AMENDMENT NO. 3 to the VARIABLE ANNUITY GMIB REINSURANCE AGREEMENT, effective October 1, 2002, between MERRILL LYNCH LIFE INSURANCE COMPANY (the “CEDING COMPANY”) and ACE TEMPEST LIFE REINSURANCE LTD. (the “REINSURER”)

Exhibit 7(b)(1)
Amendment No. 3
to the
GMIB Reinsurance Agreement between MLLIC
and
ACE Tempest Life Reinsurance LTD.

AMENDMENT NO. 3

to the

VARIABLE ANNUITY GMIB REINSURANCE AGREEMENT,
effective October 1, 2002,

between

▇▇▇▇▇▇▇ ▇▇▇▇▇ LIFE INSURANCE COMPANY
(the “CEDING COMPANY”)

and

ACE TEMPEST LIFE REINSURANCE LTD.
(the “REINSURER”)

Effective August 1, 2008, this Amendment is hereby attached to and becomes a part of the above-described Reinsurance Treaty. It is mutually agreed that the Agreement will be updated to properly reflect fund changes and endorsements. In addition, it is mutually agreed that the Agreement will be amended to clarify the reinsurer approval process for retail fee increases and the addition of new riders with asset charges.

To effect these changes, the following provisions of the Agreement are hereby amended:

	•		Schedule ▇-▇, Contracts Subject to this Reinsurance Agreement is hereby replaced by the attached Schedule ▇-▇
	•		Schedule B-2, Subaccounts Subject to this Reinsurance Agreement is hereby replaced by the attached Schedule B-2
	•		Schedule C-1, Limits and Rules of the CEDING COMPANY is hereby replaced by the attached Schedule C-l
	•		Article III, Effective Date, Term, and Terminations is hereby replaced by the attached Article III.
	•		Article XVII — Notices is hereby replaced by the attached Article XVII

his amendment is effective only if fully executed on or before September 30, 2008.

▇▇▇▇▇▇▇ ▇▇▇▇▇ Life Insurance Company

ACE Tempest Life Reinsurance Ltd.

By

▇▇▇▇▇▇▇ ▇. Rlieg

By

▇▇▇▇ ▇▇▇▇▇

Name

▇▇▇▇▇▇▇ ▇. Rlieg

Name

▇▇▇▇ ▇▇▇▇▇

Title

Vice President

Title

SVP & Chief Pricing Officer

Date

July 11, 2008

Date

July 7, 2008

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SCHEDULE B-1

Contracts Subject to this Reinsurance Agreement

Form
Number*		Policy Description
ML-VA-002		Retirement Plus
ML-VA-006		▇▇▇ Annuity
ML-076		GMIB Rider for ▇▇▇ Annuity
ML-077		GMIB Rider for Retirement Plus
ML-076-4		Annuity Payout Rates for GMIB Rider: ▇▇▇ Annuity
ML-077-4		Annuity Payout Rates for GMIB Rider: Ret Plus
ML-076-4 (Uni-Sex)		Annuity Payout Rates for GMIB Rider: ▇▇▇ Annuity
ML-077-4 (Uni-Sex)		Annuity Payout Rates for GMIB Rider: Ret Plus

Other Endorsements
ML-048		Death Benefit Enhancement ▇▇▇▇▇
▇▇-049		Death Benefit Enhancement Rider

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SCHEDULE B-2

Subaccounts Subject to this Reinsurance Agreement

Retirement Plus
BlackRock Variable Series Funds, Inc.

BlackRock Balanced Capital ▇.▇.▇▇▇▇ **

BlackRock Basic Value ▇.▇.▇▇▇▇

BlackRock Total Return ▇.▇.▇▇▇▇
BlackRock Money Market ▇.▇.▇▇▇▇ *

BlackRock Fundamental Growth ▇.▇.▇▇▇▇

BlackRock Global Allocation ▇.▇.▇▇▇▇

BlackRock Global Growth ▇.▇.▇▇▇▇
BlackRock Government Income ▇.▇.▇▇▇▇

BlackRock High Income ▇.▇.▇▇▇▇
BlackRock S&P 500 Index ▇.▇.▇▇▇▇
BlackRock International Value V.I. Fund
BlackRock Large Cap Core ▇.▇.▇▇▇▇
BlackRock Large Cap Growth V.I. Fund

BlackRock Large Cap Value ▇.▇.▇▇▇▇
BlackRock Value Opportunities ▇.▇.▇▇▇▇

BlackRock Utilities and Telecommunications ▇.▇.▇▇▇▇ **

MLIG Variable Insurance Trust

▇▇▇▇▇▇/Lord ▇▇▇▇▇▇ Mid Cap Value Portfolio

▇▇▇▇▇▇/▇▇▇▇▇▇▇▇ Mid Cap Growth Portfolio
▇▇▇▇▇▇/Allianz NFJ Small Cap Value Portfolio
▇▇▇▇▇▇/▇▇ ▇▇▇▇▇▇ Small Cap Growth Portfolio

▇▇▇▇▇▇/Delaware Trend Portfolio
▇▇▇▇▇▇/Lord ▇▇▇▇▇▇ Affiliated Portfolio

▇▇▇▇▇▇/Allianz CCM Capital Appreciation Portfolio

AIM Variable Insurance Funds

AIM ▇.▇.▇▇▇▇▇▇▇ Appreciation Fund

AIM V.I.Core Equity Fund

AllianceBernstein Variable Products Series Fund, Inc.

AllianceBernstein Large Cap Growth Portfolio

AllianceBernstein Global Technology Portfolio

American Century Variable Portfolios, Inc.

VP International Fund

VP Ultra Fund

▇▇▇▇▇ Variable Account Fund, Inc.

▇▇▇▇▇ Value Portfolio

Federated Insurance Series

Federated Capital Appreciation Fund II

Federated ▇▇▇▇▇▇▇▇ Fund II

MFS Variable Insurance Trust

MFS Emerging Growth Series

PIMCO Variable Insurance Trust

Total Return Portfolio

▇▇▇ ▇▇▇▇▇▇ Life Investment Trust

▇▇▇▇▇▇▇▇ Portfolio

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SCHEDULE B-2 (Continued)

Subaccounts Subject to this Reinsurance Agreement

▇▇▇ Annuity

BlackRock Funds

Basic Value Fund

Total Return Fund

Fundamental Growth Fund

Global Allocation Fund

S&P 500 Index Fund

Government Income Fund

Value Opportunities Fund

AIM Funds

AIM Constellation Fund

AIM Charter Fund

AIlianceBernstein

AllianceBemstein Growth and Income Fund

AIlianceBernstein Large Cap Growth Fund

Allianz Funds

OCC Renaissance Fund

NFJ Small Cap Value Fund

American Funds

Bond Fund of America

Growth Fund of America

Income Fund of America

Investment Company of America

American Century

Equity Income Fund

Davis Funds

▇▇▇▇▇ New York Venture Fund

Delaware Investments

Delaware Trend Fund

Fidelity Investments

Fidelity Advisor Overseas Fund

Fidelity Advisor Equity Growth Fund

Lord ▇▇▇▇▇▇

Bond-Debenture Fund

Mid-Cap Value Fund

MFS Investment Management

MFS Core Growth Fund

MFS Research International Fund

MFS Mid Cap Growth Fund

Oppenheimer Funds

Global Fund

Main Street Fund

Quest Opportunity Value Fund

PIMCO Funds

Total Return Fund

▇▇▇▇▇▇ Investments

Fund for Growth and Income
International Equity Fund
Voyager Fund

▇▇▇▇▇▇▇▇ Value Fund Series

Smaller-Cap Value Fund

Franklin ▇▇▇▇▇▇▇▇▇ Investments

▇▇▇▇▇▇▇▇▇ Foreign Fund
▇▇▇▇▇▇▇▇▇ Growth Fund

▇▇▇ ▇▇▇▇▇▇ Investments

Aggressive Growth Fund
▇▇▇▇▇▇▇▇ Fund
Equity and Income Fund

▇▇▇▇▇▇▇ ▇▇▇▇▇ Investment Managers

Ready Assets Trust

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SCHEDULE C-l

Limits and Rules of the CEDING COMPANY

1)		CEDING COMPANY will determine the ADJUSTED GMIB CLAIM for each qualified annuitization within seven (7) working days of GMIB EXERCISE.
2)		CEDING COMPANY reserves the right to limit cumulative RETAIL ANNUITY PREMIUMS in excess of $1,000,000.
3)		The minimum annuity purchase is $5,000 for non-qualified contracts and $2,000 for qualified contracts for Retirement Plus and $25,000 for ▇▇▇ Annuity.
4)		Valid issue ages for GMIB are 0 to 75, age last birthday.
5)		Partial withdrawals of the ANNUITY CONTRACT’S REINSURED ACCOUNT VALUE will reduce the REINSURED GMIB BENEFIT BASE in the same proportion as the ratio of the REINSURED ACCOUNT VALUE immediately after the withdrawal to the REINSURED ACCOUNT VALUE immediately before the withdrawal, except as noted in the following. If the cumulative partial withdrawals in a year do not exceed the rollup percentage times the beginning of the year Rollup Benefit Base, then the partial withdrawals will reduce the Rollup Benefit Base dollar-for-dollar.

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ARTICLE III — EFFECTIVE DATE, TERM AND TERMINATION

A.

This Agreement covers individual ANNUITY CONTRACTs issued by the CEDING COMPANY that:

	(i)		are identified by form in Schedule ▇-▇;
	(ii)		have elected no optional benefit rider forms for which a retail fee is assessed other than those forms listed on Schedule ▇-▇;
	(iii)		have accounts invested in the investment funds listed in Schedule B-2;
	(iv)		are issued within the limits and rules described in Schedule C-l;
	(v)		are in compliance with all of the other terms and provisions of this Agreement;
	(vi)		have elected the Guaranteed Minimum Income Benefit, as described in Schedule A, on or after the EFFECTIVE DATE and prior to the date this Agreement ceases to cover new ANNUITY CONTRACTS; and
	(vii)		are ACTIVE CONTRACTS.

B.		This Agreement will cease to cover new ANNUITY CONTRACTS issued by the CEDING COMPANY on the earlier of (i) October 31, 2005 or (ii) the date that the sum of all cumulative RETAIL ANNUITY PREMIUMS exceeds the limit provided in Schedule C-2, paragraph 3.
C.		This Agreement will terminate with respect to each ANNUITY CONTRACT subject to it, as of the TERMINATION DATE.
D.		The CEDING COMPANY shall have the option of terminating this Agreement for new business, existing business, or both, by giving ninety (90) days advance notice to the REINSURER, after the occurrence of any of the following:

	1.		REINSURER’S Standard and Poor’s Rating is reduced to a “BBB” or lower.
			REINSURER must report any adverse change in Standard and Poor’s Rating to CEDING COMPANY within fifteen (15) days of the change. Any notice of termination given by the CEDING COMPANY enabled by such rating reduction shall be deemed withdrawn if REINSURER’s Standard and Poor’s Rating is restored to a level higher than “BBB” during the 90 day notice period;
	2.		An order is entered appointing a receiver, conservator or trustee for management of REINSURER or a proceeding is commenced for rehabilitation, liquidation, supervision or conservation of REINSURER;
	3.		REINSURER’S U.S. GAAP surplus position is reduced to 70% or less of its U.S. GAAP surplus position as of December 31, 2001. The REINSURER must report such a reduction within fifteen (15) days after it occurs. The

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REINSURER’s surplus position as of December 31, 2001 is provided in Schedule H. Any notice of termination given by the CEDING COMPANY enabled by such surplus reduction shall be deemed withdrawn if REINSURER’s U.S. GAAP surplus position is restored to a level higher than 70% of its U.S. GAAP surplus position as of December 31, 2001 during the 90 day notice period.

E.

The REINSURER shall have the option of terminating this Agreement for new business, existing business or both by giving ninety (90) days advance written notice to the CEDING COMPANY after the occurrence of any of the following:

	1.		The CEDING COMPANY fails to provide timely submissions of all material data required to be provided in accordance with Schedule G, provided that the REINSURER’s notice of termination identifies whether new contracts, existing contracts or both will be terminated and provided further that the REINSURER’s notice of termination shall be deemed withdrawn if the CEDING COMPANY, within 90 days after the date the REINSURER’s notice of termination is given, provides to the REINSURER all data submissions then in arrears.
	2.		The CEDING COMPANY fails to pay premium due on or before the REMITTANCE DATE. In the event that premium due is not paid by the REMITTANCE DATE, the REINSURER shall have the right to terminate this agreement by giving ninety (90) days advance notice of termination to the CEDING COMPANY. If all premiums in default and interest in accordance with Article III, paragraph F are received by the REINSURER within the ninety (90) day notice period, the Agreement will remain in effect and the notice of termination deemed withdrawn. If premium remains in default as of the close of the last day of the ninety (90) day notice period, the REINSURER’s liability for all risks reinsured associated with the defaulted premiums under this Agreement will terminate.

F.

Except as otherwise provided herein, upon termination of this Agreement for existing business, the REINSURER shall have no reinsurance liability with respect to any ANNUITY CONTRACT. Notwithstanding termination of reinsurance as provided herein, the REINSURER shall continue to be liable to the CEDING COMPANY for all unpaid ADJUSTED GMIB CLAIMS arising as a result of a GMIB EXERCISE of an ACTIVE CONTRACT made prior to the date this Agreement is terminated, and the CEDING COMPANY shall continue to be liable to the REINSURER for all unpaid MONTHLY REINSURANCE PREMIUMS earned by the REINSURER under this Agreement until the date the Agreement is terminated. Any net amounts due from either party after termination are subject to a daily interest charge equal to 1/365 times the sum of (a) and (b), where (a) is the 3 month LIBOR rate on the preceding MONTHLY VALUATION DATE as published in the Wall Street Journal; and (b) is 1.00%. Interest is assessed from the REMITTANCE DATE until the date paid.

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ARTICLE XVII — NOTICES

A.

All notices required to be given hereunder shall be in writing and shall be deemed delivered if personally delivered, sent via reputable overnight carrier, sent via facsimile with evidence of successful transmission, or dispatched by certified or registered mail, return receipt requested, postage prepaid, addressed to the parties as follows:

▇▇▇▇▇ ▇▇▇▇▇
Transamerica Capital Management
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇

With a copy to:
Transamerica Capital Management
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: TCM Legal Department
Fax: (▇▇▇) ▇▇▇-▇▇▇▇

Chief Financial Officer
ACE Tempest Life Reinsurance Ltd.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇: (▇▇▇) ▇▇▇-▇▇▇▇          Fax: (▇▇▇) ▇▇▇-▇▇▇▇

B.

Notice shall be deemed given on the date it is received in accordance with the foregoing. Any party may change the person and/or the address to which notices are to be sent by notifying the other party of such change of address in writing in accordance with the foregoing.

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