Property and casualty (P&C) insurer Crum & Forster has decided to discontinue a long-standing quota share reinsurance arrangement with AmerInst Insurance Group.
Since September 2009, AmerInst’s Bermuda-based reinsurance business, AmerInst Insurance Company Limited (AMIC), has maintained a professional liability quota share agreement with C&F.
Under the terms of the agreement, AMIC reinsured a 50% quota share of C&F’s liability under insurance written by Protexure Insurance Agency, which is an indirect subsidiary of AmerInst. This was later increase to a 90% quota share under certain circumstances.
Protexture had an agency agreement in place with C&F, whereby it would act as its exclusive agent for soliciting, underwriting, quoting, binding, issuing, cancelling, non-renewing and endorsing accountants’ professional liability and lawyers’ professional liability insurance coverage.
The initial term of the agency agreement was for four years with automatic one-year renewals thereafter.
The agreement automatically renewed in September 2020, but AMIC and C&F have now decided that they will commute their reinsurance arrangement so that it will continue no later than March 31st, 2022.
As such, both parties have entered into a commutation agreement that settles all respective obligations and liabilities under the reinsurance agreement.
In exchange for the release of past and future reinsurance claims ceded by C&F and assumed by AMIC, the commutation agreement provides for the payment to C&F of $26 million, which will be paid out of funds and securities that have been held in trust.
Additionally, C&F has agreed to an amendment with Protexture that will permit Protexure to issue new and renewal professional liability policies on C&F’s paper with effective dates no later than March 31, 2022, and only in accordance with modified guidelines.
