Exhibit 99.7(v)(ii)
AUTOMATIC REINSURANCE AGREEMENT
between
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA (a
corporation organized under the laws of the state of Delaware,
having its principal place of business in Boston, Massachusetts;
hereinafter referred to as the CEDING COMPANY)
and
AXA CORPORATE SOLUTIONS LIFE REINSURANCE COMPANY
(a corporation organized under the laws of the state of Delaware,
having its principal place of business in New York, New York;
hereinafter referred to as the REINSURER)
EFFECTIVE DATE OF THIS AGREEMENT: JANUARY 29, 2001
(hereinafter referred to as the EFFECTIVE DATE)
AGREEMENT NO. 2001-41
TABLE OF CONTENTS
PREAMBLE .............................................................. 1
Article I. Scope of Agreement............................................ 1
Article II. Commencement and Termination of Liability..................... 2
Article III. Oversights and Clerical Errors................................ 3
Article IV. Net Amount at Risk............................................ 4
Article V. Reinsurance Premiums.......................................... 6
Article VI. Reinsurance Administration.................................... 7
Article VII. Settlement of Claims.......................................... 9
Article VIII. Treaty Reserve................................................ 11
Article IX. Recapture Privileges.......................................... 12
Article X. Inspection of Records......................................... 13
Article XI. Insolvency.................................................... 14
Article XII. Negotiation................................................... 15
Article XIII. Arbitration................................................... 16
Article XIV. Right to Offset Balances Due.................................. 18
Article XV. Contract and Program Changes.................................. 19
Article XVI. Confidentiality............................................... 21
Article XVII. Other Provisions.............................................. 22
A. Notifications........................................ 22
B. Assignment........................................... 22
C. Severability......................................... 22
D. Currency............................................. 22
Article XVIII. Entire Agreement.............................................. 23
Article XIX. DAC Tax....................................................... 24
Article XX. Duration of Agreement......................................... 25
Article XXI. Execution of Agreement........................................ 26
SCHEDULES AND EXHIBITS
Schedule A Plans of Reinsurance
Schedule B Investment Funds
Schedule C Required Data and Suggested Data Layout
Exhibit I Mortality Table/Projection Scale G
Exhibit II Benefit Limitation Rule
Exhibit III Annuitization Rate And Exposure Determination
Exhibit IV Confidentiality and Non-Disclosure Agreement
Exhibit V Wiring Instructions
i
PREAMBLE
This Agreement is an indemnity reinsurance agreement solely between the CEDING
COMPANY and the REINSURER. The acceptance of reinsurance hereunder shall not
create any right or legal relation whatever between the REINSURER and the
annuitant, owner, beneficiary or any other party under any contracts of the
CEDING COMPANY which may be reinsured hereunder. The CEDING COMPANY shall be and
remain solely liable to such parties under such contracts reinsured hereunder.
All provisions of this Agreement are subject to the laws of the State of
Delaware.
ARTICLE I.
SCOPE OF AGREEMENT
A. On and after the EFFECTIVE DATE of this Agreement, the CEDING COMPANY shall
automatically reinsure with the REINSURER and the REINSURER shall
automatically accept, its share of the IBNAR (defined in Article IV),
generated prior to termination of the REINSURER's liability (defined in
Article II), by the Guaranteed Minimum Income Benefit (GMIB) provisions of
the Guaranteed Retirement Income Program II (Income Program) within the
variable annuity contracts issued by the CEDING COMPANY and reinsured
hereunder (defined in Schedule A).
B. The REINSURER's maximum aggregate IBNAR (defined in Article IV) liability
incurred in any one calendar year shall not exceed the lesser of:
1. Eight Hundred (800) basis points of the REINSURER's Quota Share Percentage
(defined in Schedule A) of the average aggregate IBB (defined in Schedule
A) value inforce hereunder eligible to annuitize under the Income Program
(i.e., those contracts past their waiting period, defined in Schedule A)
over each respective calendar year of coverage. This average shall be
calculated by way of a trapezoidal rule as shown in Exhibit II, and
2. The total liability amount generated once the annual annuitization rate
reaches twenty-two and one-half percent (22.5%) during the calendar year
of coverage. This annuitization rate calculation is described in Exhibit
III.
The annuitization rate will be monitored as described in Article VI,
Paragraph D.
C. The REINSURER's maximum IBNAR liability on any individual life reinsured
hereunder shall be limited to one million dollars ($1,000,000) multiplied by
the REINSURER's Quota Share Percentage.
D. This Agreement covers only the CEDING COMPANY's contractual liability for
claims that are realized upon annuitization under the contractual terms of
the Income Program within the variable annuity contract forms specified in
Schedule A and supported by investment funds specified in Schedule B and its
Amendments, that were submitted to the REINSURER in accordance with the terms
of this Agreement set forth in Article XV, Contract and Program Changes.
Page 1
ARTICLE II.
COMMENCEMENT AND TERMINATION OF LIABILITY
A. On reinsurance ceded under the terms of this Agreement, the liability of
the REINSURER shall commence simultaneously with that of the CEDING
COMPANY.
B. The liability of the REINSURER for all reinsured contracts under this
Agreement may terminate in accordance with
1. the Duration of Agreement provisions of this Agreement set forth in
Article XX, or
2. the termination provisions set forth within Article VI, Administration,
or
3. the Recapture Privileges set forth in Article IX.
C. For an individual contract, the liability of the REINSURER under this
Agreement will terminate either in accordance with Paragraph B, above, or
upon the earliest of the following occurrences defined in the contract(s)
reinsured hereunder:
1. the date the owner elects to annuitize pursuant to other than the
Income Program;
2. surrender or termination of the contract
3. full withdrawal, including 1035 exchanges and qualified transfers when
the CEDING COMPANY terminates the contract and releases the proceeds to
the contract owner, beneficiary, annuitant or new carrier;
4. the death of the owner or annuitant where such death triggers the payment
of a contractual death benefit, except when spousal continuance has been
elected during the new business term of this Agreement as defined in
Article XX, Paragraph A. On spousal continuance election the REINSURER's
liability will be terminated upon death of the spouse;
5. attainment of the maximum annuitization age or attained age 95, if
earlier.
D. Upon annuitization under the Income Program, the liability of the REINSURER
shall terminate, subject to the payment of a benefit claim that may be due in
accordance with the IBNAR calculation as set forth in Article IV.
Page 2
ARTICLE III.
OVERSIGHTS AND CLERICAL ERRORS
A. Should either the CEDING COMPANY or the REINSURER fail to comply with any of
the terms of this Agreement, and if this is shown to be unintentional and the
result of a misunderstanding, oversight or clerical error on the part of
either the CEDING COMPANY or the REINSURER, then this Agreement shall not be
deemed abrogated thereby, but both companies shall be restored to the
positions they would have occupied had no such oversight, misunderstanding or
clerical error occurred. Such conditions are to be reported and corrected
promptly after discovery.
B. If the CEDING COMPANY or the REINSURER discovers that the CEDING COMPANY did
not cede reinsurance on a contract it should have reinsured under this
Agreement, the CEDING COMPANY will take prompt, reasonable and necessary
steps to ensure that similar oversights do not recur. Then this Agreement
shall not be deemed abrogated thereby, but both companies shall be restored
to the positions they would have occupied had the CEDING COMPANY ceded such
reinsurance at the original date. If the REINSURER receives no evidence that
the CEDING COMPANY has taken action to remedy such a situation, the REINSURER
reserves the right to limit its liability to reported contracts only.
C. Any negligent or deliberate acts or omissions by the CEDING COMPANY regarding
the insurance or reinsurance provided are the responsibility of the CEDING
COMPANY and its liability insurer, if any, but not that of the REINSURER. The
previous sentence does not negate the REINSURER's liability under Article
VII, Settlement of Claims, of this Agreement.
Page 3
ARTICLE IV.
NET AMOUNT AT RISK
A. The IBNAR (Income Benefit Net Amount at Risk) for each variable annuity
contract reinsured hereunder shall be equal to the following:
IBNAR = Maximum [( IBB * ( MAPR / SAPR ) - Account Value), 0] *
REINSURER's Quota Share Percentage
where:
- The INCOME BENEFIT BASE (IBB) is as defined in Schedule A
- The MINIMUM ANNUITY PURCHASE RATE (MAPR) per $1000 is calculated using the
following assumptions:
Mortality Table: 1983 IAM Valuation Table (see Exhibit I)
Age Setback: None
Mortality Improvement: Projection Scale G for 35 years (see
Exhibit I)
Unisex Blend: Montana: 25% male/75% female
All other states: Sex distinct only
Interest Rate: 2.5% all years
Expenses: None
Premium Taxes: Applied by state of residence and market
Age: Attained age nearest birthday on exercise date
Frequency of Payment: Monthly or quarterly or annually
Annuity Form: Limited to a Life Annuity with a 10 Year Period
Certain or Joint and Survivor Life Annuity with
20 Year Period Certain.
For qualified plans: period certain to meet IRS
requirement.
- The SETTLEMENT ANNUITY PURCHASE RATE (SAPR) per $1000, which is used at
time of annuitization for reinsurance claims settlement, is calculated
using the following assumptions:
Mortality Table: 1983 IAM Basic Table (see Exhibit I)
Age Setback: None
Mortality Improvement: Projection Scale G until year of
annuitization (see Exhibit I)
Unisex Blend: Montana: 100% male
All other states: Sex distinct only
Interest Rate: The yield on the most recently auctioned 7-Year
U.S. Treasury Security (i.e., "on-the-run"), as
posted in the Wall Street Journal, at the
beginning of the month in which annuitization
occurs minus 35 Basis Points. That interest
rate shall never be less than 1.5%. If there
is
Page 4
ARTICLE IV, NET AMOUNT AT RISK
(Continued)
no recent 7-Year U.S. Treasury Security posted,
then the linear interpolation of the 5-Year and
10-Year U. S. Treasury Security as posted by the
Wall Street Journal will be used in lieu of the
7-Year rate. The 7-Year linear interpolated rate
will be calculated using 60% of the 5-Year rate
plus 40% of the 10-Year rate.
Expenses: None
Premium Taxes: Applied by state of residence and market
Age: Attained age nearest birthday on exercise date
Frequency of Payment: Monthly or quarterly or annually
Annuity Form: Limited to a Life Annuity with a 10 Year Period
Certain or Joint and Survivor Life Annuity with
20 Year Period Certain.
For qualified plans: period certain to meet IRS
requirement.
B. The actual annuity purchase rates offered by the CEDING COMPANY at time of
annuitization under the Income Program may differ from those defined above.
The annuity rates defined above are used for settlement of reinsurance claims
only.
C. Premium taxes will be applied on a consistent basis between the MAPR and
SAPR to calculate the IBNAR.
D. The IBNAR for each contract reinsured hereunder shall be calculated as of the
last day of each calendar month prior to the termination of liability
contingencies set forth in Article II.
Page 5
ARTICLE V.
REINSURANCE PREMIUMS
A. The Reinsurance Premium is an asset-based reinsurance premium applied to the
average aggregate IBB value for the reporting period multiplied by the
REINSURER's Quota Share Percentage. The reporting period is monthly.
B. The annualized reinsurance premiums are shown below and are expressed in
terms of basis points. They shall be applied on a monthly basis by
utilizing one-twelfth (1/12th) of the annualized rates.
Issue Reinsurance Premium Guaranteed Maximum
Income Program Ages (Basis Points) (Basis Points)
-------------- ---- -------------- --------------
Income Program Rider 0-75 41.5 85.0
Income Program Rider 76-80 15.5 33.0
The current reinsurance premium rate shall be in effect for a minimum of
fifteen (15) years from the EFFECTIVE DATE of this Agreement. Thereafter, the
reinsurance premium may be increased based on expected experience but not
beyond the stated guaranteed maximum rates shown.
C. The total Reinsurance Premium due and payable in the first month shall at
least equal three thousand dollars ($3,000) for this Agreement, the
complementary GMDB Agreement ▇▇. ▇▇▇▇-▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇-▇▇ and Agreement No. 2001-48, combined. Thereafter, the minimum
reinsurance premium that is due and payable shall increase by nine hundred
dollars ($900) for each month after the first month until it reaches seven
thousand five hundred dollars ($7,500), for the combined agreements, six
months after the EFFECTIVE DATE. The total reinsurance premium that is due
and payable for the combined agreements in any month thereafter shall at
least equal seven thousand five hundred dollars ($7,500).
D. The reinsurance rates and the premium structure described above are subject
to change based on the criteria described in Article XV, Contract and Program
Changes.
Page 6
ARTICLE VI.
REINSURANCE ADMINISTRATION
A. The CEDING COMPANY acknowledges the importance of supplying timely and
accurate data, as defined herein, to enable the REINSURER to manage
effectively the risk associated with the products reinsured hereunder.
Therefore, within thirty (30) days of the end of each calendar month, the
CEDING COMPANY will take all necessary steps to furnish the REINSURER with a
seriatim electronic report as detailed in Schedule C, for each contract
specified in Schedule A, valued as of the last day of that month.
B. Additionally, within thirty (30) days of the end of each calendar month, the
CEDING COMPANY will furnish the REINSURER with a separate Summary Statement
containing the following:
1. reinsurance premiums due to the REINSURER summarized separately for
each Income Program premium class as shown in Article V;
2. benefit claim reimbursements under the contractual terms of the Income
Program that are due to the CEDING COMPANY;
3. month end date for the period covered by the Summary Statement.
C. Payments between the CEDING COMPANY and the REINSURER shall be paid net of
any amount due and unpaid under this Agreement. If the net balance is due to
the REINSURER, the amount due shall be remitted with the Summary Statement,
but no later than thirty (30) days from the month end date for the period
covered by the Summary Statement. If the net balance is due to the CEDING
COMPANY, the REINSURER shall remit the amount to the CEDING COMPANY within
ten (10) days of receipt of the Summary Statement. Wiring instructions are
attached in Exhibit V.
D. Furthermore, the REINSURER will use the summary data in Schedule C to
calculate and monitor its maximum annual aggregate IBNAR liability, as
described in Article I, Paragraph B, throughout the calendar year. Both the
CEDING COMPANY and the REINSURER shall approximate the annuitization rate
each calendar quarter during the year to determine if actual annuitization
exceeds the maximum annuitization rate, specified in Article I, Paragraph B,
on an annual basis. If the maximum annuitization rate is exceeded, the
REINSURER will temporarily suspend the payment of Income Program claims until
the end of the following calendar quarter or until such time that all data
required for the calculation is available. The REINSURER will then determine
whether a true-up of Income Program claims for the calendar year is required.
It is the intent of both parties that the calculations described in this
Paragraph D are mutually confirmed prior to initiation of any actions
described herein.
E. The payment of reinsurance premiums is a condition precedent to the liability
of the REINSURER under this Agreement. In the event the CEDING COMPANY does
not pay reinsurance premiums in a timely manner as defined below, the
REINSURER may exercise the following rights:
1. The REINSURER reserves the right to charge interest if premiums are not
paid within sixty (60) days of the due date, as defined in Paragraph C of
this Article. The interest rate charged shall be based on the ninety-(90)
day Federal Government Treasury ▇▇▇▇ as first published by the Wall Street
Journal in the month following the due date of the reinsurance premiums
plus fifty (50) basis points. The method of
Page 7
ARTICLE VI, REINSURANCE ADMINISTRATION
(Continued)
calculation shall be simple interest (360-day year). Interest will accrue
from sixty (60) days following the due date shown on the Summary
Statement.
2. The REINSURER will have the right to terminate this Agreement when premium
payments are more than ninety (90) days past due the due date described in
Paragraph C of this Article, by giving ninety (90) days written notice of
termination to the CEDING COMPANY. As of the close of the last day of this
ninety-(90) day notice period, the REINSURER's liability for all risks
reinsured associated with the defaulted premiums under this Agreement will
terminate. If all premiums in default are received within the ninety-(90)
day time period, the Agreement will remain in effect.
F. If claims are not paid within sixty (60) days of the REINSURER's receipt of
satisfactory proof of claim liability, the CEDING COMPANY reserves the right
to charge interest, based on the ninety (90) day Federal Government Treasury
▇▇▇▇ as first published by the Wall Street Journal in the month following the
due date shown on the Summary Statement plus fifty (50) basis points. The
method of calculation shall be simple interest (360-day year). Interest will
accrue from sixty (60) days following the due date shown on the Summary
Statement.
Page 8
ARTICLE VII.
SETTLEMENT OF CLAIMS
A. The claims that are eligible for reimbursement are only those that the CEDING
COMPANY is contractually required to pay on or after the expiration of the
waiting period and upon annuitization under the terms of the Income Program
where such events occur, on the policies reinsured hereunder, on or after the
EFFECTIVE DATE, subject to the liability limitations described in Article I.
B. In the event the CEDING COMPANY provides satisfactory proof of claim
liability to the REINSURER, claim settlements made by the CEDING COMPANY
shall be unconditionally binding on the REINSURER. In every case of claim,
copies of the proofs obtained by the CEDING COMPANY will be taken by the
REINSURER as sufficient.
C. Within thirty (30) days of the end of each calendar month, the CEDING COMPANY
shall notify the REINSURER of the reinsured contractual Income Program
benefits paid in that month, based on the IBNAR definition set forth in
Article IV, and the REINSURER shall reimburse the CEDING COMPANY, as provided
in Article VI, for the reinsured benefits.
D. Settlements by the REINSURER shall be in a lump sum regardless of the mode
of payment made by the CEDING COMPANY.
E. With respect to Extra-Contractual Damages, in no event will the REINSURER
participate in punitive or compensatory damages or statutory penalties which
are awarded against the CEDING COMPANY as a result of an act, omission or
course of conduct committed solely by the CEDING COMPANY in connection with
the insurance reinsured under this Agreement.
The parties recognize that circumstances may arise in which equity would
require the REINSURER, to the extent permitted by law, to share
proportionately in certain assessed situations in which the REINSURER was an
active party and directed, consented to, or ratified the act, omission or
course of conduct of the CEDING COMPANY which ultimately resulted in the
assessment of the extra-contractual damages. In such situations, the
REINSURER and the CEDING COMPANY shall share such damages so assessed in
equitable proportions.
For the purposes of this provision, the following definitions will apply:
"Punitive Damages" are those damages awarded as a penalty, the amount of
which is neither governed nor fixed by statute
"Statutory Penalties" are those amounts awarded as a penalty, but fixed
in amount by statute
"Compensatory Damages" are those amounts awarded to compensate for the
actual damages sustained and are not awarded as a penalty, nor fixed in
amount by statute
Page 9
ARTICLE VII, SETTLEMENT OF CLAIMS
(Continued)
If the REINSURER declines to be party to the contest, compromise or
litigation of a claim, it will pay its full share of the amount reinsured, as
if there had been no contest, compromise or litigation. In addition, the
REINSURER will pay its proportionate share of covered expenses incurred to
the date it notifies the CEDING COMPANY that it declines to be a party to the
contest, compromise or litigation of a claim.
F. In no event will the REINSURER be liable for expenses incurred in connection
with a dispute or contest arising out of conflicting or any other claims of
entitlement to policy proceeds or benefits, provided the REINSURER makes
payment of the amount of reinsurance to the CEDING COMPANY, as described in
the above paragraph.
Page 10
ARTICLE VIII.
TREATY RESERVE
A. The reserves held by the REINSURER in its statutory financial statement will
be greater than or equal to those required by the state where the statement
is filed.
B. It is the intention of both the REINSURER and the CEDING COMPANY that the
CEDING COMPANY qualify for reinsurance credit in all States for reinsurance
ceded hereunder. The REINSURER, at its sole cost and expense, shall do all
that is necessary to comply with the insurance laws and regulations of all
States in order to enable the CEDING COMPANY to take credit for the
reinsurance ceded hereunder, including delivery of any reports required
thereunder.
Page 11
ARTICLE IX.
RECAPTURE PRIVILEGES
A. The CEDING COMPANY may recapture existing reinsurance in force in
accordance with the following rules:
B. The CEDING COMPANY will notify the REINSURER of its intent to recapture at
least ninety (90) days prior to any recaptures.
C. No recapture will be made unless reinsurance has been in force for fifteen
(15) years, as measured from the EFFECTIVE DATE, or on some other date if
mutually agreed to by both parties.
D. The recapture shall apply to all the reinsurance in force under the
Agreement.
E. Recapture will only be available provided the total carryforward, upon
release of treaty reserves, is in a positive position. The total carryforward
is defined as the sum of the carryforwards of this Agreement and the
complementary death benefits agreement, No. 2000-14, that reinsures the same
variable annuity contracts specified in Schedule A.
F. The carryforward for each Agreement is defined as the current period's
reinsurance premium, minus all reinsurance claims paid under this Agreement
for the current period, minus a two-and-one-half (2.5) basis point annual
expense allowance applied against the average aggregate Account Value for the
current period, minus the change in treaty reserves from the prior period to
the current period, plus the prior period's carryforward. The monthly
carryforward amount is accumulated at the ninety-(90) day Federal Government
Treasury ▇▇▇▇ rate as published in the Wall Street Journal on the first
business day of the current period plus two percent (2%).
Note: For purposes of calculating the carryforward, treaty reserves are
defined as the minimum statutory reserves required of the REINSURER in the
CEDING COMPANY's state of domicile. The CEDING COMPANY shall promptly notify
the REINSURER of any change in its state of domicile.
G. Upon election, recapture shall occur ratably over a thirty-six (36) month
period (i.e., every month the initial quota share percentage reduces 2.78%
times the initial quota share percentage). It is irrevocable once elected.
H. The CEDING COMPANY and the REINSURER agree to exchange carryforward
calculations each year-end to ensure ongoing agreement on the position of
the carryforward.
Page 12
ARTICLE X.
INSPECTION OF RECORDS
A. The REINSURER, or its duly appointed representatives, shall have the right at
all reasonable times and for any reasonable purpose to inspect at the office
of the CEDING COMPANY all records referring to reinsurance ceded to the
REINSURER.
B. Relating to the business reinsured hereunder, the CEDING COMPANY or its duly
appointed representatives shall have the right at all reasonable times and
for any reasonable purpose, to inspect at the office of the REINSURER all
records referring to reinsurance ceded from the CEDING COMPANY.
Page 13
ARTICLE XI.
INSOLVENCY
A. A party to this Agreement will be deemed insolvent when it:
a. Applies for or consents to the appointment of a receiver,
rehabilitator, conservator, liquidator or statutory successor
("Authorized Representative") of its properties or assets; or
b. Is adjudicated as bankrupt or insolvent; or
c. Files or consents to the filing of a petition in bankruptcy, seeks
reorganization or an arrangement with creditors or takes advantage
of any bankruptcy, dissolution, liquidation, or similar law or
statute; or
d. Becomes the subject of an order to rehabilitate or an order to
liquidate as defined by the insurance code of the jurisdiction of
the party's domicile.
B. In the event of the insolvency of the CEDING COMPANY, all reinsurance will be
payable on the basis of the liability of the CEDING COMPANY on the policies
reinsured directly to the CEDING COMPANY or its Authorized Representative
without diminution because of the insolvency of the CEDING COMPANY.
C. In the event of insolvency of the CEDING COMPANY, the Authorized
Representative will, within a reasonable time after the claim is filed in the
insolvency proceeding, give written notice to the REINSURER of all pending
claims against the CEDING COMPANY on any policies reinsured. While a claim is
pending, the REINSURER may investigate such claim and interpose, at its own
expense, in the proceedings where the claim is adjudicated, any defense or
defenses which it may deem available to the CEDING COMPANY or its Authorized
Representative. The expenses incurred by the REINSURER will be chargeable,
subject to court approval, against the CEDING COMPANY as part of the expense
of liquidation to the extent of a proportionate share of the benefit which
may accrue to the CEDING COMPANY solely as a result of the defense undertaken
by the REINSURER. Where two or more reinsurers are participating in the same
claim and a majority in interest elect to interpose a defense or defenses to
any such claim, the expenses will be apportioned in accordance with the terms
of the Reinsurance Agreement as though such expense had been incurred by the
CEDING COMPANY.
D. Any debts or credits, matured or unmatured, liquidated or unliquidated, in
favor of or against either the REINSURER or CEDING COMPANY with respect to
this Agreement are deemed mutual debts or credits, as the case may be, and
will be offset, and only the balance will be allowed or paid. However, in the
event of liquidation, the REINSURER may offset against undisputed amounts
which are due and payable to the CEDING COMPANY, only those undisputed
amounts due the REINSURER which are not more than one hundred and eighty
(180) days past due at the date of the court order of liquidation.
E. In the event of insolvency of the REINSURER, the provisions of Article IX
notwithstanding, the CEDING COMPANY may recapture immediately all ceded
benefits upon written notice to the REINSURER, its liquidator, receiver or
statutory successor. The CEDING COMPANY shall also have a claim on the
REINSURER for any reinsurance credit amounts including reserves, unearned
premiums and other amounts due the CEDING COMPANY on such reinsurance, at the
date of recapture.
Page 14
ARTICLE XII.
NEGOTIATION
A. Within ten (10) days after one of the parties has given the other the first
written notification of a specific dispute, each party will appoint a
designated officer to attempt to resolve the dispute. The officers will meet
at a mutually agreeable location within thirty (30) days of the last
appointment and as often as necessary, in order to gather and furnish the
other with all appropriate and relevant information concerning the dispute.
The officers will discuss the problem and will negotiate in good faith
without the necessity of any formal arbitration proceedings. During the
negotiation process, all reasonable requests made by one officer to the other
for information will be honored. The designated officers will decide the
specific format for such discussions.
B. If the officers cannot resolve the dispute within thirty (30) days of their
first meeting, the parties will agree to submit the dispute to formal
arbitration, as set forth in Article XIII. However, the parties may agree in
writing to extend the negotiation period for an additional thirty (30) days.
Page 15
ARTICLE XIII.
ARBITRATION
A. It is the intention of the CEDING COMPANY and the REINSURER that the customs
and practices of the insurance and reinsurance industry will be given full
effect in the operation and interpretation of this Agreement. The parties
agree to act in all things with the highest good faith. If after the
negotiation required by Article XII, the REINSURER or the CEDING COMPANY
cannot mutually resolve a dispute that arises out of or relates to this
Agreement, the dispute will be decided through arbitration. The arbitrators
will base their decision on the terms and conditions of this Agreement and,
as necessary, on the customs and practices of the insurance and reinsurance
industry rather than solely on a strict interpretation of the applicable law.
The decision of the arbitrators shall be made within nine (9) months of the
filing of the notice of intention to arbitrate, and the arbitrators shall
agree to comply with this schedule before accepting appointment. However,
this time limit may be extended by agreement of the parties or by the
arbitrators if necessary. Once a decision is reached, there will be no appeal
of their written decision, and any court having jurisdiction of the subject
matter and the parties, may reduce that decision to judgement. Should the
arbitrators be unable to reach a decision within nine (9) months of the
filing of the notice of intention to arbitrate and should the parties further
be unable to agree upon an extension of the time limit, then either party to
this Agreement may commence litigation proceedings.
B. To initiate arbitration, either the REINSURER or the CEDING COMPANY will
notify the other party in writing of its desire to arbitrate, stating the
nature of its dispute and the remedy sought. The party to which the notice is
sent will respond to the notification in writing within ten (10) days of its
receipt.
C. There will be three arbitrators who will be current or former officers of
life insurance or reinsurance companies other than the contracting companies
or affiliates thereof. Each of the contracting companies will appoint one of
the arbitrators within thirty (30) days from the date notification is
received and these two arbitrators will select the third arbitrator within
thirty (30) days from the date of appointment of the last arbitrator. If
either party refuses or neglects to appoint an arbitrator within thirty (30)
days of the date notification is received, the other party may appoint the
second arbitrator. If the two arbitrators do not agree on a third arbitrator
within thirty (30) days of the appointment of the last arbitrator, then the
appointment of said arbitrator shall be left to the President of the American
Arbitration Association. Once chosen, the arbitrators are empowered to decide
all substantive and procedural issues by majority vote.
D. It is agreed that each of the three arbitrators should be impartial regarding
the dispute and should resolve the dispute on the basis described in Section
A of this Article.
E. The arbitration hearing will be held on the date fixed by the arbitrators in
New York City. In no event will this date be later than three (3) months
after the appointment of the third arbitrator. As soon as possible, the
arbitrators will establish pre-arbitration procedures as warranted by the
facts and issues of the particular case. At least ten (10) days prior to the
arbitration hearing, each party will provide the other party and the
arbitrators with a detailed statement of the facts and arguments they will
present at the arbitration hearing. The arbitrators may consider any relevant
evidence; they will give the evidence such weight as they deem it entitled to
after consideration of any
Page 16
ARTICLE XIII, ARBITRATION
(Continued)
objections raised concerning it. Each party may examine any witnesses who
testify at the arbitration hearing.
F. The cost of arbitration will be divided between the parties, unless the
arbitrators decide otherwise.
Page 17
ARTICLE XIV.
RIGHT TO OFFSET BALANCES DUE
The CEDING COMPANY and the REINSURER shall have, and may exercise at any time,
the right to offset any balance or balances due one party to the other, its
successors or assignees, against balances due to the other party under this
Agreement or under any other Agreements or Contracts previously or subsequently
entered into between the CEDING COMPANY and the REINSURER. This right of offset
shall not be affected or diminished because of the insolvency of either party to
this Agreement.
Page 18
ARTICLE XV.
CONTRACT AND PROGRAM CHANGES
A. The CEDING COMPANY may amend, substitute, add or delete variable investment
funds to the investment options supporting the annuity contract as described
in the contract general provisions. No such change shall be made by the
CEDING COMPANY without PRIOR notification to the REINSURER and without
changes being declared effective by the Securities and Exchange Commission
(SEC), if necessary. The REINSURER will approve or disapprove of the fund
change within fifteen (15) working days of the date on which they receive
notification.
The CEDING COMPANY agrees to maintain at all times a satisfactory selection
of core investment options with overall risk profile characteristics similar
to those listed in Schedule B at inception of the Agreement. As long as this
is the case, the REINSURER will approve such fund changes within fifteen (15)
working days of receiving such notification.
Should any such change result in a material change in the underlying risk,
the REINSURER shall have the right to modify, for that product line only, any
of the terms of this Agreement in order to restore, to the extent possible,
the risk profile of the business reinsured hereunder to its original position
when priced by the REINSURER. The REINSURER shall within fifteen (15) working
days of the date on which notification was received, provide the CEDING
COMPANY with notice of its intent to revise the terms of this Agreement. The
CEDING COMPANY shall have the right to approve or disapprove of the changes
proposed by the REINSURER. If both parties are not able to reach a mutually
satisfactory agreement on revised terms, then notwithstanding Article IX, the
CEDING COMPANY shall have the right of immediate termination of this
Agreement for new and inforce business affected by the change. The CEDING
COMPANY shall provide the REINSURER with written notification of its intent
to terminate. The date of termination shall be the date that the revised
terms would have become effective.
B. The CEDING COMPANY shall also give the REINSURER ADVANCE notice of any other
changes to any contract forms reinsured hereunder, such as the annuity
product design and/or death benefit design, the fees and charges, or the
addition of any riders. The REINSURER shall, within fifteen (15) working days
of the date on which notification was received, provide the CEDING COMPANY
with notice of its approval of such change or its intent to revise the terms
of this Agreement.
Should any such change affect new business to be reinsured under this
Agreement and result in a material change in the underlying risk, the
REINSURER shall have the right to modify, for that new business only, any of
the terms of this Agreement in order to restore, to the extent possible, the
risk profile of the business reinsured hereunder to its original position
when priced by the REINSURER. The REINSURER shall, within fifteen (15)
working days of the date on which notification was received, provide the
CEDING COMPANY with notice of its intent to revise the terms of this
Agreement. The CEDING COMPANY shall have the right to approve or disapprove
of the changes proposed by the REINSURER. If both parties are not able to
reach a mutually satisfactory agreement on revised terms, then the CEDING
COMPANY shall have the right of immediate termination of this Agreement for
new business only. The CEDING COMPANY shall
Page 19
ARTICLE XV, CONTRACT AND PROGRAM CHANGES
(Continued)
provide the REINSURER with written notification of its intent to terminate.
The date of termination shall be the date that the revised terms would have
become effective.
Should any such change affect inforce contracts reinsured under this
Agreement and result in a material change in the underlying risk, the
REINSURER shall have the right to modify, for that product line only, any of
the terms of this Agreement in order to restore, to the extent possible, the
risk profile of the business reinsured hereunder to its original position
when priced by the REINSURER. The REINSURER shall, within fifteen (15)
working days of the date on which notification was received, provide the
CEDING COMPANY with notice of its intent to revise the terms of this
Agreement. The CEDING COMPANY shall have the right to approve or disapprove
of the changes proposed by the REINSURER. If both parties are not able to
reach a mutually satisfactory agreement on revised terms, then
notwithstanding Article IX, the CEDING COMPANY shall have the right of
immediate termination of this Agreement for inforce business affected by said
change only. The CEDING COMPANY shall provide the REINSURER with written
notification of its intent to terminate. The date of termination shall be the
date that the revised terms would have become effective.
C. The above paragraphs notwithstanding, neither party, acting unreasonably,
will withhold agreement to revised terms for the sole purpose of terminating
this Agreement.
D. The CEDING COMPANY agrees to provide the REINSURER with all contractholder
communications produced by the CEDING COMPANY as though the REINSURER were a
contractholder in the CEDING COMPANY's state of domicile.
Page 20
ARTICLE XVI.
CONFIDENTIALITY
A. This Agreement incorporates the confidentiality agreement previously agreed
to between the parties on December 1, 1998 (the "Confidentiality Agreement"),
a copy of which is attached hereto as Exhibit IV. All matters with respect to
this Agreement require the utmost good faith of both parties. Both the CEDING
COMPANY and the REINSURER shall, in accordance with the terms of the
Confidentiality Agreement, hold confidential and not disclose or make
competitive use of any shared Confidential Information of the other party (as
such term is defined in the Confidentiality Agreement), unless otherwise
agreed to in writing, or unless the information otherwise becomes publicly
available by means other than by either party or their agents, or unless the
disclose is required for retrocession purposes, has been mandated by law, or
is duly required by external auditors.
B. The REINSURER will treat all personal policyholder information received from
the CEDING COMPANY as confidential information and will use good faith
efforts to keep such information private and secure, in accordance with the
CEDING COMPANY's commitment to its policyholders and in accordance with
federal and state privacy laws. The CEDING COMPANY recognizes that the
REINSURER may need to share certain information with auditors, regulators and
retrocessionaires in the normal course of conducting business.
Page 21
ARTICLE XVII.
OTHER PROVISIONS
A. Notifications. Any notice or communication given pursuant to this Reinsurance
Agreement must be in writing and either 1) delivered personally, 2) sent by
facsimile or other similar transmission to a number specified in writing by
the recipient, 3) delivered by overnight express, or 4) sent by Registered or
Certified Mail, Postage Prepaid, Return Receipt Requested, as follows:
If to CEDING COMPANY: The Manufacturers Life Insurance Company of North
America
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
If to REINSURER: AXA Corporate Solutions Life Reinsurance Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Life Reinsurance Treaty Officer
All notices and other communications required or permitted under this
Reinsurance Agreement that are addressed as provided in this Section will 1)
if delivered personally or by overnight express, be deemed given upon
delivery; 2) if delivered by facsimile transmission or other similar
transmission, be deemed given when electronically confirmed, and 3) if sent
by Registered or Certified mail, be deemed given when marked Postage Prepaid
by the sender's terminal. Any party from time-to-time may change its address,
but no such notice of change will be deemed to have been given until it is
actually received by the party sought to be charged with the contents
thereof.
B. Assignment. This Agreement shall be binding to the parties and their
respective successors and permitted assignees. This Agreement may not be
assigned by either party without the written consent of the other. Such
consent shall not be unreasonably withheld. It is understood that the CEDING
COMPANY, as of the writing of this Agreement, is contemplating an internal
consolidation of its business that could result in the assignment of this
Agreement to another entity within the CEDING COMPANY's corporate family.
Said assignment shall be considered approved by the REINSURER.
C. Severability. If any provision of this Agreement is determined to be invalid
or unenforceable, such determination will not affect or impair the validity
or the enforceability of the remaining provisions of this Agreement. If said
provision is deemed material to other provisions contained within the
agreement, both parties will negotiate in good faith to restore the agreement
to a similar position prior to said provision being determined to be invalid
or unenforceable.
D. Currency. All financial transactions under this Agreement shall be made
in U. S. dollars.
Page 22
ARTICLE XVIII.
ENTIRE AGREEMENT
This Agreement shall constitute the entire Agreement between the parties with
respect to business reinsured hereunder. There is no understanding between the
parties other than as expressed in this Agreement and any change or modification
to this Agreement shall be null and void unless made by Amendment or Addendum to
the Agreement and signed by both parties.
Page 23
ARTICLE XIX.
DAC TAX
TREASURY REGULATION SECTION 1.848-2(g)98) ELECTION
The CEDING COMPANY and the REINSURER hereby agree to the following pursuant to
Section 1.848-2(g)(8) of the Income Tax Regulations issued December 29, 1992,
under Section 848 of the Internal Revenue Code 1986, as amended. This election
shall be effective for the year this Agreement becomes effective and all
subsequent taxable years for which this Agreement remains in effect.
A. The term "party" will refer to either the CEDING COMPANY or the REINSURER
as appropriate.
B. The terms used in this Article are defined by reference to Treasury
Regulations Section 1.848-2 in effect as of December 29, 1992.
C. The party with the net positive consideration for this Agreement for each
taxable year will capitalize specified policy acquisition expenses with
respect to this Agreement without regard to the general deduction limitation
of IRC Section 848(c)(1).
D. Both parties agree to exchange information pertaining to the amount of net
consideration under this Agreement each year to ensure consistency. The
parties also agree to exchange information, which may be otherwise required
by the IRS.
E. The CEDING COMPANY will submit to the REINSURER by April 1st of each year, a
schedule of its calculation of the net consideration for the preceding
calendar year. This schedule will be accompanied by a statement signed by an
officer of the CEDING COMPANY stating that the CEDING COMPANY will report
such net consideration in its tax return for the preceding calendar year.
F. The REINSURER may contest such calculation by providing an alternate
calculation to the CEDING COMPANY in writing within thirty (30) days of the
REINSURER's receipt of the CEDING COMPANY's calculation. If the REINSURER
does not notify the CEDING COMPANY, the REINSURER will report the net
consideration as determined by the CEDING COMPANY in the REINSURER's tax
return for the previous calendar year.
G. If the REINSURER contests the CEDING COMPANY's calculation of the net
consideration, the parties will act in good faith to reach an agreement as to
the correct amount within thirty (30) days of the date the REINSURER submits
its alternate calculation. If the REINSURER and CEDING COMPANY reach
agreement on an amount of net consideration, each party shall report such
amount in their respective tax returns for the previous calendar year.
Page 24
ARTICLE XX.
DURATION OF AGREEMENT
A. This Agreement shall be open for new business until April 30, 2002 (in
accordance with complementary Agreement No. 2000-14), subject to a limit of
one billion, eight hundred million dollars ($1,800,000,000) of total new
considerations to the CEDING COMPANY on the product(s) reinsured hereunder,
divided by the REINSURER's Quota Share Percentage. Anytime on or after April
30, 2002, or anytime on or after attainment of the limit on total new
considerations described in this Paragraph, and upon ninety (90) days written
notice, either the CEDING COMPANY or the REINSURER may cancel this Agreement
for new business unilaterally or amend the terms of reinsurance for new
business by mutual agreement. Additional purchase payments made after the
close of this Agreement are covered hereunder for contracts issued during the
period this Agreement was open for new business.
B. This Agreement shall be unlimited as to its duration but may be reduced or
terminated for new business as provided in this Article, above.
C. The REINSURER provides the reinsurance coverage hereunder with the
understanding that the CEDING COMPANY will not provide its distributors
(e.g., wholesalers, producers, etc.) compensation that is different from that
which is stated below. In the event that this proves to be otherwise, the
REINSURER shall have the right to amend terms of this Agreement to return it
to its original risk profile. Should this not be possible, the REINSURER may
immediately terminate this Agreement for new and inforce business.
Income Program Annuitization Commission Schedule: None
Normal Annuitization Commission Schedule: None
D. Commutation of term certain annuity payments or any other liquidity feature
is unavailable to those individuals who annuitize under the Income Program.
In the event that this proves to be otherwise, the REINSURER shall have the
right to amend terms of this Agreement to return it to its original risk
profile. Should this not be possible, the REINSURER may immediately terminate
this reinsurance arrangement for new and inforce business.
Page 25
ARTICLE XXI.
EXECUTION OF AGREEMENT
This Agreement may be executed by the parties in separate counterparts, each of
which when so executed and delivered shall be an original, but all such
counterparts together shall constitute one and the same instrument. Each
counterpart may consist of a number of copies hereof signed by less than both,
but together signed by both of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate by their duly authorized representatives as of the EFFECTIVE DATE.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
By: ___________________________________ Date:_______________________
▇▇▇▇▇ ▇▇▇▇▇▇, Vice President & CFO
Attest: __________________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Vice President
AXA CORPORATE SOLUTIONS LIFE REINSURANCE COMPANY
By: ________________________________________ Date:_______________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, President
By: ________________________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Assistant Vice President
Attest: _______________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇, Assistant Vice President
Page 26
SCHEDULE A
PLANS OF REINSURANCE
A. REINSURER's Quota Share Percentage:
100%
B. Issue Dates:
New Policies issued on or after January 29, 2001.
Contractholders may, at their sole discretion, elect, revoke or make
changes to their contract within sixty (60) days (hereinafter known as the
60-day window) of the contract issue date. The election or termination of
any optional rider within the 60-day window will be retroactive to date of
issue, and will be covered under this Agreement. All reinsurance premiums
and claims will be trued up accordingly. The CEDING COMPANY will identify
the policies covered under the 60-day window by submitting policyholder
information on a separate data form. The CEDING COMPANY does not plan to
market or develop a program highlighting this 60-day window. (Note: A
maximum of 15% of contracts reported in any month will be covered under
the 60-day window for contracts that have passed their statutory free-look
period. There will be no limit for contracts that are still within their
statutory free-look period.
C. GMIB (Contractual Income Program Benefit) Reinsured:
Income Benefit Base (IBB)
- For Issue Ages 0-75: Greater of an Annual Ratchet to attained age 81
and a 6% Rollup to attained age 85; frozen thereafter.
- For Issue Ages 76-80: Greater of an Annual Ratchet to attained age 81
and a 4% Rollup to attained age 85; frozen thereafter.
Note: The IBB is reduced proportionately for withdrawals.
An annuitant change is allowed as long as the new annuitant is the same
age or younger than the original annuitant. The type of benefit (6% Rollup
or 4% Rollup) is based on the original annuitant's age.
Waiting Period
Contractholders can elect to annuitize under the Income Program thirty
(30) days following their tenth (10th) or later contract anniversary and
also under one of the life annuity forms stated in Article IV.
D. Product Features:
Annuitization
Annuitization under the Income Program means that the annuitant is
receiving guaranteed fixed income payments based on the IBB and the MAPR
under one of the life annuity forms shown within the MAPR calculation set
forth in Article IV.
SCHEDULE A
PLANS OF REINSURANCE (Continued)
Income Program Rider Election
The contractholder can only elect the Income Program Rider at issue. Once
election is made, it is irrevocable (except within the contractual free
look provisions of the contract).
Income Program Rider Cancellation
The contractholder of the annuity can not cancel the Income Program rider
at any time (except within the contractual free look provisions of the
contract).
Step-Up or Reset of IBB
Not Available.
E. Spousal Continuances
A Spousal Continuance occurs if the deceased owner's spouse is the
beneficiary. The surviving spouse continues the contract, including any
optional benefits such as GRIP II, as the new owner. In such a case, the
GRIP II Income Benefit Base continues the same as it would for a change of
annuitant, except the requirement that the annuitant be younger is waived
for the spouse.
Providing that the CEDING COMPANY can individually identify Spousal
Continuances, as shown in Schedule C, the REINSURER will cover Spousal
Continuances under this Agreement and will treat them as new issues to the
extent that, at the time of continuance, this Agreement is open for new
business as defined in Article XX, Paragraph A.
F. Related Contracts:
Venture Vantage Variable Annuity policy forms specified below that
elect the GRIP II rider specified below.
Policy Forms
Venture.015
Venture.015.98
Venture.016
Venture.017
Grip II Rider Form
BR003.00
BR003.00G
SCHEDULE B
INVESTMENT FUNDS
VARIABLE FUNDS
--------------------------------------------------------------------------------
AIM ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
All Cap Growth Trust Capital Appreciation Trust Tactical Allocation Trust
Aggressive Growth Trust
Lord ▇▇▇▇▇▇ Munder
CGTC Mid Cap Value Trust Internet Technologies
Diversified Bond Trust
Income & Value Trust Manufacturers Advisor PIMCO
US Large Cap Value Trust Corporation Global Bond Trust
Small Company Blend Trust Pacific Rim Emerging Total Return Trust
Markets Trust
▇▇▇▇▇ & Steers Money Market Trust ▇▇▇▇▇▇
Real Estate Securities Quantitative Equity Trust Global Equity
Balanced Trust Mid Cap Opportunities
▇▇▇▇▇ Selected Quantitative Mid Cap Trust
Financial Services Lifestyle Conservative 280 ▇▇▇▇ Price -- Flem.
Fundamental Value Trust International Stock Trust
Lifestyle Moderate 460 Trust
Dreyfus Lifestyle Balanced 640 Trust Salomon
All Cap Value Trust Lifestyle Growth 820 Trust US Government Securities
Lifestyle Aggressive 1000 Trust
Fidelity Trust Strategic Bond Trust
Large Cap Growth Trust International Index Trust
Overseas Trust Total Stock Market Index SsgA
Strategic Opportunities Trust Growth Trust
Trust 500 Index Trust
Mid Cap Index Trust SsgA
Founders Small Cap Index Trust Growth Trust
International Small Cap
Trust ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇ Price
ML Basic Value Focus Trust Equity Income Trust
▇▇▇▇▇▇▇▇ ▇▇ Special Value Focus Trust Blue Chip Growth Trust
Emerging Small Company ML Developing Capital Science & Technology
Trust Markets Trust Trust
Small Company Value Trust
Investco MFS Health Sciences Trust
Telecommunications Trust Strategic Growth Trust
Mid Cap Growth Trust Capital Opportunities Trust ▇▇▇▇▇▇▇▇▇
Utilities Trust International Value Trust
Janus
Dynamic Growth Trust ▇▇▇▇▇▇ ▇▇▇▇▇. ▇▇▇▇. Wellington
Value Trust Growth & Income Trust
High Yield Trust Investment Quality Bond Trust
Mid Cap Stock Trust
FIXED FUNDS
One Year
DCA Twelve Month
DCA Six Month
Note: This Schedule B reflects fund offerings as of May 1, 2001, as approved
by the REINSURER.
SCHEDULE C
REQUIRED DATA AND SUGGESTED DATA LAYOUT
(Page 1 of 3)
FIELD DESCRIPTION COMMENTS
Annuitant's ID: Last Name
First Name
Middle Name
Sex M or F
Date of Birth YYYYMMDD
Social Security No. / Social Insurance No.
Joint Annuitant's ID: Last Name If Applicable
First Name
Middle Name
Sex M or F
Date of Birth YYYYMMDD
Social Security No. / Social Insurance No.
Owner's ID: Last Name
First Name
Middle Name
Sex M or F
Date of Birth YYYYMMDD
Social Security No. / Social Insurance No.
Joint Owner's ID: Last Name If Applicable
First Name
Middle Name
Sex M or F
Date of Birth YYYYMMDD
Social Security No. / Social Insurance No.
Policy Number
Policy Issue Date YYYYMMDD
Policy Issue Status NI = True New Issue, SC = Spousal
Continuance,
EX = 1035 Exchange
Tax Status Qualified (Q), or Non-qualified (N)
SCHEDULE C
REQUIRED DATA AND SUGGESTED DATA LAYOUT
(Page 2 of 3)
FIELD DESCRIPTION COMMENTS
GMDB/EEB SECTION (If applicable)
Mortality Risk Definition Indicator AV = VNAR; CV = VNAR + SCNAR
Death Claim Trigger A = Annuitant, O = Owner, 1 = 1st to die, 2 = 2nd to die (e.g., A2 =
payable upon death of second of joint annuitants)
Current Ratchet Value If Applicable
Current Reset Value If Applicable
Current Rollup Value If Applicable
Current Return of Premium Value If Applicable
Minimum Guaranteed Death Benefit
Contract Death Benefit Greater of Account Value and Minimum Guaranteed Death Benefit
Effective Date of the Rider
Account Value as of the Effective Date of the Rider
Mortality Risk VNAR Max [Contractual Death Benefit - Account Value), 0]
SCNAR Surrender Charge, if applicable
EEMNAR T%(AV less Net Purchase Payments), if applicable
Earnings AV less Net Purchase Payments
Earnings Cap If Applicable
Tax Percentage If Applicable
GEM Rider Y = benefit elected, N = benefit not elected, NA = not applicable
GMIB SECTION (If applicable)
GMIB Indicator Y = benefit elected, N = benefit not elected, NA = not applicable
Income Benefit Elected 01 = option 1, 02 = option 2, etc.
Expiration of Waiting Period YYYYMMDD
GMIB Annuitization Date YYYYMMDD - actual date
Most Recent GMIB Step-up / Reset Date YYYYMMDD, if applicable
Cancellation Date YYYYMMDD, if applicable
Pricing Cohort Indicator
IBB Amount
GMIB IBNAR Amount Calculated using an individual life annuity form with 10 years certain
Treasury Rate Used in IBNAR calculation
GMAB SECTION (If applicable)
GMAB Indicator Y = benefit elected, N = benefit not elected, NA = not applicable
Accumulation Benefit Elected 01 = option 1, 02 = option 2, etc.
Maturity Date YYYYMMDD
Most Recent GMAB Step-up / Rollover Date YYYYMMDD, if applicable
Cancellation Date YYYYMMDD, if applicable
Pricing Cohort Indicator
GMAB Guaranteed Value Current Value
GMAB NAR Max [ (GMAB Guaranteed Value - Account Value) , 0]
Account Value Current total value
Surrender Charge If reinsured
Cumulative Deposits Total premiums
Cumulative Withdrawals Total withdrawals
Net Purchase Payments Total premiums less total withdrawals (proportional adjustment)
Deposits made in quarter of death dollar value
Quota Share reinsured percentage
SCHEDULE C
REQUIRED DATA AND SUGGESTED DATA LAYOUT
(Page 3 of 3)
FIELD DESCRIPTION COMMENTS
Funding Vehicle Values:
"MorningStar" designations (US)
Aggressive Growth
Balanced
Corporate Bond
Government Bond
Growth
Growth and Income
High Yield Bond
International Bond
International Stock
Money Market
Specialty Fund
Fixed Account
Dollar Cost Averaging
Note: total of funding vehicles should
equal account value.
Termination Information:
Termination Date YYYYMMDD, If applicable
Reason for Termination Death (D), Annuitization (A), 1035 Exchange (X), GMIB Election (I),
Other (O).
Cause of Death If applicable. Use your Cause of Death code, and provide translation
Summary Information: For reconciliation purposes (may be paper summary)
Total number of records Monthly aggregate information by GMIB Design, GMAB Design, and
Pricing Cohort (if applicable)
Total of each dollar field Monthly aggregate information by GMIB Design, GMAB Design, and
Pricing Cohort (if applicable)
Note: All values to nearest dollar
EXHIBIT I
MORTALITY TABLE
1983 BASIC PER THOUSAND RATES (APPLY AT ATTAINED AGE)
-----------------------------------------------------
AGE MALE - QX'S FEMALE - QX'S AGE MALE - QX'S FEMALE - QX'S AGE MALE - QX'S FEMALE - QX'S
--- ----------- ------------- --- ----------- ------------- --- ----------- -------------
5 0.419 0.216 51 4.923 2.240 97 243.467 220.718
6 0.389 0.178 52 5.347 2.461 98 260.817 234.558
7 0.370 0.149 53 5.776 2.696 99 279.877 249.383
8 0.391 0.149 54 6.212 2.944 100 301.007 265.794
9 0.409 0.151 55 6.660 3.212 101 324.568 284.392
10 0.424 0.157 56 7.121 3.501 102 350.918 305.779
11 0.438 0.163 57 7.599 3.813 103 380.419 330.556
12 0.450 0.172 58 8.100 4.154 104 413.429 359.322
13 0.461 0.183 59 8.647 4.534 105 450.309 392.682
14 0.472 0.194 60 9.264 4.963 106 491.419 431.234
15 0.483 0.209 61 9.981 5.453 107 537.118 475.581
16 0.496 0.223 62 10.822 6.014 108 587.766 526.324
17 0.509 0.238 63 11.811 6.656 109 643.723 584.064
18 0.524 0.254 64 12.960 7.370 110 705.349 649.402
19 0.542 0.271 65 14.279 8.151 111 773.004 722.940
20 0.561 0.289 66 15.777 8.989 112 847.048 805.278
21 0.583 0.307 67 17.463 9.876 113 927.840 897.018
22 0.607 0.326 68 19.349 10.812 114 963.920 948.509
23 0.633 0.346 69 21.440 11.837 115 1000.000 1000.000
24 0.662 0.367 70 23.746 12.997
25 0.691 0.388 71 26.274 14.339
26 0.722 0.409 72 29.034 15.910
27 0.752 0.430 73 32.039 17.756
28 0.782 0.450 74 35.327 19.899
29 0.812 0.470 75 38.940 22.363
30 0.843 0.490 76 42.923 25.171
31 0.873 0.511 77 47.319 28.343
32 0.904 0.532 78 52.168 31.908
33 0.937 0.554 79 57.506 35.920
34 0.973 0.579 80 63.362 40.439
35 1.019 0.606 81 69.768 45.528
36 1.076 0.638 82 76.757 51.246
37 1.147 0.674 83 84.342 57.654
38 1.238 0.718 84 92.478 64.818
39 1.351 0.768 85 101.097 72.798
40 1.490 0.824 86 110.136 81.659
41 1.658 0.890 87 119.530 91.464
42 1.859 0.963 88 129.240 102.241
43 2.096 1.047 89 139.327 113.879
44 2.366 1.140 90 149.874 126.228
45 2.666 1.247 91 160.970 139.141
46 2.992 1.368 92 172.699 152.469
47 3.343 1.507 93 185.143 166.069
48 3.714 1.666 94 198.374 179.816
49 4.104 1.841 95 212.460 193.587
50 4.508 2.033 96 227.468 207.261
EXHIBIT I
MORTALITY TABLES
(continued)
1983 VALUATION PER THOUSAND RATES (APPLY AT ATTAINED AGE)
---------------------------------------------------------
Age Male - qx's Female - qx's Age Male - qx's Female - qx's Age Male - qx's Female - qx's
--- ----------- ------------- --- ----------- ------------- --- ----------- -------------
5 0.377 0.194 51 4.431 2.016 97 219.120 198.646
6 0.350 0.160 52 4.812 2.215 98 234.735 211.102
7 0.333 0.134 53 5.198 2.426 99 251.889 224.445
8 0.352 0.134 54 5.591 2.650 100 270.906 239.215
9 0.368 0.136 55 5.994 2.891 101 292.111 255.953
10 0.382 0.141 56 6.409 3.151 102 315.826 275.201
11 0.394 0.147 57 6.839 3.432 103 342.377 297.500
12 0.405 0.155 58 7.290 3.739 104 372.086 323.390
13 0.415 0.165 59 7.782 4.081 105 405.278 353.414
14 0.425 0.175 60 8.338 4.467 106 442.277 388.111
15 0.435 0.188 61 8.983 4.908 107 483.406 428.023
16 0.446 0.201 62 9.740 5.413 108 528.989 473.692
17 0.458 0.214 63 10.630 5.990 109 579.351 525.658
18 0.472 0.229 64 11.664 6.633 110 634.814 584.462
19 0.488 0.244 65 12.851 7.336 111 695.704 650.646
20 0.505 0.260 66 14.199 8.090 112 762.343 724.750
21 0.525 0.276 67 15.717 8.888 113 835.056 807.316
22 0.546 0.293 68 17.414 9.731 114 914.167 898.885
23 0.570 0.311 69 19.296 10.653 115 1000.000 1000.000
24 0.596 0.330 70 21.371 11.697
25 0.622 0.349 71 23.647 12.905
26 0.650 0.368 72 26.131 14.319
27 0.677 0.387 73 28.835 15.980
28 0.704 0.405 74 31.794 17.909
29 0.731 0.423 75 35.046 20.127
30 0.759 0.441 76 38.631 22.654
31 0.786 0.460 77 42.587 25.509
32 0.814 0.479 78 46.951 28.717
33 0.843 0.499 79 51.755 32.328
34 0.876 0.521 80 57.026 36.395
35 0.917 0.545 81 62.791 40.975
36 0.968 0.574 82 69.081 46.121
37 1.032 0.607 83 75.908 51.889
38 1.114 0.646 84 83.230 58.336
39 1.216 0.691 85 90.987 65.518
40 1.341 0.742 86 99.122 73.493
41 1.492 0.801 87 107.577 82.318
42 1.673 0.867 88 116.316 92.017
43 1.886 0.942 89 125.394 102.491
44 2.129 1.026 90 134.887 113.605
45 2.399 1.122 91 144.873 125.227
46 2.693 1.231 92 155.429 137.222
47 3.009 1.356 93 166.629 149.462
48 3.343 1.499 94 178.537 161.834
49 3.694 1.657 95 191.214 174.228
50 4.057 1.830 96 204.721 186.535
EXHIBIT I
(continued)
PROJECTION SCALE G
Age Male Female Age Male Female Age Male Female
--- ---- ------ --- ---- ------ --- ---- ------
5 1.50% 1.50% 53 1.70% 1.95% 101 0.20% 0.25%
6 1.50% 1.50% 54 1.65% 1.90% 102 0.00% 0.00%
7 1.50% 1.50% 55 1.60% 1.85% 103 0.00% 0.00%
8 1.25% 1.40% 56 1.55% 1.80% 104 0.00% 0.00%
9 1.00% 1.30% 57 1.50% 1.75% 105 0.00% 0.00%
10 0.75% 1.20% 58 1.50% 1.75% 106 0.00% 0.00%
11 0.50% 1.10% 59 1.50% 1.75% 107 0.00% 0.00%
12 0.25% 1.00% 60 1.50% 1.75% 108 0.00% 0.00%
13 0.24% 0.90% 61 1.50% 1.75% 109 0.00% 0.00%
14 0.23% 0.80% 62 1.50% 1.75% 110 0.00% 0.00%
15 0.22% 0.70% 63 1.50% 1.75% 111 0.00% 0.00%
16 0.21% 0.60% 64 1.50% 1.75% 112 0.00% 0.00%
17 0.20% 0.50% 65 1.50% 1.75% 113 0.00% 0.00%
18 0.18% 0.50% 66 1.50% 1.75% 114 0.00% 0.00%
19 0.16% 0.50% 67 1.50% 1.75% 115 0.00% 0.00%
20 0.14% 0.50% 68 1.45% 1.75%
21 0.12% 0.50% 69 1.40% 1.75%
22 0.10% 0.50% 70 1.35% 1.75%
23 0.10% 0.55% 71 1.30% 1.75%
24 0.10% 0.60% 72 1.25% 1.75%
25 0.10% 0.65% 73 1.25% 1.70%
26 0.10% 0.70% 74 1.25% 1.65%
27 0.10% 0.75% 75 1.25% 1.60%
28 0.23% 0.85% 76 1.25% 1.55%
29 0.36% 0.95% 77 1.25% 1.50%
30 0.49% 1.05% 78 1.25% 1.50%
31 0.62% 1.15% 79 1.25% 1.50%
32 0.75% 1.25% 80 1.25% 1.50%
33 1.00% 1.45% 81 1.25% 1.50%
34 1.25% 1.65% 82 1.25% 1.50%
35 1.50% 1.85% 83 1.25% 1.50%
36 1.75% 2.05% 84 1.25% 1.50%
37 2.00% 2.25% 85 1.25% 1.50%
38 2.00% 2.25% 86 1.25% 1.50%
39 2.00% 2.25% 87 1.25% 1.50%
40 2.00% 2.25% 88 1.20% 1.45%
41 2.00% 2.25% 89 1.15% 1.40%
42 2.00% 2.25% 90 1.10% 1.35%
43 1.95% 2.20% 91 1.05% 1.30%
44 1.90% 2.15% 92 1.00% 1.25%
45 1.85% 2.10% 93 1.00% 1.25%
46 1.80% 2.05% 94 1.00% 1.25%
47 1.75% 2.00% 95 1.00% 1.25%
48 1.75% 2.00% 96 1.00% 1.25%
49 1.75% 2.00% 97 1.00% 1.25%
50 1.75% 2.00% 98 0.80% 1.00%
51 1.75% 2.00% 99 0.60% 0.75%
52 1.75% 2.00% 100 0.40% 0.50%
EXHIBIT II
BENEFIT LIMITATION RULE
TRAPEZOIDAL RULE
Average Aggregate IBB Value inforce in calendar year Z equals:
IBB(Jan )
B +
-------------
24
IBB(Feb ) + IBB(Mar ) + IBB(Apr ) + IBB(May )
B B B B +
----------------------------------------------
12
IBB(Jun ) + IBB(Jul ) + IBB(Aug ) + IBB(Sep )
B B B B +
-----------------------------------------------
12
IBB(Oct ) + IBB(Nov ) + IBB(Dec )
B B B +
----------------------------------
12
IBB(Dec )
E
-----------
24
where IBB(Month B) is equal to the beginning of month aggregate IBB value of the
Related Contracts listed in Schedule A and IBB(Month E) is equal to the end of
month aggregate IBB value of the Related Contracts listed in Schedule A that are
eligible to annuitize under the Income Program. Contracts eligible to annuitize
under the Income Program are those contracts whose waiting period expired prior
to calendar year Z and those contracts whose waiting period will expire during
calendar year Z.
For partial calendar years IBB(Month B) for months prior to the EFFECTIVE DATE
of this Reinsurance Agreement or for months subsequent to the termination of all
business hereunder, should be set equal to zero.
EXHIBIT III
ANNUITIZATION RATE AND EXPOSURE DETERMINATION
DEFINED VARIABLES
W total IBB value for each reinsured contract, as of the contract's
z anniversary in calendar year Z, which is eligible to annuitize under the
Income Program (i.e., past their waiting period) by November 30th of year
Z.
N total IBB value for each reinsured contract, as of the contract's
z anniversary in calendar year Z, which is eligible to annuitize under the
Income Program during the month of December in year Z (i.e. not part of
W(z)).
TW total IBB value, from cohort W(z), terminating within 30-days after the
z contract's anniversary in year Z; total IBB value is measured as of the
date of termination
TN total IBB value, from cohort N(z), terminating within 30-days after the
z contract's anniversary in year Z; total IBB value is measured as of the
date of termination
Terminations are defined as follows:
- Death of owner or annuitant resulting in payment of death benefit
- Surrender of Contract and partial withdrawals
- Annuitizations which are not under the Income Program
- Attainment of maximum annuitization age or attained age 95, if earlier
A (W ) total IBB value, as of the contract's anniversary in calendar year Z,
z z from cohort W(z) which annuitized under the Income Program rider during
year Z
A (N ) total IBB value, as of the contract's anniversary in calendar
z z year Z, from cohort N(z) which annuitized under the Income Program rider
during year Z
----------------------------------------------------------------------------
Exposure = W - 1/2 TW + 1/2 (N + N ) - 1/4(T + T )
z z z Z Z-1 Nz Nz-1
Annuitization _ Rate = A (W ) + A (N ) + A (N )
Z Z Z Z Z Z Z-1
-----------------------------
Exposure
Z
EXHIBIT IV
CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT
EXHIBIT V
WIRING INSTRUCTIONS
AXA CORPORATE SOLUTIONS LIFE REINSURANCE COMPANY'S TECHNICAL ACCOUNT
Account held at: Chase Manhattan Bank, N.A.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Account Number: ABA# ▇▇▇▇▇▇▇▇▇
Account # 323-095569
Premium & Loss Account
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA'S ACCOUNT
Account held at: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇
Account Number: ABA# ▇▇▇▇▇▇▇▇▇
Account # ▇▇▇▇▇▇▇▇
MNA Transfer Account