EX-99.7. 2 d23690dex997.htm REINSURANCE AGREEMENT WITH UNION HAMILTON REINSURANCE AGREEMENT BETWEEN PACIFIC LIFE INSURANCE COMPANY A Nebraska Domiciliary with Executive Offices in Newport Beach, CA referred to as the “Ceding Company” AND UNION...

ARTICLE I

GENERAL PROVISIONS

ARTICLE II

REINSURANCE PREMIUMS

ARTICLE III

CLAIMS

ARTICLE IV

TRUST ACCOUNT AND LETTER OF CREDIT

ARTICLE V

RESERVES

ARTICLE VI

ACCOUNTING AND SETTLEMENTS

ARTICLE VII

DURATION, RECAPTURE AND TERMINATION

ARTICLE VIII

TERMINAL ACCOUNTING AND SETTLEMENT

ARTICLE IX

REPRESENTATIONS AND COVENANTS

ARTICLE X

ARBITRATION

ARTICLE XI

INSOLVENCY

ARTICLE XII

SPECIAL DISPUTE RESOLUTION PROCEDURES AND INDEMNIFICATION

ARTICLE XIII

EXECUTION AND EFFECTIVE DATE

SCHEDULE A

RISKS REINSURED

SCHEDULE B

QUARTERLY ACTIVITY AND SETTLEMENT REPORT

SCHEDULE B -1

MONTHLY SERIATIM DATA FILE

SCHEDULE B-2

QUARTERLY SERIATIM DATA FILE

SCHEDULE C

CEDING COMPANY DATA

SCHEDULE D

MATERIALITY THRESHOLD

EXHIBIT I

FORM OF RESERVE CREDIT TRUST AGREEMENT

EXHIBIT II

RESERVE CREDIT REQUIRED BALANCE METHODOLOGY

EXHIBIT III

FORM OF PARENTAL GUARANTY

1.

Risks Reinsured. The Reinsurer agrees to indemnify the Ceding Company for, and the Ceding Company agrees to automatically cede to and reinsure with the Reinsurer, according to the terms and conditions hereof, the portion of the risks under the annuity riders described in Schedule A attached hereto.

2.

Coverages and Exclusions.

(a)

Only the Guaranteed Withdrawal Benefit Riders for Single Life and for Joint Life (collectively referred to as “Riders”) and state variations thereof, issued for use with certain variable annuity contracts (“Base Annuity(ies)”) as described in Schedule A, are reinsured under this Agreement. The term Base Annuities includes the base annuity contract and any riders and endorsements other than the Riders.

(b)

Only the guaranteed lifetime income payment benefits as set forth in Article III, Paragraph 1, are reinsured under this Agreement. Any other benefits and payments provided under the Riders and Base Annuities are excluded from coverage under this Agreement.

(c)

Only Riders sold by the Ceding Company in the United States to United States residents are reinsured under this Agreement.

3.

Plan of Reinsurance. This indemnity reinsurance will be on a coinsurance basis.

4.

Program Changes.

(a)

The Ceding Company will provide the Reinsurer with written notice of any proposed change after the Effective Date which affects the Riders’ benefits reinsured hereunder (“Proposed Program Changes”). Proposed Program Changes shall be divided into two categories:

(A)

a Proposed Program Change which is not a Material Change requires only notification to, but not approval from, the Reinsurer as set forth in Paragraph (b) below; and

(B)

a Proposed Program Change which is a Material Change requires approval from the Reinsurer as set forth in Paragraph (c) below. For purposes of this Paragraph 4, Material Change shall mean any change which is projected to result in (i) a greater than [XXX]%, but no less than $[XXX], change in the Coinsurance Reserve or (ii) a greater than [XXX]%, but no less than 5 basis points, change in the risk neutral present value of future living benefit claims expressed as a percentage of living benefit base. The parties shall act reasonably and expeditiously to resolve any dispute over whether or not a Proposed Program Change is a material change.

(b)

Proposed Program Changes Requiring Notification Only. The Ceding Company will provide the Reinsurer with written notice of any Proposed Program Change which is not a Material Change at least 45 days prior to such Proposed Program Change taking effect. The following Proposed Program Changes shall not be considered Material Changes and shall require notification only under this Paragraph (b): (i) changes made to Rider fee charges in accordance with the parameters set forth in the May 1, 2014 prospectuses, for the products shown on Schedule A, as supplemented up to the Effective Date and which are made in the normal course of business; (ii) changes in the investment objectives, investment strategies, or fund managers of the sub-funds underlying the fund-of-funds Allowable Investment Options, including the addition of new underlying funds that are within the risk characteristics of the existing fund-of-funds, from those set forth in the May 1, 2014 prospectuses for the fund-of-funds Allowable Investment Options as supplemented up to the Effective Date; or (iii) changes in the Allowable Investment Options’ fees or charges from those set forth in the May 1, 2014 prospectuses for the Allowable Investment Options as supplemented up to the Effective Date.

(c)

Proposed Program Changes which are Material Changes shall become effective no earlier than sixty (60) days after the Ceding Company provides the Reinsurer with written notification of the Program Change unless within forty-five (45) days of receiving such notification, the Reinsurer has notified the Ceding Company in writing that it rejects the Proposed Program Change. Any such written notice shall set forth specifically the reason(s) why the Reinsurer is rejecting the Proposed Program Change. The Reinsurer must act reasonably and in good faith in making its decision to reject any Proposed Program Change.

(d)

If the Reinsurer does not reject the Proposed Program Change which is a Material Change, the Reinsurer shall (i) assume the share of any increase in the Ceding Company’s liability resulting from the change, and (ii) receive credit for the share of any decrease in the Ceding Company’s liability resulting from the change.

(e)

If the Reinsurer rejects a Proposed Program Change which is a Material Change, the Ceding Company may either: (i) elect not to implement the Proposed Program Change; (ii) administer the reinsurance under this Agreement as if no such change had occurred, i.e., the Reinsurer’s liability under this Agreement will be determined as if no such change occurred; (iii) apply the Proposed Program Change only to Riders not yet issued and terminate this Agreement for such newly issued Riders; or (iv) upon at least seven (7) days prior written notice to the Reinsurer, recapture the Riders affected by the Proposed Program Change, provided that such recapture occurs within thirty (30) days of the implementation of the Proposed Program Change with an effective date as of the effective date of the change. In the event of a recapture under this Paragraph (e), the Ceding Company shall pay the Reinsurer the Recapture Fee [***Under review by PL] as set forth in Article VII, Paragraph 6 for the portion of the Riders recaptured and the Coinsurance Reserve at the time of recapture for the portion of the Riders recaptured will be due to the Ceding Company.

(f)

At the Reinsurer’s request, if a fund is deviating significantly from its investment objectives, investment strategies, volatility targets or other investment limitations as outlined in the prospectus, the Ceding Company agrees to use good faith commercially reasonable efforts to cause the fund manager to adhere to such investment objectives, investment strategies, volatility targets or limitations.

5.

Damages. The Reinsurer shall not indemnify the Ceding Company for, and will not be liable for, any damages, fines, or other form of extra-contractual obligations awarded against the Ceding Company resulting from any act, omission, or course of conduct on the part of the Ceding Company or its directors, officers, employees and agents, including, but not limited to, any fraud, oppression, bad faith, regulatory non-compliance, improper sales practices, improper disclosure, unfair trade or other practices, strict liability, or negligent, reckless or intentional wrongs. The following types of damages are examples of damages that would be excluded from this Agreement for the conduct described above, including but not limited to: actual damages, damages for emotional distress, punitive or exemplary damages and attorney fees and expenses incurred in the defense of any such claims.

6.

Annuity Administration. The Ceding Company will administer the Base Annuities and the Riders and will perform all accounting for such Base Annuities and Riders.

7.

Inspection. With reasonable written notice to the other party, the Reinsurer or the Ceding Company may inspect, at the inspecting party’s own expense, during normal business hours, at the principal office of the party to be inspected, the original papers and any and all other books or documents (whether maintained in physical or electronic format) relating to or affecting reinsurance under this Agreement. The parties shall cooperate with each other to facilitate any such inspection, including obtaining and/or making available records and information held by one party and, upon request of the other, shall make available to the requesting party such officers, employees and third party administrators as the requesting party may reasonably request to provide information concerning the reinsurance under this Agreement. The parties shall provide a reasonable workspace during the inspection. The Ceding Company and the Reinsurer shall work together to reduce the costs of inspections to the fullest extent practicable by making documents and other data available electronically and taking such other steps as may be required to enable the conduct of “desk audits.” The Reinsurer or the Ceding Company will not use any information obtained through any inspection pursuant to this Paragraph for any purpose not relating to the reinsurance hereunder.

8.

Taxes and Assessments. The Reinsurer will not reimburse the Ceding Company for any state guarantee fund assessments or other taxes or assessments paid by the Ceding Company in connection with the Riders. Premium taxes, where applicable, will be deducted from the contract owners’ Contract Value for Claims payable due to annuitization at contract maturity.

9.

Election to Determine Specified Annuity Acquisition Expenses. The Ceding Company and the Reinsurer agree to the election pursuant to Section 1.848-2(g)(8) of the Income Tax Regulations effective December 29, 1992, under Section 848 of the Internal Revenue Code of 1986, as amended (such election, the “DAC Tax Election”), whereby:

(a)

The party with the net positive consideration for this Agreement for each taxable year will capitalize specified contract acquisition expenses with respect to this Agreement without regard to the general deductions limitation of Section 848(c)(1) of the Code;

(b)

The parties agree to exchange information pertaining to the amount of net consideration under this Agreement each year to ensure consistency or as otherwise required by the Internal Revenue Service. The Ceding Company will submit a schedule to the Reinsurer by May 1st of each year presenting its calculation of the net consideration for the preceding taxable year. (The term “net consideration” means “net consideration” as defined in Regulation Section 1.848-2(f).) The Reinsurer may contest the calculation by providing an alternative calculation to the Ceding Company in writing within thirty (30) calendar days of receipt of the Ceding Company’s schedule. If the Reinsurer does not so notify the Ceding Company within the required timeframe, the Reinsurer will report the net consideration as determined by the Ceding Company in the Reinsurer’s tax return for the previous calendar year. Any differences will be resolved between the parties so that consistent amounts are reported on the respective tax returns for the preceding taxable year; and,

(c)

This DAC Tax Election will be effective for the first taxable year in which this Agreement is effective and for all years for which this Agreement remains in effect.

10.

Condition. The reinsurance hereunder is subject to the same limitations and conditions specified in the Riders issued by the Ceding Company except as otherwise provided in this Agreement.

11.

Errors and Oversights. An unintentional oversight or clerical error (“Error”) in the administration of this Agreement by either party will not constitute a breach of this Agreement. Upon discovery, the Error will be promptly corrected so that both parties are restored to the position they would have occupied had the Error not occurred. If it is not possible to restore each party to the position it would have occupied but for the failure to comply, the parties will endeavor in good faith to promptly resolve the situation in a manner that is fair and reasonable, and most closely approximates the intent of the parties as evidenced by this Agreement. In the event a payment is corrected, the party receiving the payment may charge interest calculated according to the terms specified in Article VI, Paragraph 6. The provisions of this Paragraph 11 shall not relieve either party of its obligation to perform within the time period specified for such obligations in this Agreement.

12.

Adjustments. If the Ceding Company’s liability under any of the Riders is changed because of a misstatement of age, sex or any other material fact, the Reinsurer will (a) assume that portion of any increase in the Ceding Company’s liability, resulting from the change, which corresponds to the quota share of the Riders; and (b) receive credit for that portion of any decrease in the Ceding Company’s liability, resulting from the change, which corresponds to the quota share of the Riders reinsured hereunder.

13.

Remedies and Waiver. All remedies of any party are cumulative. Failure of either the Ceding Company or the Reinsurer to exercise any right, privilege, power or remedy at law, equity or in existence by virtue of this Agreement or to otherwise insist upon strict compliance with any of the terms, provisions and conditions of this Agreement, or the obligations of the other party, will not constitute a waiver of such right, privilege, power, remedy, term, provision, condition, or obligation. Moreover, the failure of either party to enforce any part of this Agreement shall not be deemed to be an act of ratification or consent. No prior transactions or dealings between the parties shall be deemed to establish any custom or usage waiving or modifying any provision of this Agreement.

14.

Assignment/Change of Control. Neither party may assign any of its rights, duties or obligations under this Agreement without the prior written consent of the other party, which consent will not be unreasonably withheld. This provision does not limit the Reinsurer’s right to further reinsure the Riders, however, the Reinsurer will provide the Ceding Company with 30 days prior notice of its intent to further reinsure the Riders.

15.

Choice of Law. This Agreement will be governed by the laws of the State of Nebraska, without giving effect to the choice of law provisions. Notwithstanding the preceding, this Paragraph 15 shall not be interpreted to permit the parties to avoid their obligations to arbitrate their disputes pursuant to Article X of this Agreement.

16.

Amendments. This Agreement may be amended only by written agreement of the parties. Any change or modification to this Agreement shall be null and void unless made by amendment to this Agreement and signed by both parties.

17.

Current Practices. The Ceding Company will not materially change or alter its annuity contract issuance criteria or practices, annuity contract administration or other administrative practices in effect on the Effective Date with respect to the Riders without the prior written consent of the Reinsurer. For purposes of this Paragraph 17, a material change or alteration is a change or alteration which would reasonably be expected to affect the liability or profitability of the Reinsurer under this Agreement (“Material Change”). If the Reinsurer does not consent to a Material Change, the Reinsurer’s rights, remedies and obligations hereunder shall be determined as if no such change occurred. Such consent shall not be unreasonably withheld.

18.

Entire Agreement. The terms expressed herein and the Reserve Credit Trust Agreement constitute the entire agreement between the parties with respect to the Riders reinsured hereunder. There are no understandings between the parties with respect to the business reinsured other than as expressed in this Agreement.

19.

Confidentiality and Data Security. The Ceding Company and the Reinsurer agree that Customer and Proprietary Information (as defined herein) will be treated as confidential. Customer Information includes, but is not limited to, medical, financial, and other personal information about proposed, current, and former contract owners, annuitants, applicants, and beneficiaries of Base Annuities and Riders issued by the Ceding Company. Proprietary Information includes, but is not limited to, business plans and trade secrets, mortality and lapse studies, underwriting manuals and guidelines, reinsurance fees and expenses, applications and contract forms, and the specific terms and conditions of this Agreement.

(a)

is or becomes available to the general public through no fault of the party receiving the Customer or Proprietary Information (the “Recipient”); or

(b)

is independently developed by the Recipient without violating any obligations under this Agreement and without the use of any Customer or Proprietary Information; or

(c)

is acquired by the Recipient from a third party not covered by a confidentiality agreement.

•

Holding all Customer Information transmitted to them by or on behalf of the Ceding Company in strict confidence;

•

Maintaining appropriate measures that are designed to protect the security, integrity and confidentiality of Customer Information;

•

Using Customer Information only in the ordinary course of business to carry out the Reinsurer’s obligations under this Agreement; and

•

Disclosing Customer Information to third parties only as necessary to perform services under the Agreement, for purposes of retrocession, or as may be required or permitted by law.

20.

Agent For Service of Process. The Reinsurer agrees to designate the Nebraska Director of Insurance or a designated attorney as its true and lawful attorney upon who may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Ceding Company.

21.

Submission to Jurisdiction. The Reinsurer agrees that in the event of its failure to perform its obligations under the terms of this Agreement, the Reinsurer, at the request of the Ceding Company, shall: (a) submit to the jurisdiction of any court of competent jurisdiction in Nebraska; (b) comply with all requirements necessary to give such court jurisdiction; and (c) abide by the final decision of such court or of any appellate court in the event of an appeal. Notwithstanding the preceding, neither the Reinsurer nor the Ceding Company shall avoid their obligations to arbitrate their disputes under Article X of this Agreement.

22.

Notice Provision. Any notice, request, report or other communication required or permitted hereunder shall be in writing and shall be delivered personally (by courier or otherwise), by electronic mail, by facsimile, sent by certified or registered mail, postage prepaid and return receipt requested, or by express mail or other nationally recognized overnight or same-day delivery service. Any such notice shall be deemed given when so delivered personally, by electronic mail, by such delivery service or facsimile, or if mailed three (3) days after the date of deposit in the United States mail, as follows:

If to the Ceding Company:

[XXX]

With a copy to:

[XXX]

If to the Reinsurer:

[XXX]

If to the Ceding Company:

[XXX]

        AND

[XXX]

If to the Reinsurer:

[XXX]

23.

Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or email with a PDF attachment shall be effective as delivery of a manually executed counterpart of this Agreement.

24.

Accounting and Tax Advice. Each party hereto agrees that it has relied on advice from its own accountants and tax counsel regarding the financial reporting treatment and the tax characterization of the transactions described in this Agreement.

25.

Extreme Adverse Capital Requirement Event. For its own corporate practices, the Reinsurer is required to identify Extreme Adverse Capital Requirement Events. An “Extreme Adverse Capital Requirement Event” as used in this Agreement, means Reinsurer’s reasonable determination that, as a result of any amendment to, or change in, including any announced change in, the laws or regulations of the United States or any political subdivision thereof or therein, or as a result of any official or administrative pronouncement or action or judicial decision, interpreting or applying such laws or regulations, this Agreement receives or will receive Material Adverse Treatment in determining any of [XXX] or its affiliates’ reportable capital ratios. Material Adverse Treatment shall mean any treatment that results or will result in an increase of at

least [XXX]% of the effective capital requirement related to this Agreement on the Effective Date. Any notice of an Extreme Adverse Capital Requirement Event will identify such amendment, change, interpretation or application of the applicable law or regulation and will be provided by Reinsurer to the Ceding Company no earlier than three years prior to the effective date of such amendment, change, interpretation or application of the applicable law or regulation and no earlier than one year following the execution of this Agreement. For the avoidance of doubt, this provision does not give the Reinsurer the right to force recapture.

26.

Severability/Construction. If any provision of this Agreement is determined to be invalid, illegal or unenforceable, all of the other terms and provisions shall remain in full force and effect to the extent that their continuance is practical and consistent with the original intent of the parties. In addition, if any provisions are held invalid, illegal or unenforceable, the parties will attempt in good faith to renegotiate this Agreement to carry out its original intent. This Agreement shall be construed without regard to any presumption or rule requiring a construction or interpretation against the party drafting or causing any instrument to be drafted.

27.

Currency. All amounts stated in this Agreement are payable in United States dollars, unless specified otherwise. Any amounts payable in currency other than United States dollars shall be paid in United States dollars at the rate(s) of exchange as agreed by the parties or at the rate of exchange on the date that payment was made.

28.

OFAC Compliance. The Ceding Company and the Reinsurer represent that they are using, and shall use best efforts to continue to be, in compliance with all laws, regulations, judicial and administrative orders applicable to the Policies as they pertain to the sanction laws administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), as such laws may be amended from time to time (collectively the “Laws”). Neither party shall be required to take any action under this Agreement that would violate said Laws, including, but not limited to, making any payments in violation of the Laws.

Should either party discover or otherwise become aware that a reinsurance transaction has been entered into or a payment has been made in violation of the Laws, the party who first becomes aware of the violation of the Laws shall notify the other party, and the parties shall cooperate in order to take all necessary corrective actions. Where coverage provided by this Agreement would be in violation of the Laws, such coverage shall be null and void. In such event, each party shall be restored to the position it would have occupied if the violation had not occurred, including the return of any payments received, unless prohibited by law.

29.

Survival. All provisions of this Agreement shall survive its termination (i) to the extent necessary to carry out the purpose of this Agreement or to ascertain and enforce the parties rights or obligations hereunder existing at the time of termination and (ii) to the extent stated herein.

30.

FATCA. The Reinsurer and the Ceding Company will each provide the other party all information necessary to comply with the Foreign Account Tax Compliance Act (“FATCA”) consistent with Sections 1471 – 1474 of the US Internal Revenue Code (“Code”) and any Treasury Regulations, or other guidance issued pursuant thereto, any information necessary for the party to enter into an agreement described in Section 1471(b) of the Code and to comply with the terms of that agreement or to comply with the terms of any inter-governmental agreements between the U.S and any other jurisdictions relating to FATCA. This information will be provided promptly upon reasonable request by either party to this Agreement and promptly upon learning that any such information previously provided has become obsolete or incorrect.

31.

Force Majeure. Neither party shall be liable for damages nor shall the other party have the right to terminate this Agreement for any failure of or delay in the performance of this Agreement for the period that such failure or delay is due to causes beyond the reasonable control of the party whose performance is affected (including electronic or communications failure).

(a)

equals the quota share of the Riders reinsured hereunder, as set forth in Schedule A;

(b)

equals the Rider charges collected in such Accounting Period by the Ceding Company as set forth under the terms of the Riders; and

(c)

equals applicable commission and expense allowances set at [XXX]%

1.

Claims. The Reinsurer will reimburse the Ceding Company for the Reinsurer’s quota share percentage of Claims paid by the Ceding Company during the current Accounting Period in accordance with the contractual terms of the Riders. The term “Claims” means the payment of the guaranteed lifetime payments made by the Ceding Company under the terms of the Riders once the Guaranteed Withdrawal Benefit is in effect. For purposes of this Agreement, the Guaranteed Withdrawal Benefit will be in effect when the Contract Value is reduced to zero and the benefit is payable in accordance with the terms of the Rider. Contract Value shall have the same meaning as set forth in the Base Annuities and Riders. In the event annuitization occurs at the Maximum Annuity Date specified in the Contract, Claims will also include the lifetime payment by the Ceding Company of Protected Payment Amounts after the Contract Value at annuitization, less any applicable premium taxes, increased at the statutory interest rate required for payout annuities and decreased for the benefits paid has been reduced to zero. For avoidance of doubt, Claims will not include any other form of annuity payments, upon the occurrence of the Maximum Annuity Date or otherwise, including Life Only fixed annuity payments based on the Net Contract Value, less applicable charges determined under the current or guaranteed income factors.

2.

Claim Notice. The Reinsurer will accept the decision of the Ceding Company with respect to payment of Claims owed under the contractual terms of the Riders and as specified under the terms of this Agreement. In the event the Ceding Company overpays benefits under the Riders, due to post-death payments, for example, the Reinsurer will accept the decision of the Ceding Company whether to recover those overpayments. To the extent overpayments are recovered, the Ceding Company will reimburse the Reinsurer its proportionate share of such recovery for the Accounting Period during which such overpayment was made.

1.

Reserve Credit Trust Agreement.

(a)

The Ceding Company and the Reinsurer will enter into a trust agreement, substantially in the form attached hereto as Exhibit I (the “Reserve Credit Trust Agreement”), as a full or partial alternative to the Letter of Credit described in Paragraph 2 below. To the extent a Reserve Credit Trust Agreement is established, the trust account created thereunder will be referred to as the “Reserve Credit Trust Account” and the assets held in the trust account created thereunder will be herein referred to as “Reserve Credit Trust Assets.” The Reinsurer will bear all of the costs associated with creating and maintaining the Reserve Credit Trust Agreement.

(b)

The Reinsurer shall deposit Qualifying Assets (as defined below) in the Reserve Credit Trust Account with a fair market value equal to the “Reserve Credit Required Balance,” as defined below, less the amount of the Letter of Credit, if any, maintained pursuant to Paragraph 2 below and less the fair market value of any assets in the Segregated Accounts, as defined below, and the trustee shall hold the Reserve Credit Trust Assets in the Reserve Credit Trust Account for the benefit of the Ceding Company pursuant to the terms of the Reserve Credit Trust Agreement, including the investment guidelines agreed by the parties and as amended from time to time.

(c)

Notwithstanding any other provisions in this Agreement, the Ceding Company may withdraw the Reserve Credit Trust Assets held in the Reserve Credit Trust Account at any time and from time to time and any such assets withdrawn from the Reserve Credit Trust Assets shall be utilized and applied by the Ceding Company (or any successor by operation of law of the Ceding Company, including, but not limited to, any liquidator, rehabilitator, receiver or conservator of the Ceding Company), without diminution or increase because of insolvency on the part of the Ceding Company or the Reinsurer; only for the following purposes:

(i)

to pay or reimburse the Ceding Company for the Reinsurer’s share of premiums returned, but not yet recovered from the Reinsurer, to the owners of the Riders reinsured under this Agreement on account of cancellations of such Riders;

(ii)

to pay or reimburse the Ceding Company for the Reinsurer’s share of claims paid by the Ceding Company, but not yet recovered from the Reinsurer, under the provisions of the Riders reinsured under this Agreement;

(iii)

to pay or reimburse the Ceding Company for any other amounts necessary to secure the credit or reduction from liability for reinsurance taken by the Ceding Company under this Agreement;

(iv)

where the Ceding Company has received notification of termination of the Reserve Credit Trust Account and where the Reinsurer’s entire obligation under this Agreement remains unliquidated and undischarged ten (10) calendar days prior to the termination date, to withdraw amounts equal to the Reinsurer’s share of liabilities, to the extent that the liabilities have not yet been funded by the Reinsurer.

(d)

The amount that the aggregate fair market value of the Qualifying Assets in the Reserve Credit Trust Account, plus the principal amount of the Letter of Credit, plus the fair market value of any assets in the Segregated Accounts, exceeds [XXX]% of the Reserve Credit Required Balance calculated based on the most recent statement of the actual Reserve Credit Required Balance provided by the Ceding Company as set forth under Article IV, Paragraph 3 below is defined as the “Excess Collateral Amount.” The Reinsurer shall have the right to seek approval (which shall not be unreasonably or arbitrarily withheld or delayed) from the Ceding Company to withdraw the Excess Collateral Amount from the Reserve Credit Trust Account or the Segregated Accounts or reduce the principal amount of such Letter of Credit in an amount equal to the Excess Collateral Amount. In the event the Ceding Company does not provide such written approval for the release to the Reinsurer of the Excess Collateral Amount (or lesser amount as requested by the Reinsurer), within seven (7) business days of receipt of written request from the Reinsurer, then an amount shall be payable by the Ceding Company to the Reinsurer calculated as follows: (i) the Excess Collateral Amount (or lesser amount as requested by the Reinsurer) multiplied by a rate equal to [XXX] bps divided by three-hundred-sixty-five (365), times (ii) the number of days from and including the eighth (8th) business day after receipt of the written request from the Reinsurer until and including the date on which the Ceding Company provides the requested written approval. Any amount payable hereunder shall be included as part of the Ceding Company’s Net Settlement Amount shown on Schedule B for the applicable Accounting Periods.

2.

Letter of Credit. Notwithstanding anything to the contrary contained in Paragraph 1 above, the Reinsurer may elect to arrange for the establishment of a clean, unconditional and irrevocable Letter of Credit for the exclusive benefit of the Ceding Company, which shall comply with the requirements for credit for reinsurance under Nebraska insurance law and regulations. The Letter of Credit shall be required only if the Reinsurer fails to establish and maintain as fully funded the Reserve Credit Trust Agreement under the terms and conditions of Paragraph 1 above. The Reinsurer will bear all of the costs associated with the Letter of Credit. The amount of the Letter of Credit will at all times equal or exceed (x) minus (y) minus (z) where:

(x)

equals the Coinsurance Reserve, as defined in Paragraph 5 below;

(y)

equals the fair market value of the Reserve Credit Trust Assets, as described in Paragraph 1 above;

(z)

equals the fair market value of the assets in the Segregated Accounts.

(a)

to pay or reimburse the Ceding Company for the Reinsurer’s share, if any, of premiums, fees and charges returned, but not yet recovered from the Reinsurer, to the owners of the Riders reinsured under this Agreement on account of cancellations of such Riders; or

(b)

to pay or reimburse the Ceding Company for the Reinsurer’s share of claims paid by the Ceding Company, but not yet recovered from the Reinsurer, under the provisions of the Riders reinsured under this Agreement; or

(c)

to pay or reimburse the Ceding Company for any other amounts necessary to secure the credit or reduction from liability for reinsurance taken by the Ceding Company under this Agreement; or

(d)

where the Letter of Credit will expire without renewal or be reduced or replaced by a Letter of Credit for a reduced amount and where the Reinsurer’s entire obligation under this Agreement remains unliquidated and undischarged ten (10) days prior to the termination date to withdraw amounts equal to the Reinsurer’s share of liabilities, to the extent that the liabilities have not yet been funded by the Reinsurer.

3.

Maintenance of the Reserve Credit Required Balance. The Ceding Company using sound actuarial principles and following the methodology set forth in Exhibit II attached hereto, will provide to the Reinsurer a written notice of the estimated Reserve Credit Required Balance by no later than the twenty-second (22nd) day of the last month of the calendar quarter. If the sum of the aggregate fair market value of the Qualifying Assets in the Reserve Credit Trust Account plus the fair market value of the assets in any Segregated Accounts plus the amount of any Letters of Credit, is less than the estimated Reserve Credit Required Balance contained in such notice, the Reinsurer shall, no later than the last day of such calendar quarter, deposit additional Qualifying Assets in the Reserve Credit Trust Account so that the aggregate fair market value of the Qualifying Assets in the Reserve Credit Trust Accounts plus the fair market value of the assets in any Segregated Accounts plus the amount of any Letters of Credit, is not less than the estimated Reserve Credit Required Balance. The Ceding Company shall provide the Reinsurer with written notice of the actual Reserve Credit Required Balance no later than the tenth (10th) business day following the end of the calendar quarter. If the Reinsurer disagrees with the Reserve Credit Required Balance, estimated or otherwise, it will promptly notify the Ceding Company. The parties shall be expeditious and reasonable in resolving any such dispute.

4.

Order of Draw. In the event the Reinsurer establishes multiple sources of reserve credit trust(s) pursuant to Paragraph 1 above and/or letter(s) of credit pursuant to Paragraph 2 above, and the Reinsurer has specified in writing to the Ceding Company an order of draw from these sources of reserve credit, the Ceding Company will draw from these sources of reserve credit in the order specified by Reinsurer for the purposes specified in items (i), (ii), and (iii) of Paragraphs 1 or 2. The order of draw is not applicable to withdrawals for the purpose specified in item (iv) of Paragraphs 1 or 2. This forbearance shall be binding upon the Ceding Company and its successors.

5.

Coinsurance Reserve. The Coinsurance Reserves will be based on the Nebraska statutory reserve requirement, for benefits reinsured hereunder, in effect as of the beginning of the applicable Accounting period. The Coinsurance Reserve at all times is equal to the Reinsurer’s share of (a) minus (b), where (a) is the Ceding Company’s Gross-of-Reinsurance statutory reserve for the Base Annuities including all riders; and (b) is the Ceding Company’s Net-of-Reinsurance statutory reserve for the Base Annuities including all riders.

(i)

equals the Conditional Tail Expectation at 70th percentile (CTE 70) of the Present Values of the Greatest Accumulated Deficiency (PV GAD), as defined in NAIC Actuarial Guideline 43; and

(ii)

equals the Standard Scenario Amount (SSA), as defined in NAIC Actuarial Guideline 43.

1.

Riders Coinsurance. Riders will be reinsured on a coinsurance basis. Accordingly, the Reinsurer will establish a trust account and/or letter of credit pursuant to Article IV as collateral for its quota share portion under this Agreement so that the Ceding Company may deduct full reserve credit in its statutory financial statements for such quota share portion.

2.

Reserve Strengthening. Any Discretionary Reserve Strengthening made by the Ceding Company without the Reinsurer’s prior written consent, shall be the sole responsibility of the Ceding Company and shall not be part of the collateral requirements of the Reinsurer to place assets in trust or provide a letter of credit as set forth in Article IV of this Agreement. Discretionary Reserve Strengthening means an increase in the Coinsurance Reserve for the Riders reinsured under this Agreement due solely to the Ceding Company’s decision to hold Statutory Reserves in excess of the minimum level of reserves which the Ceding Company, using sound actuarial principles, deems necessary to meet the requirements of AG 43 (or other applicable regulation(s) as amended/adopted) for the Base Annuities and the Riders.

1.

Quarterly Accounting Period. Each Accounting Period under this Agreement will be a calendar quarter, except that: (a) the initial Accounting Period runs from the Effective Date of this Agreement through the last day of the calendar quarter during which this Agreement is executed by both parties, and (b) the final Accounting Period runs from the end of the preceding Accounting Period until the terminal accounting date of this Agreement, as described in Article VIII, Paragraph 2.

2.

Accounting Reports.

(a)

Quarterly Accounting Reports. Quarterly accounting reports in the form of Schedule B and Schedule B-2 attached hereto will be submitted to the Reinsurer by the Ceding Company not later than thirty (30) calendar days after the end of each Accounting Period in the case of Schedule B and not later than fifteen (15) calendar days in the case of Schedule B-2. Such reports will include information on the amount of Reinsurance Premiums, Claims, the Ceding Company’s and Reinsurer’s Settlement Amounts together with such Supplemental Information as required in Schedule B and the seriatim data as set forth in Schedule B-2.

(b)

Monthly Reports. The Ceding Company will provide the Reinsurer with monthly reports (whether in electronic or physical form as mutually agreed to by the parties) within fifteen (15) calendar days after the end of each month during the term hereof accurately showing the detailed information with respect to the Base Annuities and Riders as set forth in Schedule B-1. The Ceding Company will provide the Reinsurer with such additional information as the Reinsurer may reasonably request.

3.

Quarterly Settlement. Within forty (40) calendar days after the end of each Accounting Period:

(a)

the Ceding Company will pay the Reinsurer: (i) the Reinsurance Premiums, as described in Article II; (ii) any applicable Recapture fee as described in Article 1, Paragraph 4(e) and (iii) any charge for an Excess Collateral Amount as described in Article IV, Paragraph 1(d); and

(b)

the Reinsurer will pay the Ceding Company (i) the Claims, as described in Article III; and (ii) any applicable return of Coinsurance Reserve as described in Article I, Paragraph 4(e).

3.

Annual Accounting Reports. The Ceding Company will provide the Reinsurer with annual accounting reports within sixty (60) calendar days after the end of the calendar year for which such reports are prepared. These reports will contain sufficient information about the Base Annuities and Riders to enable the Reinsurer to prepare its annual financial reports and to verify the information reported in Schedule B attached hereto, and will include(i) Exhibit 5 (“Aggregate Reserve for Life Insurance”) by reserve basis, Page 7 (“Analysis of Increase in Reserves During the Year”), Page 28 (“Exhibit of Number of Policies”), and Schedule S (“Reinsurance Activity”) of the Annual Statement. In addition, the Ceding Company will provide the Reinsurer with experience studies for lapses and Guaranteed Minimum Withdrawal Benefit utilization on an annual basis and mortality experience on a triennial basis. The AG43 Memorandum covering the riders reinsured hereunder will be provided by the Ceding Company to the Reinsurer within one hundred twenty (120) calendar days after the end of the calendar year for which the report is prepared.

5.

Estimations. If the amounts, as defined in Paragraph 3 above and Schedule B, cannot be determined by the dates described in Paragraph 3 above, on an exact basis, settlements will be paid in accordance with a mutually agreed upon formula which will approximate the actual settlements. Adjustments will then be made to reflect actual amounts when they become available. Ceding Company will provide written notice to the Reinsurer as soon as reasonably practicable if the amounts described in Paragraph 3 cannot be determined by the date of the Quarterly Accounting Report.

6.

Delayed Payment. For purposes of this Agreement, if there is a delayed settlement of a payment due, from either party hereunder, there will be a “Delayed Payment Interest Penalty” added to the amount that is overdue. The Delayed Payment Interest Penalty is equal to the amount due, times the Delayed Interest Rate (as defined below), prorated for the period that the amount is overdue. The “Delayed Interest Rate” is equal to seventy-five (75) basis points plus the average of the one month London Interbank Offered Rates (LIBOR) as published by The Wall Street Journal at the end of each calendar month ending during the current Accounting Period.

7.

Offset of Payments. All monies due either the Ceding Company or the Reinsurer under this Agreement or any other agreements between the parties will be offset against each other, dollar for dollar, regardless of any insolvency of either party. In the event of insolvency, offsets will be allowed in accordance with the statutory, common and case laws of the state, territory or country, as applicable, taking jurisdiction over the insolvency, as such laws exist as of the Effective Date of this Agreement.

8.

Partial Recapture. If as permitted under the terms of this Agreement, only some of the Riders reinsured hereunder are recaptured, then the accounting and settlements described above will thereafter be made with respect to the remaining Riders reinsured hereunder and not recaptured.

1.

Duration. Except as otherwise provided herein, this Agreement is unlimited in duration.

2.

Reinsurer’s Liability.

(a)

The liability of the Reinsurer with respect to any Riders will begin simultaneously with that of the Ceding Company, but not prior to the Effective Date of this Agreement. The Reinsurer’s liability with respect to any Rider and Claims will terminate and the Reinsurer shall have no further liability for the Riders and Claims on the earliest of: (i) the date such Rider is recaptured; (ii) the date the Ceding Company’s liability on such Rider is terminated; or (iii) the date this Agreement is terminated. Termination of the Reinsurer’s liability is subject to payments in respect of such liability in accordance with the provisions of Article VIII of this Agreement. In no event should the interpretation of this Paragraph imply a unilateral right of the Reinsurer to terminate this Agreement, except as described in Paragraph 3 below.

(b)

The Reinsurer shall accept Riders, with effective dates as set forth on Schedule A, for coverage under the terms of this Agreement only until the earliest to occur of (i) [XXX]; (ii) the date the total of the Reinsurer’s quota share of Purchase Payments on the Base Annuities with the Riders exceeds [XXX]; and (iii) the date, after the Reinsurer’s quota share of Purchase Payments on the Base Annuities with the Riders exceeds [XXX], designated by the Reinsurer at its option, upon providing at least 180 days prior written notice. For purposes of this Paragraph 2(b), Purchase Payments for Riders issued after the Contract Date shall equal the Contract Value on the Rider Effective Date. The exercise of this right to terminate for new business will not cause this Agreement to terminate as to the Riders which have previously been issued and covered under this Agreement.

3.

Termination by Reinsurer.

4.

Termination by Ceding Company.

(a)

If the Reinsurer fails to pay any undisputed amounts due to the Ceding Company pursuant to this Agreement within sixty (60) calendar days after the end of any Accounting Period, the Ceding Company may, in addition and without limitation to any other right or remedy of the Ceding Company under this Agreement, terminate this Agreement and recapture all the Policies subject to thirty (30) calendar days prior written notice to the Reinsurer, during which time the Reinsurer may make such required payments. If the Reinsurer makes full payment of such undisputed amounts due within the thirty (30) calendar day notice period, the termination notice shall be deemed withdrawn and the above described right of recapture shall not apply. The Ceding Company shall not be required to pay a Recapture Fee for termination and recapture under this

(b)

If the Reinsurer fails to provide collateral to satisfy the Reserve Credit Required Balance as provided under the terms of this Agreement, the Ceding Company may terminate this Agreement and recapture all the Riders, subject to thirty (30) days prior written notice to the Reinsurer, during which time the Reinsurer or its Guarantor (as defined in Paragraph (c) below) may remedy the failure to provide the collateral sufficient to meet the Reserve Credit Required Balance. If the Reinsurer provides the required collateral during such thirty (30) day period, the termination notice shall be deemed withdrawn and the above described right of recapture shall not apply. The Ceding Company will not be required to pay a Recapture Fee for a termination and recapture under this Paragraph 4(b). In the event of recapture under this Paragraph 4(b), an amount will be due the Ceding Company equal to (i) plus (ii) where: (i) is the Coinsurance Reserve at the time of recapture as calculated by the Ceding Company under Article IV and (ii) is a Termination Fee equal to two (2) times the annualized Reinsurance Premiums calculated under Article II for the Accounting Period immediately preceding the Accounting Period during which recapture occurs, provided that the Termination Fee is only due and payable if the recapture occurs during the first twenty (20) years of the Agreement. Any Reserve Credit Trust Assets and/or amounts of Letters of Credit may be withdrawn by the Ceding Company, less amounts already held by the Ceding Company in the Segregated Account, to satisfy such amount due to the Ceding Company.

(c)

If the parental guaranty issued by [XXX]. (the “Guarantor”) for the benefit of the Ceding Company in substantially the form set forth in Exhibit III hereto becomes invalid or unenforceable against the Guarantor in accordance with its terms, the Ceding Company may terminate this Agreement and may recapture all Riders subject to thirty (30) days prior written notice to the Reinsurer. The Ceding Company shall not be required to pay a Recapture Fee for a termination and recapture under this Paragraph 4(c). In the event of termination and recapture under this Paragraph 4(c), an amount will be due the Ceding Company equal to (i) plus (ii) where: (i) is the Coinsurance Reserve at the time of recapture as calculated by the Ceding Company under Article IV and (ii) is a Termination Fee equal to two (2) times the annualized Reinsurance Premiums calculated under Article II for the Accounting Period immediately preceding the Accounting Period during which recapture occurs, provided that the Termination Fee is only due and payable if the recapture occurs during the first twenty (20) years of this Agreement. Any Reserve Credit Trust Assets and/or amounts of Letters of Credit may be withdrawn by the Ceding Company, less amounts already held by the Ceding Company in the Segregated Account, to satisfy such amount due to the Ceding Company.

(d)

If the Reinsurer is deemed to be insolvent as described in Article ▇▇, ▇▇▇▇▇▇▇▇▇ ▇, the Ceding Company may terminate this Agreement and recapture all the Riders subject to thirty (30) days prior written notice to the Reinsurer. The Ceding Company will not be required to pay a Recapture Fee and the Reinsurer shall not be required to pay a Termination Fee for a termination and recapture under this Paragraph 4(d). In the event of termination and recapture under this Paragraph 4(d), the Coinsurance Reserve at the time of recapture as calculated by the Ceding Company under Article IV will be due to the Ceding Company and any Reserve Credit Trust Assets and/or amounts of Letters of Credit may be withdrawn by the Ceding Company, less amounts already held by the Ceding Company in the Segregated Account, to satisfy such amount due to the Ceding Company.

(e)

If after the Effective Date, there is a change in applicable law or regulation or a change of interpretation, not as a result of solicitation by the Ceding Company, by the insurance regulator of

(f)

In the event the Reinsurer undergoes a Change of Control Event as set forth in Article I, Paragraph 14, the Ceding Company may terminate this Agreement and recapture all Riders, subject to thirty (30) days prior written notice to the Reinsurer. The Ceding Company shall not be required to pay a Recapture Fee and the Reinsurer shall not be required to pay a Termination Fee for termination and recapture under this Paragraph 4(f). In the event of termination and recapture under this Paragraph 4(f), the Coinsurance Reserve at the time of recapture as calculated by the Ceding Company under Article IV will be due to the Ceding Company and any Reserve Credit Trust Assets and/or amounts of Letters of Credit may be withdrawn by the Ceding Company, less amounts already held by the Ceding Company in the Segregated Account, to satisfy such amount due to the Ceding Company.

(g)

In the event the Reinsurer provides notice to the Ceding Company of an Extreme Adverse Capital Requirement Event, as defined in Article I, Paragraph 25, the Ceding Company may terminate this Agreement and recapture all Riders within one (1) year of having been provided such notice. The Ceding Company shall not be required to pay a Recapture Fee and the Reinsurer shall not be required to pay a Termination Fee for termination and recapture under this Paragraph 4(g). In the event of termination and recapture under this Paragraph 4(g), the Coinsurance Reserve at the time of recapture as calculated by the Ceding Company under Article IV will be due to the Ceding

5.

Additional Recapture. In addition to the Ceding Company’s recapture rights under Article I, Paragraph 4 and under Paragraph 4 above, the Riders reinsured hereunder are eligible for recapture, at the option of the Ceding Company, subject to ninety (90) calendar days prior written notice under the following conditions:

(a)

The Ceding Company may on or after [XXX], recapture all of the Riders reinsured hereunder provided that the Ceding Company pays to the Reinsurer a Recapture Fee, as set forth in Paragraph 6 below, due at the end of the Accounting Period during which recapture occurs.

(b)

The Ceding Company may recapture all of the Riders reinsured hereunder [XXX] years or later after the Effective Date of this Agreement without the payment of the Recapture Fee.

(c)

A partial recapture is not permitted except as provided under Article I, Paragraph 4.

6.

Recapture Fee. The Recapture Fee to be paid by the Ceding Company as required under the terms of this Agreement shall equal:

7.

Conversions and Internal Replacements. Unless expressly approved by the Reinsurer in writing, such approval not to be unreasonably withheld, the Ceding Company, its affiliates, successors or permitted assigns, shall not initiate a program of Internal Replacement (other than the Withdrawal Benefit Rider Exchanges set forth in the May 1, 2014 product prospectuses as supplemented up to the Effective Date) that would include any of the Riders reinsured hereunder. For purposes of this Agreement, the term “Internal Replacement” means any instance in which a Base Annuity or Rider or any portion of the cash value of a

1.

Terminal Accounting. In the event that this Agreement is terminated in accordance with Article VII, Paragraph 3 or 4, or all reinsurance under this Agreement is recaptured, a Terminal Accounting and Settlement will take place. In the event this Agreement is terminated or all of the Riders reinsured under this Agreement are recaptured, the parties shall have no further obligations under this Agreement after a Terminal Accounting and Settlement has taken place as forth below, except as specified in Article XII.

2.

Date. The terminal accounting date will be the earliest of: (a) the effective date of recapture pursuant to any notice of recapture given under this Agreement, (b) the effective date of termination pursuant to any notice of termination given under this Agreement, or (c) such other date mutually agreed to in writing.

3.

Settlement. The Terminal Accounting and Settlement will take place within thirty (30) calendar days after the terminal accounting date and will consist of:

(a)

the quarterly settlement as provided in Article VI, Paragraph 3, computed as of the terminal accounting date;

(b)

payment by the Ceding Company to the Reinsurer of any applicable Recapture Fee determined in accordance with Article I, Paragraph 4, or Article VII, Paragraphs 3, 4 or 5;

(c)

the return of any Segregated Account Balance and any interest accrued on it owed to the Reinsurer;

(d)

payment by the Reinsurer to the Ceding Company of the Coinsurance Reserve in accordance with the terms set forth in Article I, Paragraph 4 and Article VII, Paragraphs 3 and 4; and

(e)

payment by the Reinsurer to the Ceding Company of the Termination Fee in accordance with the terms set forth in Article VII, Paragraph 4.

(A)

effective date of its written approval to terminate the Reserve Credit Trust Agreement and return the Reserve Credit Trust Account assets to the Reinsurer;

(B)

effective date of its written approval to terminate the Letter of Credit; and

(C)

return of any amounts in the Segregated Accounts to the Reinsurer.

4.

Supplementary Accounting and Settlement. In the event that, subsequent to the Terminal Accounting and Settlement as provided above, a change is made with respect to any amounts due, a supplementary accounting will take place pursuant to Paragraph 3 above. Any amount owed to the Ceding Company or to the Reinsurer by reason of such supplementary accounting will be paid within ten (10) calendar days upon the completion thereof.

1.

Solvency. The Ceding Company and the Reinsurer each represent and warrant to the other that it is solvent in all jurisdictions in which it does business or is licensed to do business and each agrees to promptly notify the other party if it becomes insolvent, as defined in Article XI, Paragraph 1.

2.

Ceding Company Representations. The Ceding Company acknowledges that, at the Reinsurer’s request, it has provided the Reinsurer with the information described in Schedule A and the Ceding Company Data described in Schedule C prior to the execution of this Agreement by the Reinsurer. The Ceding Company represents that the information described in Schedules A and C was compiled in a commercially reasonable manner using sound actuarial practices. The Ceding Company represents that, to the best of its knowledge, all information contained in the Schedules A and C was in each case, when delivered and is on the Effective Date, complete and accurate in all material respects. The Ceding Company further represents that any assumptions made in preparing the information contained in Schedule C were reasonably consistent with commercially accepted actuarial principles. The Ceding Company further represents that, to the best of its knowledge, there are no omissions, errors, changes or discrepancies, which would materially affect the information described above, except as otherwise disclosed in writing to the Reinsurer. The Reinsurer has relied on such data and the foregoing representations in entering into this Agreement and acknowledges that the information provided by the Ceding Company is not a guarantee of future performance. The Ceding Company’s representations and warranties contained in this Paragraph 2 shall apply to all amendments which are made to the information in Schedules A and C, as if such representations and warranties were set forth in such amendments, and the Reinsurer will rely on such representations and warranties in entering into any such amendments.

(a)

The Ceding Company is a corporation validly existing and in good standing under the laws of the State of Nebraska.

(b)

The execution, delivery and performance by the Ceding Company of this Agreement are within the Ceding Company’s corporate powers, have been duly authorized by all necessary corporate action, do not require any approval of its shareholders other than as already obtained and do not contravene the Ceding Company’s organizational documents or any law or any material contractual restriction binding on or affecting the Ceding Company.

(c)

No authorization or approval or other action by, and no notice to or filing with (other than those notices already given or filings already made), any governmental authority or regulatory body is required for the due execution, delivery and performance by the Ceding Company of this Agreement.

(d)

This Agreement is a legal, valid and binding agreement enforceable against the Ceding Company in accordance with the Ceding Company’s terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

(e)

There are no actions, suits or proceedings pending against, or to Ceding Company’s knowledge, threatened against Ceding Company by or before any court, governmental agency or arbitrator that involve this Agreement or that are reasonably likely, either individually or in the aggregate, to have a Material Adverse Effect upon the Ceding Company. “Material Adverse Effect” means a material adverse effect upon (i) the business, financial condition, results of operations or prospects of the Ceding Company; (ii) the binding nature, validity or enforceability of this Agreement; (iii) the ability of the Ceding Company to perform its obligations under this Agreement; or (iv) the rights of the Reinsure or its affiliates under this Agreement.

(f)

The Ceding Company is a United States taxpayer.

(g)

The Ceding Company has entered into this transaction for an appropriate business purpose.

(h)

The Ceding Company is sophisticated, has relied on its own judgment and advisers in connection with the transaction, and has not relied on the Reinsurer, [XXX], their affliliates, or anyone acting on their behalf with respect to the transaction’s suitability or fitness for a particular purpose.

3.

Reinsurer Representations. Reinsurer represents the following to the Ceding Company:

(a)

Reinsurer is a corporation validly existing and in good standing under the laws of Bermuda, and is authorized to write life reinsurance business.

(b)

The execution, delivery and performance by Reinsurer are within Reinsurer’s corporate powers, have been duly authorized by all necessary corporate action, do not require any approval of its shareholders other than as already obtained and do not contravene Reinsurer’s organizational documents or any law or any material contractual restriction binding on or affecting Reinsurer.

(c)

No authorization or approval or other action by, and no notice to or filing with (other than those notices already given or filings already made), any governmental authority or regulatory body is required for the due execution, delivery and performance by Reinsurer of this Agreement.

(d)

This Agreement is a legal, valid and binding agreement enforceable against Reinsurer in accordance with Reinsurer’s terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

(e)

There are no actions, suits or proceedings pending against, or to Reinsurer’s knowledge, threatened against Reinsurer by or before any court, governmental agency or arbitrator that involve this Agreement or that are reasonably likely, either individually or in the aggregate, to have a Material Adverse Effect upon the Reinsurer. Material Adverse Effect means a material adverse effect upon (i) the business, financial condition, results of operations or prospects of the Reinsurer; (ii) the binding nature, validity or enforceability of this Agreement; (iii) the ability of the Reinsurer to perform its obligations under this Agreement; or (iv) the rights of the Ceding Company or its affiliates under this Agreement.

(f)

Reinsurer is a United States taxpayer.

(g)

Reinsurer has entered into this transaction for an appropriate business purpose.

(h)

Reinsurer is sophisticated, has relied on its own judgment and advisers in connection with the transaction, and has not relied on the Ceding Company or anyone acting on its behalf with respect to the transaction’s suitability or fitness for a particular purpose.

4.

Ceding Company Covenants.

(a)

The accounting for this transaction by the Ceding Company will be in accordance with appropriate jurisdictional statutory accounting principles, including disclosure requirements.

(b)

The Ceding Company shall report or provide copies of, as applicable, the following to the Reinsurer within the timeframe specified below:

(i)

As promptly as practicable after receipt, any notice from any governmental authority that (x) any license, permit, charter or registration that is material or otherwise necessary to the conduct of the Ceding Company’s business related to the Base Annuities or Riders is to be suspended or revoked; or (y) the Ceding Company is to cease and desist any practice, procedure or policy employed by it in the conduct of its business related to the Base Annuities or Riders, and such practice, procedure or policy, or the cessation of such practice, procedure or policy would have a Material Adverse Effect; or (z) is otherwise material to the Base Annuities or Riders or this Agreement.

(ii)

Promptly upon request by the Reinsurer, the unaudited quarterly or annual financial statements, as the case may be, of the Ceding Company prepared in accordance with the applicable statutory accounting principles, and the annual audited financial statement of the Ceding Company prepared in accordance with the applicable statutory accounting principles.

(c)

The Ceding Company will maintain, renew, and keep in full force and affect its legal existence and the rights, licenses, and privileges material to the conduct of this transaction.

5.

Reinsurer Covenants.

(a)

The Reinsurer shall promptly notify the Ceding Company if it fails to maintain capital equal to or greater than the minimum margin of solvency as determined under Bermuda law and regulation.

(b)

The Reinsurer shall notify the Ceding Company as promptly as practicable after receipt, of any notice from any governmental authority that (x) any license, permit, charter or registration that is material or otherwise necessary to the conduct of the Reinsurer’s business related to this Agreement is to be suspended or revoked; or (y) the Reinsurer is to cease and desist any practice, procedure or policy employed by it in the conduct of its business related to this Agreement, and such practice, procedure or policy, or the cessation of such practice, procedure or policy would have a Material Adverse Effect; or (z) is otherwise material to this Agreement.

(c)

The Reinsurer has elected to be taxed as a domestic corporation under Section 953(d) of the Internal Revenue Code and will provide the Ceding Company with prompt written notice in the event such election is revoked or otherwise terminates.

(d)

The accounting for this transaction by Reinsurer will be in accordance with appropriate jurisdictional statutory accounting principles, including disclosure requirements.

(e)

The Reinsurer will, upon request from the Ceding Company, provide the unaudited quarterly and annual financial statements, as the case may be, of the Reinsurer prepared in accordance with GAAP and in accordance with statutory principles, and the annual audited financial statements of the Reinsurer prepared in accordance with GAAP and in accordance with statutory principles.

(f)

The Reinsurer will have good and marketable title, free and clear of all liens, to all Qualifying Assets immediately prior to the deposit thereof in the Reserve Credit Trust Account at any time during the term of this Agreement.

(g)

The Reinsurer will maintain, renew, and keep in full force and affect its legal existence and the rights, licenses, and privileges material to the conduct of this transaction.

1.

Binding Arbitration. Except as provided in Article ▇▇, ▇▇▇▇▇▇▇▇▇ ▇, any and all disputes arising out or relating to this Agreement, including but not limited to disputes relating to its formation or validity shall be submitted to binding arbitration. Any arbitration shall be based upon the Procedures for the Resolution of U.S. Insurance and Reinsurance Disputes dated April 2004 (the “Procedures”), as supplemented or limited by the paragraphs below.

(a)

The arbitration panel (the “Panel”) shall consist of three disinterested arbitrators, one to be appointed by the Ceding Company, one to be appointed by the Reinsurer and the third to be appointed by the two party-appointed arbitrators. The third arbitrator shall serve as the umpire, who shall be neutral. The arbitrators and umpire shall be persons who are current or former officers or executives of an insurer or reinsurer other than the parties to this Agreement or their affiliates or subsidiaries. Within thirty (30) calendar days of the commencement of the arbitration proceeding, each party shall provide the other party with the identification of its party-appointed arbitrator, his or her address (including telephone, fax and e-mail information) and provide a copy of the arbitrator’s curriculum vitae. If either party fails to appoint an arbitrator within that thirty (30) calendar day period, the non-defaulting party will appoint an arbitrator to act as the party-appointed arbitrator for the defaulting party. The two party-appointed arbitrators shall seek to reach agreement on an umpire as soon as practical but no later than thirty (30) calendar days after the appointment of the second arbitrator. The party-appointed arbitrators may consult, in confidence, with the party who appointed them concerning the appointment of the umpire.

(b)

Where the two party-appointed arbitrators have failed to reach agreement on an umpire within the time specified in Paragraph (a) above, each party shall propose to the other in writing, within seven (7) calendar days thereafter, eight umpire candidates each of whom meets the requirements for umpires set forth above. The umpire will then be selected in accordance with the Procedures. (Unless the Parties agree otherwise, the ▇▇▇▇▇ U.S. Umpire Questionnaire Form in effect at the time of the commencement of the arbitration shall be used.)

(c)

The arbitration shall take place in State of California and shall commence no later than forty five (45) calendar days after the appointment of the umpire.

(d)

Unless prohibited by law, the federal and state courts of the State of Nebraska shall have exclusive jurisdiction over any and all court proceedings that either party may initiate to compel arbitration or to enforce, confirm, vacate or modify an arbitration award. The decision of the Panel shall be delivered to the parties no later than twenty (20) calendar days after the close of the arbitration proceedings, and shall be final and binding. In no event shall the Panel include in the arbitration award any punitive, exemplary or other form of extra contractual damages. This Agreement permits the award by the Panel of arbitration costs, attorney fees, and any other reasonable expenses.

(e)

In the event of any conflict between the Procedures and this Article, this Article, and not the Procedures, will control. This Article shall survive the expiration or termination of the Agreement.

1.

Insolvency of a Party to this Agreement. 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 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 to avoid bankruptcy or makes formal application for 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.

2.

Ceding Company’s Insolvency. In the event of the Ceding Company’s insolvency, any payments due the Ceding Company from the Reinsurer pursuant to the terms of this Agreement will be made directly to the Ceding Company or its conservator, liquidator, receiver or statutory successor. The reinsurance will be payable by the Reinsurer on the basis of the liability of the Ceding Company under the Riders reinsured without diminution or increase because of the insolvency of the Ceding Company. The conservator, liquidator, receiver or statutory successor of the Ceding Company will give the Reinsurer written notice of the pendency of a claim against the Ceding Company on any rider reinsured within a reasonable time after such claim is filed in the insolvency proceeding. During the pendency of any such claim, the Reinsurer may investigate such claim and interpose in the Ceding Company’s name (or in the name of the Ceding Company’s conservator, liquidator, receiver or statutory successor), in the proceeding where such claim is to be adjudicated, any defense or defenses which the Reinsurer may deem available to the Ceding Company or its conservator, liquidator, receiver or statutory successor. The expense thus incurred by the Reinsurer will be chargeable, subject to court approval, against the Ceding Company as a part of the expense of liquidation to the extent of a proportionate share of the benefit that may accrue to the Ceding Company solely as a result of the defense undertaken by the Reinsurer.

1.

Disputes over Calculations. This paragraph 1 is intended to address disputes between the Ceding Company and the Reinsurer solely to the extent they relate to one or more specific calculations, including terminal accounting calculations. Any such disputes not resolved pursuant to this Paragraph 1 shall be resolved pursuant to Article X. Rights, duties or obligations resulting from either party’s failure to act other than in accordance with the provisions of this Agreement shall be subject to Article X.

(a)

If a dispute arises between the Ceding Company and the Reinsurer in regards to the calculation of any amounts to be paid or reserved (including Reinsurance Premiums, Claims, materiality of Proposed Program Changes, Coinsurance Reserve, Settlement Amounts, and Recapture Fee) which cannot be resolved by the parties within thirty (30) calendar days, then the Ceding Company and Reinsurer will each prepare written reports describing the calculation in dispute.

(b)

Within ten (10) business days after the close of the thirty (30) calendar day internal resolution period, these written reports will be submitted to a mutually acceptable third party actuary, accountant or investment professional (the “Outside Expert”).

(c)

Within a thirty (30) calendar day period, the Outside Expert will determine a dollar amount (or other value, as applicable) for the disputed calculation which will fall in the range between the values proposed by the Ceding Company and the Reinsurer.

(d)

The fees, costs and expenses of retaining the Outside Expert will be shared equally between the Ceding Company and the Reinsurer.

ATTEST:

Pacific Life Insurance Company

(“Ceding Company”)

By:

By:

Title:

Title:

Date:

Date:

Location:

Location:

ATTEST:

[XXX]

(“Reinsurer”)

By:

By:

Title:

Title:

Date:

Date:

Location:

Location:

ATTEST:

[XXX]

(“Reinsurer”)

By:

By:

Title:

Title:

Date:

Date:

Location:

Location:

1.

Risks Reinsured. The amount of reinsurance under this Agreement will be [XXX]% quota share of the Ceding Company’s liability for Claims as defined in Article III, Paragraph 1, paid by the Ceding Company in accordance with the terms of the Riders attached to the Base Annuities, which Base Annuities and Riders (a) each have an effective date between [XXX]; (b) are accepted by the Reinsurer for coverage under the terms of Article VII, Paragraph 2(b); and (c) are on the forms described below:

(i)

The following Riders including all state variations:

Corelncome Advantage Select (Single)

Corelncome Advantage Select (Joint)

Corelncome Advantage Select ▇▇▇▇▇▇ ▇▇▇▇▇ (Single)

Corelncome Advantage Select ▇▇▇▇▇▇ ▇▇▇▇▇ (Joint)

CoreIncome Advantage 4 Select (Single)

CoreIncome Advantage 4 Select (Joint)

ICC13:20-1258

ICC13:20-1259

ICC13:▇▇-▇▇▇▇-▇

ICC13:▇▇-▇▇▇▇-▇

ICC13:20-1256

ICC13:20-1257

(ii)

The following Base Annuities including all state variations:

Pacific Choice

Pacific Destinations

Pacific Innovations Select

Pacific Journey Select

Pacific Odyssey

Pac One select

Value Select

Pacific Voyages

ICC12:10-1252, ICC12:10-1253

ICC09:10-1170, ICC11:10-1212

10-10300

ICC10:10-1185 ICC10:10-1185L

10-17800

10-1128

ICC11:10-1221

10-1130

DCA Plus

▇▇▇

▇▇▇▇ ▇▇▇

Simple ▇▇▇

Qualified Plan Rider

403b TSA Rider

457 Plan Rider

ICC11:20-1219

ICC12:20-1266

ICC12:20-1267

ICC12:20-1268

ICC12:20-1269

ICC12:20-1270

ICC12:20-1271

a.

Single Life

b.

Joint Life

 ▇▇▇▇ Standard 

 Scenario Amount 

 Payout 

 Reserve 

Ceding Company Gross

Ceding Company Net

Coinsurance Reserve Ceded

    Beginning of Accounting Period    

    End of Accounting Period    

Income Base

# of Contracts

Contract Value

1.

Policy Detail Report

2.

Fund Amount Report

3.

Historical GMWB Rates Report by Rider Type with Effective Date

Pol_num

Policy number

Opt

N/A

LOB

Qual and non qual only

Ist

Issue State

REST

Resident State

Comm Opt

Commission option

Spousal_ind

Spousal continuation indicator

Product

Base Product

Plan_code

Base policy plan code

Iss_Yr

Base policy issue year

Iss_Mn

Base policy issue month

Iss_Day

Base policy issue day

Iss_Age

Base policy issue age ( age nearest birthday)

Gender

Gender associates with “Iss_Age”

Joint_ind

Joint life indicator

“Y”

Iss_Age(2)

Base policy joint life issue age ( age nearest birthday)

Gender(2)

Gender associates with “Iss_Age(2)”

Polcy_loan

Policy Loan Amount ( fund 198 )

DCA_amt _6

DCA Amount – 6 month

DCA_amt _12

DCA Amount – 12 month

GIO_3

3-year GIO

GIO_6

6-year GIO

GIO_10

10-year GIO

Fixed Amt

NO DCA, NO GIO and No Loan

Var Amt

Total Variable Annuity Value

YTD PREM

Year to date Premium

Enhanced DB

Retrun of premium/ or return of premium with interest

Reset DB

Highest anniversary value

TWOP

200% * ( Total Premium - Total Withdrawal ) — for Premier DB calculation

GIA

GMIB Type

GIAY

GMIB Effective Year ( Most Current )

GIAM

GMIB Effective Month ( Most Current )

GIAD

GMIB Effective Day ( Most Current )

GIAC

GIA Annual BPs/400 * Annuity Value ( estimated )

GIAB

GMIB Guaranteed Income Base

GIAST

GMIB Step-up Value

EEG

EEG Type

EEGY

EEG Effective Year

EEGM

EEG Effective Month

EEGD

EEG Effective Day

EEGC

EEG Annual BPs/400 * Annuity Value ( estimated )

GPA

GMAB Type

GPAY

GMAB Effective Year ( Most Current )

GPAM

GMAB Effective Month ( Most Current )

GPAD

GMAB Effective Day ( Most current )

GPAC

GPA Annual BPs/400 * Annuity Value ( estimated )

GPAB

GMAB Guaranteed Amount

IAR

GMWB Type

IARY

GMWB Effective Year ( Most Current )

IARM

GMWB Effective Month ( Most Current )

IARD

GMWB Effective Day ( Most Current )

IARC

IAR Annual BPs/400 * Protected Payment Base ( estimated )

IARP

GMWB Protected Payment Base

IARB

GMWB Remaining Protected Balance

IARW

N/A

WITH

Systematic Withdrawal Indicator

EEGP

EEG Remaining Purchase Payments – for EEG earning calculation, See Below

IARWITHIND

IA+ Withdrawal indicator ( at least one withdrawal after the later of rider effective date or most recent reset date ). For Foundation 10 — there is any withdrawal since the most current Foundation 10 purchase year, (nothing to do with the current reset).

IARCRDBASE

IA+ Credit Base:Remaining Protected balance on later of rider eff. Date or most recent reset date + Cumulative purchase payment received after later of rider effective date or most recent reset date.

IARWITHAGE

IA+ First Withdrawal Age, Oldest owner ALB on withdrawal date of first withdrawal after later of rider eff date or most recent reset date. Youngest annuitant ALB on withdrawal date of first withdrawal after the later of rider eff date or most recent reset date ( owner is not a natural person )

TOT PREM

Total Premiums since issued.

TOT WITH

Total Withdrawals since issued.

GIAFee

GIA Annual fee bps

GPAFee

GPA Annual fee bps

IARFee

IAR Annual fee bps

GIASubType

GIA SubType

EEGSubType

EEG SubType

GPASubType

GPA SubType

IARSubType

IAR SubType

IARYr

GMWB original issue year

IARMo

GMWB original issue month

IARDay

GMWB original issue day

GPAYr

GMAB original issue year

GPAMo

GMAB original issue month

GPADay

GMAB original issue day

GIAYr

GMIB original issue year

▇▇▇▇▇

GMIB original issue month

GIADay

GMIB original issue day

EEDBfee

EEG Annual fee bps

Pol_num

Policy number

Reissue

Y/N

LOB

Q/NQ

Status

Base Policy Status

Spousal_ind

Y/N

Iss_Yr

Base policy issue year

Iss_Mn

Base policy issue month

Iss_Day

Base policy issue day

Iss_Age

Base policy issue age ( age nearest birthday)

Gender

Gender associates with “Iss_Age”

Joint_ind

Joint life indicator

Iss_Age(2)

Base policy joint life issue age ( age nearest birthday)

Gender(2)

Gender associates with “Iss_Age(2)”

Tmonth

Base Policy Terminated Month

Tday

Base Policy Terminated Day

Tyear

Base Policy Terminated Year

Tmonth_WB

GMWB Terminated Month

Tday_WB

GMWB Terminated Day

Tyear_WB

GMWB Terminated Year

Plan_code

Product Plan Code

Loan

Loan Amount

GIO3

GIO - 3 Year

GIO6

GIO - 6 Year

GIO10

GIO - 10 Year

DCA6

6-month ▇▇▇

▇▇▇▇▇

12-month DCA

Fixed

Fixed Amount excludes DCA, GIO and Loan

Var Amount

Varaible Annuity Value

Fund Value

Total Fund Value

Cash Value

Total Cash surrender Value

Premium

Premium Paid

Dumpin

Dump-in Premium

Value Adjustment

Value Adjustment

Credit Enhanced

Credit Enhancement Amount

Commission

Commission Paid

Commission

Chgback

Commission Charge-back

Policy Fee

Policy Fee Collected

Death

Annuity Value released by Death during the quarter

Surrender

Annity Value released by Surrender ( Full and Partial ) during the quarter

Annuitization

Annity Value released by Annuitization ( Full and Partial )during the quarter

Net Surrender

Net Surrender Amount

Net Annuitization

Net Annuitization

GMDBR

GMDB Rider Charge ( not regular M&E fees )

GMAB Rider Fee

GMAB Rider Fee Collected during the quarter

GMIB Rider Fee

GMIB Rider Fee Collected during the quarter

GMWB Rider Fee Collected ( include accrued GMWB rider charge in the surrender charge

GMWB Rider Fee

) during the quarter

EEG

EEG option

GPA

GPA option

GIA

GIA Option

IAR

IAR Option

GIASubType

GIA SubType

EEGSubType

EEG SubType

GPASubType

GPA SubType

IARSubType

IAR SubType

PBonus

Persistency Bonus

DB Claim Amount

Death Claim ( DB over Annuity Value ) during the quarter

GPA Dump-in

GMAB Dump-in

•

Email from ▇▇▇▇▇▇▇▇ ▇▇▇▇ of Ceding Company to ▇▇▇▇▇▇▇ ▇▇▇▇ of Reinsurer sent Wednesday August 27, 2014, at 3:07pm, titled, “Due Diligence List,” which notified the Reinsurer that deal specific information had been uploaded to the [XXX] provided file sharing site including Product and Fund Prospectuses, mortality assumptions, AG43 and C3PII valuation scenarios, base lapse rates, and an illustration of the GMWB dynamic lapse rates.

•

Email from ▇▇▇▇▇▇▇▇ ▇▇▇▇ of Ceding Company to ▇▇▇▇▇▇▇ ▇▇▇▇ of Reinsurer sent Thursday August 28, 2014, at 7:04pm, titled, “Due Diligence List,” which notified the Reinsurer that deal specific information had been uploaded to the [XXX] provided file sharing site regarding the age/gender mix, average contract size and Q/NQ for of the products, as well as an email sent at 9:48am that notified Reinsurer that cash flow files had been uploaded to the [XXX] provided file sharing site.

•

Email from ▇▇▇▇▇▇▇▇ ▇▇▇▇ of Ceding Company to Jee Shen of Reinsurer sent Wednesday September 24, 2014, at 2:24pm, titled, “Due Diligence List,” which provided to the Reinsurer the files titled, “CIA4 Select Specs Final 122012 (clean).pdf” (the marketing specifications), “CIAP Pricing Book 20120828.pdf” (the Pricing Book), and “CIP4 Pricing Assumptions.xlsx” (the pricing assumptions linked to the Pricing Book).

•

Email from ▇▇▇▇▇▇▇▇ ▇▇▇▇ of Ceding Company to Jee Shen of Reinsurer sent Wednesday September 24, 2014, at 2:25pm, titled, “Due Diligence List,” which provided to the Reinsurer the files titled, “CIA Select Specs Final 122012 (clean).pdf” (the marketing specifications), “CIA5P Pricing Book 20120828.pdf” (the Pricing Book), and CIA5P Pricing Assumptions.xlsx” (the pricing assumptions linked to the Pricing Book).

•

Email from ▇▇▇▇▇▇▇▇ ▇▇▇▇ of Ceding Company to Jee Shen of Reinsurer sent Wednesday September 24, 2014, at 2:29pm, titled, “Due Diligence List,” which provided to the Reinsurer the files titled, “Question as of 09242014.xlsx” and 20130809 GMWB Utilization Proposal” (both files sent in response to Reinsurer’s questions about dynamic lapse assumptions, utilization assumptions, mortality assumptions, and GAAP accounting treatment).

•

Email from ▇▇▇▇▇▇▇▇ ▇▇▇▇ of Ceding Company to Jee Shen of Reinsurer sent Tuesday September 30, 2014, at 5:29pm, titled, “Due Diligence List,” which provided to the Reinsurer the file titled, “Inforce Study as of 06302014.xlxs,” providing the statistical data for the current inforce.

•

Email from ▇▇▇▇▇▇▇▇ ▇▇▇▇ of Ceding Company to Jee Shen of Reinsurer sent Thursday October 2, 2014, at 7:02pm, titled, “Due Diligence List,” which provided to the Reinsurer the files titled, “Fund expenses.xlxs,” and “Customer Allocation as of 06302014.xlxs,” which detailed the fund expenses and customer allocations for the fifteen rider-eligible funds.

•

Email from ▇▇▇▇▇▇ ▇▇▇▇▇ of Ceding Company to Jee Shen of Reinsurer sent Friday October 3, 2014, at 12:09pm, titled, “Due Diligence List,” which provided to the Reinsurer the file titled, “Product and Fund Prospectuses.xlxs,” which contains a link to the Pacific Life Annuity webpage with PDFs of the product prospectuses.

•

Email from ▇▇▇▇▇▇▇▇ ▇▇▇▇ of Ceding Company to Jee Shen of Reinsurer sent Friday October 3, 2014, at 3:04pm, titled, “Due Diligence List,” which provided to the Reinsurer the file titled, “Customer Allocation for 2014 policies as of 06302014.xlxs.”

•

Email from ▇▇▇▇▇▇ ▇▇▇▇▇ of Ceding Company to Jee Shen of Reinsurer sent Wednesday October 22, 2014, at 6:03pm, titled, “Pacific Life GLWB Rider eligible funds – CUSIP and SecID,” which provided a table listing by the fifteen fund riders of the CUSIPs and SecIDs.

•

Email from ▇▇▇▇▇▇▇▇ ▇▇▇▇ of Ceding Company to Jee Shen of Reinsurer sent Friday October 24, 2014, at 12:43pm, titled, “PacLife GLWB Rider Charges,” which provided the file titled, “PAC Life GLWB Charges.xlxs.”

•

Email from ▇▇▇▇▇▇▇▇ ▇▇▇▇ of Ceding Company to Jee Shen of Reinsurer sent Friday October 24, 2014, at 12:52pm, titled, “PacLife GLWB Rider Charges,” which provided eight rider forms in the following files: “CIA_Select_-_Joint_Life_(IC13-20-1261-1-EJ).pdf,” “CIA_Select_-_Single_Life_(IC13-20-1260-1-EJ).pdf,” “CIA_Select_-Single_Life_(ICC13-20-1258-EJ).pdf,” “CIA_Select-Joint_Life_(ICC13-20-1259-EJ).pdf,” “CIA4_Select-Joint_Life_(ICC13-20-1257).pdf,” “CIA4_Select-Single_Life_(ICC13-20-1256).pdf.”

•

Email from ▇▇▇▇▇▇▇▇ ▇▇▇▇ of Ceding Company to ▇▇▇▇▇▇ ▇▇▇▇▇ of Ceding Company, which cc’d Jee Shen of Reinsurer, sent Thursday October 30, 2014, at 10:56am, titled, “PacLife Assumptions,” which provided Pacific Life’s pricing assumptions for the CIA Select and CIA4 Select riders in the following files: “CIA5P Pricing Book 20120828.pdf,” CIAP Pricing Book 20120828.pdf,” “CIA5P Pricing Assumptions.xlxs,” and “CIAP Pricing Assumptions.xlxs.”

•

Email from ▇▇▇▇▇▇▇▇ ▇▇▇▇ of Ceding Company to Jee Shen of Reinsurer sent Monday November 10, 2014, at 3:58pm, titled, “▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇,” which provided the prospectuses and base VA contract forms in the following four files: “Destinations_(ICC09-10-1170).pdf,” “Destinations_B_(ICC10-10-1180).pdf,” and “Destinations_O-Series_(ICC11-10-1212).pdf.”

•

Email from ▇▇▇▇▇ ▇▇▇▇ of Ceding Company to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and Jee Shen of Reinsurer sent Friday November 14, 2014, at 12:44pm, titled, “Volatility management funds within the Port Opt,” which notified Reinsurer of the removal of the Tactical Strategy Portfolio and the Tactical International Portfolio funds from the Portfolio Optimization portfolios and provided the following two files: “13241-14B_Final.pdf,” which is the internal memo regarding the updates to the variable annuity investment options released on October 16, 2014, and “PSF Supp Tactical Portfolio.pdf,” which is the supplement, dated September 19, 2014, to the prospectus for the Pacific Select Fund Class I and P Shares, dated May 1, 2014.

•

Email from ▇▇▇▇▇ ▇▇▇▇▇▇▇ of Ceding Company to Jee Shen of Reinsurer sent Tuesday, November 25, 2014, at 1:05pm, titled, “Rider State Variations – Rider Copies,” which provided the following twelve files: “20-1260CA-1 CIA Select ▇▇▇▇▇ (single).docx,” “20-1260CT-1 CIA Select ▇▇▇▇▇ (single).docx,” “20-1260FL-1 CIA Select ▇▇▇▇▇ (single).docx,” 20-1260MT-1 CIA Select ▇▇▇▇▇ (single).docx,” 20-1261CA-1 CIA Select ▇▇▇▇▇ (joint).docx,” 20-1261CT-1 CIA Select ▇▇▇▇▇ (joint).docx,” “20-11261FL-1 CIA Select ▇▇▇▇▇ (joint).docx,” “20-1261MT-1 CIA Select ▇▇▇▇▇ (joint).docx,” “20-1226CA.docx,” “20-1226CT.docx,” “20-1226FL.docx,” and “20-1226MT.docx.”

•

Email from ▇▇▇▇▇ ▇▇▇▇▇▇▇ of Ceding Company to Jee Shen of Reinsurer sent Tuesday, November 25, 2014, at 1:05pm, titled, “Rider State Variations – Rider Copies,” which provided the following twelve files: “20-1258CA CIA Select (single)-FINAL.docx,” “20-1258CT CIA Select (single) -FINAL.docx,” “20-1258FL CIA Select (single) -FINAL.docx,” 20-1258MT CIA Select (single) -FINAL.docx,” 20-1259CA CIA Select (joint) -FINAL.docx,” 20-1259CT CIA Select (joint) -FINAL.docx,” “20-11259FL CIA Select (joint) -FINAL.docx,” “20-1259MT CIA Select (joint) -FINAL.docx,” “20-1256CA CIA4 Select+(single) -FINAL.docx,” “20-1256CT CIA4 Select(single) -FINAL.docx,” “20-1256FL CIA4 Select(single) -FINAL.docx,” and “20-1256MT CIA4 Select(single) -FINAL.docx.”

•

Email from ▇▇▇▇▇ ▇▇▇▇▇▇▇ of Ceding Company to Jee Shen of Reinsurer sent Tuesday, November 25, 2014, at 1:06pm, titled, “Rider State Variations,” which provided the following four files: “▇▇-▇▇▇▇-▇ and ▇▇-▇▇▇▇-▇ CIA Select State Law Variations.doc,” “20-1256 and 20-1257 CIA4 Select State Law Variations.doc,” “20-1258 and 20-1259 CIA Select State Law Variations.doc.”

•

Email from ▇▇▇▇▇ ▇▇▇▇ of Ceding Company to Jee Shen of Reinsurer sent Tuesday December 30, 2014, at 11:50am, titled, “Pacific Life rider pricing,” which notified Reinsurer of pricing increase on the currently-active riders and provided the file titled, “Rider Pricing Decisions 12-17-2014 for Period 2-1-2015 to 4-30-2015.pdf.”

•

Email from ▇▇▇▇▇ ▇▇▇▇▇▇▇ of Ceding Company to Jee Shen of Reinsurer sent Wednesday March 4, 2015, at 10:53am, titled, “Contract Form Examples with Current information,” and provided the following six files: “VR15428683-Rider.pdf,” “VR15428796-Rider.pdf,” “VR15428812-Rider.pdf,” “VR15428969-Rider.pdf,” “VR15429018-Rider.pdf,” and “VR15429041-Rider.pdf.”

•

Email from ▇▇▇▇▇▇▇▇ ▇▇▇▇ of Ceding Company to ▇▇▇▇▇▇▇ ▇▇▇▇ of Reinsurer sent on Monday March 9, 2015, at 5:38pm, titled, “Preliminary Downloads for new UH treaty ( Schedule – B-1 ), which provided the details of the reports to be provided under Schedule B-1 and provided the following two files: “Proposed reinsurance monthly downloads.xlsx,” and Proposed reinsurance quarterly download v 2015_02_18_[XXX] edits.xlsx.”

•

Email from ▇▇▇▇▇ ▇▇▇▇ of Ceding Company to Jee Shen of Reinsurer sent on Friday March 27, 2015, at 8:57am, titled, “PL Rider Pricing,” which notified Reinsurer of pricing increase on the currently-active riders and provided the file titled, “Rider Pricing Decisions 3-26-2015 for Period 5-1-2015 to 7-31-2015.pdf.”

•

Email from ▇▇▇▇▇ ▇▇▇▇ of Ceding Company to Enzinma ▇▇▇▇▇▇ of Reinsurer sent on Thursday April 9, 2015, at 3:22pm, titled, “20150326 Rider Price Change Notice v2,” which notified Reinsurer of the price increase on the ▇▇▇▇▇▇ ▇▇▇▇▇ sales channel to align it with the increase on national sales and provided the file titled, “Rider Price Change Notice v2.pdf.”

1.

Effective Date of Change

2.

Describe the Proposed Program Change as per Article1, Paragraph 4 (a).

3.

Describe current actuarial and market assumptions including base lapse assumptions, mortality assumptions, utilization assumptions, starting yield curve and standard scenario discount rates, if any are different from the most recently provided documentation.

4.

Results as described below.

Current Values

Revised Values (after change)

Percentage

Change

AG43 CTE 70 Ceding Company Gross

AG43 CTE 70 Ceding Company Net

AG43 CTE 70 Ceded to [XXX]

AG43 Standard Scenario Ceding Company Gross

AG43 Standard Scenario Ceding Company Net

AG43 Standard Scenario Ceded to [XXX]

AG43 Coinsurance Reserve Ceded

Risk Neutral Present Value*

*

The risk neutral present value of future living benefit claims, expressed as a percentage of living benefit base, based on the capital market assumptions (risk free interest rates, implied volatilities, etc) as of the most recent month end prior to program change notification as used in the Ceding Company’s embedded derivative GAAP liability calculations.

*

Risk free interest rates based on the US swap curve

Section 1.01.

The Grantor hereby establishes a trust account (the “Trust Account”) with the Trustee at the Trustee’s office at ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, upon the terms and conditions hereinafter set forth and shall include the base trust account and the one or more subaccounts as deemed necessary for operational purposes of the Beneficiary. The Trust Account established hereunder is for the exclusive use and benefit of the Beneficiary and the assets deposited therein shall be subject to withdrawal by the Beneficiary solely as provided herein. As used herein, the term “Beneficiary” shall include any successor of the Beneficiary by operation of law, including, without limitation, any liquidator, rehabilitator, receiver or conservator.

Section 1.02.

(a)    The Trustee and its lawfully appointed successors is and are authorized and shall have power to receive such funds and other property as the Grantor, or the Beneficiary from time to time may transfer or remit to or vest in the Trustee or place in the Trustee’s hands or under the Trustee’s control, or as otherwise deposited in the Trust Account and to hold, invest, reinvest, manage and dispose of the same for the uses and purposes and in the manner and according to the provisions hereinafter set forth. All such trusteed assets at all times shall be maintained by the Trustee as a trust account, separate and distinct from all other assets.

(b)    The assets in the trust account (the “Trust Assets”) must be held as specified in (c) below or at the Trustee’s office in the United States. The assets must be segregated from other assets of the Trustee and the assets of the Trustee’s other clients.

(c)    The Trustee shall have the right to hold property on an uncertificated basis with the issuer or in book-entry form.

Section 1.03.

Assets deposited in the Trust Account and investments and reinvestments thereof shall consist of currency of the United States of America, certificates of deposit issued by a United States bank and payable in currency of the United States of America and

investments of the type permitted by Nebraska Code Sections 44-5132 through 44-5133 and 44-5137 through 44-5141and the Investment Guidelines attached hereto as Exhibit B provided, that each such investment that is a security is issued by an institution that is not the parent, subsidiary or affiliate of either the Grantor or the Beneficiary (“Authorized Investments”). Any deposit or investment direction by the Grantor (as provided for in Section 1.08 below) or substitution (as provided in Section 1.08 below) shall constitute certification by the Grantor to the Trustee that the assets so deposited or to be purchased pursuant to such investment direction or so substituted are Authorized Investments. The Trustee shall not be responsible for determining whether any assets in the Trust Account are or continue to be Authorized Investments or whether the assets in the Trust Account are sufficient to secure the Grantor’s obligations.

Section 1.04.

The Grantor shall, upon execution of this Reinsurance Trust Agreement, and from time to time thereafter as required, execute endorsements in blank or other transfer instruments with respect to all securities or other property standing in the Grantor’s name or otherwise which are delivered to the Trustee to form a part of the Trust Account so that, whenever necessary, the Beneficiary (or the Trustee upon the direction of the Beneficiary) can negotiate any such asset without the consent or signature of the Grantor or any other person or entity. Any assets received by the Trustee which are not in such proper negotiable form or accompanied by the appropriate transfer documents shall not be accepted by the Trustee and shall be returned to the Grantor as unacceptable.

Section 1.05.

(a)    The Trustee is authorized to transfer into the name of nominees selected by it all registered securities from time to time held under this Reinsurance Trust Agreement. The Trustee shall be responsible for the acts of its nominee with respect to such securities.

(b)    The Trustee is authorized, without further information, to exchange securities in temporary form for securities in definitive form, to effect an exchange of the shares where the par value of stock is changed, and to surrender securities at maturity or when advised of earlier call for redemption, against payment therefor in accordance with accepted industry practice. The Trustee shall have no duty to notify the Grantor of any rights, duties, limitations, conditions or other information set forth in any security (including mandatory or optional put, call and similar provisions), but the Trustee shall forward to the Grantor any notices or other documents subsequently received in regard to any such security. The Trustee shall maintain securities received in bearer form unless instructed by the Grantor to exchange such securities for securities in registered form.

(c)    Where redemption options, tenders or other like rights with respect to securities have fixed expiration dates, the Grantor understands that in order for the Trustee to act, the Trustee must receive the Grantor’s instructions at its offices, addressed as the Trustee may from time to time request, by no later than 9:00 a.m. (Trustee’s local time) at least one business day prior to the last scheduled date to act with respect thereto (or such earlier date or time as the Trustee may notify the Grantor). Absent the Trustee’s timely receipt of such instruction, such instruments will expire without liability to the Trustee unless the Trustee did not, with due diligence, provide the Grantor with timely and appropriate information.

Section 1.06.

(a)    At the request of the Grantor, all dividends, interest and other income resulting from the investment of the assets in the Trust Account shall be deposited into a separate account in the Grantor’s name; provided, however, that, except as provided in subsection (b) below, the Trustee shall have no obligation with respect to the collection of such income

(b)    From time to time, the Trustee may elect, but shall not be obligated, to credit the Trust Account with the amount of interest, dividends or principal payments due on assets in the Trust Account before actually receiving such payments from a payor, central

depository, broker or other agent employed by the Grantor or the Trustee. Any such crediting shall be at the Grantor’s sole risk, and the Trustee shall be authorized to reverse any such credit in the event it does not receive good funds from the payor, central depository, broker or agent. The Trustee shall not be required to enforce collection by legal means or otherwise or any such payment, but shall use reasonable diligence to make all such collections as may be effected in the ordinary course of business.

(c)    It is understood that the Trustee is not required to make advances of cash, securities or any other property on behalf of the Trust Account, or permit overdrafts in the Trust Account, in connection with the acquisition or disposition of assets in the Trust Account; provided, however, that if the Trustee were required by the Grantor or by industry practice to make such an advance or permit such an overdraft, such advance or overdraft shall be deemed a loan by the Trustee to the Grantor, which loan shall be payable on demand and shall bear interest at the Trustee’s customary rate for similar loans. The Grantor shall be solely responsible for repayment of such loan and all interest thereon. The Trust Account shall not be utilized for the payment of such loan or the interest thereon. The Trustee may, however, deduct the amount of such loan and any interest thereon from any dividends, interest and other income of the Trust Account received by the Trustee before payment to the Grantor.

Section 1.07.

The Grantor directs the Trustee not to disclose the Grantor’s name, address and securities positions to issuers of securities held in the Trust Account, pursuant to SEC rules implementing The Shareholder Communications Act of 1985.

The Grantor’s address is as set forth on the signature page hereof. The Grantor and the Beneficiary each certify that their respective Taxpayer Identification Numbers set forth on the last page hereof are correct and that the Grantor and the Beneficiary each are not subject to “backup withholding” under Section 3406(a)(1)(c) of the Internal Revenue Code or any successor provision when the appropriate original tax form, W-8BEN or W-9, is given to the Trustee. The Grantor and the Beneficiary agree to notify the Trustee immediately in writing of any change in the information set forth in this paragraph.

Section 1.08.

The responsibility for directing the Trustee to invest and reinvest the assets in the Trust Account shall be that of the Grantor’s and, unless and until directed by the Grantor, the Trustee shall not be required to take any action with respect to the investment or reinvestment of the Trust Account’s assets.

The Trustee shall invest and reinvest the Trust Account, or any part thereof, in such Authorized Investments as the Grantor shall direct in writing. The Trustee shall execute any direction to buy or sell securities and settle securities transactions itself or through a duly licensed broker or agent. The Trustee shall not be responsible for any act or omission, or the solvency, of any such broker or agent unless the act or omission is the result of the Trustee’s negligence, willful misconduct or lack of good faith. Any loss incurred from any investment directed by the Grantor shall be borne exclusively by the Trust Account.

The Grantor may substitute Authorized Investments for any Trust Assets; provided, that following any substitution the market value of the substitute asset is not less than the market value of the asset so withdrawn. The Trustee shall not be required to take any action with respect to the substitution of Trust Assets. The Trustee shall have no responsibility whatsoever to determine the value of such substituted securities or that such substituted securities constitute Authorized Investments.

Section 1.09.

Reserved.

Section 1.10.

The Grantor shall have the full unqualified right to vote and execute consents and to exercise any and all proprietary rights not inconsistent with this Reinsurance Trust Agreement with respect to any securities or other property forming a part of the Trust Account. The Grantor shall be entitled to recognize the assets held in the Trust Account as funds held in trust for the benefit of ceding companies.

Section 1.11.

Withdrawals from the Trust Account may be made by the Beneficiary at any time and from time to time, without notice to the Grantor and subject only to prior written notice from the Beneficiary to the Trustee. Requests for withdrawals from the Trust Account shall be made pursuant to a withdrawal form in the form of Exhibit A attached hereto. No other statement or document need be presented by the Beneficiary in order to withdraw assets, except that the Beneficiary shall be required by the Trustee to acknowledge receipt of withdrawn assets. Upon receipt of the Beneficiary’s instruction, the Trustee shall immediately take any and all necessary steps to transfer absolutely and unequivocally to the Beneficiary all right, title and interest in the assets being withdrawn, and to deliver the physical custody thereof directly to the Beneficiary; provided, that, with respect to deposit or other accounts in other banks or with respect to book-entry securities, the Trustee shall execute the written directions of the Beneficiary with respect to the transfer, deposit or other disposition of the withdrawn assets. The Trustee shall be protected in relying upon any written demand of the Beneficiary for such withdrawal and on any statement made therein.

Section 1.12.

(a)    The Trustee will provide the Grantor, and the Beneficiary with a schedule of assets and transaction statements showing all transactions in the Trust Account upon its inception, and thereafter at intervals no less frequently than as of the end of each calendar quarter and in no event more frequently than as of the end of each month. Such Schedules and Statements shall be given as soon as practicable, but in no event later than fifteen (15) days after such date. Unless the Grantor or the Beneficiary files with the Trustee a written exception, or claim of noncompliance with the Grantor’s instructions, within three (3) months of the closing date of the period covered by such Schedules and Statements, the Grantor and the Beneficiary will be conclusively deemed to have waived any such exception or claim.

(b)    The Trustee shall furnish to the Grantor, and the Beneficiary notice of any deposits to or withdrawals from the Trust Account within ten (10) calendar days of the occurrence of such event.

ARTICLE II.

PROVISIONS RELATING TO THE TRUSTEE

Section 2.01.

The Trustee shall be a bank or trust company which is a member of the Federal Reserve System of the United States of America or a U.S. state chartered bank and shall not be a parent, subsidiary or affiliate of the Grantor or the Beneficiary.

Section 2.02.

(a)    The Trustee shall be entitled to receive as compensation for its services hereunder, an annual fee, computed and payable quarterly, at such rate as may be agreed from time to time in writing between the Grantor and the Trustee. The Grantor shall be solely responsible for the payment of the fee of the Trustee and all reasonable expenses of the Trustee, including reasonable fees of counsel. The Trust Account shall not be utilized for the payment of such fees and expenses. The Trustee may, however, deduct any unpaid fees and expenses from any dividends, interest and other income of the Trust Account received by the Trustee before payment to the Grantor.

(b)    The Grantor indemnifies the Trustee against and holds it harmless from any claim, loss, liability, cost or expense (including reasonable attorneys’ fees and expenses), incurred or made without negligence, willful misconduct or lack of good faith on the Trustee’s part, arising out of or in connection with the Trustee’s performance of its obligations under this Reinsurance Trust Agreement. This indemnity shall survive the termination of this Reinsurance Trust Agreement or the Trustee’s resignation or discharge.

Section 2.03.

The Trustee shall be responsible for the safekeeping and administration of the Trust Account in accordance with provisions of this Reinsurance Trust Agreement. The duties and obligations of the Trustee shall be only those specifically set forth in this Reinsurance Trust Agreement, and the Trustee shall have no duty to take any other action unless specifically agreed to by the Trustee in writing. Without limiting the generality of the foregoing the Trustee shall not have any duty: to appear in or defend any suit with respect thereto unless requested by the Grantor or the Beneficiary in writing and indemnified to the Trustee’s satisfaction; to advise, manage, supervise or make recommendations with respect to the purchase, retention or sale of assets in the Trust Account; with respect to any assets in the Trust Account as to which default in the payment of principal or interest has occurred, to give notice of default, make demand for payment or take any other action, to provide notification of the solvency or financial condition or legal ability, or to be responsible for the consequences of insolvency or the legal inability, of any broker, dealer, bank or other agent employed by the Grantor or the Trustee with respect to the assets in the Trust Account, except to the extent that the Trustee was negligent, engaged in misconduct or acted in bad faith in the selection of any such person or entity or to be responsible for the accuracy of any securities information, market values or other similar information provided by third-party services to which the Trustee subscribes or which the Trustee engages, which information is provided to the Grantor or the Beneficiary in statements or otherwise, or upon which the Trustee relies in performing pursuant to this Reinsurance Trust Agreement, or upon which the Grantor or the Beneficiary relies, or to be responsible for the failure to redeem any called bond or take any other action if notice of such call or action was not provided by any services to which it subscribes, unless the Trustee has been negligent in the selection on any such service. The Trustee shall be liable only for its own negligence, willful misconduct or lack of good faith.

Section 2.04.

Unless otherwise provided in this Reinsurance Trust Agreement, the Trustee is authorized to comply with and rely upon all written instructions, directions, notices and other communications given by persons specified in incumbency certificates furnished to the Trustee from time to time by the Grantor, and the Beneficiary, respectively, and by attorneys-in-fact acting under written authority furnished to the Trustee by the Grantor, and the Beneficiary, including, without limitation, instructions, directions, notices and other communications given by letter, facsimile or other electronic means of transmission, if the Trustee reasonably believes such instructions, directions, notices and other communications to be genuine and to have been signed or presented by the proper party or parties. With respect to facsimile and other similar electronic methods of giving instructions, directions, notices and communications, the Grantor, and the Beneficiary acknowledge that there are more secure methods of sending instructions, directions, notices and communications but have nevertheless elected to use such methods of communication. In the absence of negligence, the Trustee shall not incur any liability to any one resulting from actions taken by the Trustee in reliance in good faith on such instructions, directions, notice and other communications (i) from any attorney-in-fact or (ii) from any officer specified in an incumbency certificate delivered hereunder prior to receipt by the Trustee of a more current certificate. All notices provided to the Trustee (unless otherwise provided therein) shall be deemed to be effective when received by the Trustee.

Section 2.05.

Whenever in the administration of the Trust Account created by this Reinsurance Trust Agreement the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering or omitting any action thereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed, such as in the case of withdrawal of assets from the Trust Account by the Beneficiary, which is specifically prescribed by Section 1.11 of this Reinsurance Trust Agreement) may be deemed to be conclusively proved and established by a statement or certificate signed by or on behalf of the Grantor and/or the Beneficiary and delivered to the Trustee and said certificates shall constitute the full warranty to the Trustee for any action taken, suffered or omitted by it on the faith thereof; but in its discretion, the Trustee may in lieu thereof accept other evidence of the fact or matter or may require such other or additional evidence as it may deem reasonable.

Section 2.06.

(a)    Except where otherwise expressly provided in this Reinsurance Trust Agreement, any statement, certificate, notice, request, consent, approval, or other instrument to be delivered or furnished by or on behalf of the Grantor, and/or the Beneficiary shall be sufficiently executed if executed in the name of the Grantor, and/or the Beneficiary by an officer or agent of such party whose name and specimen signature appears on current incumbency certificates furnished by such party. The Trustee shall be protected in acting upon any written statement or other instrument made by such officer or agent of the Grantor and/or the Beneficiary with respect to the authority conferred on him.

(b)    The Trustee shall be under no obligation to determine whether or not any instruction given by the Grantor, and/or the Beneficiary are contrary to any provision of law.

Section 2.07.

The Trustee may as reasonably necessary consult with counsel selected by it. The opinion of said counsel shall be full and complete authority and protection for the Trustee with respect to any action taken, suffered or omitted by it in good faith and in accordance with the opinion of said counsel other than with respect to the withdrawal of assets from the Trust Account by the Beneficiary.

Section 2.08.

The Trustee shall keep full and complete records of the administration of the Trust. Any person or persons duly authorized in writing by the Grantor and/or the Beneficiary may examine such records at any time during business hours.

Section 2.09.

(a)    The Trustee hereby accepts the trust herein created and declared upon the terms herein expressed.

(a)    The Trustee may resign, by written resignation, effective not less than ninety (90) days after receipt thereof by the Grantor and the Beneficiary, and the Grantor may remove the Trustee at any time, without assigning any cause therefore, by the delivery to the Trustee and the Beneficiary of a written notice of removal, effective not less than ninety (90) days after receipt by the Trustee and the Beneficiary of the notice, provided, that no such resignation or removal shall be effective until a successor trustee reasonably acceptable to the Beneficiary has been appointed by the Grantor and has accepted such appointment and all assets in the Trust Account have been duly transferred to such successor trustee. In any case of the appointment of a successor trustee, all of the powers, rights and duties of the Trustee named herein shall survive and continue in the successor trustee and every successor trustee shall succeed to take and have all the estate power, rights and duties which belonged to or were held by its predecessor. In the case of the resignation or removal of the Trustee, the Trustee shall have the right to a final accounting with respect to the Trust Account.

Section 2.10.

(a)    All assets in the Trust Account shall be valued at their current fair market value in United States dollars on a basis determined by the Trustee in its sole discretion.

(b)    Upon the written request of the Grantor, or the Beneficiary, the Trustee shall promptly permit the Grantor, or the Beneficiary, its agent or employees, or independent auditors designated by the Grantor, or the Beneficiary to examine, audit, excerpt, transcribe and copy, during normal business hours, any books, documents, papers and records relating to the Trust Account or the assets in the Trust Account.

Section 3.01.

This Reinsurance Trust Agreement shall be effective until terminated by sixty (60) days’ advance written notice sent to the Trustee by the Grantor. Written notice of termination shall be delivered by the Trustee to the Beneficiary at least thirty (30) but not more than forty-five (45) days prior to termination. Upon the date of termination of this Reinsurance Trust Agreement, the Trustee shall: (i) with the Beneficiary’s written consent, and at the direction of the Grantor, transfer, pay over and deliver to the Grantor all of the assets of the Trust Account in exchange for a receipt from the Grantor; or (ii) deliver such assets to a successor trustee meeting the requirements of Section 2.01 hereof, and the Trustee’s liability and obligations under this Reinsurance Trust Agreement shall thereupon cease.

Section 3.02.

THE PROVISIONS OF AND VALIDITY AND CONSTRUCTION OF THIS REINSURANCE TRUST AGREEMENT AND ANY AMENDMENTS THERETO SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF WISCONSIN, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF AND THE TRUST ACCOUNT CREATED HEREUNDER SHALL BE ADMINISTERED IN ACCORDANCE WITH THE INTERNAL LAWS OF SAID STATE.

Section 3.03.

This Reinsurance Trust Agreement may be amended at any time by written agreement signed by the Grantor, the Beneficiary and the Trustee; provided, however, that from time to time after the date hereof the Grantor may propose such amendments to this Reinsurance Trust Agreement as the Grantor reasonably determines, based on advice of counsel, are necessary to ensure that assets deposited in the Trust Account are treated as admitted assets of the Grantor for all purposes under the insurance law of the Grantor’s domiciliary jurisdiction, or any successor provisions thereto and any regulations promulgated thereunder. Promptly upon receipt of such proposal, the Beneficiary will determine whether its rights to security under this Reinsurance Trust Agreement, or its ability to obtain credit on the statutory financial statements it files with the insurance department of its state of domicile and in all other states in which it must file such statements, would be prejudiced by adoption of such proposal. Unless the Beneficiary reasonably determines that its rights are prejudiced, the Beneficiary and the Trustee shall consent to such amendment. In the event that the Beneficiary reasonably determines that any such amendment is prejudicial to its interests, it shall have the right to disapprove by written notice any such proposed amendment.

Section 3.04.

This Reinsurance Trust Agreement is not subject to any conditions or qualifications outside of this Reinsurance Trust Agreement.

Section 3.05.

In the event any provision of this Reinsurance Trust Agreement shall be held invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the remaining parts of this Reinsurance Trust Agreement.

Section 3.06.

This Reinsurance Trust Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and the counterparts shall constitute but one and the same instrument, which shall be sufficiently evidenced by any one counterpart.

Section 3.07.

This Reinsurance Trust Agreement may not be assigned by any party without the prior written consent of the other parties, and any such attempted assignment shall be void. This Reinsurance Trust Agreement shall be binding upon the successors and permitted assigns of the parties hereto.

Section 3.08.

All notices or demands shall be deemed effective on the same day that the notice or demand is sent if such notice or demand is sent by facsimile transmission or delivered by hand. Otherwise notices or demands shall be deemed effective five (5) days after such notice or demand has been sent by certified mail. All notices or demands shall be in writing and shall be delivered by hand, by certified mail, return receipt requested, or by facsimile transmission addressed to the parties at the following addresses:

If to the Trustee:

            [XXX]

If to the Beneficiary:

            [XXX]

If to the Grantor:

            [XXX]

Hereafter, either party may change the individual, title, and/or contact information of a party’s notice recipient by notice to the other parties in accordance with this Section 3.08.

By:

Name

Address:

By:

Address:

Taxpayer Identification Number:

and

By:

Name

Address:

Pacific Life Insurance Company (“Beneficiary”)

By:

Name

Address:

Taxpayer Identification Number:

US BANK NATIONAL ASSOCIATION (“Trustee”)

By:

Address:

1.    

Amount of cash and/or Assets to be Withdrawn and Transferred:

Amount of cash: $                                                 

Assets:                                                  

2.    

Transfer Directions:

Transferee:

Location of Account:                                

Account No:                                                 

Date:

[Beneficiary Company] (“Beneficiary”)

Name:

Title:

Name:

Title:

(A)

the United States or by any agency thereof or United States government sponsored enterprise;

(B)

any state of the United States;

(C)

any territory or possession of the United States or any other governmental unit in the United States; or

(D)

any agency or instrumentality of any governmental unit referred to in subparagraphs (B) and (C) of this Paragraph (1); provided, that obligations to be eligible under this Paragraph (D) shall be by law (statutory or otherwise) payable, as to both principal and interest, from taxes levied or by law required to be levied or from adequate special revenues pledged or otherwise appropriated or by law required to be provided for the purpose of such payment, but in no event shall obligations be eligible for investment under this paragraph if payable solely out of special assessments on properties benefited by local improvements.

1)

On the fifteenth (15th) calendar day of the last month of the Accounting Period, Pacific Life shall provide: (i) a grid containing the projected Coinsurance Reserve under a variety of market sensitivities; and (ii) the aggregate mapped Pacific Life VA investment distribution for equity funds, as of the prior month-end, to assist with step 3i, as shown in the Illustrative Example, attached hereto.

2)

On the twenty-second (22nd) calendar day of the same month, Pacific Life shall estimate the Reserve Credit Required Balance for the upcoming quarter-end using the sensitivity table from step 2 and the methodology below:

i.

Estimate the equity fund return since the prior month-end

ii.

Reduce the return calculated in step i. by 5%

iii.

Calculate the change in 10-year treasury rate since the prior month-end

iv.

Reduce the change in the 10-year treasury rate from step iii. by 25bps

v.

Estimate the ceded reserve by linearly interpolating sensitivities using assumptions ii. and iv.

vi.

Increase the change in the 10-year treasury from step iii. by 25bps

vii.

Estimate the ceded reserve by linearly interpolating sensitivities using assumptions ii. and vi.

viii.

The estimated Reserve Credit Required Balance is equal to the greater of amount v. and vii.

•

Adverse market conditions between the time of the estimate and upcoming quarter-end

•

Uncertainty in the sensitivity estimates due to basis difference, evolution of the inforce, changes in the hedge position, and other assumptions varying from experience

•

A margin is included for both treasury rate movement directions due to possible interactions between the stochastic and standard scenario reserves

3)

On the tenth (10th) business day following quarter-end, Pacific Life shall provide [XXX] with the actual Reserve Credit Required Balance as of the quarter-end.

1)

On 12/12/14 (10th business day in December), Pacific Life communicates to [XXX] that the ceded reserve amount as of 11/28/2014 (last business-day in November) is $0.2mm.

2)

On 12/15/14, Pacific Life provides the sensitivities of the ceded reserve as of 11/28/2014:

($mm)

Equity Sensitivity

  -50bps (floored at half of initial)  

Flat

+50bps

Flat

-10% Equity

-40% Equity

RTY (Small)

20%  

3)

On December 22, 2014, [XXX] uses the proposed methodology to determine the trust amount (note, the values as of 12/22/2014 are provided for illustration purposes):

i.

Estimate the fund return since 11/28/2014

RTY

SPTR

GDDUEAFE

ii.

Reduce the return calculated in step i. by 5%:

iii.

Calculate the change in 10 year treasury rate since 11/28/2014:

10-Year Treasury Yield    

iv.

Reduce the 10-year treasury rate from step iii. by 25bps:

v.

Estimate the ceded reserve by linearly interpolating sensitivities using ii. and iii:

•

Interpolate between equity sensitivities from the down 50 bps treasury yield column:

•

Interpolate between equity sensitivities from the flat treasury yield column:

•

Interpolate between the values from the equity interpolation based on the change in the

vi.

Increase the change in the 10-year treasury from step iii. by 25bps

vii.

Estimate the ceded reserve by linearly interpolating sensitivities using ii. and vi.

•

Interpolate between equity sensitivities from the flat treasury yield column:

•

Interpolate between equity sensitivities from the up 50bps treasury yield column:

•

Interpolate between the values from the equity interpolation based on the change in 10-year treasury yield:

viii.

The estimated Reserve Credit Required Balance is equal to the 15.8mm (which is the greater of step v., 5.2mm, and step vii., 5.8mm)

(a)

Failure to timely deliver the Obligations as required in Section 1 above,

(b)

A default in any term, condition or representation contained in or referred to in this Guaranty.

(a)

it is a corporation duly organized and validly existing under the laws of Delaware;

(b)

it has all requisite corporate power and authority to execute, deliver, and perform this Guaranty;

(c)

its execution, delivery, and performance of this Guaranty have been duly authorized by all necessary action on its part;

(d)

it has executed and delivered this Guaranty and this Guaranty is the legal, valid, and binding obligation of Guarantor, enforceable against it in accordance with its terms subject to the effect of applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws relating to or affecting creditors’ rights generally, and to the effect of general principles of equity (regardless of whether considered in a proceeding in equity or at law);

(e)

neither the execution nor delivery of this Guaranty nor compliance with or fulfillment of the terms, conditions, and provisions hereof, conflicts with, results in a material breach or violation of the terms, conditions, or provisions of, or constitutes a material default, an event of default, or an event creating rights of acceleration, termination, or cancellation, or a loss of rights under (i) the organizational documents of Guarantor, (ii) any judgment, decree, order, contract, agreement, indenture, instrument, note, mortgage, lease, governmental permit, or other authorization, right, restriction, or obligation to which Guarantor is a party or any of its property is subject or by which Guarantor is bound, or (iii) any federal, state, or local law, statute, ordinance, rule, or regulation applicable to Guarantor;

(f)

no consent, authorization, approval, order, license, certificate, or permit or act of or from, or declaration of filing with, any governmental authority or any party to any contract, agreement, instrument, lease, or license to which Guarantor is a party or by which Guarantor is bound, is required for the execution, delivery, performance, or compliance with the terms hereof by Guarantor, except as have been obtained as required prior to the date hereof;

(g)

there is no pending, or to the best of its knowledge, threatened, litigation against Guarantor in any court or before any commission or regulatory body, whether federal, state, or local, which challenges the validity or enforceability of this Guaranty; and

(h)

it is not insolvent within the meaning of applicable state laws and federal laws relating generally to bankruptcy, insolvency, or reorganization or relief of debtors.

Guarantor:

[XXX]

With a copy to:

[XXX]

AND

Ceding Company:

[XXX]

With a copy to:

[XXX]

By:

Name:

[XXX]

Its:

Executive Vice President and Treasurer