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TYPICAL “FULLY DEVELOPED” AGGREGATE EXTENSION CLAUSE INCLUDED IN LMX OUTWARDS REINSURANCE CONTRACTS FROM THE MID-1960s ONWARDS

TYPICAL “FULLY DEVELOPED”AGGREGATE EXTENSION CLAUSE INCLUDED IN LMX OUTWARDS REINSURANCE CONTRACTS FROM THE MID-1960s ONWARDS

AGGREGATE EXTENSION CLAUSE (APPLICABLE TO LIABILITY AND PROFESSIONAL INDEMNITY BUSINESS ONLY)

1. As regards liability incurred by the Reinsured for losses on risks covering on an aggregate basis, if required by the Reinsured, this reinsurance shall protect the Reinsured excess of the amounts as provided for herein in the aggregate any one such aggregate loss up to the limit of indemnity as provided for herein in all any one such aggregate loss.2. Notwithstanding that this reinsurance is effected on a “losses occurring during the period” basis, all aggregate policies or contracts coming within the scope of this protection shall be covered on a “risks incepting during the period” basis.Furthermore, where an aggregate policy or contract is issued for limits relevant to an overall period greater than 12 months with an inception date during the period of this reinsurance then such policy or contract shall be covered hereunder for the whole of its period notwithstanding any annual resignature. Long term policy periods with annual limits are to be treated as each annual period being a separate policy or contract with the anniversary date being regarded as the inception date. It is understood and agreed that the inception date of each declaration or “signing off” a contract shall govern its date of attachment to this reinsurance.3. It is understood and agreed that policies or contracts to which such aggregate risks attach, effected directly and/or by way of reinsurance, in a series of “layers” (whether immediately excess of each other or otherwise) shall be deemed to be one aggregate risk for the purpose of this reinsurance provided such policies and/or contracts have inception dates during the period of this reinsurance.4. Furthermore, in circumstances in which one event or occurrence or series of events or occurrences originating from one cause affects more than one policy or contract issued to different Insureds or Reinsureds, then in such circumstances, a series of policies or contracts so issued shall be deemed to constitute one aggregate risk for the purpose of this reinsurance, provided that each policy or contract has inception during the period of this reinsurance. Nevertheless, in circumstances in which the policy or policies of more than one Insured are involved in an aggregation of losses, only that part of the aggregation concerned with and originating from the one cause shall be considered as being covered by this reinsurance in respect of each and every loss.5. Notwithstanding the foregoing the Reinsured, as an alternative, have the option to extract from an aggregate policy or contract the amount of the loss sustained by them arising from any one accident and/or series of accidents arising out of one event in order that such loss can be added to the Reinsured’s losses from accidents or series of accidents arising from the same event on other policies or contracts, provided that the loss occurs during the period of this reinsurance.6. Notwithstanding anything herein contained to the contrary, it is understood and agreed that Excess of Loss Reinsurances written by the Reinsured on an aggregate basis issued in the name and for the account of a Lloyd’s Syndicate or Insurance or Reinsurance Company protecting their whole account or a section of their account, shall not be covered hereunder on an aggregate basis. The foregoing exclusion shall not apply to aggregate liability assumed by the Reinsured on an “each and every loss” contract containing an Aggregate Extension Clause.7. For the purpose of paragraphs 4 and 5 of this Clause, the amount of a loss from one accident or series of accidents arising out of one event or cause on an aggregate policy or contract shall be deemed to be that percentage of the aggregate loss to the Reinsured on the original policy or contract that the total loss from the particular accident bearsto the total aggregate losses to the original Insured or Reinsured on the businessprotected.

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