Common use of Recapture Right Clause in Contracts

Recapture Right. Business ceded under the agreement shall not be eligible for recapture, provided however, if any Reinsured Contract that was not otherwise known to have been issued by the Company outside New York as of the Effective Date later becomes known as having been issued by the Company outside of New York, the Reinsured Contract shall be recaptured at that time. Upon recapture of any such Reinsured Contract, the Reinsurer shall pay to the Ceding Company, a recapture amount equal to the sum of (1) the modified coinsurance reserve as of the date of recapture plus (2) the greater of the coinsurance reserve as of the date of recapture and the fair value of the coinsured liabilities as calculated by the Ceding Company in accordance with generally accepted accounting principles as of the date of recapture. The Ceding Company shall pay to the Reinsurer a modified coinsurance reserve adjustment equal to the modified coinsurance reserve as of the date of recapture.