# CERTIFICATE CONDITIONS

1. The Company warrants to retain for its own account, as a minimum, the amount specified in Item 8 on the face of this Certificate which amount may be subject to Treaty Reinsurance on either an excess or a pro-rata basis, unless otherwise declared to RECO. In the event of the Company's retention being less than such amount, RECO's liability shall be proportionately reduced.
2. The liability of RECO shall be limited to the amount stated in Item 9 of this Certificate and shall follow that of the Company to, or on behalf of, the Insured named in Item 3 of this Certificate and, except as otherwise specifically provided in this Certificate, shall be subject only to the terms and conditions expressed in the policy(ies) reinsured.
3. Except as provided by the insolvency clause and any amendment thereto referred to in Condition 13, the obligations under this Certificate shall run to the Company and RECO shall have no obligation to the original insured or anyone claiming under the policy(ies) reinsured.
4. The Company shall, when requested, furnish RECO with a copy of its policy(ies) and all endorsements thereto which in any manner affect this reinsurance, and shall make available for inspection and place at the disposal of RECO at reasonable times any of its records relating to this reinsurance or claims in connection therewith.
5. The reinsurance hereunder is subject to the standard Nuclear Incident Exclusion Clause(s) and standard War Exclusion Clause(s) for the coverage provided.
6. The Company shall notify RECO promptly of any change in the policy(ies) reinsured hereunder which affects this Certificate and such change is subject to acceptance by RECO.
7. Prompt notice shall be given by the Company to RECO of any occurrence or accident which appears likely to involve this reinsurance and, while RECO does not undertake to investigate or defend claims or suits, RECO, directly, or through its representatives and/or counsel, shall nevertheless have the right and be given the opportunity to associate with the Company and its representatives at RECO's expense in the defense and control of any claim, suit or proceeding which may involve this reinsurance with the full cooperation of the Company.
8. All claims covered by this reinsurance when settled by the Company shall be binding on RECO, who shall be bound to pay its proportion of such settlements. In addition thereto, RECO shall be bound to pay (1) its proportion of expenses, other than Company salaries and office expenses, incurred by the Company in the investigation and settlement of claims and suits, and (2) its proportion of court costs, interest on any judgment or award and litigation expenses (provided its prior consent to legal proceedings has been obtained from RECO), as follows: (a) with respect to reinsurance provided on an excess of loss basis, in the ratio that RECO's loss payment bears to the Company's gross loss payment; and (b) with respect to reinsurance provided on a pro-rata basis, in the ratio that RECO's limit of liability bears to the Company's gross limit of liability.
9. Payment of RECO's proportion of loss and expense incurred by the Company will be made to the Company promptly upon receipt and approval by RECO of satisfactory proof of loss.
10. RECO 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 or 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 for loss attaches.
11. The Company will be liable for all taxes on premiums ceded to RECO under this Certificate.
12. 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.
13. In the event of insolvency of the Company, the terms of this Certificate are amended to conform to the statute of any state of the United States having jurisdiction to the extent that such reinsurance as is afforded hereunder may be credited to the Company as an admitted asset or deduction from liability, it being understood that, subject to such amendment, RECO may avail itself of any other provisions of any such statute applicable.
14. Cancellation of the policy(ies) reinsured hereunder shall constitute an automatic cancellation of this reinsurance as of the same date and on the same premium basis as that of the policy(ies) reinsured. However, if the policy(ies) is/are cancelled and simultaneously rewritten, the Company, if so desires, may resubmit the risk for acceptance by RECO on the new basis and for the new term. The Company shall be entitled to return premiums payable on the cancelled reinsurance, less the amount of the ceding commission thereon, if any. This reinsurance may be cancelled at any time by either the Company or RECO giving written notice to the other party stating when (not less than the number of days stated in Item 12 of this Certificate) thereafter such cancellation shall be effective. If cancelled by the Company without simultaneous cancellation of the Company's policy, adjustment of the premium for this Certificate shall be on a short rate basis.
15. In the event of non-payment of premium, notwithstanding the provisions of the foregoing Condition 14, RECO may cancel by giving the Company 10 days written notice.
16. The terms of this Certificate shall not be waived or changed except by endorsement issued to form a part hereof, executed by a duly authorized representative of RECO.
17. If an Intermediary is designated on the face of this Certificate, such Intermediary is hereby recognized as the Intermediary negotiating this reinsurance through whom all premiums, loss payments and communications relating to business hereunder including cancellation notices, if any, shall be transmitted by and to the parties hereunder.