird
One Atlantic Center
1201 West Peachtree Street
Atlanta, GA 30309-3424
Attention: J. Vaughan Curtis, Esq.
Section 18.3. SEVERABILITY. If any term or provision of this
Agreement shall be held void, illegal or unenforceable,
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<PAGE>
the validity of the remaining portions or provisions shall not be affected
thereby.
Section 18.4. SUCCESSORS AND ASSIGNS. This Agreement may not be
assigned by either party without the prior written consent of the other. The
provisions of this Agreement shall be binding upon and inure to the benefit
of and be enforceable by the parties hereto and their respective successors
and assigns as permitted herein.
Section 18.5. NO THIRD PARTY BENEFICIARIES. Except as otherwise
specifically provided for in Article X of this Agreement, nothing in this
Agreement is intended or shall be construed to give any person, other than
the parties hereto, their successors and permitted assigns, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein, and Zenith shall not be directly liable hereunder
to any reinsured under any Insurance Contract.
Section 18.6. INTERPRETATION. For purposes of this Agreement, the
words "hereof," "herein," "hereby" and other words of similar import refer to
this Agreement as a whole unless otherwise indicated. Whenever the words
"include", "includes", or "including" are used in this Agreement, they shall
be deemed to be followed by the words "without limitation". Whenever the
singular is used herein, the same shall include the plural, and whenever the
plural is used herein, the same shall include the singular, where appropriate.
Section 18.7. EXECUTION IN COUNTERPARTS. This Agreement may be
executed by the parties hereto in any number of counterparts and by each of
the parties hereto in separate counterparts, each of which counterparts, when
so executed and delivered, shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Section 18.8. AMENDMENTS; ENTIRE AGREEMENT. This Agreement may be
amended only by written agreement of the parties. This Agreement, together
with the Purchase Agreement and the Ancillary Agreements, supersedes all
prior discussions and written and oral agreements and constitutes the sole
and entire agreement between the parties with respect to the subject matter
hereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized representatives as of the date first
above written.
ZENITH INSURANCE COMPANY
By /s/ JOHN J. TICKNER
-----------------------------
John J. Tickner
Senior Vice President
RISCORP INSURANCE COMPANY
By: /s/ FREDERICK M. DAWSON
------------------------------
Frederick M. Dawson
President
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<PAGE>
SCHEDULE 3.2
STATE REQUIREMENTS FOR TRANSFER
AND NOVATION OF INSURANCE CONTRACTS
FLORIDA Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the third, to be sent 30
days after the second, stating that the Policyholder will be
deemed to have accepted if no respense is recived within 30
days.
<PAGE>
SCHEDULE 7.1-A REINSURANCE AGREEMENTS
1. Workers' Compensation Quota Share Reinsurance Agreement between RISCORP
Insurance Company, RISCORP Property and Casualty Insurance Company and
American Re-Insurance Company effective January 1, 1995 including
Endorsement Nos. E001 through E004 and Indemnity Agreements dated February
7, 1995.
2. RISCORP National Insurance Company Workers Compensation Quota Share
Agreement by and between RISCORP National Insurance Company and Chartwell
Reinsurance Company (50%), Swiss Reinsurance America Corp. (25%), and
Trenwick America Reinsurance Corp. (25%) effective October 1, 1996.
3. Workers Compensation Excess of Loss Reinsurance Agreement between RISCORP
Property and Casualty Insurance Company, RISCORP Insurance Company, and
RISCORP National Insurance Company and Continental Casualty Company
effective January 1, 1997.
4. Workers Compensation and Employers Liability Excess of Loss Reinsurance
Agreement between RISCORP Property & Casualty Insurance Company, RISCORP
Insurance Company and RISCORP National Insurance Company and Continental
PTO Casualty Company, effective January 1, 1997.
<PAGE>
SCHEDULE 7.1-B REINSURANCE AGREEMENTS
1. Medical Excess of Loss Reinsurance Agreement between RISCORP Property &
Casualty Insurance Company and The Cologne Life Reinsurance Company
effective September 1, 1995.
2. Property Quota Share Agreement between RISCORP Property & Casualty
Insurance Company and Scor Reinsurance Company, Signet Star Reinsurance
Company, Hartford Fire Insurance Company, Chartwell Reinsurance Company and
Great Lakes American Reinsurance Company effective January 1, 1996.
3. Casualty Excess of Loss Agreement between RISCORP Property & Casualty
Insurance Company and Scor Reinsurance Company, Signet Star Reinsurance
Company, Hartford Fire Insurance Company, and Chartwell Reinsurance Company
effective January 1, 1996.
4. Commercial Umbrella Quota Share Treaty between RISCORP Property & Casualty
Insurance Company and Scor Reinsurance Company, Signet Star Reinsurance
Company, Hartford Fire Insurance Company, and Chartwell Reinsurance Company
effective January 1, 1996.
5. Workers Compensation Quota Share Retrocessional Treaty Agreement between
Chartwell Reinsurance Company and RISCORP Insurance Company effective
September 1, 1995.
<PAGE>
FLORIDA EXHIBIT A
RISCORP INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
Zenith Insurance Company has agreed to replace RISCORP Insurance Company
as your insurer under [insert policy/certificate name and number] effective
[insert date]. Zenith Insurance Company's principal place of business is
21255 Califa Street, Woodland Hills, California, 91367-5021; however, all
correspondence with Zenith Insurance Company concerning your policy should be
sent to 1390 Main Street, Sarasota, Florida 34236. You may obtain
additional information concerning Zenith Insurance Company from reference
materials in your local library or by contacting your Insurance Commissioner
at [insert address and phone number].
Zenith Insurance Company is licensed in the following states: Alabama,
Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District
of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa,
Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New Mexico, New York,
North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina,
South Dakota, Tennessee, Texas, Utah, Vermont, Virginia and Wisconsin.
YOUR RIGHTS
You may choose to consent to or reject the transfer of your policy to
Zenith Insurance Company. If you want your policy transferred, you may
notify us in writing by signing and returning the enclosed pre-addressed,
postage-paid card or by writing to us at:
RISCORP Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
[fax]
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS, YOU WILL BE
SENT A SECOND NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN
THIRTY(30) DAYS AFTER THE DATE OF THE SECOND NOTICE, YOU WILL BE SENT A THIRD
NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY (30) DAYS
AFTER THE DATE OF THE THIRD NOTICE, YOU WILL BE DEEMED TO HAVE ACCEPTED THE
TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP
Insurance Company or exercise any option under your policy.
<PAGE>
EFFECT OF TRANSFER
If you accept this transfer, all terms and conditions of the Policy
remain unchanged, except that Zenith Insurance Company shall be the insurer.
Zenith Insurance Company shall have all of the rights and obligations of
RISCORP Insurance Company under the Policy as though it had issued the Policy
originally. In addition, all payments, correspondence and inquiries such as
policy changes, notices, claims or suits or actions on the Policy shall in
the future be submitted directly to Zenith Insurance Company at the address
indicated above.
If you have any further questions about this agreement, you may contact
RISCORP Insurance Company or Zenith Insurance Company.
Sincerely,
___________________ ________________________
RISCORP INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
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<PAGE>
RISCORP INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
SECOND NOTICE
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
You were previously sent a Notice of Transfer and Certificate of Assumption
notifying you that Zenith Insurance Company has agreed to replace RISCORP
Insurance Company as your insurer under [insert policy/certificate name and
number] effective [insert date]. Zenith Insurance Company's principal place of
business is 21255 Califa Street, Woodland Hills, California, 91367-5021;
however, all correspondence with Zenith Insurance Company concerning your policy
should be sent to 1390 Main Street, Sarasota, Florida 34236. You may obtain
additional information concerning Zenith Insurance Company from reference
materials in your local library or by contacting your Insurance Commissioner at
[insert address and phone number].
Zenith Insurance Company is licensed in the following states: Alabama,
Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District
of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa,
Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New Mexico, New York,
North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina,
South Dakota, Tennessee, Texas, Utah, Vermont, Virginia and Wisconsin.
YOUR RIGHTS
We are sending you a second notice because we did not receive the
pre-addressed response card or other written notice from you indicating your
rejection of the proposed transfer. If you want your policy transferred to
Zenith Insurance Company, you may notify us in writing by signing and
returning the enclosed pre-addressed, postage-paid card or by writing to us
at:
RISCORP Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
[fax]
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS, YOU WILL BE
SENT A THIRD NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN
THIRTY (30) DAYS AFTER THE DATE OF THE THIRD NOTICE, YOU WILL BE DEEMED TO
HAVE ACCEPTED THE TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP
Insurance Company or exercise any option under your policy.
<PAGE>
EFFECT OF TRANSFER
If you accept this transfer, all terms and conditions of the Policy
remain unchanged, except that Zenith Insurance Company shall be the insurer.
Zenith Insurance Company shall have all of the rights and obligations of
RISCORP Insurance Company under the Policy as though it had issued the Policy
originally. In addition, all payments, correspondence and inquiries such as
policy changes, notices, claims or suits or actions on the Policy shall in
the future be submitted directly to Zenith Insurance Company at the address
indicated above.
If you have any further questions about this agreement, you may contact
RISCORP Insurance Company or Zenith Insurance Company.
Sincerely,
_________________________ ________________________
RISCORP INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
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<PAGE>
RISCORP INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
THIRD AND FINAL NOTICE
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
You were previously sent a Notice of Transfer and Certificate of Assumption
notifying you that Zenith Insurance Company has agreed to replace RISCORP
Insurance Company as your insurer under [insert policy/certificate name and
number] effective [insert date]. Zenith Insurance Company's principal place of
business is 21255 Califa Street, Woodland Hills, California, 91367-5021;
however, all correspondence with Zenith Insurance Company concerning your policy
should be sent to 1390 Main Street, Sarasota, Florida 34236. You may obtain
additional information concerning Zenith Insurance Company from reference
materials in your local library or by contacting your Insurance Commissioner at
[insert address and phone number].
Zenith Insurance Company is licensed in the following states: Alabama,
Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of
Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas,
Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota,
Mississippi, Missouri, Nebraska, New Jersey, New Mexico, New York, North
Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South
Dakota, Tennessee, Texas, Utah, Vermont, Virginia and Wisconsin.
YOUR RIGHTS
We are sending you a third notice because we did not receive the
pre-addressed response card or other written notice from you indicating your
rejection of the proposed transfer. If you want your policy transferred to
Zenith Insurance Company, you may notify us in writing by signing and
returning the enclosed pre-addressed, postage-paid card or by writing to us
at:
RISCORP Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
[fax]
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS OF THE DATE OF
THIS THIRD AND FINAL NOTICE, YOU WILL BE DEEMED TO HAVE ACCEPTED THE
TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP
Insurance Company or exercise any option under your policy.
-5-
<PAGE>
EFFECT OF TRANSFER
If you accept this transfer, all terms and conditions of the Policy
remain unchanged, except that Zenith Insurance Company shall be the insurer.
Zenith Insurance Company shall have all of the rights and obligations of
RISCORP Insurance Company under the Policy as though it had issued the Policy
originally. In addition, all payments, correspondence and inquiries such as
policy changes, notices, claims or suits or actions on the Policy shall in
the future be submitted directly to Zenith Insurance Company at the address
indicated above.
If you have any further questions about this agreement, you may contact
RISCORP Insurance Company or Zenith Insurance Company.
Sincerely,
_________________________ ________________________
RISCORP INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FL 34236
SARASOTA, FL 34236
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<PAGE>
- ----------------------------------------------------------------------------
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
[NOTICE DATE]
RESPONSE CARD
_________ YES, I accept the transfer of my policy
from RISCORP Insurance Company to
Zenith Insurance Company.
_________ NO, I reject the proposed transfer of
my policy from RISCORP Insurance Company
to Zenith Insurance Company and wish
to retain my policy with RISCORP
Insurance Company.
_____________ ______________________________
DATE SIGNATURE
NAME:
_______________________________________________________________________
STREET ADDRESS:
_______________________________________________________________________
CITY, STATE, ZIP:
_______________________________________________________________________
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<PAGE>
EXHIBIT B
RISCORP INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FLORIDA 34236
SARASOTA, FLORIDA 34236
NOTICE AND CERTIFICATE OF ASSUMPTION
Policy No: ____________
Issued to: ____________
THIS CERTIFICATE certifies and you are hereby notified that, pursuant to the
terms of an Assumption and Indemnity Reinsurance Agreement, the above policy
and all of its endorsements (the "Policy") issued by RISCORP Insurance
Company have been assumed by Zenith Insurance Company. This change is
effective as of 12:01 a.m. Eastern Standard Time on [Effective Date].
All terms and conditions of the Policy remain unchanged, except that Zenith
Insurance Company shall be the insurer. Zenith Insurance Company shall have
all of the rights and obligations of RISCORP Insurance Company under the
Policy as though it had issued the Policy originally. All payments,
correspondence and inquiries such as policy changes, notices, claims or suits
or actions on the Policy shall in the future be submitted directly to Zenith
Insurance Company at the address indicated above.
This Notice and Certificate of Assumption forms a part of and should be
attached to the Policy issued by RISCORP Insurance Company.
IN WITNESS WHEREOF, RISCORP Insurance Company and Zenith Insurance
Company have each caused this Notice and Certificate of Assumption to be
signed by their duly authorized officers in facsimile to become effective as
their original signatures.
_________________________ ________________________
RISCORP INSURANCE COMPANY ZENITH INSURANCE COMPANY
ONE SARASOTA TOWER 1390 MAIN STREET
SUITE 608 SARASOTA, FLORIDA 34236
SARASOTA, FLORIDA 34236
<PAGE>
EXHIBIT C
ZENITH INSURANCE COMPANY
1390 MAIN STREET
SARASOTA, FLORIDA 34236
[ADDRESSEE]
Reference: RISCORP Insurance Company
Policy No: ____________
Issued to: ____________
Claim No: _____________
Dear Claimant:
This notice is sent to you in connection with your pending claim.
Please be advised that the captioned insurance policy (the "Policy") has been
assumed by Zenith Insurance Company, effective as of 12:01 a.m. Eastern Standard
Time on [Effective Date].
All correspondence and inquiries relating to your claim or suits or
actions on the Policy shall in the future be submitted directly to Zenith
Insurance Company at the address indicated above.
________________________
ZENITH INSURANCE COMPANY
1390 MAIN STREET
SARASOTA, FLORIDA 34236
<PAGE>
EXHIBIT 10.7
EXECUTION COPY
ASSUMPTION AND INDEMNITY
REINSURANCE AGREEMENT
by and between
ZENITH INSURANCE COMPANY
and
RISCORP PROPERTY & CASUALTY INSURANCE COMPANY
Dated as of April 1, 1998
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
BUSINESS REINSURED . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III
ASSUMPTION CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE IV
POLICY ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE V
CONSIDERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
ARTICLE VI
RESERVES; CREDIT FOR REINSURANCE . . . . . . . . . . . . . . . . . . . . 6
ARTICLE VII
ASSIGNMENT OF CEDED REINSURANCE AGREEMENTS. . . . . . . . . . . . . . . .7
ARTICLE VIII
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
ARTICLE IX
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE X
ACCOUNTING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE XI
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE XII
INSOLVENCY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE XIII
OFFSET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE XIV
RIGHTS WITH RESPECT TO QUOTA SHARE POLICIES . . . . . . . . . . . . . . 12
ARTICLE XV
ARBITRATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE XVI
TERRITORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
<PAGE>
ARTICLE XVII
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE XVIII
MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . 14
SCHEDULE 3.2. - STATE REQUIREMENTS FOR TRANSFER AND NOVATION OF INSURANCE
CONTRACTS
SCHEDULE 7.1-A ASSIGNED REINSURANCE CONTRACTS
SCHEDULE 7.1-B ASSUMED REINSURANCE CONTRACTS
EXHIBIT A POLICYHOLDER NOTICE
EXHIBIT B EXPIRED POLICY NOTICE
EXHIBIT C CLAIMANT NOTICE
-ii-
<PAGE>
ASSUMPTION AND INDEMNITY REINSURANCE AGREEMENT
THIS ASSUMPTION AND INDEMNITY REINSURANCE AGREEMENT (this
"Agreement"), dated as of 12:01 a.m. New York City Time on April 1, 1998 (the
"Effective Date"), is made by and between ZENITH INSURANCE COMPANY, a stock
insurance company organized under the laws of the State of California
("Zenith"), and RISCORP PROPERTY & CASUALTY INSURANCE COMPANY, a stock insurance
company organized under the laws of the State of Florida (the "Company").
WHEREAS, Zenith and the Company have entered into the Purchase
Agreement (as defined below); and
WHEREAS, the Purchase Agreement provided for Zenith and the Company to
enter into an indemnity reinsurance agreement;
WHEREAS, the parties have agreed to amend the Purchase Agreement to
provide for Zenith and the Company to enter into an assumption reinsurance
agreement;
WHEREAS, Zenith and the Company are entering into this Agreement
pursuant to the Purchase Agreement, as so amended;
WHEREAS, the Company has agreed to cede to Zenith, and Zenith has
agreed to assume certain liabilities and obligations of the Company under the
Insurance Contracts (as defined in the Purchase Agreement).
NOW, THEREFORE, in consideration of the mutual covenants and promises
and upon the terms and conditions set forth herein, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. Capitalized terms used herein and not
otherwise defined in this Agreement shall have the meanings given to them in the
Purchase Agreement. As used in this Agreement, the following terms shall have
the following meanings:
"CLAIMANT" means any claimant under any Insurance Contract who (a) has
an open claim on the Effective Date, or (b) files a claim after the Effective
Date.
"EFFECTIVE DATE" means the date specified in the first paragraph
hereof.
"INSURANCE CONTRACTS" shall mean those Insurance Contracts (as defined
in the Purchase Agreement) issued by the Company.
<PAGE>
"INSURANCE LIABILITIES" shall mean those Insurance Liabilities (as
defined in the Purchase Agreement) arising under or in connection with the
Insurance Contracts.
"NOVATED POLICIES" means those Insurance Contracts for which: (a) the
Company or Zenith has received a written acceptance by the Policyholder of the
transfer and assumption under this Agreement; and (b) with respect to any
Insurance Contract that was issued or issued for delivery in a state where
written acceptance by the Policyholder is not required by law or the appropriate
regulatory authority to effect an assumption and novation, (i) the Policyholder
is deemed to have accepted the transfer and assumption under this Agreement by
paying premiums directly to Zenith or taking such other action as may be
recognized under applicable state law as evidence of the Policyholder's
acceptance of the transfer and assumption, or (ii) the Policyholder has,
following the mailing to the Policyholder of such notices as may be prescribed
by applicable state law, neither accepted nor rejected the transfer and
assumption within a timeframe under which applicable state law or appropriate
regulatory authority permits the policyholder to be deemed to have accepted the
transfer and assumption. Any claim made by any Claimant under an Insurance
Contract which expired prior to the Effective Date shall, subject to the last
sentence of this paragraph, be deemed to be a claim under a Novated Policy. If
an Insurance Contract defined herein as a Novated Policy is determined by law or
an appropriate regulatory authority, by judicial decision or otherwise to be not
novated, such Insurance Contract shall for all purposes of this Agreement be
deemed retroactive to the Effective Date to be a Quota Share Policy.
"POLICYHOLDER" means each holder of an Insurance Contract that is in
force on the Effective Date.
"PURCHASE AGREEMENT" means the Asset Purchase Agreement, dated as of
June 17, 1997, as amended, among Zenith, the Company, RISCORP Insurance Company,
RISCORP Property Casualty Insurance Company, RISCORP, Inc., RISCORP of Florida,
Inc., RISCORP Management Services, Inc., RISCORP Managed Care Services, Inc.,
RISCORP Insurance Services, Inc., CompSource, Inc., RISCORP of Illinois, Inc.,
Independent Association Administrators Incorporated, RISCORP Real Estate
Holdings, Inc., RISCORP Acquisition, Inc., RISCORP West, Inc., RISCORP Services,
Inc., RISCORP Staffing Solutions Holdings, Inc., RISCORP Staffing Solutions,
Inc. I and RISCORP Staffing Solutions, Inc. II.
"QUOTA SHARE POLICIES" shall have the meaning set forth in Section 2.3
hereof.
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<PAGE>
ARTICLE II
BUSINESS REINSURED
Section 2.1 BUSINESS REINSURED. Subject to all of the terms and
conditions contained herein, the Company hereby cedes to Zenith, and Zenith
hereby assumes as reinsurance from the Company, all of the rights and
obligations of the Company under each of the Insurance Contracts.
Section 2.2 NOVATED POLICIES. Zenith shall be the successor to the
Company under the Novated Policies that it assumes as if the Novated Policies
were direct obligations originally issued by Zenith. Zenith shall be
substituted in the place and stead of the Company so as to effect a novation of
the respective Insurance Contracts and release the Company from any and all
rights and obligations thereunder. Each insured under a Novated Policy shall
disregard the Company as a party thereto and treat Zenith as if it had been
originally obligated thereunder except as otherwise provided herein. The
insureds shall file claims arising under the Novated Policies on or after the
effective date of such novation directly with Zenith. The insureds under the
Novated Policies shall also have a right to assert claims related to such
Novated Policies directly against Zenith and Zenith hereby consents to be
subject to such claims by any insured under the Novated Policy; PROVIDED,
HOWEVER, that the rights of any insured under any Insurance Contract shall be
limited to and consist of those rights set forth in such Insurance Contract
(including any rider or endorsement thereto), and no insured shall have the
right to receive any greater amount under any Insurance Contract than such
insured would have had in the absence of this Agreement (except that in
assessing such right no effect shall be given to any bankruptcy, liquidation,
insolvency, reorganization or moratorium of the Company, or the effect of laws
or legal procedures affecting enforcement of creditors' rights against the
Company generally). Payments made to insureds in discharge of obligations to
provide direct coverage to insureds will diminish any obligation in respect to
those Novated Policies which Zenith may have to the estate of the Company if it
shall be in receivership, liquidation or rehabilitation proceedings.
Section 2.3 QUOTA SHARE POLICIES. To the extent Zenith has not for
any reason assumed by novation any Insurance Contracts or Insurance Liabilities,
Zenith shall accept and reinsure, on a quota share basis, 100% of Insurance
Liabilities under such Insurance Contracts (the "Quota Share Policies"), in
accordance with the terms and conditions of this Agreement, and hereby agrees to
pay directly, on behalf of the Company, any claims or losses reinsured under
this Agreement which arise under such Quota Share Policies; PROVIDED, HOWEVER,
that the insureds under such Quota Share Policies shall not have the right to
assert claims related to such Quota Share Policies directly against Zenith. A
payment made to an insured in discharge of
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obligations of RISCORP to provide direct coverage to the insured will
diminish the obligation in respect thereof which Zenith may have to the
estate of the Company if it shall be in receivership, liquidation or
rehabilitation proceedings.
Section 2.4 TERMS; CONDITIONS. All Insurance Liabilities for which
Zenith shall assume liability hereunder, either as Novated Policies or Quota
Share Policies, are subject in all respects to the same written terms,
conditions, waivers, modifications, alterations and cancellations as the
Insurance Contracts. Zenith accepts and assumes the Insurance Liabilities
subject to all defenses, setoffs and counterclaims to which the Company would be
entitled with respect to the Insurance Contracts. The parties agree that no
such defenses, setoffs or counterclaims are waived under this Agreement and that
as of the Effective Date, Zenith shall be fully subrogated to all such defenses,
setoffs and counterclaims and be entitled to the full benefits thereof.
ARTICLE III
ASSUMPTION CERTIFICATES
Section 3.1 NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION. (a)
Zenith, with the cooperation and assistance of the Company, shall prepare for
mailing to every Policyholder a Notice of Transfer and Certificate of
Assumption, including a form for rejection or acceptance and a self-addressed
return envelope, substantially in the form attached hereto as EXHIBIT A
(collectively, the "Policyholder Notices"), subject to changes required by state
law or required by any state insurance regulator as a condition for approval of
the mailing of such Policyholder Notices to Policyholders. The Company shall
cooperate and assist Zenith in the preparation and mailing of the Policyholder
Notices as provided herein. Zenith shall mail Policyholder Notices by certified
mail, return receipt requested, to the Policyholders located in a particular
state within thirty days of receipt of all regulatory approvals necessary for
such mailing.
(b) Zenith, with the cooperation and assistance of the Company, shall
prepare for mailing and mail, within thirty days of receipt of all regulatory
approvals necessary for such mailing, to each holder of an Insurance Contract
which expired without renewal during the two year period immediately prececeding
the Effective Date a Notice of Transfer and Assumption substantially in the form
attached hereto as EXHIBIT B (collectively, the "Expired Policy Notices"),
subject to changes required by state law or required by any state insurance
regulator as a condition for approval of the mailing of such Expired Policy
Notices to said holders of Insurance Contracts and Claimants.
(c) Zenith, with the cooperation and assistance of the Company, shall
prepare for mailing and mail, within thirty days
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of the Effective Date, to each Claimant who has an open claim on the
Effective Date, a Notice substantially in the form attached hereto as EXHIBIT
C (collectively, the "Claimant Notices"), subject to changes required by
state law or required by any state insurance regulator as a condition for
approval of the mailing of such Claimant Notices to said holders of Insurance
Contracts and Claimants. In addition, Zenith, with the cooperation and
assistance of the Company, shall prepare and mail a Claimant Notice to each
Claimant who is not a Policyholder (as defined herein), but who, after the
Effective Date, files a claim under any Insurance Contract.
Section 3.2 EFFECT OF NOTICE. A Policyholder shall be deemed to have
accepted the transfer and assumption under this Agreement(1) upon receipt by
Zenith of the Policyholder's written acceptance of the transfer and assumption,
or (2) with respect to any Insurance Contract issued or issued for delivery in a
state where written acceptance by the Policyholder is not required by the
appropriate regulatory authority to effect an assumption and novation, upon
taking such action, or failing to take any action following the mailing of the
Policyholder Notice as specified in Schedule 3.2. attached hereto.
ARTICLE IV
POLICY ADMINISTRATION
Section 4.1 POLICY ADMINISTRATION BY ZENITH. The Company grants to
Zenith authority in all matters relating to the administration of the Insurance
Contracts assumed by Zenith to the extent such authority may be granted pursuant
to applicable law and agrees to cooperate fully with Zenith in the transfer of
such administration. Zenith agrees, at its expense, to be responsible for such
administration. In order to assist and to evidence more fully the substitution
of Zenith in the place and stead of the Company, the Company hereby nominates,
constitutes and appoints Zenith as its attorney-in-fact with respect to the
rights, duties, privileges and obligations of the Company in and to the
Insurance Contracts assumed by Zenith, with full power and authority to act in
the name, place and stead of the Company with respect to such Insurance
Contracts including, without limitation, the power without reservation, to
service all such Insurance Contracts, to adjust, to defend, to settle and to pay
all claims, to recover salvage and subrogation for any losses incurred and to
take such other and further actions as may be necessary or desirable to effect
the transactions contemplated by this Agreement. In addition to other
responsibilities set forth in this Agreement, Zenith shall also issue on the
Company's behalf, but wherever possible in the name of Zenith, all Insurance
Contracts assumed by Zenith which the Company is contractually or otherwise
obligated to issue on and after the Effective Date.
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Section 4.2 FORWARDING OF NOTICES AND OTHER COMMUNICATIONS. The
Company agrees that, after the Effective Date, it will forward to Zenith, within
forty-five (45) days of receipt, all notices and other written communications
received by it relating to the Insurance Contracts assumed by Zenith (including,
without limitation, all inquiries or complaints from state insurance regulators,
agents, brokers and insureds and all notices of claims, suits and actions for
which it receives services of process).
ARTICLE V
CONSIDERATION
Section 5.1 INITIAL CONSIDERATION. In consideration of Zenith's
assumption of the Insurance Liabilities hereunder, the Company shall transfer to
Zenith the Transferred Assets pursuant to Section 2.01 of the Purchase Agreement
related to the Company's Insured Liabilities.
Section 5.2 FUTURE PREMIUMS. Zenith is entitled to receive all
premiums and other consideration paid on or after the Effective Date with
respect to the Insurance Contracts. In the event that the Company receives any
premiums or other consideration with respect to an Insurance Contract on or
after the Effective Date, it shall promptly remit such premiums or other
consideration to Zenith, along with pertinent information in its possession
relating to such premiums, including information as to the Insurance Contract
and period to which such premium relates. Zenith shall assume all responsibility
for billing and collection of premiums. The Company shall reasonably cooperate
with Zenith in causing insureds under the Insurance Contracts to pay premiums to
Zenith after the Effective Date.
ARTICLE VI
RESERVES; CREDIT FOR REINSURANCE
Section 6.1 RESERVES; CREDIT FOR REINSURANCE. Zenith shall maintain
all insurance licenses necessary to permit the Company to obtain full financial
statement credit in all applicable jurisdictions for the reinsurance provided to
it by Zenith pursuant to this Agreement, PROVIDED that if Zenith shall fail to
maintain such licenses, it shall provide the Company with collateral security
permitted under applicable law for purposes of obtaining financial statement
credit for the reinsurance provided under this Agreement. Any unearned premium,
loss and loss adjustment expense reserves required by the foregoing in no event
shall be less than the amounts required under the law of any jurisdiction having
regulatory authority with respect to the establishment of reserves relating to
the Insurance Contracts.
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ARTICLE VII
ASSIGNMENT OF CEDED REINSURANCE AGREEMENTS
Section 7.1 ASSIGNMENT. (a) As of the Effective Date, the Company
shall transfer, set over, assign and convey to Zenith all of its right, title
and interest in any amount held by or due from the assuming reinsurers under the
reinsurance agreements listed in SCHEDULE 7.1-A ("Schedule 7.1-A Reinsurance"),
including (i) amounts held by or which may become due from the assuming
reinsurers thereunder for losses or loss adjustment expenses on Insurance
Contracts for which the Reinsurer has assumed liability or for losses paid by
the Company prior to the Effective Date, and (ii) letters of credit, trust funds
and other security mechanisms outstanding for the benefit of the Company
pursuant to the terms of any of the Schedule 7.1-A Reinsurance. The Company
hereby authorizes Zenith, as of the Effective Date, to prepare and submit, on
the Company's behalf and in the Company's name, all statements and reports
required of the Company under the Schedule 7.1-A Reinsurance, and further
authorizes Zenith to take all other actions required of the Company under the
Schedule 7.1-A Reinsurance or otherwise permitted thereunder, and Zenith agrees
to prepare and submit such reports and take all such actions, except that Zenith
shall not undertake to pay on behalf of the Company, and shall not be obligated
hereunder to pay, any amount due to the reinsurers under the Schedule 7.1-A
Reinsurance unless the Company's obligation to pay such amount shall have been
accrued as a liability on the Final Business Balance Sheet.
(b) As of the Effective Date, the Reinsurer shall be substituted for
and succeed to all of the rights and liabilities of the Company, under the
reinsurance agreements listed in SCHEDULE 7.1-B (the "Schedule 7.1-B
Reinsurance" and, together with the Schedule 7.1-A Reinsurance, the "Ceded
Reinsurance") and shall be recognized for all purposes as the "Company"
thereunder in substitution for the Company. The Company shall transfer, set
over, assign and convey to Zenith all of its rights and obligations of any
nature whatsoever under the Schedule 7.1-B Reinsurance, including (i) amounts
held by or which may become due from assuming reinsurers with respect to any
reinsurance ceded by the Company to the reinsurer thereunder, and (ii) letters
of credit, trust funds and other security mechanisms outstanding for the benefit
of the Company pursuant to the terms of any of the Ceded Reinsurance. Zenith
shall accept such conveyance, transfer and assignment of the Company's rights
under the Schedule 7.1-B Reinsurance and assumes all of the Company's
obligations under the Schedule 7.1-B Reinsurance existing on or arising after
the Effective Date. The assignment and assumption of the Schedule 7.1-B
Reinsurance effected by this Section 7.1 shall be effective only if such
assignment (i) is permitted under the terms of such Schedule 7.1-B Reinsurance
or as otherwise consented to by the reinsurer thereunder, and (ii) shall
preserve fully the obligations of the reinsurers thereunder in respect of
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the Insurance Contracts. If the Company's rights and obligations under any
such Schedule 7.1-B Reinsurance are not assigned to and assumed by Zenith,
(i) after the Effective Date, Zenith shall be responsible for the payment of
all premiums and other considerations required to be paid by the Company in
respect of any of the Schedule 7.1-B Reinsurance, (ii) all reinsurance
recoveries attributable to any of the Schedule 7.1-B Reinsurance are assigned
and shall accrue to the benefit of Zenith hereunder by operation of this
Section 7.1 and shall, upon receipt thereof by the Company, be paid promptly
thereby to Zenith upon and in accordance with its direction, and (iii) such
assignment shall be effective at such time as the assignment may be effected
while preserving fully the obligations of the reinsurer under the respective
Schedule 7.1-B Reinsurance.
(c) The Company shall reasonably cooperate with Zenith in causing
reinsurers under the Ceded Reinsurance to pay reinsurance recoveries to Zenith
after the Effective Date.
Section 7.2 CEDED REINSURANCE COLLATERAL. To the extent necessary to
effect any transfer or assignment pursuant to this Section 7.1 of any assumed
reinsurance, the Company hereby appoints Zenith as attorney-in-fact for the
Company to act for and on behalf of it with respect to letters of credit, trust
funds and other security mechanisms outstanding for the benefit of the Company
pursuant to the terms of any of the Ceded Reinsurance, and the Company shall
execute and deliver to Zenith such additional instruments as Zenith may
reasonably request to give effect to such appointment as attorney-in-fact, and
to provide appropriate evidence that the Company has assigned to Zenith all of
its rights under the Ceded Reinsurance with respect to any such letters of
credit, trust funds or other accounting mechanism. Zenith shall use its
reasonable best efforts to the extent deemed reasonably necessary by Zenith, to
cause the reinsurers under the Ceded Reinsurance to provide replacement letters
of credit, trust funds or other security mechanisms, as applicable, naming
Zenith as the beneficiary thereof in amounts and with terms substantially
similar to those currently provided by such reinsurers for the benefit of the
Company.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 SOLE REMEDY. Notwithstanding anything to the contrary in
this Agreement, the Company shall not settle any claim, waive any right,
defense, setoff or counterclaim with respect to, or amend, commute or terminate,
any Insurance Contract or Ceded Reinsurance without the prior written consent of
Zenith, except in accordance with the provisions of the indemnities referred to
in the following sentence. The Company's sole and exclusive remedy with respect
to a breach of this Agreement shall be the indemnities provided by Section 9.02
of the Purchase Agreement, except that any dispute between the
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parties arising hereunder for which such indemnities are being sought shall
be subject to arbitration pursuant to Article XV hereof.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 INSPECTION. Zenith and the Company, or their designated
representatives, may inspect, at the place where such records are located, any
and all books and records of the other parties hereto reasonably relating to
this Agreement, during normal business hours and upon reasonable notice. The
rights of the parties under this Section 9.1 shall survive termination of this
Agreement.
Section 9.2 MISUNDERSTANDINGS AND OVERSIGHTS. Any delay, omission,
error or failure to pay amounts due or to perform any other act required by this
Agreement that is unintentional and caused by misunderstanding or oversight
shall not be held to relieve either party to this Agreement from any obligation
hereunder if such delay, omission, error or failure is corrected within 20
Business Days of receipt of notice of such delay, omission, error or failure and
neither party shall have been prejudiced.
Section 9.3 ADJUSTMENTS. If the liability of the Company under any
of the Insurance Contracts is changed as a result of a change required by law or
regulation or any other reason, Zenith will share in the change proportionately
(100%) to the amount reinsured hereunder.
Section 9.4 COMMUNICATIONS RELATING TO THE INSURANCE CONTRACTS.
After the Effective Date, the Company and Zenith each shall forward promptly to
the other copies of all notices and other written communications it receives
relating to the Insurance Contracts (including without limitation, all inquiries
and complaints from state insurance regulators, brokers and other service
providers and reinsureds, all policyholder complaints and complaints received
from other claimants under the Insurance Contracts and all notices of claims,
suits and actions for which it receives service of process). As used in this
Section, "complaint" means any written communication primarily expressing a
grievance against the Company or Zenith.
Section 9.5 DUTY OF COOPERATION. The Company and Zenith shall
cooperate fully with the other in all reasonable respects in order to accomplish
the objectives of this Agreement.
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ARTICLE X
ACCOUNTING
Section 10.1 ACCOUNTING REPORTS. On or before the last Business Day
of each month, Zenith will provide the Company with reports of activities under
this Agreement for the preceding month. Such reports shall show any amounts due
the Company or Zenith, as the case may be, as reimbursement for paid claims,
premiums or other amounts due with respect to the Insurance Contracts. The net
balance due either party, as indicated in the monthly report, shall be remitted
to the other party within 15 days of the delivery of said monthly report. The
requirements of this Section 10.1 shall terminate if, for twelve consecutive
months, no amounts are reported as due either party with respect to the
Insurance Contracts; PROVIDED, such requirements shall be reinstated and shall
continue in effect for an additional twelve months if at any time following such
termination, any balance or amount becomes due either party under this
Agreement.
Section 10.2 FINANCIAL STATEMENT INFORMATION. On or before the last
business day of each January, April, July and October, Zenith shall provide the
Company with a quarterly or annual report containing the financial, accounting
and actuarial information necessary to prepare regulatory, tax and GAAP monthly,
quarterly and annual financial statements and returns and satisfy other related
requirements, including reserve and related calculations respecting the
Insurance Contracts in the form reasonably required by the Company, and will
maintain or cause to be maintained the data processing systems that will enable
Zenith to provide such information. The Company shall cooperate with Zenith in
preparing such reports and shall supply such information as Zenith requires to
prepare such statements and returns and satisfy such requirements. The
requirements of this Section shall terminate automatically upon the termination
of the reporting requirements of Section 10.1 and shall be reinstated
automatically upon the reinstatement of such reporting requirements.
Section 10.3 REPORTS TO INSURANCE DEPARTMENTS. Zenith and the
Company will promptly furnish to the other, copies of any and all filings with,
and reports or communications received from, any regulatory authority which
relate directly and materially to the Insurance Contracts, including, without
limitation, each annual statement, each quarterly financial report to the
insurance department of the party's domicile and each report on periodic
examination issued by the insurance department of the party's domicile to the
extent it relates to the Insurance Contracts. The requirements of this Section
shall terminate automatically upon the termination of the reporting requirements
of Section 10.1 and shall be reinstated automatically upon the reinstatement of
such reporting requirements.
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ARTICLE XI
TERMINATION
Section 11.1 TERMINATION. Except as mutually agreed by the Company
and Zenith, this Agreement shall be unlimited in duration.
ARTICLE XII
INSOLVENCY
Section 12.1 PAYMENTS BY ZENITH. Zenith hereby agrees that all
amounts due under this Agreement with respect to all Quota Share Policies shall
be payable by Zenith on the basis of the liability of the Company under such
contracts, without diminution because of the insolvency, liquidation or
rehabilitation of the Company Insurance Subsidiary. Zenith shall make payments
due hereunder with respect to Quota Share Policies directly to the Company or to
its conservator, receiver, liquidator or other statutory successor.
Section 12.2 CLAIMS. It is agreed that any conservator, receiver,
liquidator or statutory successor of the Company shall give prompt written
notice to Zenith of the pendency or submission of a claim under any Insurance
Contract. With respect to any Insurance Contract, during the pendency of such
claim, Zenith may investigate such claim and interpose, at its own expense, in
the proceeding where such claim is to be adjudicated, any defense available to
the Company or its conservator, receiver, liquidator or statutory successor.
The expense thus incurred by Zenith is chargeable against the Company as a part
of the expense of insolvency, liquidation or rehabilitation to the extent of a
proportionate share of the benefit which accrues to the Company solely as a
result of the defense undertaken by Zenith. Where Zenith and other assuming
companies are involved in the same claim and a majority in interest elect to
interpose a defense to such claim, the expense shall be apportioned in
accordance with the terms of the insurance agreement as though such expense had
been incurred by the Company.
ARTICLE XIII
OFFSET
Section 13.1 OFFSET. Notwithstanding any provisions of this Agreement
to the contrary, any balances or amounts due from one party to the other under
this Agreement are deemed
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mutual debts or credits, as the case may be, and shall be set off, and only
the balance shall be allowed or paid.
ARTICLE XIV
RIGHTS WITH RESPECT TO QUOTA SHARE POLICIES
Section 14.1 SOLE BENEFICIARY. Zenith's quota share reinsurance of
100% of the Insurance Liabilities of the Company with respect to any of the
Quota Share Policies is intended for the sole benefit of the parties to this
Agreement and shall not create any right on the part of any Policyholder,
insured, claimant or beneficiary under such Quota Share Policies against Zenith
or any legal relation between such Policyholders, insureds, claimants or
beneficiaries and Zenith.
ARTICLE XV
ARBITRATION
Section 15.1 APPOINTMENT OF ARBITRATORS. Any dispute or
difference arising under this Agreement that cannot be resolved by agreement
among the parties hereto shall be decided by arbitration in accordance with
this Article XV. Any such arbitration shall be conducted expeditiously and
confidentially in accordance with the Commercial Arbitration Rules of the
American Arbitration Association ("AAA") as such rules shall be in effect on
the date of delivery of demand for arbitration. Any such arbitration shall
be heard and conducted in New York, New York. Notwithstanding the rules of
the AAA, the arbitration panel in any such arbitration shall consist of three
persons who must be disinterested current or retired officers of insurance or
reinsurance companies other than the parties to this Agreement or their
Affiliates. Within twenty days of delivery of any demand for arbitration
hereunder, the Company and Zenith shall each appoint one arbitrator, and the
two arbitrators so selected shall appoint the third arbitrator within twenty
days of their appointment. In the event the two selected arbitrators are
unable to agree upon the selection of a third arbitrator after reasonable
efforts, a panel of seven qualified persons shall be requested from the AAA.
The parties shall alternately strike one person with the last remaining
person being the third designated arbitrator; the party responding to the
initial demand for arbitration shall have the first turn. Each party shall
pay the fees of its own attorneys, expenses of witnesses and all other
expenses connected with the presentation of such party's case. One-half of
any remaining costs of any arbitration, including the cost of the record or
transcripts thereof, if any, administrative fees and all other fees involved
shall be paid by Zenith, and the remaining one-half shall be paid by the
Company.
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Section 15.2 DECISION. The arbitrators shall render a decision
within 60 days of the end of the arbitration hearing. The arbitrators shall
consider customary and standard practices in the insurance business. They shall
decide by a majority vote of the arbitrators. All conclusions of law reached by
the arbitrators shall be made in accordance with the internal substantive laws
of the State of New York without regard to conflict of laws principles. Any
award rendered by the arbitrators shall be accompanied by a written opinion
setting forth the findings of fact and conclusions of law relied upon in
reaching their decision. There shall be no appeal from their written decision.
Judgment may be entered on the decision of the arbitrators by any court having
jurisdiction.
Section 15.3 CONFIDENTIALITY. Zenith and the Company agree that the
existence, conduct and content of any arbitration shall be kept confidential and
no party shall disclose to any person any information about such arbitration,
except as may be required by law or for financial reporting purposes in each
party's financial statements.
Section 15.4 SURVIVAL OF ARTICLE. This Article XV shall survive
termination of this Agreement.
Section 15.5 OTHER ACTIONS. Submission of a matter to arbitration
shall be a condition precedent to any right to institute a proceeding at law or
in equity concerning such matter, except for injunctive or other provisional
relief pending the arbitration of a matter subject to arbitration pursuant to
this Agreement. Subject to the foregoing, each party hereto consents to the non
exclusive jurisdiction of the United States District Court for the Southern
District of New York (the "Chosen Court") in respect of any claim arising out
of, related to or contemplated by this Agreement, (i) waives any objection to
laying venue in any such action or proceeding in the Chosen Court, (ii) waives
any objection that at the Chosen Court is an inconvenient forum or does not have
jurisdiction over any party hereto and (iii) agrees that service of process upon
such party in any such action or proceeding shall be effective if notice is
given in accordance with Section 16.02 of this Agreement.
ARTICLE XVI
TERRITORY
Section 16.1 TERRITORY. This Agreement shall apply to all Insurance
Contracts issued by the Company without territorial limitation.
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ARTICLE XVII
TAXES
Section 17.1 TAXES. Zenith shall be responsible for and shall pay
all premium taxes which shall accrue on or after the Effective Date with respect
to the Insurance Contracts; the Company shall remain responsible for the payment
of, and Zenith shall have no obligation to pay, any premium taxes which shall
accrue prior to the Effective Date which have not otherwise been accrued on the
Final Business Balance Sheet.
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
Section 18.1 HEADINGS. Headings used herein are not a part of this
Agreement and shall not affect the terms hereof.
Section 18.2 NOTICES. All notices and communications hereunder shall
be in writing and shall be deemed given if delivered personally or sent by
overnight delivery service (providing for proof of delivery). All notices or
communications with Zenith under this Agreement shall be directed to:
Zenith Insurance Company
21255 Califa Street
Woodland Hills, CA 91367-5021
Attention: Stanley R. Zax
with copies to:
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019
Attention: Alexander M. Dye, Esq.
All notices and communications with the Company under this Agreement shall be
directed to:
RISCORP, Inc.
1390 Main Street
Sarasota, Florida 34236
Attention: Walter E. Riehemann, Esq.
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with copies to:
Polsinelli, White, Bardman & Shalton, P.C.
700 West 47th Street
Kansas City, MO 64112
Attention: Robert B. Sullivan, Esq.
Alston & Bird
One Atlantic Center
1201 West Peachtree Street
Atlanta, GA 30309-3424
Attention: J. Vaughan Curtis, Esq.
Section 18.3 SEVERABILITY. If any term or provision of this
Agreement shall be held void, illegal or unenforceable, the validity of the
remaining portions or provisions shall not be affected thereby.
Section 18.4 SUCCESSORS AND ASSIGNS. This Agreement may not be
assigned by either party without the prior written consent of the other. The
provisions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
assigns as permitted herein.
Section 18.5 NO THIRD PARTY BENEFICIARIES. Except as otherwise
specifically provided for in Article X of this Agreement, nothing in this
Agreement is intended or shall be construed to give any person, other than the
parties hereto, their successors and permitted assigns, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein, and Zenith shall not be directly liable hereunder to any
reinsured under any Insurance Contract.
Section 18.6 INTERPRETATION. For purposes of this Agreement, the
words "hereof," "herein," "hereby" and other words of similar import refer to
this Agreement as a whole unless otherwise indicated. Whenever the words
"include", "includes", or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation". Whenever the singular
is used herein, the same shall include the plural, and whenever the plural is
used herein, the same shall include the singular, where appropriate.
Section 18.7 EXECUTION IN COUNTERPARTS. This Agreement may be
executed by the parties hereto in any number of counterparts and by each of the
parties hereto in separate counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Section 18.8 AMENDMENTS; ENTIRE AGREEMENT. This Agreement may be
amended only by written agreement of the
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parties. This Agreement, together with the Purchase Agreement and the
Ancillary Agreements, supersedes all prior discussions and written and oral
agreements and constitutes the sole and entire agreement between the parties
with respect to the subject matter hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives as of the date first above
written.
ZENITH INSURANCE COMPANY
By /s/ JOHN J. TICKNER
----------------------
John J. Tickner
Senior Vice President
RISCORP PROPERTY & CASUALTY INSURANCE COMPANY
By: /s/ FREDERICK M. DAWSON
-----------------------
Frederick M. Dawson
President
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SCHEDULE 3.2
STATE REQUIREMENTS FOR TRANSFER
AND NOVATION OF INSURANCE CONTRACTS
ALABAMA Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the second, to be sent 30
days after the first, requesting affirmative consent; the
third, to be sent 30 days after the second, stating that the
Policyholder will be deemed to have accepted if no response
is received within 30 days.
FLORIDA Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the second, to be sent 30
days after the first, requesting affirmative consent; the
third, to be sent 30 days after the second, stating that the
Policyholder will be deemed to have accepted if no response
is received within 30 days.
MARYLAND Affirmative consent of Policyholder or failure by the
Policyholder to object after receipt of 3 letters, the first
requesting affirmative consent; the second, to be sent 30
days after the first, requesting affirmative consent; the
third, to be sent 30 days after the second, stating that the
Policyholder will be deemed to have accepted if no response
is received within 30 days.
<PAGE>
SCHEDULE 7.1-A REINSURANCE AGREEMENTS
1. Workers' Compensation Quota Share Reinsurance Agreement between RISCORP
Insurance Company, RISCORP Property and Casualty Insurance Company and
American Re-Insurance Company effective January 1, 1995 including
Endorsement Nos. E001 through E004 and Indemnity Agreements dated February
7, 1995.
2. RISCORP National Insurance Company Workers Compensation Quota Share
Agreement by and between RISCORP National Insurance Company and Chartwell
Reinsurance Company (50%), Swiss Reinsurance America Corp. (25%), and
Trenwick America Reinsurance Corp. (25%) effective October 1, 1996.
3. Workers Compensation Excess of Loss Reinsurance Agreement between RISCORP
Property and Casualty Insurance Company, RISCORP Insurance Company, and
RISCORP National Insurance Company and Continental Casualty Company
effective January 1, 1997.
4. Workers Compensation and Employers Liability Excess of Loss Reinsurance
Agreement between RISCORP Property & Casualty Insurance Company, RISCORP
Insurance Company and RISCORP National Insurance Company and Continental
PTO Casualty Company, effective January 1, 1997.
<PAGE>
SCHEDULE 7.1-B REINSURANCE AGREEMENTS
1. Medical Excess of Loss Reinsurance Agreement between RISCORP Property &
Casualty Insurance Company and The Cologne Life Reinsurance Company
effective September 1, 1995.
2. Property Quota Share Agreement between RISCORP Property & Casualty
Insurance Company and Scor Reinsurance Company, Signet Star Reinsurance
Company, Hartford Fire Insurance Company, Chartwell Reinsurance Company and
Great Lakes American Reinsurance Company effective January 1, 1996.
3. Casualty Excess of Loss Agreement between RISCORP Property & Casualty
Insurance Company and Scor Reinsurance Company, Signet Star Reinsurance
Company, Hartford Fire Insurance Company, and Chartwell Reinsurance Company
effective January 1, 1996.
4. Commercial Umbrella Quota Share Treaty between RISCORP Property & Casualty
Insurance Company and Scor Reinsurance Company, Signet Star Reinsurance
Company, Hartford Fire Insurance Company, and Chartwell Reinsurance Company
effective January 1, 1996.
5. Workers Compensation Quota Share Retrocessional Treaty Agreement between
Chartwell Reinsurance Company and RISCORP Insurance Company effective
September 1, 1995.
<PAGE>
FLORIDA EXHIBIT A
RISCORP PROPERTY & CASUALTY ZENITH INSURANCE COMPANY
INSURANCE COMPANY 1390 MAIN STREET
ONE SARASOTA TOWER SARASOTA, FLORIDA 34236
SUITE 608
SARASOTA, FL 34236
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
Zenith Insurance Company has agreed to replace RISCORP Property &
Casualty Insurance Company as your insurer under [insert policy/certificate
name and number] effective [insert date]. Zenith Insurance Company's
principal place of business is 21255 Califa Street, Woodland Hills,
California, 91367-5021; however, all correspondence with Zenith Insurance
Company concerning your policy should be sent to 1390 Main Street, Sarasota,
Florida 34236. You may obtain additional information concerning Zenith
Insurance Company from reference materials in your local library or by
contacting your Insurance Commissioner at [insert address and phone number].
Zenith Insurance Company is licensed in the following states: Alabama,
Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District
of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa,
Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New Mexico, New York,
North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina,
South Dakota, Tennessee, Texas, Utah, Vermont, Virginia and Wisconsin.
YOUR RIGHTS
You may choose to consent to or reject the transfer of your policy to
Zenith Insurance Company. If you want your policy transferred, you may
notify us in writing by signing and returning the enclosed pre-addressed,
postage-paid card or by writing to us at:
RISCORP Property & Casualty Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
[fax]
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS, YOU WILL BE
SENT A SECOND NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN
THIRTY(30) DAYS AFTER THE DATE OF THE SECOND NOTICE, YOU WILL BE SENT A THIRD
NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY (30) DAYS
AFTER THE DATE OF THE THIRD NOTICE, YOU WILL BE DEEMED TO HAVE ACCEPTED THE
TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP
Property & Casualty Insurance Company or exercise any option under your
policy.
<PAGE>
EFFECT OF TRANSFER
If you accept this transfer, all terms and conditions of the Policy
remain unchanged, except that Zenith Insurance Company shall be the insurer.
Zenith Insurance Company shall have all of the rights and obligations of
RISCORP Insurance Company under the Policy as though it had issued the Policy
originally. In addition, all payments, correspondence and inquiries such as
policy changes, notices, claims or suits or actions on the Policy shall in
the future be submitted directly to Zenith Insurance Company at the address
indicated above.
If you have any further questions about this agreement, you may contact
RISCORP Property & Casualty Insurance Company or Zenith Insurance Company.
Sincerely,
_____________________________ _________________________________
RISCORP PROPERTY & CASUALTY ZENITH INSURANCE COMPANY
INSURANCE COMPANY 1390 MAIN STREET
ONE SARASOTA TOWER SARASOTA, FLORIDA 34236
SUITE 608
SARASOTA, FL 34236
-2-
<PAGE>
RISCORP PROPERTY & CASUALTY ZENITH INSURANCE COMPANY
INSURANCE COMPANY 1390 MAIN STREET
ONE SARASOTA TOWER SARASOTA, FLORIDA 34236
SUITE 608
SARASOTA, FL 34236
SECOND NOTICE
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
You were previously sent a Notice of Transfer and Certificate of
Assumption notifying you that Zenith Insurance Company has agreed to replace
RISCORP Property & Casualty Insurance Company as your insurer under
[insert policy/certificate name and number] effective [insert date]. Zenith
Insurance Company's principal place of business is 21255 Califa Street,
Woodland Hills, California, 91367-5021; however, all correspondence with
Zenith Insurance Company concerning your policy should be sent to 1390 Main
Street, Sarasota, Florida 34236. You may obtain additional information
concerning Zenith Insurance Company from reference materials in your local
library or by contacting your Insurance Commissioner at
[insert address and phone number].
Zenith Insurance Company is licensed in the following states: Alabama,
Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District
of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa,
Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New Mexico, New York,
North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina,
South Dakota, Tennessee, Texas, Utah, Vermont, Virginia and Wisconsin.
YOUR RIGHTS
We are sending you a second notice because we did not receive the
pre-addressed response card or other written notice from you indicating your
rejection of the proposed transfer. If you want your policy transferred to
Zenith Insurance Company, you may notify us in writing by signing and
returning the enclosed pre-addressed, postage-paid card or by writing to us
at:
RISCORP Property & Casualty Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
[fax]
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS, YOU WILL BE
SENT A THIRD NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN
THIRTY (30) DAYS AFTER THE DATE OF THE THIRD NOTICE, YOU WILL BE DEEMED TO
HAVE ACCEPTED THE TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP
Property & Casualty Insurance Company or exercise any option under your
policy.
-3-
<PAGE>
EFFECT OF TRANSFER
If you accept this transfer, all terms and conditions of the Policy
remain unchanged, except that Zenith Insurance Company shall be the insurer.
Zenith Insurance Company shall have all of the rights and obligations of
RISCORP Insurance Company under the Policy as though it had issued the Policy
originally. In addition, all payments, correspondence and inquiries such as
policy changes, notices, claims or suits or actions on the Policy shall in
the future be submitted directly to Zenith Insurance Company at the address
indicated above.
If you have any further questions about this agreement, you may contact
RISCORP Property & Casualty Insurance Company or Zenith Insurance Company.
Sincerely,
_____________________________ _________________________________
RISCORP PROPERTY & CASUALTY ZENITH INSURANCE COMPANY
INSURANCE COMPANY 1390 MAIN STREET
ONE SARASOTA TOWER SARASOTA, FLORIDA 34236
SUITE 608
SARASOTA, FL 34236
-4-
<PAGE>
RISCORP PROPERTY & CASUALTY ZENITH INSURANCE COMPANY
INSURANCE COMPANY 1390 MAIN STREET
ONE SARASOTA TOWER SARASOTA, FLORIDA 34236
SUITE 608
SARASOTA, FL 34236
THIRD AND FINAL NOTICE
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT
CAREFULLY.
TRANSFER OF POLICY
You were previously sent a Notice of Transfer and Certificate of
Assumption notifying you that Zenith Insurance Company has agreed to replace
RISCORP Property & Casualty Insurance Company as your insurer under
[insert policy/certificate name and number] effective [insert date]. Zenith
Insurance Company's principal place of business is 21255 Califa Street,
Woodland Hills, California, 91367-5021; however, all correspondence with
Zenith Insurance Company concerning your policy should be sent to 1390 Main
Street, Sarasota, Florida 34236. You may obtain additional information
concerning Zenith Insurance Company from reference materials in your local
library or by contacting your Insurance Commissioner at [insert address and
phone number].
Zenith Insurance Company is licensed in the following states: Alabama,
Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District
of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa,
Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New Mexico, New York,
North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina,
South Dakota, Tennessee, Texas, Utah, Vermont, Virginia and Wisconsin.
YOUR RIGHTS
We are sending you a third notice because we did not receive the
pre-addressed response card or other written notice from you indicating your
rejection of the proposed transfer. If you want your policy transferred to
Zenith Insurance Company, you may notify us in writing by signing and
returning the enclosed pre-addressed, postage-paid card or by writing to us
at:
RISCORP Property & Casualty Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
[fax]
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS OF THE DATE OF
THIS THIRD AND FINAL NOTICE, YOU WILL BE DEEMED TO HAVE ACCEPTED THE
TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP
Property & Casualty Insurance Company or exercise any option under your
policy.
-5-
<PAGE>
EFFECT OF TRANSFER
If you accept this transfer, all terms and conditions of the Policy
remain unchanged, except that Zenith Insurance Company shall be the insurer.
Zenith Insurance Company shall have all of the rights and obligations of
RISCORP Insurance Company under the Policy as though it had issued the Policy
originally. In addition, all payments, correspondence and inquiries such as
policy changes, notices, claims or suits or actions on the Policy shall in
the future be submitted directly to Zenith Insurance Company at the address
indicated above.
If you have any further questions about this agreement, you may contact
RISCORP Property & Casualty Insurance Company or Zenith Insurance Company.
Sincerely,
_____________________________ _________________________________
RISCORP PROPERTY & CASUALTY ZENITH INSURANCE COMPANY
INSURANCE COMPANY 1390 MAIN STREET
ONE SARASOTA TOWER SARASOTA, FLORIDA 34236
SUITE 608
SARASOTA, FL 34236
-6-
<PAGE>
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
[NOTICE DATE]
RESPONSE CARD
_________ YES, I accept the transfer of my policy
from RISCORP Property & Casualty
Insurance Company to Zenith
Insurance Company.
_________ NO, I reject the proposed transfer of
my policy from RISCORP Property & Casualty
Insurance Company to Zenith Insurance
Company and wish to retain my policy with
RISCORP Property & Casualty Insurance Company.
________________________ _________________________________
DATE SIGNATURE
NAME: _______________________________________________________________________
STREET ADDRESS: _____________________________________________________________
CITY, STATE, ZIP: ___________________________________________________________
-7-
<PAGE>
AL, MD EXHIBIT A
RISCORP PROPERTY & CASUALTY ZENITH INSURANCE COMPANY
INSURANCE COMPANY 1390 MAIN STREET
ONE SARASOTA TOWER SARASOTA, FL 34236
SUITE 608
SARASOTA, FL 34236
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
Zenith Insurance Company has agreed to replace RISCORP Property & Casualty
Insurance Company as your insurer under [insert policy/certificate name and
number] effective [insert date]. Zenith Insurance Company's principal place of
business is 21255 Califa Street, Woodland Hills, California, 91367-5021;
however, all correspondence with Zenith Insurance Company concerning your policy
should be sent to 1390 Main Street, Sarasota, Florida 34236. You may obtain
additional information concerning Zenith Insurance Company from reference
materials in your local library or by contacting your Insurance Commissioner at
[insert address and phone number].
YOUR RIGHTS
You may choose to consent to or reject the transfer of your policy to
Zenith Insurance Company. If you want your policy transferred, you may
notify us in writing by signing and returning the enclosed pre-addressed,
postage-paid card or by writing to us at:
RISCORP Property & Casualty Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS, YOU WILL BE
SENT A SECOND NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN
THIRTY(30) DAYS AFTER THE DATE OF THE SECOND NOTICE, YOU WILL BE SENT A THIRD
NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY (30) DAYS
AFTER THE DATE OF THE THIRD NOTICE, YOU WILL BE DEEMED TO HAVE ACCEPTED THE
TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP
Property & Casualty Insurance Company or exercise any option under your
policy.
EFFECT OF TRANSFER
If you accept this transfer, Zenith Insurance Company will be your
insurer. It will have direct responsibility to you for the payment of all
claims, benefits and for all other policy obligations. RISCORP Property &
Casualty Insurance Company will no longer have any obligations to you.
<PAGE>
If you accept this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
If you have any further questions about this agreement, you may contact
RISCORP Property & Casualty Insurance Company or Zenith Insurance Company.
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
Sincerely,
___________________________ ________________________
RISCORP PROPERTY & CASUALTY ZENITH INSURANCE COMPANY
INSURANCE COMPANY 1390 Main Street
One Sarasota Tower Sarasota, FL 34236
Suite 608
Sarasota, FL 34236
-2-
<PAGE>
RISCORP PROPERTY & CASUALTY ZENITH INSURANCE COMPANY
INSURANCE COMPANY 1390 MAIN STREET
ONE SARASOTA TOWER SARASOTA, FL 34236
SUITE 608
SARASOTA, FL 34236
SECOND NOTICE
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
You were previously sent a Notice of Transfer and Certificate of Assumption
notifying you that Zenith Insurance Company has agreed to replace RISCORP
Property & Casualty Insurance Company as your insurer under [insert
policy/certificate name and number] effective [insert date]. Zenith Insurance
Company's principal place of business is 21255 Califa Street, Woodland Hills,
California, 91367-5021; however, all correspondence with Zenith Insurance
Company concerning your policy should be sent to 1390 Main Street, Sarasota,
Florida 34236. You may obtain additional information concerning Zenith
Insurance Company from reference materials in your local library or by
contacting your Insurance Commissioner at [insert address and phone number].
YOUR RIGHTS
We are sending you a second notice because we did not receive the
pre-addressed response card or other written notice from you indicating your
rejection of the proposed transfer. If you want your policy transferred to
Zenith Insurance Company, you may notify us in writing by signing and
returning the enclosed pre-addressed, postage-paid card or by writing to us
at:
RISCORP Property & Casualty Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS, YOU WILL BE SENT
A THIRD NOTICE. IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY (30)
DAYS AFTER THE DATE OF THE THIRD NOTICE, YOU WILL BE DEEMED TO HAVE ACCEPTED THE
TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP Property
& Casualty Insurance Company or exercise any option under your policy.
EFFECT OF TRANSFER
If you accept this transfer, Zenith Insurance Company will be your
insurer. It will have direct responsibility to you for the payment of all
claims, benefits and for all other policy obligations. RISCORP Property &
Casualty Insurance Company will no longer have any obligations to you.
-3-
<PAGE>
If you accept this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
If you have any further questions about this agreement, you may contact
RISCORP Property & Casualty Insurance Company or Zenith Insurance Company.
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
Sincerely,
___________________________ ________________________
RISCORP PROPERTY & CASUALTY ZENITH INSURANCE COMPANY
INSURANCE COMPANY 1390 Main Street
One Sarasota Tower Sarasota, FL 34236
Suite 608
Sarasota, FL 34236
-4-
<PAGE>
RISCORP PROPERTY & CASUALTY ZENITH INSURANCE COMPANY
INSURANCE COMPANY 1390 MAIN STREET
ONE SARASOTA TOWER SARASOTA, FL 34236
SUITE 608
SARASOTA, FL 34236
THIRD AND FINAL NOTICE
NOTICE OF TRANSFER AND CERTIFICATE OF ASSUMPTION
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
TRANSFER OF POLICY
You were previously sent a Notice of Transfer and Certificate of Assumption
notifying you that Zenith Insurance Company has agreed to replace RISCORP
Property & Casualty Insurance Company as your insurer under [insert
policy/certificate name and number] effective [insert date]. Zenith Insurance
Company's principal place of business is 21255 Califa Street, Woodland Hills,
California, 91367-5021; however, all correspondence with Zenith Insurance
Company concerning your policy should be sent to 1390 Main Street, Sarasota,
Florida 34236. You may obtain additional information concerning Zenith
Insurance Company from reference materials in your local library or by
contacting your Insurance Commissioner at [insert address and phone number].
YOUR RIGHTS
We are sending you a third notice because we did not receive the
pre-addressed response card or other written notice from you indicating your
rejection of the proposed transfer. If you want your policy transferred to
Zenith Insurance Company, you may notify us in writing by signing and
returning the enclosed pre-addressed, postage-paid card or by writing to us
at:
RISCORP Property & Casualty Insurance Company
One Sarasota Tower
Suite 608
Sarasota, FL 34236
941-366-5015
IF YOU DO NOT WANT YOUR POLICY TRANSFERRED, YOU MUST NOTIFY US IN WRITING BY
SIGNING AND RETURNING THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID CARD OR BY
WRITING TO US AT THE ABOVE ADDRESS.
IF WE DO NOT RECEIVE YOUR WRITTEN REJECTION WITHIN THIRTY DAYS OF THE DATE OF
THIS THIRD AND FINAL NOTICE, YOU WILL BE DEEMED TO HAVE ACCEPTED THE TRANSFER.
If you reject the transfer, you may keep your policy with RISCORP Property
& Casualty Insurance Company or exercise any option under your policy.
EFFECT OF TRANSFER
If you accept this transfer, Zenith Insurance Company will be your
insurer. It will have direct responsibility to you for the payment of all
claims, benefits and for all other policy obligations. RISCORP Property &
Casualty Insurance Company will no longer have any obligations to you.
If you accept this transfer, you should make all premium payments and
claims submissions to Zenith Insurance Company and direct all questions to
Zenith Insurance Company.
-5-
<PAGE>
For your convenience, a pre-addressed postage-paid response card is
enclosed. Please take time now to read the enclosed notice and complete and
return the response card.
If you have any further questions about this agreement, you may contact
RISCORP Property & Casualty Insurance Company or Zenith Insurance Company.
Sincerely,
___________________________ ________________________
RISCORP PROPERTY & CASUALTY ZENITH INSURANCE COMPANY
INSURANCE COMPANY 1390 Main Street
One Sarasota Tower Sarasota, FL 34236
Suite 608
Sarasota, FL 34236
-6-
<PAGE>
- -----------------------------------------------------------------------------
RESPONSE CARD
_________ YES, I accept the transfer of my policy
from RISCORP Property & Casualty Insurance Company to
Zenith Insurance Company.
_________ NO, I reject the proposed transfer of
my policy from RISCORP Property & Casualty Insurance Company
to Zenith Insurance Company and wish
to retain my policy with RISCORP Property & Casualty
Insurance Company.
_____________ ______________________________
DATE SIGNATURE
NAME:
_______________________________________________________________________
STREET ADDRESS:
_______________________________________________________________________
CITY, STATE, ZIP:
_______________________________________________________________________
-7-
<PAGE>
EXHIBIT B
RISCORP PROPERTY & CASUALTY ZENITH INSURANCE COMPANY
INSURANCE COMPANY 1390 MAIN STREET
ONE SARASOTA TOWER SARASOTA, FLORIDA 34236
SUITE 608
SARASOTA, FLORIDA 34236
NOTICE AND CERTIFICATE OF ASSUMPTION
Policy No: ____________
Issued to: ____________
THIS CERTIFICATE certifies and you are hereby notified that, pursuant to the
terms of an Assumption and Indemnity Reinsurance Agreement, the above policy
and all of its endorsements (the "Policy") issued by RISCORP Property &
Casualty Insurance Company have been assumed by Zenith Insurance Company.
This change is effective as of 12:01 a.m. Eastern Standard Time on
[Effective Date].
All terms and conditions of the Policy remain unchanged, except that Zenith
Insurance Company shall be the insurer. Zenith Insurance Company shall have
all of the rights and obligations of RISCORP Property & Casualty Insurance
Company under the Policy as though it had issued the Policy originally. All
payments, correspondence and inquiries such as policy changes, notices,
claims or suits or actions on the Policy shall in the future be submitted
directly to Zenith Insurance Company at the address indicated above.
This Notice and Certificate of Assumption forms a part of and should be
attached to the Policy issued by RISCORP Insurance Company.
IN WITNESS WHEREOF, RISCORP Property & Casualty Insurance Company
and Zenith Insurance Company have each caused this Notice and Certificate of
Assumption to be signed by their duly authorized officers in facsimile to
become effective as their original signatures.
___________________________ ________________________
RISCORP PROPERTY & CASUALTY ZENITH INSURANCE COMPANY
INSURANCE COMPANY 1390 MAIN STREET
ONE SARASOTA TOWER SARASOTA, FLORIDA 34236
SUITE 608
SARASOTA, FLORIDA 34236
-2-
<PAGE>
EXHIBIT C
ZENITH INSURANCE COMPANY
1390 MAIN STREET
SARASOTA, FLORIDA 34236
[ADDRESSEE]
Reference: RISCORP Property & Casualty Insurance Company
Policy No: ____________
Issued to: ____________
Claim No: _____________
Dear Claimant:
This notice is sent to you in connection with your pending claim.
Please be advised that the captioned insurance policy (the "Policy") has been
assumed by Zenith Insurance Company, effective as of 12:01 a.m. Eastern
Standard Time on [Effective Date].
All correspondence and inquiries relating to your claim or suits
or actions on the Policy shall in the future be submitted directly to Zenith
Insurance Company at the address indicated above.
________________________
Zenith Insurance Company
1390 MAIN STREET
SARASOTA, FLORIDA 34236
<PAGE>
EXHIBIT 99
[logo]
Zenith National Insurance Corp.
21255 Califa Street
Woodland Hills, CA 91367-5021
Reply to: P.O. Box 9055
Van Nuys, CA 91409-9055
Telephone 818/713-1000
PRESS RELEASE
- -------------------------------------------------------------------------------
BUSINESS & FINANCIAL EDITORS FREDRICKA TAUBITZ
Executive Vice President
FOR IMMEDIATE RELEASE & Chief Financial Officer
ZENITH NATIONAL CLOSES ITS PURCHASE OF ASSETS OF RISCORP
WOODLAND HILLS, CA, April 2, 1998 . . . . . . . Zenith National
Insurance Corp. (ZNT) announced today that its wholly-owned subsidiary,
Zenith Insurance Company, closed its transaction to purchase certain assets
of RISCORP, Inc. and its subsidiaries under an agreement previously announced
on June 17, 1997. The transaction is effective April 1, 1998.
Under the transaction, Zenith acquired all the assets and assumed certain of
the liabilities of RISCORP, Inc. and its subsidiaries related to the workers'
compensation business, including inforce insurance business as well as the
right to all new and renewal policies. Zenith also purchased RISCORP's
"First Call"(sm) managed care workers' compensation system.
RISCORP will no longer engage in the workers' compensation or managed care
businesses.
The purchase price, to be paid in cash, will be the difference between the
book value of the assets purchased and the book value of the liabilities
assumed by Zenith as of April 1, 1998. The final purchase price is subject
to audit and a dispute resolution process and cannot be determined at this
time. At closing, Zenith paid the minimum cash purchase price of $35 million
and assumed $15 million in certain indebtedness of RISCORP, Inc.
Continued
<PAGE>
Stanley R. Zax, Chairman and President commented, "We are delighted to expand
our Southeast operations with the closing of the purchase of the assets and
inforce business of RISCORP. The consummation of this strategic acquisition
provides expanded geographic diversification in our workers' compensation
business and adds state-of-the-art managed care and agent Internet
communication capabilities to our operations. We welcome all of RISCORP's
policyholders, agents, claimants and employees to the Zenith Family and we
are excited about renewing and energizing our new partners with a goal of a
mutually beneficial and profitable relationship."
The above release contains statements that constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933,
as amended and Section 21E of the Securities and Exchange of 1934, as
amended. The words "believe", "estimate", "expect", "intend", "anticipate",
and similar expressions and variations thereof identify certain of such
forward-looking statements, which speak only as of the dates on which they
were made. Zenith National Insurance Corp. undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result
of new information, future events, or otherwise. Readers are cautioned that
any such forward-looking statements are not guarantees of future performance
and involve risks and uncertainties, and that actual results may differ
materially from those indicated in the forward-looking statements as a result
of various factors. Readers are cautioned not to place undue reliance on
these forward-looking statements.
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