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United Insurance Holdings enters reinsurance agreements

United Insurance Holdings Corp. announced the placement of a quota share reinsurance program and a renewal of its aggregate excess-of-loss reinsurance program.

The programs cover in-force, new and renewal business.

The quota share program, effective Dec. 1., provides coverage only for United Property & Casualty Insurance Co. The excess of loss program is effective Jan. 1, 2017, and covers United Property and Casualty, Interboro Insurance Co. and Family Security Insurance Co. Inc.

The programs are designed to work in conjunction with United Insurance Holdings' catastrophe excess-of-loss reinsurance.

The quota share agreement includes a cession rate of 20%, 15% on single-year and 5% for a two-year period. The quota share agreement provides coverage for typical catastrophes like hurricanes, tropical storms, tropical depressions and earthquakes, for other types of weather-related catastrophes and for attritional losses.

For other-catastrophe perils, the quota share agreement provides coverage alongside the excess-of-loss program after United Insurance Holdings' retention has been satisfied.

For the more typical catastrophes, the quota share provides ground-up protection that reduces United Insurance Holdings' retention for losses. Quota share reinsurers' obligations for attritional losses is subject to a loss ratio cap.

The aggregate excess of loss agreement provides coverage only for atypical weather perils. For those losses that are more than $1 million but less than $15 million, United Insurance Holdings will retain in aggregate 100% of losses up to $30 million. Reinsurers will be liable for all losses in excess of $30 million in aggregate not to exceed an annual aggregate limit of $30 million. That program was placed at 85% rather than 100% because of the quota share reinsurers' liability for atypical catastrophe related losses after the $30 million retention.