Common use of Rate Guarantee Clause in Contracts

Rate Guarantee. 1. The reinsurance premiums in Exhibit B, Rates and Allowances, (and all rate tables attached hereto) are guaranteed for one year. Although the Reinsurer anticipates continuing to accept reinsurance at these rates, the Reinsurer has the right to increase these rates by giving the Company at least ninety (90) days advance written notice stating both the rate increase date and the percentage rate increase. The percentage rate increase will apply to each policy on the anniversary date following the effective date of the increase. The increased rates may not exceed the valuation net premium for annually renewable term insurance calculated using the applicable statutory mortality table and the maximum statutory interest rate for each year. 2. Any such increase will only be implemented pursuant to a uniform increase in reinsurance premium rates for the Reinsurer's YRT business for its entire portfolio of in force permanent life reinsurance assumed from all insurers having the following characteristics: reinsurance became effective on new policies issued after the effective date of this Agreement; the Reinsurer has the right to raise reinsurance premium rates; the policies were issued during the time period between the effective and termination dates of this Agreement; policies were underwritten on a fully underwritten basis; the policies are term, universal or variable universal life, as appropriate, with comparable underwriting classes. 3. In addition, if the Reinsurer increases the rates, the Company has the right (but not the obligation) to recapture, in its entirety, all of the reinsured business for which the Reinsurer increases the reinsurance premiums. Recapture shall be on the next policy anniversary of each policy. The Company must notify the Reinsurer of its intention to recapture within ninety (90) days after its receipt of the written notice of the rate increase. In such circumstances, the Reinsurer will refund any unearned premium minus the amount of any unearned allowances.