# SCHEDULE B - PART 2
## CERTIFICATE OF PROPERTY/CASUALTY FACULTATIVE REINSURANCE
### NY INSURANCE EXCHANGE
#### GENERAL CONDITIONS

**THIS CERTIFICATE includes both Part 1 (Declarations) and Part 2 (General Conditions) which together constitute one agreement. In no event shall anyone other than the Underwriter(s), the Company, its or their receiver, liquidator, or statutory successor, have any rights under this Certificate.**

1. **UNDERWRITERS' LIABILITY & RETENTION**: The Company warrants to retain for its own account, subject to treaty reinsurance if applicable, the Company retention specified on Part 1 of this Certificate (Declarations). In the event of the Company's Retention being less than such amount, the Underwriter(s)' liability shall be proportionately reduced. The liability of the Underwriter(s) as specified in the Declarations, shall follow that of the Company, subject in all respects to all terms, conditions, and limits of the Company's policy except when otherwise specifically provided herein or designated as non-concurrent reinsurance in the Declarations. The Underwriter(s) certificate period shall be as specified in the Declarations at 12:01 AM as of both dates at the place specified in the Company's policy. The Company shall furnish the Underwriter(s) with a copy of its policy and all endorsements thereto and agrees to notify the Underwriter(s) promptly of all changes which in any manner affect this Certificate.

2. **CLAIMS AND SETTLEMENT**: The Company shall settle all claims under its policy in accordance with the terms and conditions thereof. If the reinsurance hereunder is pro rata, the Underwriter(s) shall be liable for its pro rata proportion of settlements made by the Company. If the reinsurance hereunder is excess, the Underwriter(s) shall be liable for its excess proportion of settlements made by the Company after deduction of any recoveries from pro rata reinsurance inuring to the benefit of the Underwriter(s).

The Underwriter(s) shall be liable for its proportion of allocated loss expenses incurred by the Company in the same ratio that the Underwriter's share of the settlement or judgement bears to the total amount of such settlement or judgement under the policy reinsured. The term "allocated loss expense" means all expenses incurred in the investigation and settlement of claims or suits but excluding Company salaries and office expenses. It also includes court costs and interest on any judgement or award provided the Underwriter's prior consent to trial court proceedings has been obtained. Allocated loss expenses shall not include expenses incurred by the Company in regard to any actual or alleged liability that is not within the provisions of the policy reinsured.

The Company shall advise the Underwriter(s) promptly of any claim and any subsequent developments pertaining thereto which, in the opinion of the Company, may involve the reinsurance hereunder. The Company has the obligation to investigate and defend claims or suits affecting this reinsurance and to pursue such claims or suits to final determination. The Company, when so requested, will afford the Underwriter(s), an opportunity to be associated with the Company, at the expense of the Underwriter(s) in the defense or control of any claim, suit or proceeding involving this reinsurance, and the Company and the Underwriter(s) shall cooperate in every respect in the defense and control of such claim, suit or proceeding.

3. **PROOF OF LOSS**: The Company shall furnish proof of a loss and loss expense satisfactory to the Underwriter(s) and payment by the Underwriter(s) of its proportion thereof shall be made promptly thereafter; provided, however, in the event of insolvency of the Company payment by the Underwriter(s) of its proportion of loss and loss expense which the Company has incurred or for which it is liable, shall be made to the liquidator, receiver or statutory successor of the Company in accordance with the provisions of Section 12 of these general conditions.

4. **INSPECTION OF RECORDS**: At the request of the Underwriter(s) the Company shall place at its disposal and Underwriter(s) shall have the right at all reasonable times in the office of the Company, or elsewhere if mutually agreed, to inspect all books, records and papers of the Company in any way pertaining to the reinsurance provided hereunder, including but not limited to claims in connection therewith.

5. **SALVAGE**: The Underwriter(s) will be paid or credited by the Company with its proportion of salvages i.e., reimbursement obtained or recovery made by the Company, less the actual cost (excluding Company salaries and office expenses) of obtaining such reimbursement of making such recovery. If the reinsurance afforded by this Certificate is on an Excess of Loss basis, salvage shall be applied in the inverse order in which liability attaches.

6. **OFFSET**: The Underwriter(s) may offset any balance(s) whether on account of premiums, claims, losses, adjustment expense, salvage or any other amount(s) due from one party to the other under this Certificate or under any other agreement heretofore or hereafter entered into between the Company and the Underwriter(s) whether acting as assuming reinsurer(s) or as ceding company, through the intermediary named herein. (For the right of offset in the event of insolvency, see paragraph 12).

7. **WAR AND NUCLEAR EXCLUSION**: The reinsurance hereunder is subject to "Nuclear", "Nuclear Exclusion" and "War Exclusion" clauses considered standard for the coverage provided.

8. **PRIOR ATTACHMENT**: If the reinsurance hereunder attaches prior to the date of acceptance, the Company warrants that there are no known or reported losses which might be recoverable under this Certificate as of the date this reinsurance is accepted.

9. **CANCELLATION**: (a) Should the Company's policy be cancelled, this Certificate shall terminate simultaneously. This Certificate may also be cancelled upon prior written notice by the Company or by the Underwriter(s) upon not less than the number of days listed on Item 6 of the Declarations, which notice shall state when thereafter the reinsurance afforded hereby shall terminate. Proof of mailing shall be deemed proof of notice and calculation of the earned premium shall follow the Company calculation in the use of short rate or pro rata tables.