EX-g.3
AUTOMATIC AND FACULTATIVE
YEARLY RENEWABLE TERM REINSURANCE AGREEMENT
Effective March 29, 2004
Between
▇▇▇▇▇▇▇ NATIONAL LIFE INSURANCE COMPANY OF NEW YORK
("Ceding Company")
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
And
SECURITY LIFE OF DENVER INSURANCE COMPANY
("Reinsurer")
Security Life Center
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Reinsurer Agreement No. 0323-7107
AUTOMATIC AND FACULTATIVE
YEARLY RENEWABLE TERM REINSURANCE AGREEMENT
This Agreement is between
▇▇▇▇▇▇▇ NATIONAL LIFE INSURANCE COMPANY OF NEW YORK,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
And
SECURITY LIFE OF DENVER INSURANCE COMPANY,
Security Life Center, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇.
The Reinsurer agrees to reinsure certain portions of the Ceding Company's
contract risks as described in the terms and conditions of this Automatic and
Facultative Yearly Renewable Term Reinsurance Agreement (the "Agreement"), which
includes any attached Schedules and Exhibits
This reinsurance Agreement constitutes the entire Agreement between the parties
with respect to the business being reinsured hereunder and there are no
understandings between the parties other than as expressed in this Agreement.
Any change or modification to this Agreement is null and void unless made by
amendment to this Agreement and signed by both parties.
In witness of the above, the Ceding Company and the Reinsurer have by their
respective officers executed and delivered this Agreement in duplicate on the
dates indicated below, with an effective date of March 29, 2004.
▇▇▇▇▇▇▇ NATIONAL LIFE INSURANCE COMPANY OF NEW YORK SECURITY LIFE OF DENVER
INSURANCE COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇
----------------------------------------- -----------------------------------------
Title: SVP & Chief Actuary Title: Regional Head of Pricing
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Date: 3/1/05 Date: 1/4/05
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By: ▇▇▇▇▇▇▇ ▇. ▇▇▇ By: /s/ ▇▇▇ ▇. ▇▇▇▇
----------------------------------------- -----------------------------------------
Title: VP Title: President, Individual Re
----------------------------------------- -----------------------------------------
Date: 3/3/05 Date: Jan 4/05
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AUTOMATIC AND FACULTATIVE YEARLY RENEWABLE TERM
REINSURANCE AGREEMENT
Table of Contents
1. PARTIES TO AGREEMENT.............................................................................................4
2. REINSURANCE BASIS................................................................................................4
3. AUTOMATIC REINSURANCE TERMS......................................................................................4
a. CONVENTIONAL UNDERWRITING...............................................................................4
b. MAXIMUM DOLLAR RETENTION................................................................................5
c. REINSURERS' AUTOMATIC BINDING LIMITS....................................................................5
d. AUTOMATIC IN FORCE AND APPLIED FOR LIMIT................................................................5
e. RESIDENCE...............................................................................................5
f. MINIMUM CESSION.........................................................................................5
g. NO PRIOR FACULTATIVE SUBMISSIONS. ......................................................................5
4. AUTOMATIC REINSURANCE NOTICE PROCEDURE...........................................................................5
5. FACULTATIVE REINSURANCE..........................................................................................5
6. COMMENCEMENT OF REINSURANCE COVERAGE.............................................................................6
a. AUTOMATIC REINSURANCE...................................................................................6
b. FACULTATIVE REINSURANCE.................................................................................6
c. PRE-ISSUE COVERAGE......................................................................................6
7. BASIS OF REINSURANCE AMOUNT AND REINSURANCE PREMIUM RATES........................................................7
a. LIFE REINSURANCE........................................................................................7
b. SUPPLEMENTAL BENEFITS...................................................................................7
i. OTHER INSURED TERM INSURANCE RIDER.............................................................7
ii. SCHEDULED TERM INSURANCE RIDER.................................................................7
iii. TERMINAL ILLNESS RIDER.........................................................................7
c. TABLE RATED SUBSTANDARD PREMIUMS........................................................................8
d. FLAT EXTRA PREMIUMS.....................................................................................8
e. PREMIUM ADJUSTMENTS.....................................................................................8
8. CASH VALUES OR LOANS.............................................................................................8
9. PAYMENT OF REINSURANCE PREMIUMS..................................................................................9
a. PREMIUM DUE.............................................................................................9
b. FAILURE TO PAY REINSURANCE PREMIUMS.....................................................................9
c. OVERPAYMENT OF REINSURANCE PREMIUM......................................................................9
d. UNDERPAYMENT OF REINSURANCE PREMIUM.....................................................................9
e. RETURN OF REINSURANCE PREMIUM...........................................................................9
f. UNEARNED REINSURANCE PREMIUMS...........................................................................9
10. PREMIUM TAX REIMBURSEMENT.......................................................................................10
11. DAC TAX AGREEMENT...............................................................................................10
12. REPORTS.........................................................................................................10
13. RESERVES FOR REINSURANCE........................................................................................11
14. DEATH AND TERMINAL ILLNESS CLAIMS...............................................................................11
a. NOTICE OF DEATH OR TERMINAL ILLNESS....................................................................11
b. PROOFS.................................................................................................11
c. CLAIMS PAYABLE.........................................................................................12
d. AMOUNT AND PAYMENT OF DEATH OR TERMINAL ILLNESS CLAIMS.................................................12
e. CONTESTED CLAIMS.......................................................................................12
f. CLAIM EXPENSES.........................................................................................13
g. EXTRACONTRACTUAL DAMAGES...............................................................................13
15. POLICY CHANGES..................................................................................................13
a. NOTICE.................................................................................................13
b. INCREASES..............................................................................................14
c. REDUCTIONS OR TERMINATIONS.............................................................................14
d. RISK CLASSIFICATION CHANGES............................................................................14
e. NON-FORFEITURE BENEFITS (REDUCED PAID-UP)..............................................................14
16. EXCHANGES AND REPLACEMENTS......................................................................................14
a. NOTICE.................................................................................................14
b. EXCHANGES AND REPLACEMENTS.............................................................................15
17. POLICYHOLDER REINSTATEMENTS.....................................................................................15
a. AUTOMATIC REINSTATEMENT................................................................................15
b. FACULTATIVE REINSTATEMENT..............................................................................15
c. PREMIUM ADJUSTMENT.....................................................................................15
d. REINSTATEMENT FOLLOWING REINSURANCE OF NON-FORFEITURE BENEFITS.........................................15
18. INCREASE IN MAXIMUM DOLLAR RETENTION LIMITS AND RECAPTURE.......................................................16
a. NEW BUSINESS...........................................................................................16
b. RECAPTURE..............................................................................................16
19. ERROR AND OMISSION..............................................................................................17
20. INSOLVENCY......................................................................................................17
21. ARBITRATION.....................................................................................................18
a. GENERAL................................................................................................18
b. NOTICE.................................................................................................18
c. PROCEDURE..............................................................................................18
22. OFFSET..........................................................................................................19
23. GOOD FAITH; FINANCIAL SOLVENCY..................................................................................19
24. TREATMENT OF CONFIDENTIAL INFORMATION...........................................................................19
25. TERM OF THIS AGREEMENT AND TERMINATION..........................................................................20
26. MEDICAL INFORMATION BUREAU......................................................................................21
27. SEVERABILITY....................................................................................................21
28. SURVIVAL........................................................................................................22
29. NON-WAIVER......................................................................................................22
30. NEW YORK LAW AND JURISDICTION...................................................................................22
31. NOTIFICATIONS...................................................................................................22
Listing of Schedules:
SCHEDULE A - COVERAGE AND LIMITS
1. Plans Reinsured
2. Reinsurance Amount
3. Ceding Company's Maximum Dollar Retention Limits
4. Reinsurers' Automatic Binding Limits
5. Automatic In Force and Applied for Limits
6. Premium Due
7. Recapture Period
8. Net Amount at Risk
SCHEDULE B - REINSURANCE PREMIUMS
1. Reinsurance Premiums - Life
2. Reinsurance Premiums - Supplemental Benefits
3. Age Basis
B-I : STANDARD ANNUAL REINSURANCE PREMIUMS
[REDACTED] REINSURANCE RATES
SCHEDULE C - REPORTING INFORMATION
Information on Risks Reinsured
Sample Policy Exhibit Summary
Sample Reserve Credit Summary
Sample Accounting Summary
SCHEDULE D - FACULTATIVE FORMS
Application for Reinsurance
Notification of Reinsurance
EXHIBIT I - CEDING COMPANY'S UNDERWRITING GUIDELINES
AUTOMATIC AND FACULTATIVE YEARLY RENEWABLE TERM
REINSURANCE AGREEMENT
1. PARTIES TO AGREEMENT.
This Agreement is solely between the Reinsurer and the Ceding Company.
There is no third party beneficiary to this Agreement. Reinsurance
under this Agreement will not create any right or legal relationship
between the Reinsurer and any other person, for example, any insured,
policyholder, agent, beneficiary, assignee, or other reinsurer. The
Ceding Company agrees that it will not make the Reinsurer a party to
any litigation between any such third party and the Ceding Company. The
Ceding Company and the Reinsurer will not disclose the other's name to
these third parties with regard to the agreements or transactions that
are between the Ceding Company and the Reinsurer, unless the Ceding
Company or the Reinsurer gives prior written approval for the use of
its own name.
The terms of this Agreement are binding upon the parties, their
representatives, successors, and assigns. The parties to this Agreement
are bound by ongoing and continuing obligations and liabilities until
this Agreement terminates for new business and the underlying policies
are no longer in force, whichever occurs later. This Agreement shall
not be bifurcated, partially assigned, or partially assumed.
2. REINSURANCE BASIS.
This Agreement, including the attached Schedules, states the terms and
conditions of automatic and facultative reinsurance that is on a Yearly
Renewable Term basis. This Agreement is applicable only to reinsurance
of policies directly written by the Ceding Company. Any policies
acquired through merger with another company, reinsurance, or purchase
of another company's policies are not included under the terms of this
Agreement.
3. AUTOMATIC REINSURANCE TERMS.
The Ceding Company agrees to cede and the Reinsurer agrees to
automatically accept contractual risks on the life insurance plans and
supplemental benefits shown in Section 1 of Schedule A, subject to the
following requirements:
a. CONVENTIONAL UNDERWRITING.
Automatic reinsurance applies only to insurance applications
underwritten by the Ceding Company with conventional
underwriting and issue practices that are consistently
applied. Conventional underwriting and issue practices are
those customarily used and generally accepted by the Ceding
Company.
Some examples of non-customary underwriting practices that are
not acceptable for automatic reinsurance under this Agreement
are table-shaving programs, guaranteed issue, any form of
simplified underwriting, short-form applications, any form of
non-customary non-medical underwriting limits, or internal or
external policy exchanges that do not require conventional
underwriting.
Some examples of unacceptable issue practices that are not
acceptable for automatic reinsurance under this Agreement are
the issuance of a policy that has contestability or suicide
clauses with time limitations that are shorter than the
maximum allowed by state law and policy exchanges,
replacements or term conversions resulting from policies not
originally reinsured by the Reinsurer. The Ceding Company must
comply with Underwriting Guidelines at least as restrictive as
those set forth in Exhibit I.
b. MAXIMUM DOLLAR RETENTION.
The Ceding Company will retain, and not otherwise reinsure, an
amount of insurance on each life equal to its Maximum Dollar
Retention Limits shown in Section 3 of Schedule A. If the
Ceding Company's scheduled Maximum Dollar Retention Limit is
zero, automatic reinsurance is not available.
c. REINSURERS' AUTOMATIC BINDING LIMITS.
On any one life, the amount automatically reinsured under all
agreements with all reinsurers must not exceed the Reinsurers'
Automatic Binding Limits shown in Section 4 of Schedule A.
d. AUTOMATIC IN FORCE AND APPLIED FOR LIMIT.
The total amount of life insurance in force and applied for on
any one life with all companies, of which the Ceding Company
is aware, must not exceed the In Force and Applied For Limit
shown in Section 5 of Schedule A.
e. RESIDENCE.
Each insured must be a resident of New York at the time of issue.
f. MINIMUM CESSION.
There will be no minimum amount of reinsurance per cession for
this Agreement.
g. NO PRIOR FACULTATIVE SUBMISSIONS.
To be eligible for automatic reinsurance, the risk must not
have been submitted on a facultative basis to the Reinsurer or
any other reinsurer, within the last three years, unless the
reasons for the original facultative submission no longer
apply.
4. AUTOMATIC REINSURANCE NOTICE PROCEDURE.
After the policy has been paid for and delivered, the Ceding Company
will submit all relevant individual policy information, as defined in
Schedule C, in its next statement to the Reinsurer.
5. FACULTATIVE REINSURANCE.
The Ceding Company may apply for facultative reinsurance with the
Reinsurer on a risk if the automatic reinsurance terms are not met, or
if the terms are met and it prefers to apply for facultative
reinsurance. If the Ceding Company wishes to obtain a facultative quote
from other reinsurers on a risk eligible for automatic reinsurance, the
risk must also be submitted concurrently to the Reinsurer for a
facultative offer, but the Ceding Company shall be under no obligation
to await receipt of a facultative offer from the Reinsurer prior to
accepting a reinsurance quote from other reinsurers. The following
items must be submitted to obtain a facultative quote:
a. A form substantially similar to the Reinsurer's "Application
for Reinsurance" form shown in Schedule D.
b. Copies of the original insurance application, medical
examiner's reports, financial information, and all other
papers and information obtained by the Ceding Company
regarding the insurability of the risk.
c. The initial and ultimate risk amounts requested.
After receipt of the Ceding Company's application, the Reinsurer will
promptly examine the materials and notify the Ceding Company either of
the terms and conditions of the Reinsurer's offer for facultative
reinsurance or that no offer will be made. The Reinsurer's offer
expires 120 days after the offer is made, unless the written offer
specifically states otherwise. If the Ceding Company accepts the
Reinsurer's offer, then the Ceding Company will note its acceptance in
its underwriting file and mail, as soon as possible but no later than
90 days, a formal reinsurance cession to the Reinsurer using a form
substantially similar to the "Notification of Reinsurance" form shown
in Schedule D. If the Ceding Company does not accept the Reinsurer's
offer, then the Ceding Company will notify the Reinsurer in writing, as
soon as possible.
6. COMMENCEMENT OF REINSURANCE COVERAGE.
Commencement of the Reinsurer's reinsurance coverage on any policy or
pre-issue risk under this Agreement is described below:
a. AUTOMATIC REINSURANCE.
The Reinsurer's reinsurance coverage for any policy that is
ceded automatically under this Agreement will begin and
terminate simultaneously with the Ceding Company's contractual
liability for the policy reinsured, unless otherwise
terminated in accordance with the terms of this Agreement.
b. FACULTATIVE REINSURANCE.
The Reinsurer's reinsurance coverage for any policy that is
ceded facultatively under this Agreement will begin when:
i. The Ceding Company accepts the Reinsurer's offer; and
ii. The policy has been issued.
Reinsurer's reinsurance coverage for any policy that is ceded
facultatively under this Agreement will terminate
simultaneously with the Ceding Company's contractual liability
for the policy reinsured, unless otherwise terminated in
accordance with the terms of this Agreement.
c. PRE-ISSUE COVERAGE.
The Reinsurer will not be liable for benefits paid under the
Ceding Company's conditional receipt or temporary insurance
agreement unless all the conditions for automatic reinsurance
coverage under Article 3 of this Agreement are met. The
Reinsurer's liability under the Ceding Company's conditional
receipt or temporary insurance agreement is limited to the
lesser of i. or ii. below:
i. The Reinsurer's share of the Reinsurers' Automatic Binding
Limits shown in Section 4 of Schedule A.
ii. The amount for which the Ceding Company is liable,
less the amount the Ceding Company retained pursuant
to Section 2.a. of Schedule A, less any amount of
reinsurance with other reinsurers.
The pre-issue liability applies only once on any given life
regardless of how many receipts were issued or initial
premiums were accepted by the Ceding Company. After a policy
has been issued, no reinsurance benefits are payable under
this pre-issue coverage provision.
In the event that the Ceding Company's rules with respect to
cash handling and the issuance of conditional receipt or
temporary insurance are not followed, the Reinsurer will
participate in the liability if the conditions for automatic
reinsurance are met and the Ceding Company does not knowingly
allow such rules to be violated or condone such a practice.
Such liability shall be limited to the lesser of i or ii
above. As in all cases, the provisions of Article 14 apply to
such a claim.
7. BASIS OF REINSURANCE AMOUNT AND REINSURANCE PREMIUM RATES.
a. LIFE REINSURANCE.
Reinsurance shall be on a excess basis. The amount reinsured
on a policy is the policy's net amount at risk less the Ceding
Company's retention available on the policy less any amount of
reinsurance with other reinsurers. The retention on each life,
or both lives for joint policies, is shown in Section 3 of
Schedule A. The net amount at risk is defined in Section 8 of
Schedule A. The reinsurance premiums per [REDACTED] are shown
in Section 1 of Schedule B.
b. SUPPLEMENTAL BENEFITS.
For the supplemental benefits reinsured under this Agreement,
the following provisions will apply:
i. OTHER INSURED TERM INSURANCE RIDER.
For the Other Insured Term Insurance Rider, the
reinsurance benefit is the Reinsurer's Net Amount at
Risk on the rider. The reinsurance premiums for this
benefit are shown in Section 2.a of Schedule B.
ii. SCHEDULED TERM INSURANCE RIDER.
For the Scheduled Term Insurance Rider, the
reinsurance benefit is the Reinsurer's Net Amount at
Risk on the rider. The reinsurance premium rates for
the Scheduled Term Insurance Rider are shown in
Section 2.b of Schedule B.
iii. TERMINAL ILLNESS RIDER.
For the Terminal Illness Rider, the reinsurance
benefit is the Reinsurer's Net Amount at Risk on the
portion of the death benefit claimed under the rider.
The terminal illness benefit paid under the
provisions of the Terminal Illness Rider will
directly reduce the death benefit payable under the
Policy. In such situations, the Reinsurer will share
in the reduction of death benefit proportionally with
the Ceding Company, according to the Reinsurer's pool
share and the Ceding Company's quota share percentage
amount, as set forth in Section 2 of Schedule A. No
Supplemental Benefit Reinsurance Premium is payable
for this benefit.
c. TABLE RATED SUBSTANDARD PREMIUMS.
If the Ceding Company's policy is issued with a table rated
substandard premium, the reinsurance premiums shown in Section
1.b of Schedule B will apply.
d. FLAT EXTRA PREMIUMS.
If the Ceding Company's policy is issued with a flat extra
premium, the reinsurance premiums shown in Section 1.c of
Schedule B will apply.
e. PREMIUM ADJUSTMENTS.
The Reinsurer reserves the right to unilaterally increase the
reinsurance premiums if the Reinsurer increases the
reinsurance premium rates on all assumed yearly renewable term
reinsurance on individual life insurance policies, for which
the rates are not fully guaranteed. The maximum reinsurance
premiums are equal to the statutory valuation premiums for
yearly renewable term insurance at the maximum interest rates
and minimum mortality rates applicable at the policy issue
date. If the Reinsurer changes the reinsurance premiums, it
will give the Ceding Company 30 days prior written notice of
the rate change. Any change applies only to reinsurance
premiums due after the expiration of the 30 day notice period.
If the Reinsurer exercises the right to change rates, as set
forth above, the Ceding Company has the right, but no
obligation, to recapture in its entirety all of the reinsured
business, for which the Reinsurer increased the reinsurance
premiums, by giving the Reinsurer 30 days written notice of
the Ceding Company's intent to recapture said business. If the
Ceding Company chooses to recapture under the provisions of
this Article 7.e, the Ceding Company will not pay to the
Reinsurer any amount representing a recapture fee. Any
recapture pursuant to the conditions of this Article 7.e, will
be effective on each policy's anniversary immediately
following the expiration of the 30 day notice period. Such
notice to the Reinsurer must be provided within 30 days of the
receipt of the Reinsurer's rate change notice or else the
Ceding Company will be deemed to have accepted the Reinsurer's
rate change and will have forfeited the right to recapture
under the provisions of this Article 7.e for the specific
block of business for which the Reinsurer increased rates.
Upon the effective date of recapture and again six months
following the recapture, the Reinsurer will calculate a
terminal accounting that will include a refund of unearned
premiums and unpaid claims. The Reinsurer will not pay to the
Ceding Company any amount representing the reserve held on the
business. Payment of amounts specified in the terminal
accounting will be the Reinsurer's full and final payment to
the Ceding Company.
8. CASH VALUES OR LOANS.
This Agreement does not provide reinsurance for cash surrender values.
In addition, the Reinsurer will not participate in policy loans or
other forms of indebtedness on reinsured business.
9. PAYMENT OF REINSURANCE PREMIUMS
a. PREMIUM DUE.
The reinsurance premiums for each reinsurance cession are due
as shown in Section 6 of Schedule A.
b. FAILURE TO PAY REINSURANCE PREMIUMS.
If the reinsurance premiums are 60 days past due, for reasons
other than those due to error or omission as defined below in
Article 18, the premiums will be considered in default and the
Reinsurer may terminate the reinsurance upon 30 days' prior
written notice to the Ceding Company; provided, however, that
the termination shall be of no force and effect if the Ceding
Company cures the default within said 30 day period. The
Reinsurer will have no further liability as of the termination
date. The Ceding Company will be liable for the prorated
reinsurance premiums to the termination date. The Ceding
Company agrees that it will not force termination under the
provisions of this paragraph to avoid the recapture
requirements or to transfer the block of business reinsured to
another reinsurer.
c. OVERPAYMENT OF REINSURANCE PREMIUM.
If the Ceding Company overpays a reinsurance premium and the
Reinsurer accepts the overpayment, the Reinsurer's acceptance
will not constitute nor create a reinsurance liability nor
result in any additional reinsurance. Instead, the Reinsurer
will be liable to the Ceding Company for a credit in the
amount of the overpayment, without interest.
d. UNDERPAYMENT OF REINSURANCE PREMIUM.
If the Ceding Company fails to make a full premium payment for
a policy or policies reinsured hereunder, due to an error or
omission as defined below in Article 18, the amount of
reinsurance coverage provided by the Reinsurer shall not be
reduced. However, once the underpayment is discovered, the
Ceding Company will be required to pay to the Reinsurer the
difference between the full premium amount and the amount
actually paid, without interest. If payment of the full
premium is not made within 60 days after the discovery of the
underpayment, the underpayment shall be treated as a failure
to pay premiums and subject to the conditions of Article 9.b.,
above.
e. RETURN OF REINSURANCE PREMIUM.
If a misrepresentation or misstatement on an application or a
death of an insured by suicide results in the Ceding Company
returning the policy premiums to the policy owner rather than
paying the policy benefits, the Reinsurer will refund all of
the reinsurance premiums it received on that policy to the
Ceding Company, without interest.
This refund given by the Reinsurer will be in lieu of all
other reinsurance benefits payable on that policy under this
Agreement. If there is an adjustment to the policy benefits
due to a misrepresentation or misstatement of age or sex, a
corresponding adjustment will be made to the reinsurance
benefits.
f. UNEARNED REINSURANCE PREMIUMS.
Unearned reinsurance premiums will be returned on deaths,
surrenders and other terminations. This refund will be on a
prorated basis without interest from the date of termination
of the policy to the date through which a reinsurance premium
has been paid.
10. PREMIUM TAX REIMBURSEMENT.
The Reinsurer will not reimburse the Ceding Company for premium taxes.
11. DAC TAX AGREEMENT.
The Ceding Company and the Reinsurer hereby enter into an election
under Treasury Regulations Section 1.848-2(g) (8) whereby:
a. For each taxable year under this Agreement, the party with the
net positive consideration, as defined in the regulations
promulgated under Treasury Code Section 848, will capitalize
specified policy acquisition expenses with respect to this
Agreement without regard to general deductions limitation of
Section 848 (c) (1);
b. The Ceding Company and the Reinsurer agree to exchange
information pertaining to the net consideration under this
Agreement each year to ensure consistency or as otherwise
required by the Internal Revenue Service;
c. The Ceding Company will submit to the Reinsurer by May 1 of
each year its calculation of the net consideration for the
preceding calendar year. This schedule of calculations will be
accompanied by a statement signed by an officer of the Ceding
Company stating that the Ceding Company will report such net
consideration in its tax return for the preceding calendar
year;
d. The Reinsurer may contest such calculation by providing an
alternative calculation to the Ceding Company in writing
within 30 days of the Reinsurer's receipt of the Ceding
Company's calculation. If the Reinsurer does not so notify the
Ceding Company, the Reinsurer will report the net
consideration as determined by the Ceding Company in the
Reinsurer's tax return for the previous calendar year;
e. If the Reinsurer contests the Ceding Company's calculation of
the net consideration, the parties will act in good faith to
reach an agreement as to the correct amount within 30 days of
the date the Reinsurer submits its alternative calculation. If
the Ceding Company and the Reinsurer reach agreement on the
net amount of consideration, each party will report such
amount in their respective tax returns for the previous
calendar year.
Both Ceding Company and Reinsurer represent and warrant that they are
subject to U.S. taxation under either Subchapter L of Chapter 1, or
Subpart F of Subchapter N of Chapter 1 of the Internal Revenue Code of
1986, as amended.
12. REPORTS.
The administering party is the Ceding Company. The reporting period is
monthly. For each reporting period, the Ceding Company will submit a
statement to the Reinsurer with information that is substantially
similar to the information displayed in Schedule C. The statement will
include information on the risks reinsured with the Reinsurer, premiums
owed, policy exhibit activity, and an accounting summary. Within 15
days after the end of each calendar quarter, the Ceding Company will
submit a reserve credit summary similar to that shown in Schedule C.
13. RESERVES FOR REINSURANCE.
The Reinsurer shall hold reinsurance reserves in accordance with all
applicable laws and regulations that the Reinsurer deems controlling.
14. DEATH AND TERMINAL ILLNESS CLAIMS. a. NOTICE OF DEATH OR TERMINAL
ILLNESS.
The Ceding Company will notify the Reinsurer, as soon as
reasonably possible, after it receives notice of a claim,
arising from the death or terminal illness of an insured under
a Policy or supplemental benefit reinsured.
b. PROOFS.
The Ceding Company may elect not to provide the Reinsurer
proper death or terminal illness claim proofs, including a
copy of the insured's death certificate, if applicable, and
all death or terminal illness claim papers provided the
following conditions, as set forth below in Articles 14.b.i
through ▇▇.▇.▇▇, are satisfied. Proof of payment made by the
Ceding Company to the claimant will be provided to the
Reinsurer as verification when the death or terminal illness
claim has been paid.
i. The total face amount for contestable death
or terminal illness claims to be paid by the
Ceding Company to the claimant will be equal
to or less than [REDACTED].
ii. The total face amount for incontestable
death or terminal illness claims to be paid
by the Ceding Company to the claimant will
be equal to or less than [REDACTED].
iii.The Ceding Company agrees to provide the
Reinsurer with cause of death codes that
correspond or translate to similar codes
used by the Reinsurer.
iv. Notwithstanding Article 14.b., above, the
Ceding Company agrees to provide the
Reinsurer with proper death or terminal
illness claim proofs, all death or terminal
illness claim papers and a copy of the
insured's death certificate, if appropriate,
for all death or terminal illness claims
that were initially underwritten
facultatively, and for all contested death
or terminal illness claims, meaning those
death or terminal illness claims that are in
a dispute.
v. Upon the Reinsurer's request, the Ceding
Company agrees to send all death or terminal
illness claim proofs, papers, and death
certificates, if applicable, for a 5%
sampling of streamlined death or terminal
illness claims received in a given year.
vi. The Ceding Company acknowledges and agrees
that the process for death or terminal
illness claims streamlining as outlined in
Article 14.b may be revoked at anytime at
the sole discretion of the Reinsurer with
reasonable written notice given to the
Ceding Company, at which time the Ceding
Company agrees to provide all death or
terminal illness claim papers to the
Reinsurer to consider and process death or
terminal illness claims.
c. CLAIMS PAYABLE.
Claims are payable only as a result of the actual death (or
terminal illness) of an insured, to the extent reinsured under
this Agreement and for which there is contractual liability
for the death or terminal illness claim under the issuing
company's in force policy. Acceleration or estimation of death
claims on living individuals is not permitted, will not be
due, owing or payable, nor will they form the basis of any
claim against the Reinsurer whatsoever.
d. AMOUNT AND PAYMENT OF DEATH OR TERMINAL ILLNESS CLAIMS.
After the Reinsurer receives proper death or terminal illness
claim notice, proofs of the death or terminal illness claim,
and proof of payment of the death or terminal illness claim by
the Ceding Company, the Reinsurer will promptly pay the
reinsurance death benefits or terminal illness benefits due
and owing to the Ceding Company in one lump sum. The Ceding
Company's contractual liability for death or terminal illness
claims is binding on the Reinsurer. The maximum death benefit
payable to the Ceding Company under each reinsured policy is
the Net Amount at Risk, as set forth in Section 8 of Schedule
A, specifically reinsured hereunder. The total reinsurance in
all companies on a policy will not exceed the Ceding Company's
total contractual liability on the policy, less its amount
retained on the policy. The excess, if any, of the total
reinsurance in all companies plus Ceding Company's retained
amount on the policy over its contractual liability under the
reinsured policy will first be applied to reduce all
reinsurance on the policy. This reduction in reinsurance will
be shared among all the reinsurers in proportion to their
respective amounts of reinsurance prior to the reduction.
e. CONTESTED CLAIMS.
The Ceding Company will notify the Reinsurer in writing of its
intention to contest, compromise, or litigate a claim
involving a reinsured policy. At this time, the Ceding Company
will provide all information relevant to its intention to
contest, compromise, or litigate a claim to the Reinsurer,
including, but not limited to investigation papers, the
applicable underwriting file, and all claims proofs. The
Reinsurer may, within 30 days of receipt of all information
relevant to the claim, notify the Ceding Company in writing of
the Reinsurer's disagreement with the Ceding Company's
intention to contest, compromise, or litigate a claim. In
addition, as new relevant information becomes available to the
Ceding Company regarding said claim, the Ceding Company will
provide such information to the Reinsurer, and the Reinsurer
may, within 30 days of receipt of the new relevant information
on the claim, notify the Ceding Company in writing of the
Reinsurer's disagreement with the Ceding Company's intention
to contest, compromise, or litigate a claim. In the event the
Reinsurer disagrees with the Ceding Company's intention to
contest, compromise, or litigate a claim, the Reinsurer will
pay the Reinsurer's proportionate share of the Net Amount at
Risk on the claim in full to the Ceding Company. In this
event, the Reinsurer shall not share in any expense involved
in any such contest or compromise, nor in any reduction in
claim resulting therefrom. If the Reinsurer elects to
participate in the contest, compromise or litigation of said
claim, (i) the Reinsurer shall bear its proportionate share of
any settlement amount or judgment, as set forth in Article
14.g, below, as well as its proportionate share of any
expenses incurred by the Ceding Company in contesting,
compromising, or litigating any claim, as set forth in Article
14.f, below; and (ii) if the Ceding Company's contest,
compromise, or litigation results in a reduction in its
liability, the Reinsurer will benefit by a proportionate share
in such reduction. For purposes of this Article 14.e., the
Reinsurer's proportionate share shall be the proportion of the
Net Amount at Risk reinsured by the Reinsurer on the policy or
rider to the total Net Amount at Risk on such policy or rider.
If the Reinsurer should decline to participate in the contest,
compromise or litigation, the Reinsurer will then release all
of its liability by paying the Ceding Company its full share
of reinsurance death benefits for the policy and not sharing
in any subsequent reduction in liability.
f. CLAIM EXPENSES.
The Reinsurer will pay its share of reasonable investigation
and legal expenses connected with the litigation or settlement
of contractual liability claims unless the Reinsurer has
released its liability, in which case the Reinsurer will not
participate in any expenses after the date of release.
However, claim expenses do not include routine claim and
administration expenses, including the Ceding Company's home
office expenses. Also, expenses incurred in connection with a
dispute or contest arising out of conflicting claims of
entitlement to policy proceeds or benefits that the Ceding
Company admits are payable are not a claim expense under this
Agreement.
g. EXTRACONTRACTUAL DAMAGES.
The Reinsurer will not participate in and will not be liable
to pay the Ceding Company or others for any amounts in excess
of the Reinsurer's Net Amount at Risk. Extracontractual
damages or liabilities and related expenses and fees are
specifically excluded from the reinsurance coverage provided
under this Agreement. Extracontractual damages are any damages
awarded against the Ceding Company, including, for example,
those resulting from negligence, reckless or intentional
conduct, fraud, oppression, or bad faith committed by the
Ceding Company in connection with the mortality risk insurance
reinsured under this Agreement.
The excluded extracontractual damages will include, by way of
example and not limitation:
i. Actual and consequential damages;
ii. Damages for emotional distress or oppression;
iii. Punitive, exemplary or compensatory damages;
iv. Statutory damages, fines, or penalties;
v. Amounts in excess of the risk reinsured hereunder
that the Ceding Company pays to settle a dispute or
claim;
vi. Third-party attorney fees, costs and expenses.
However, for claim denials and rescissions, the Reinsurer will
reimburse the Ceding Company for the Ceding Company's
extracontractual damages that result from the Reinsurer's
actions that directly and proximately cause such
extracontractual damages. Any such reimbursement will be in
proportion to the Reinsurer's direct and proximate
participation in the actions that lead to the extracontractual
damages.
15. POLICY CHANGES.
a. NOTICE.
If a reinsured policy is changed, a corresponding change will
be made in the reinsurance coverage for that policy. The
Ceding Company will notify the Reinsurer of the change in the
Ceding Company's next accounting statement.
b. INCREASES.
If life insurance on a reinsured policy is increased and the
increase is subject to new underwriting evidence, then the
increase of life insurance on the reinsured policy will be
administered the same as the issuance of a new policy. If the
increase is not subject to new underwriting evidence, and
increases are scheduled and known at issue, then the increase
will be automatically accepted by the Reinsurer, but the total
amount of reinsurance is not to exceed the Reinsurers'
Automatic Binding Limits shown in Section 4 of Schedule A.
Reinsurance rates will be based on the original issue age,
duration since issuance of the original policy and the
original underwriting classification. Other increases not
subject to new underwriting evidence are not allowed under
this Agreement.
c. REDUCTIONS OR TERMINATIONS.
If life insurance on a reinsured policy is reduced, then the
Ceding Company will reduce or terminate reinsurance on that
life. The reinsured amount on the life with all reinsurers
will be reduced, effective on the same date, by the amount
required such that the Ceding Company maintains its Maximum
Dollar Retention Limit, as set forth in Section 3 of Schedule
A. If life insurance on a reinsured policy is terminated, then
reinsurance will cease on the date of such termination.
Reductions and terminations are permitted only when the
underlying policyholder directs such a reduction or
termination of the issuing company policy that is in force at
the time that the reductions and terminations take place.
d. RISK CLASSIFICATION CHANGES.
If a policyholder requests a Table Rating reduction or removal
of a Flat Extra, such change will be underwritten according to
the Ceding Company's Underwriting Guidelines as set forth in
Exhibit I. Risk classification changes on facultative policies
will be subject to the Reinsurer's approval.
e. NON-FORFEITURE BENEFITS (REDUCED PAID-UP).
If the original policy lapses and reduced paid up insurance is
elected under the terms of the policy, the amount reinsured
will be reduced and the Ceding Company will notify the
Reinsurer of the new amount of reinsurance. If reinsurance is
on an excess basis, reinsurance will be reduced by the full
amount of the reduction. If the amount of the reduction
exceeds the risk amount reinsured, the reinsurance on the
policy will be terminated. The reinsurance rates will remain
the same as the rates used for the original policy and will be
based on the original issue age, duration since issuance of
the original policy and the original underwriting
classification.
16. EXCHANGES AND REPLACEMENTS.
a. NOTICE.
If a policy reinsured under this Agreement is exchanged or
replaced, as defined below in 16.c, the Ceding Company will
notify the Reinsurer of the change in the Ceding Company's
next accounting statement. Unless mutually agreed otherwise in
writing, policies that are not reinsured with the Reinsurer
and that are exchanged or replaced with a plan covered under
this Agreement will not be reinsured hereunder.
b. EXCHANGES AND REPLACEMENTS.
For purposes of this Agreement, an exchange or replacement is
a new policy replacing an existing policy of the same type,
where the new policy lacks at least one of the following
characteristics: new business underwriting, full first year
commissions, new suicide period, or new contestable period.
For the purposes of this Article 16.b, a policy will be
considered to be of the `same type' if the new policy and the
previous policy are both individual life insurance plans,
reinsured on a YRT basis, where the rates are not fully
guaranteed. New policies resulting from exchanges or
replacements in the insurance reinsured hereunder will
continue to be ceded to the Reinsurer under this Agreement, in
an amount not to exceed the original amount reinsured
hereunder.
Reinsurance rates for exchanges or replacements will be those
in effect at issuance of the original policy and will be point
in scale (based on the original issue age, duration, and
original underwriting class since issuance of the original
policy). The recapture period applicable to the original
policy shall govern the new policy and duration shall be
measured from the effective date of the original policy.
If an exchange or replacement results in an increase in risk
amount, the increase will be underwritten by the Ceding
Company as new business and will be eligible for reinsurance
coverage under this Agreement as new business.
When an exchange or replacement is fully underwritten with new
suicide and contestable periods and full first year
commissions, the resulting policy will be administered the
same as the issuance of a new policy.
17. POLICYHOLDER REINSTATEMENTS.
a. AUTOMATIC REINSTATEMENT.
If the Ceding Company reinstates a policy that was originally
ceded to the Reinsurer as automatic reinsurance using
conventional underwriting practices, the Reinsurer's
reinsurance for that policy will be reinstated.
b. FACULTATIVE REINSTATEMENT.
If the Ceding Company has been requested to reinstate a policy
that was originally ceded to the Reinsurer as facultative
reinsurance, the Ceding Company will resubmit the case to the
Reinsurer for underwriting approval before the reinsurance can
be reinstated.
c. PREMIUM ADJUSTMENT.
The reinsurance premiums for the interval during which the
policy was lapsed will be paid to the Reinsurer on the same
basis as the Ceding Company charged its policyholder for the
reinstatement.
d. REINSTATEMENT FOLLOWING REINSURANCE OF NON-FORFEITURE BENEFITS.
If the Ceding Company has been requested to reinstate a
policy that was reinsured while on extended term or reduced
paid-up then the reinsurance for the extended term or reduced
paid up option will terminate and the original policy will be
reinstated using either the automatic or facultative
reinstatement procedures set forth above, in accordance with
the reinsurance method used for the original policy. If the
reinstatement results in an increase in the Reinsured Net
Amount at Risk greater than that attained at the time of the
non-forfeiture activity, the terms of Article 15b [Increases]
will govern the increase.
18. INCREASE IN MAXIMUM DOLLAR RETENTION LIMITS AND RECAPTURE.
a. NEW BUSINESS.
If the Ceding Company increases its Maximum Dollar Retention
Limits listed in Section 3 of Schedule A, then it may, at its
option and with 90 days' written notice to the Reinsurer,
increase its Maximum Dollar Retention Limits shown in Section
3 of Schedule A for policies issued after the effective date
of the Maximum Dollar Retention Limit increase.
A change to the Ceding Company's Maximum Dollar Retention
Limits will not affect the reinsured policies in force except
as specifically provided in Article 18.b, below. Furthermore,
unless agreed between the parties, an increase in Ceding
Company's Maximum Dollar Retention Limits will not effect an
increase in the total risk amount that it may automatically
cede to the Reinsurer.
b. RECAPTURE.
If the Ceding Company increases its Maximum Dollar Retention
Limits listed in Section 3 of Schedule A, then it may, with 90
days' written notice to the Reinsurer, reduce or recapture the
reinsurance in force subject to the following requirements:
i. An in-force cession is not eligible for recapture
until it has been reinsured for the minimum number of
years shown in Section 7 of Schedule A. The effective
date of the reduction in reinsurance will be the
later of the first policy anniversary following the
expiration of the 90-day notice period to recapture
and the policy anniversary date when the required
minimum number of years is attained.
ii. On all policies eligible for recapture, reinsurance
will be reduced by the amount necessary to increase
the total insurance retained up to the new Maximum
Dollar Retention Limits.
iii. If more than one policy per life is eligible for
recapture, then any recapture must be effected
beginning with the policy with the earliest issue
date and continuing in chronological order according
to the remaining policies' issue dates.
iv. The Ceding Company may not rescind its election to
recapture for policies becoming eligible at future
anniversaries.
v. Recapture of reinsurance will not be allowed on any
policy for which the Ceding Company did not keep its
Maximum Dollar Retention Limit at issue. The Ceding
Company's Maximum Dollar Retention Limits are stated
in Section 3 of Schedule A.
vi. If any policy eligible for recapture is also eligible
for recapture from other reinsurers, the reduction in
the Reinsurer's reinsurance on that policy will be in
proportion to the total amount of reinsurance on the
life with all reinsurers.
vii. Recapture will not be made on a basis that may result
in any anti-selection against the Reinsurer. The
Reinsurer maintains the discretion to determine when
anti-selection has occurred. Said determination will
be made in a fair an equitable manner.
19. ERROR AND OMISSION.
Any unintentional or accidental failure of the Ceding Company or the
Reinsurer to comply with the terms of this Agreement which can be shown
to be the result of an oversight, misunderstanding or clerical error,
will not be deemed a breach of this Agreement. Upon discovery, the
error will be corrected so that both parties are restored to the
position they would have occupied had the oversight, misunderstanding
or clerical error not occurred, except that no payment shall be made
with respect to interest or other amounts that might have been earned
through employment of any funds that would have been available if the
oversight, misunderstanding or clerical error had not occurred. Should
it not be possible to restore both parties to such a position, the
Ceding Company and the Reinsurer shall negotiate in good faith to
equitably apportion any resulting liabilities and expenses.
This provision applies only to oversights, misunderstandings or
clerical errors relating to the administration of reinsurance covered
by this Agreement. This provision does not apply to the administration
of the insurance provided by the Ceding Company to its insured or any
other errors or omissions committed by the Ceding Company with regard
to the policy reinsured hereunder.
20. INSOLVENCY.
In the event that the Ceding Company is deemed insolvent, as determined
by the Insurance Commissioner of the Ceding Company's state of
domicile, all reinsurance death or terminal illness claims payable
hereunder will be payable by the Reinsurer directly to the Ceding
Company, its liquidator, receiver or statutory successor, without
diminution because of the insolvency of the Ceding Company. It is
understood, however, that in the event of such insolvency, the
liquidator, receiver or statutory successor of the Ceding Company will
give written notice to the Reinsurer of the pendency of a death or
terminal illness claim against the Ceding Company on a risk reinsured
hereunder within a reasonable time after such death or terminal illness
claim is filed in the insolvency proceeding. Such notice will indicate
the policy reinsured and whether the death or terminal illness claim
could involve a possible liability on the part of the Reinsurer. During
the pendency of such claim, the Reinsurer may investigate such death or
terminal illness claim and interpose, at its own expense, in the
proceeding where such death or terminal illness claim is to be
adjudicated, any defense or defenses it may deem available to the
Ceding Company, its liquidator, receiver or statutory successor. It is
further understood that the expense thus incurred by the Reinsurer will
be chargeable, subject to court approval, against the Ceding Company as
part of the expense of liquidation to the extent of a proportionate
share of the benefit that may accrue to the Ceding Company solely as a
result of the defense undertaken by the Reinsurer. Where two or more
reinsurers are participating in the same death or terminal illness
claim and a majority in interest (determined with respect to shares of
net amount at risk) elects to interpose a defense or defenses to any
such death or terminal illness claim, the expense will be apportioned
among the reinsurers in the same proportion that the reinsurer's net
liability bears to the sum of the net liability of all reinsurers on
the insured's date of death or terminal illness.
21. ARBITRATION.
a. GENERAL.
Any dispute or other matter in question between the Ceding
Company and the Reinsurer arising out of, or relating to, the
formation, interpretation, performance, or breach of this
Agreement, whether such dispute arises before or after
termination of this Agreement, and whether in contract, tort,
or otherwise, shall be settled by arbitration.
b. NOTICE.
To initiate arbitration, either the Ceding Company or the
Reinsurer shall notify the other party in writing of its
desire to arbitrate. The notice shall identify the claimant,
the contract at issue, and the nature of the claims and/or
issues. Notice shall be sent certified mail, with return
receipt, or another service which produces a receipt. The
arbitration will be deemed to have been commenced on the date
the notice of arbitration is received.
c. PROCEDURE.
There will be three arbitrators who will each have no less
than 10 years of insurance or reinsurance industry experience
and who are current or former officers of life insurance or
life reinsurance companies other than the parties to this
Agreement, their affiliates or subsidiaries. The arbitrators
shall not be under the control of any party, nor shall any
member of the panel have a financial interest in the outcome
of the dispute. Within 30 days following the commencement of
the arbitration proceedings, each party will provide the other
with the identification of their appointed arbitrator, and
provide a copy of the arbitrator's curriculum vitae. If either
party refuses or neglects to appoint an arbitrator within 30
days, the other party may appoint the second arbitrator to act
as the appointed arbitrator for the defaulting party by
providing notice and a copy of the arbitrator's curriculum
vitae. Each party's appointed arbitrator shall appoint a third
arbitrator (the "Umpire"). If the two arbitrators are unable
to agree upon the selection of a third arbitrator within 30
days following their appointment, each arbitrator shall
nominate three candidates within 10 days thereafter, two of
whom the other shall decline and the decision shall be made by
drawing lots. In the event any arbitrator fails, refuses, or
becomes unable to act as such before an award has been
rendered, a successor shall be selected in the same manner as
the original arbitrator.
The claimant and respondent shall each submit initial briefs
to the panel outlining the issues in dispute and the reasons
for their respective positions within 30 days of the notice of
the appointment of the Umpire.
The arbitrators shall consider this Agreement an honorable
engagement rather than merely a legal obligation, and the
panel shall make its decision with consideration given to the
custom and usage of the insurance and reinsurance industry.
The arbitrators shall have the power to determine all
procedural rules of the arbitration, including, but not
limited to inspection of documents, examination of witnesses,
and any other matter related to the conduct of the
arbitration. The panel and the Umpire shall have the authority
to issue subpoenas (including subpoenas to third party
witnesses) and other orders to enforce their decisions. Ex
parte communications with party appointed arbitrators shall be
permitted until the arbitration hearing commences. The
arbitrators shall recognize the attorney/client privilege and
the attorney work product doctrine. Neither a party nor an
arbitrator may disclose the existence, content, or result of
any arbitration hereunder, except to the extent such
disclosure may be required for review and enforcement by a
court of competent jurisdiction, to support reinsurance or
retrocessional recoveries, or as otherwise agreed by the
parties. The location of all proceedings shall be the
headquarters of the Ceding Company, unless the parties agree
otherwise.
The panel may issue orders for interim relief upon showing of
good cause, including pre-award security. Absent good cause
for an extension as determined by the panel, the panel shall
render the final award within 9 months of the appointment of
the Umpire, unless the parties agree otherwise, and within 30
days after the date of the closing of the hearing. The panel
is authorized to award any remedy or sanctions allowed by
applicable law, including, but not limited to monetary
damages, equitable relief, pre or post award interest, costs
of arbitration, attorneys fees, and other final or interim
relief; provided that arbitrators shall not be empowered to
award damages in excess of compensatory damages. The decision
of the arbitrators will be made by majority rule, and shall be
final and binding on both parties. Either party to the
arbitration may petition any court having jurisdiction over
the parties to reduce the decision to judgment. Unless the
arbitrators decide otherwise, each party will bear the expense
of its own arbitration activities, including its appointed
arbitrator and any outside attorney and witness fees. The
parties will jointly and equally bear the expense of the third
arbitrator and other costs of the arbitration.
22. OFFSET.
All amounts due or otherwise accrued to any of the parties hereto
whether by reason of premiums, losses, expenses, or otherwise, under
this Agreement or any other contract heretofore or hereafter entered
into, between the parties hereto, will at all times be fully subject to
the right of offset and only the net balance will be due and payable.
The right of offset will not be affected or diminished because of the
insolvency of either party.
23. GOOD FAITH; FINANCIAL SOLVENCY.
This Agreement is entered into in reliance on warranties,
representations and disclosures contained herein. The parties agree to
act in good faith in carrying out their duties under this Agreement,
and in connection therewith, each party shall provide full and fair
disclosure of all information required to be reported to the other
under the terms of this Agreement. Each party represents and warrants
to the other party that it is solvent on a statutory basis in all
states in which it does business or is licensed. Each party agrees to
promptly notify the other if it is subsequently determined by the
insurance regulatory authority of any state in which it does business
or is licensed to be financially impaired on a statutory basis.
In addition, the Ceding Company affirms that it has disclosed and will
continue to disclose to the Reinsurer all matters material to this
Agreement, such as its underwriting and policy issues (rules,
philosophies, practices, and management personnel), its financial
condition, studies and reports on the business reinsured, and any
change in its ownership or control. The Reinsurer or its
representatives have the right at any reasonable time to inspect the
Ceding Company's records relating to this Agreement.
24. TREATMENT OF CONFIDENTIAL INFORMATION.
The Reinsurer acknowledges that in connection with this Agreement, it
may receive business or technical information and policyowner nonpublic
personal information from the Ceding Company which the Ceding Company
considers to be proprietary and confidential (collectively the
"Confidential Information"), the value of which might be lost if the
confidentiality of such information is not maintained. The Ceding
Company reserves all rights to the Confidential Information disclosed
to the Reinsurer by the Ceding Company, including the proprietary
features contained therein. The Reinsurer agrees: (i) to treat as
confidential all Confidential Information received from the Ceding
Company in the same manner in which the Reinsurer treats its own
confidential information; (ii) to disclose Confidential Information to
only those of its employees who have a need to know such information in
order to accomplish the purposes of this Agreement and who are made
aware of the confidentiality provisions of this Agreement; (iii) to not
disclose Confidential Information to any third party except as required
by law, except the Reinsurer may disclose such Confidential
Information, in order to accomplish the purposes of this Agreement, to
the Reinsurer's retrocessionaires and the Reinsurer's affiliates; and
(iv) to not use Confidential Information for any purpose except those
purposes permitted by the Agreement, and those purposes necessitated to
fulfill its obligations under the Agreement. The Reinsurer shall use
its best efforts to prevent any and all unlawful disclosures of such
information, including unlawful disclosures made by its employees.
The Reinsurer also agrees to provide a high degree of care in
maintaining appropriate measures to protect the security, integrity,
and confidentiality of any and all customer nonpublic personal
information (the "Measures") that the Ceding Company makes accessible
to the Reinsurer pursuant to this Agreement. The Measures shall be
designed to:
a. Ensure the security and confidentiality of customer nonpublic
personal information;
b. Protect against any anticipated threats or hazards to the security
or integrity of such information; and c. Protect against
unauthorized access to, or use of, such information that could
result in substantial harm or inconvenience to any customer.
A breach of the provisions in this Article 24 shall be considered a
material breach of the Agreement.
25. TERM OF THIS AGREEMENT AND TERMINATION.
a. The Ceding Company will maintain and continue the reinsurance
provided in this Agreement as long as the policy to which it
relates is in force or has not been fully recaptured. This
Agreement may be terminated, without cause, for the acceptance
of new reinsurance after 90 days' written notice of
termination by either party to the other. The Reinsurer will
continue to accept reinsurance during this 90-day period. The
Reinsurer's acceptance will be subject to both the terms of
this Agreement and the Ceding Company's payment of applicable
reinsurance premiums.
b. The Ceding Company shall have the option of terminating this
Agreement for existing business, and recapture all, but not
less than all of the business reinsured hereunder, by giving
90 days advance written notice to the Reinsurer, within 30
days of the occurrence of either of the following:
i. The Reinsurer's publicized claims paying ability
ratings assigned by two or more of the following
industry rating agencies, fall below the minimum
acceptable ratings, defined in the following table,
for more than 90 consecutive business days:
INDUSTRY RATING AGENCY MINIMUM ACCEPTABLE RATINGS
Standard & Poor's BBB-
▇▇▇▇▇'▇ A3
A.M. Best B+
Fitch BBB-
However, any industry rating agency that has either
discontinued its ratings services for any period of
time, or has not published a current claims paying
ability rating for the Reinsurer for any period of
time, will not be a specified industry rating agency
for that period. Any notice of termination given by
the Ceding Company due to such rating reduction shall
be deemed withdrawn if the Reinsurer's publicized
claims paying ability ratings are restored to a level
equal to of higher than minimum acceptable ratings
set forth in the preceding table during the 90 day
notice period; or
ii. An order is entered appointing a receiver,
conservator, or trustee for management of the
Reinsurer; or a proceeding is commenced for
rehabilitation, liquidation, or conservation of the
Reinsurer. The Ceding Company's right to terminate
and recapture the business reinsured under this
Agreement, pursuant to this Article 25.b.ii, will
expire when the conditions shown in this Article
25.b.ii are no longer satisfied.
In the event of the occurrence of either Article 25.b.i or
Article 25.b.ii, above, the Ceding Company will pay to the
Reinsurer a recapture fee equal to the present value of future
profits. If the Reinsurer and the Ceding Company are unable to
come to mutual agreement on the present value of future
profits, the parties agree to hire an independent actuarial
consultant to calculate the recapture fee. The expense of the
services of the actuarial consultant will be shared equally
between the Ceding Company and the Reinsurer. The Reinsurer
will not pay to the Ceding Company any amount representing the
reserves on the business.
c. In addition, this Agreement may be terminated immediately for
the reinsurance of new business by either party if one of the
parties materially breaches this Agreement, becomes insolvent,
or has been determined by the insurance regulatory authority
of any state in which it does business, or is licensed, to be
financially impaired on a statutory basis. The Ceding Company
agrees that it will not force termination under the provisions
of this Article solely to avoid the recapture requirements or
to transfer the block of business reinsured to another
reinsurer.
26. MEDICAL INFORMATION BUREAU.
The Reinsurer is required to strictly adhere to the Medical Information
Bureau Rules, and the Ceding Company agrees to abide by these Rules, as
amended from time to time. The Ceding Company will not submit a
preliminary notice, application for reinsurance, or reinsurance cession
to the Reinsurer unless the Ceding Company has an authentic, signed
preliminary or regular application for insurance in its home office and
the current required Medical Information Bureau authorization.
27. SEVERABILITY
In the event that any court, arbitrator, or administrative agency
determines any provision or term of this Agreement to be invalid,
illegal or unenforceable, all of the other terms and provisions of this
Agreement shall remain in full force and effect to the extent that
their continuance is practicable and consistent with the original
intent of the parties. However, in the event this Article is exercised
and the Agreement no longer reflects the original intent of the
parties, the parties agree to attempt to renegotiate this Agreement in
good faith to carry out its original intent.
28. SURVIVAL.
All provisions of this Agreement shall survive its termination to the
extent necessary to carry out the purposes of this Agreement or to
ascertain and enforce the parties' rights or obligations hereunder
existing at the time of termination.
29. NON-WAIVER.
No waiver by either party of any violation or default by the other
party in the performance of any promise, term or condition of this
Agreement shall be construed to be a waiver by such party of any other
or subsequent default in performance of the same or any other promise,
term or condition of this Agreement. No prior transactions or dealings
between the parties shall be deemed to establish any custom or usage
waiving or modifying any provision hereof. The failure of either party
to enforce any part of this Agreement shall not constitute a waiver by
such party of its right to do so, nor shall it be deemed to be an act
of ratification or consent.
30. NEW YORK LAW AND JURISDICTION.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to any jurisdiction's
choice of law rules. In the event of the need for a judicial
determination respecting this Agreement, the Ceding Company and the
Reinsurer will consent to the jurisdiction of any court of general
jurisdiction within the State of New York.
31. NOTIFICATIONS.
Any notice, demand or other document required or permitted to be
delivered hereunder will be in writing and will be (i) mailed by
first-class, registered or certified United States mail, postage
prepaid, or (ii) delivered in person, and will be addressed to the
recipient in the manner indicated below:
NOTICE TO CEDING COMPANY.
▇▇▇▇▇▇▇ National Life Insurance Company of New York
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
NOTICE TO REINSURER.
Security Life of Denver Insurance Company
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Each notice, demand, or other document that is delivered in the manner
described above will be deemed to be sufficiently delivered, given,
served, sent, provided, and received for all purposes at such time as
it is delivered to the addressee (with the return receipt, delivery
receipt, or affidavit of messenger), or at such time as delivery is
refused upon presentation.
SCHEDULE A
COVERAGE AND LIMITS
1. PLANS REINSURED:
The policy plans and supplemental benefits eligible for automatic and
facultative reinsurance coverage are:
================================================================================= =================================
Plans Plan Codes
--------------------------------------------------------------------------------- ---------------------------------
Perspective Investor VUL VL100, VL1NY
--------------------------------------------------------------------------------- ---------------------------------
Other Insured Term Insurance Rider OR100, OR2NY
--------------------------------------------------------------------------------- ---------------------------------
Scheduled Term Insurance Rider SR100, SR1NY
--------------------------------------------------------------------------------- ---------------------------------
Terminal Illness Rider
================================================================================= =================================
Policies reinsured hereunder may be backdated up to six months prior to
issue date in order to save age.
2. REINSURANCE AMOUNT:
a. AUTOMATIC LIFE REINSURANCE:
Subject to the Reinsurer's share of the Reinsurers' Automatic
Acceptance Limits in Section 4 of Schedule A, the Reinsurer
will automatically reinsure 20.00% of the excess Net Amount at
Risk, as defined in Section 8 of this Schedule A, above the
Ceding Company's Maximum Dollar Retention Limits, which are
defined in Section 3 of this Schedule A.
b. FACULTATIVE LIFE REINSURANCE:
The Ceding Company's amount and the Reinsurer's amount of the
Net Amount at Risk shall be determined on a case-by-case basis
for facultative cessions.
c. SCHEDULED TERM INSURANCE RIDER:
Where the Scheduled Term Insurance Rider is issued, the Ceding
Company will cede to the pool an amount based on the ultimate
(or highest) Scheduled Term Insurance Rider (STR) amount plus
the base/target amount plus any other insurance issued by the
Ceding Company on the insured minus the Ceding Company's
Maximum Dollar Retention Limit. The Ceding Company will also
treat the ultimate amount of STR plus the base/target amount
plus any other insurance in force with the insured as the
total for Automatic Binding Limits and In Force and Applied
For Limits. The following examples describe the intentions of
the parties.
o BASE OF [REDACTED] VUL WITH THE HIGHEST (ULTIMATE)
AMOUNT OF STR BEING [REDACTED]: The Ceding Company
will treat the case as a [REDACTED] face amount for
evaluating the Automatic Binding Limit and In Force
and Applied For Limits. Therefore, we would calculate
[REDACTED] ultimately retained and [REDACTED]
ultimately ceded, and the Ceding Company will
proportionately cede [REDACTED]% ([REDACTED] divided
by [REDACTED]) from each of the initial base and all
future increases on the STR as scheduled.
o BASE OF [REDACTED] VUL WITH THE HIGHEST (ULTIMATE)
AMOUNT OF STR BEING [REDACTED] PLUS [REDACTED] IN
FORCE WITH THE CEDING COMPANY WITH [REDACTED]
RETAINED: The Ceding Company would calculate
retention as [REDACTED] minus the
SCHEDULE A, CONTINUED
[REDACTED] already retained for [REDACTED] ultimately
retained, and would cede [REDACTED]% ([REDACTED]
divided by [REDACTED]) from each of the initial base
and all future increases on the STR as scheduled.
o BASE OF [REDACTED] WITH THE HIGHEST (ULTIMATE) AMOUNT
OF STR BEING [REDACTED]: The Ceding Company would
treat the case as facultative since the ultimate
amount exceeds the Automatic Binding Limit, and would
expect to normally retain the full Maximum Dollar
Retention Limit.
o BASE OF [REDACTED] WITH THE HIGHEST (ULTIMATE) AMOUNT
OF STR BEING [REDACTED] WITH [REDACTED] IN FORCE: The
Ceding Company would treat the case as facultative
since the total amount in force and applied for
exceeds the In Force and Applied For Limits, and
would retain the full Maximum Dollar Retention Limit.
The Ceding Company will accept an average of a 10% per year
increase in STR ultimate amount above the base/target amount,
but will allow no schedule that allows more than a 50%
increase from the target amount in any one year. Any annual
increase larger than 10% must not allow the average increases
for the policy to exceed 10% per year up to and including the
year with the larger increase. Any cases requesting higher
percentages may be considered facultatively.
3. CEDING COMPANY'S MAXIMUM DOLLAR RETENTION LIMITS:
============================================================================================================
NEW YORK BUSINESS RETENTION
------------------------------------------------------------------------------------------------------------
Issue Age Std-Table 2 Table 3-8 Table 9 +
-------------------------------------------- --------------------- --------------------- -------------------
0 - 65 [REDACTED] [REDACTED] [REDACTED]
-------------------------------------------- --------------------- --------------------- -------------------
66 - 75 [REDACTED] [REDACTED] [REDACTED]
-------------------------------------------- --------------------- --------------------- -------------------
76 - 85 [REDACTED] [REDACTED] [REDACTED]
-------------------------------------------- --------------------- --------------------- -------------------
86 + [REDACTED] [REDACTED] [REDACTED]
============================================ ===================== ===================== ===================
4. REINSURERS' AUTOMATIC BINDING LIMITS:
On each life, the amount automatically reinsured under all agreements
with all reinsurers, including the Ceding Company's share, must not
exceed the following:
============================================================================================================
NEW YORK BUSINESS AUTOMATIC BINDING LIMITS
------------------------------------------------------------------------------------------------------------
Issue Age Std-Table 2 Table 3-8 Table 9 - 16
-------------------------------------------- --------------------- --------------------- -------------------
0 - 65 [REDACTED] [REDACTED] [REDACTED]
-------------------------------------------- --------------------- --------------------- -------------------
66 - 75 [REDACTED] [REDACTED] [REDACTED]
-------------------------------------------- --------------------- --------------------- -------------------
76 - 85 [REDACTED] [REDACTED] [REDACTED]
-------------------------------------------- --------------------- --------------------- -------------------
86 + [REDACTED] [REDACTED] [REDACTED]
============================================ ===================== ===================== ===================
5. AUTOMATIC IN FORCE AND APPLIED FOR LIMIT:
The total amount of life insurance in force and applied for on any one
life with all companies, of which the Ceding Company is aware, must not
exceed the amounts set forth in the following table:
================================================== ==================== ====================================
Std-Table 6 Table 7 - 16
-------------------------------------------------- -------------------- ------------------------------------
New York Business [REDACTED] [REDACTED]
================================================== ==================== ====================================
6. PREMIUM DUE:
Reinsurance premiums are due annually in advance. These premiums are
due on the issue date and each subsequent policy anniversary.
7. RECAPTURE PERIOD:
Recapture is only allowed in accordance with Article 18.b of this
Agreement. The minimum number of years for a cession to be reinsured
before it is eligible for recapture pursuant to Article 18.b. is 20
years.
8. NET AMOUNT AT RISK:
The Net Amount at Risk on the policies and riders eligible for
reinsurance under this Agreement, is defined below:
OPTION A BASE POLICY: The Net Amount at Risk is the Death Benefit minus
the Policy Value, where the Death Benefit is the greater of the Face
Amount or the minimum amount required under Section 7702 of the IRC.
OPTION B BASE POLICY: The Net Amount at Risk is the Death Benefit minus
the Policy Value, where the Death Benefit is the greater of the Face
Amount plus Policy Value or the minimum amount required under Section
7702 of the IRC.
OPTION C BASE POLICY: The Net Amount at Risk is the Death Benefit minus
the Policy Value, where Death Benefit is the greater of the Face Amount
plus the sum of the premiums paid by the policyholder minus all prior
total partial surrender amounts, or the minimum amount required under
Section 7702 of the IRC.
OTHER INSURED TERM INSURANCE RIDER: The Net Amount at Risk is the Face
Amount of the rider.
SCHEDULED TERM INSURANCE RIDER: The Net Amount at Risk upon issue
of the rider is as described in Section 2a of this Schedule A.
For purposes of this Agreement, the following will apply:
The Face Amount is the amount the Ceding Company uses to determine the
death benefit and proceeds payable under the policy. The Initial Base
Face Amount will be shown in the policy data of the policy.
The Policy Value is the sum of the policy fixed account value and the
variable account value.
SCHEDULE B
REINSURANCE PREMIUMS
1. REINSURANCE PREMIUMS - LIFE:
a. Standard annual reinsurance premiums per [REDACTED] reinsured
are the following percentages of the [REDACTED] Reinsurance
Rates attached to this Schedule B, as Schedule B--I:
============================================================================================================
[REDACTED]
------------------------------------------------------------------------------------------------------------
Year 1 Years 2 - 20 Years 21 +
-------------------------------------------- --------------------- -------------------- --------------------
All Classes [REDACTED] [REDACTED] [REDACTED]
============================================ ===================== ==================== ====================
b. Table rated substandard reinsurance premiums are the
appropriate multiple of the standard reinsurance premiums
([REDACTED]% per table).
c. Flat Extra reinsurance premiums are the following percentages
of such premiums charged the insured:
======================================================================================================
Permanent flat extra premiums (for more than [REDACTED] years duration)
--------------------------------------------------- --------------------------------------------------
First Year [REDACTED]%
--------------------------------------------------- --------------------------------------------------
Renewal Years [REDACTED]%
=================================================== ==================================================
======================================================================================================
Temporary flat extra premiums (for [REDACTED] years or less duration)
--------------------------------------------------- --------------------------------------------------
All Years [REDACTED]%
=================================================== ==================================================
2. REINSURANCE PREMIUMS - SUPPLEMENTAL BENEFITS:
a. OTHER INSURED TERM INSURANCE RIDER:
For Other Insured Term Insurance Rider, the reinsurance
premiums are the following percentages of the [REDACTED]
Reinsurance Rates, attached to this Schedule B, as Schedule
B--I, for the reinsured portion of the policy:
============================================================================================================
OTHER INSURED TERM INSURANCE RIDER
------------------------------------------------------------------------------------------------------------
Year 1 Years 2 - 20 Years 21 +
------------------------- --------------------------- -------------------------- ---------------------------
All Classes [REDACTED] [REDACTED] [REDACTED]
========================= =========================== ========================== ===========================
b. SCHEDULED TERM INSURANCE RIDER:
For Scheduled Term Insurance Rider, the reinsurance premiums
are the following percentages of the [REDACTED] Reinsurance
Rates, attached to this Schedule B, as Schedule B--I, for the
reinsured portion of the policy:
============================================================================================================
SCHEDULED TERM INSURANCE RIDER
------------------------------------------------------------------------------------------------------------
Year 1 Years 2 - 20 Years 21 +
------------------------------------------ --------------------- --------------------- ---------------------
All Classes [REDACTED] [REDACTED] [REDACTED]
========================================== ===================== ===================== =====================
3. AGE BASIS:
Age Nearest Birthday
SCHEDULE B--I
REINSURANCE PREMIUMS
STANDARD ANNUAL COINSURANCE PREMIUMS
[REDACTED] REINSURANCE RATES
SCHEDULE C
REPORTING INFORMATION
INFORMATION ON RISKS REINSURED
1. Type of Transaction
2. Effective Date of Transaction
3. Automatic/Facultative Indicator
4. Policy Number
5. Full Name of Insured
6. Date of Birth
7. Sex
8. Smoker/Nonsmoker
9. Policy Plan Code
10. Insured's State of Residence
11. Issue Age
12. Issue Date
13. Duration from Original Policy Date
14. Face Amount Issued
15. Reinsured Amount (Initial Amount)
16. Reinsured Amount (Current Amount at Risk)
17. Change in Amount at Risk Since Last Report
18. Death Benefit Option (For Universal Life Type Plans)
19. ADB Amount (If Applicable)
20. Substandard Rating
21. Flat Extra Amount Per Thousand
22. Duration of Flat Extra
23. ▇▇ ▇▇▇▇▇ (Yes or No)
24. Previous Policies (Yes or No)
25. Premiums
SCHEDULE C, CONTINUED
SAMPLE POLICY EXHIBIT SUMMARY
(LIFE REINSURANCE ONLY)
CEDING COMPANY:
--------------------------------------------------------------------------------
REINSURER:
--------------------------------------------------------------------------------
ACCOUNT NO:
--------------------------------------------------------------------------------
PREPARED BY: Phone: ( )
------------------------------ ------------ ---------------------
DATE PREPARED:
--------------------------------------------------------------------------------
TYPE OF REINSURANCE:
Yearly Renewable Term
------------------------------------------
Coinsurance
------------------------------------------
Modified Coinsurance
------------------------------------------
Other
------------------------------------------
VALUATION DATE:
------------------
NUMBER OF AMOUNT OF
POLICIES REINSURANCE
A. In Force Beginning
of Period / /
------ ------ ------- ---------------- --------------------------
B. New Paid Reinsurance Ceded
---------------- --------------------------
C. Reinstatements
---------------- --------------------------
D. Revivals
---------------- --------------------------
E. Increases (Net)
---------------- --------------------------
F. Conversion In
---------------- --------------------------
G. Transfers In
---------------- --------------------------
H. Total Increases (B - G)
---------------- --------------------------
I. Deaths
---------------- --------------------------
J. Maturities
---------------- --------------------------
K. Cancellations
---------------- --------------------------
L. Expiries
---------------- --------------------------
M. Surrenders
---------------- --------------------------
N. Lapses
---------------- --------------------------
O. Recaptures
---------------- --------------------------
P. Other Decreases (Net)
---------------- --------------------------
Q. Reductions
---------------- --------------------------
R. Conversions Out
---------------- --------------------------
S. Transfers Out
---------------- --------------------------
T. Total Decreases (I - S)
---------------- --------------------------
U. Current In Force / /
----- ------ ------ ---------------- --------------------------
(A + H - T)
SCHEDULE C, CONTINUED
SAMPLE RESERVE CREDIT SUMMARY
CEDING COMPANY:
------------------------------------------------------------------------------
REINSURER:
------------------------------------------------------------------------------
ACCOUNT NO:
------------------------------------------------------------------------------
PREPARED BY: Phone: ( )
------------------------------ ------------ -------------------
DATE PREPARED:
------------------------------------------------------------------------------
TYPE OF REINSURANCE:
Yearly Renewable Term
------------------------------------------
Coinsurance
------------------------------------------
Modified Coinsurance
------------------------------------------
Other
------------------------------------------
VALUATION DATE:
------------------
TYPE OF RESERVES:
Statutory
------------------------------------------
GAAP
------------------------------------------
Tax
------------------------------------------
ISSUE
VALUATION BASIS YEAR IN FORCE IN FORCE RESERVE
MORTALITY INTEREST VALUATION RANGE COUNT AMOUNT CREDIT
A. Life Insurance
-------------- ----------- -------------- --------- ----------- ----------- -------------
-------------- ----------- -------------- --------- ----------- ----------- -------------
B. Accidental
Death Benefit
-------------- ----------- -------------- --------- ----------- ----------- -------------
C. Disability
Active Lives
-------------- ----------- -------------- --------- ----------- ----------- -------------
D. Disability
Disabled Lives
-------------- ----------- -------------- --------- ----------- ----------- -------------
E. Other
Please Explain
-------------- ----------- -------------- --------- ----------- ----------- -------------
GRAND TOTAL:
-----------
SCHEDULE C, CONTINUED
SAMPLE ACCOUNTING SUMMARY
CEDING COMPANY:
------------------------------------------------------------------------------
REINSURER:
------------------------------------------------------------------------------
ACCOUNT NO:
------------------------------------------------------------------------------
PREPARED BY: Phone: ( )
------------------------------ ------------ -------------------
DATE PREPARED:
------------------------------------------------------------------------------
TYPE OF REINSURANCE:
Yearly Renewable Term
------------------------------------------
Coinsurance
------------------------------------------
Modified Coinsurance
------------------------------------------
Other
------------------------------------------
VALUATION DATE:
----------------------------
LIFE WP AD TOTAL
Premiums
First Year
------------ ----------- ----------- ------------
Renewal
------------ ----------- ----------- ------------
Allowances
First Year
------------ ----------- ----------- ------------
Renewal
------------ ----------- ----------- ------------
Adjustments
First Year
------------ ----------- ----------- ------------
Renewal
------------ ----------- ----------- ------------
Net Due Reinsurer
First Year
------------ ----------- ----------- ------------
Renewal
------------ ----------- ----------- ------------
TOTAL DUE
------------ ----------- ----------- ------------
(The above information should be a summary of
the detailed information provided to the Reinsurer.)
SCHEDULE D
FACULTATIVE FORMS
(See attached sample forms.)
Application for Reinsurance
Notification of Reinsurance
EXHIBIT I
CEDING COMPANY'S UNDERWRITING GUIDELINES
(See attached)