5
EXCESS OF LOSS
REINSURANCE AGREEMENT
(hereinafter the "Agreement")
Entered into Between
MANULIFE REINSURANCE LIMITED
of
▇▇▇▇▇▇▇▇, Bermuda
(hereinafter the "Ceding Company")
AND
▇▇▇▇▇▇▇ FINANCIAL LIFE AND ANNUITY INSURANCE COMPANY (formerly
"The College Life Insurance Company of America")
of
Dallas, Texas
(hereinafter the "Reinsurer")
October 1, 2000
Table of Contents
Page
ARTICLE I GENERAL PROVISIONS 3
ARTICLE II REINSURANCE PREMIUMS 5
ARTICLE III BENEFIT PAYMENTS 5
ARTICLE IV OVERRIDE COMMISSION 6
ARTICLE V ACCOUNTING AND SETTLEMENTS 6
ARTICLE VI DURATION 7
ARTICLE VII TERMINAL ACCOUNTING AND SETTLEMENT 9
ARTICLE VIII PROXY TAX 9
ARTICLE IX ARBITRATION 11
ARTICLE X GOVERNING LAW 12
ARTICLE XI INSOLVENCY 12
ARTICLE XII REPRESENTATIONS AND WARRANTIES 13
ARTICLE XIII EXECUTION AND EFFECTIVE DATE 14
SCHEDULE A QUARTERLY REPORT OF ACTIVITY AND SETTLEMENT 15
SCHEDULE B NOVATION 16
EXCESS OF LOSS
REINSURANCE AGREEMENT
The Ceding Company and the Reinsurer mutually agree to reinsure on the terms and
conditions stated herein. This Agreement is an indemnity reinsurance agreement
solely between the Ceding Company and the Reinsurer, and performance of the
obligations of each party under this Agreement will be rendered solely to the
other party. In no instance will anyone other than the Ceding Company or the
Reinsurer have any rights under this Agreement, and the underlying direct
writing companies will be and remain solely liable to any insured, policyowner
or beneficiary under any policy reinsured hereunder.
ARTICLE I
GENERAL PROVISIONS
1. Policies and Risks Reinsured. The Reinsurer agrees to indemnify
the Ceding Company for, and the Ceding Company agrees to reinsure
with the Reinsurer, according to the terms and conditions hereof,
the excess of loss portion of the risks assumed by the Ceding
Company under the Coinsurance and Modified Coinsurance Agreement
numbered 5073 effective as of October 1, 2000 (the "Underlying
Agreement") by and between the Ceding Company and Employers
Reassurance Corporation ("Underlying Ceding Company").
2. Coverages and Exclusions. Only the risks reinsured under the
Underlying Agreement are reinsured under this Agreement.
3. Expenses. The Reinsurer will bear no part of the expenses
incurred in connection with the risks reinsured hereunder, except
as otherwise provided herein.
4. No Extracontractual Damages. The Reinsurer does not indemnify the Ceding
Company for, and will not be liable for, any extracontractual damages or
extracontractual liability resulting from fraud, oppression, bad faith,
strict liability, or negligent, reckless or intentional wrongs on the
part of the Ceding Company or its directors, officers, employees and
agents. The following types of damages are examples of damages that
would be excluded from this Agreement for the conduct described above:
actual damages, damages for emotional distress, and punitive or
exemplary damages.
5. Inspection. At any reasonable time, the Reinsurer may inspect, during
normal business hours, at the principal office of the Ceding Company,
the original papers and any and all other books or documents relating to
or affecting reinsurance under this Agreement. The Reinsurer will not
use any information obtained through any inspection pursuant to this
Paragraph for any purpose not relating to reinsurance hereunder.
6. Misunderstandings and Oversights. If any failure to pay amounts due or
to perform any other act required by this Agreement is unintentional and
caused by misunderstanding or oversight, the Ceding Company and the
Reinsurer will adjust the situation to what it would have been had the
misunderstanding or oversight not occurred.
7. Currency. All amounts in this Agreement are in U.S. dollars
unless specified otherwise. Any amounts payable in currency other than
U.S. dollars shall be paid in U.S. dollars at the rate(s) of exchange
as agreed by the parties or at the rate of exchange on the date that
payment was made.
8. Assignment. Neither party may assign any of its rights, duties or
obligations under this Agreement without prior written consent of the
other party.
9. Amendments. This Agreement may be amended only by written agreement
of the parties.
10. Entire Agreement. The terms expressed herein constitute the entire
agreement between the parties with respect to the risks reinsured
hereunder. There are no understandings between the parties with respect
to the risks reinsured hereunder other than as expressed in this
Agreement. Except where otherwise indicated herein, the words and terms
in this agreement shall have the same meaning as given in the Underlying
Agreement.
11. Severability. In the event that any provision or term of this Agreement
shall be held to be illegal or unenforceable, all of the other terms and
provisions shall remain in full force and effect, except if the
provision or term held to be illegal or unenforceable is also held to be
a material part of this Agreement such that the party in whose favor the
material term or provision was stipulated herein would not have entered
into this Agreement without such term or provision, then the party in
whose favor the material term or provision was stipulated shall have the
right, upon such holding, to terminate this Agreement.
12. Non-Waiver of Rights. No forbearance on the part of either party to
insist upon compliance by the other party with the terms of this
Agreement shall be construed as, or constitute a waiver of, any of the
terms of this Agreement.
13. Survival of Representations and Warranties. All obligations,
representations and warranties made in this Agreement shall survive the
termination of this Agreement and shall continue in full force and
effect until all obligations of the parties hereunder have been
discharged in full.
▇▇▇▇▇▇ ▇▇
REINSURANCE PREMIUMS
At the end of each Accounting Period, the Ceding Company will pay the Reinsurer,
with respect to the risks reinsured under the Agreement, Reinsurance Premiums
equal to the greater of zero and (a) less (b) where:
(a) equals any positive settlement amounts collected by the Ceding
Company on the Underlying Agreement including any interest on
delayed payments received by the Ceding Company and
(b) equals any Cumulative Loss Carry Forward amounts as defined in
Article III increased by a proportionate share of any interest
on delayed payments received by the Ceding Company in (a) above.
The Loss Carry Forward Repayment for a given Accounting Period is defined as the
lesser of (a) and (b) above.
ARTICLE III
BENEFIT PAYMENTS
At the end of each Accounting Period, the Reinsurer will pay the Ceding Company,
with respect to the risks reinsured under the Agreement, Benefit Payments equal
to the greater of (a) zero and (b) any settlement amounts payable by Ceding
Company on the Underlying Agreement less $25,000. The resulting unreimbursed
amount (the lesser of $25,000 or the absolute value of any negative settlement
on the Underlying Agreement) will be considered a Loss Carry Forward.
A Cumulative Loss Carry Forward will be calculated as (a) plus (b) less (c)
where:
(a) equals the Cumulative Loss Carry Forward from the prior Accounting Period
with interest at the annualized rate equal to the 3 month U.S. Treasury
▇▇▇▇ discount rate as of the end of the prior Accounting Period plus 2%
(the annualized rate will be adjusted to a quarterly rate by dividing the
rate by four);
(b) equals the current Accounting Period Loss Carry Forward; and
(c) equals any Loss Carry Forward Repayment for the current Accounting
Period per Article II.
ARTICLE IV
OVERRIDE COMMISSION
At the end of each Accounting Period, the Reinsurer will pay the Ceding Company
an Override Commission equal to fifty (50) basis points multiplied by the
Unamortized Ceding Commission at the start of the quarter, where the Unamortized
Ceding Commission is in accordance with the Underlying Agreement. The Override
Commission will be increased by a proportionate share of any interest on delayed
payments received by the Ceding Company noted in Article II, item a.
ARTICLE V
ACCOUNTING AND SETTLEMENTS
1. Quarterly Accounting Period. Each Accounting Period under this Agreement
will be a calendar quarter, except that: (a) the initial Accounting
Period runs from the Effective Date of this Agreement through December
31, 2000, and (b) the final Accounting Period runs from the end of the
preceding Accounting Period until the terminal accounting date of this
Agreement as described in Article VII, Paragraph 2.
2. Quarterly Accounting Reports. Accounting reports in the form of Schedule
A will be submitted to the Reinsurer by the Ceding Company for each
Accounting Period not later than fifteen (15) days after the Ceding
Company receives the Underlying Ceding Company's report under the
Underlying Agreement for such Accounting Period. Such reports will
include information on the amount of Reinsurance Premiums, Benefit
Payments, and the Override Commission.
3. Quarterly Settlements. If the amount shown in Paragraph 2 is due the
Reinsurer, the Ceding Company's payment thereof shall accompany the
report, provided that the Ceding Company has received all amounts from
the Underlying Ceding Company under the Underlying Agreement. If the
amount shown in Paragraph 2 is due the Ceding Company, the Reinsurer
shall make its payment thereof to the Ceding Company within 15 days
after receiving the report.
4. Estimations. If the amounts, as defined in Paragraph 2 above, cannot be
determined at such dates on an exact basis, such payments will be paid
in accordance with a mutually agreed upon formula which will approximate
the actual payments. Adjustments will then be made to reflect actual
amounts when they are available.
5. Delayed Payments. For purposes of Paragraph 3 above, if there is a
delayed settlement of a payment due, there will be an interest penalty,
at an interest rate equal to the prevailing 3 month U.S. Treasury ▇▇▇▇
discount rate on the date the payment becomes overdue plus 2%, for the
period that the amount is overdue.
6. Offset of Payments. Any debts or credits, matured or unmatured,
liquidated or unliquidated, regardless of when they arose or were
incurred, in favor of or against either the Ceding Company or the
Reinsurer with respect to this Agreement or with respect to any other
claim of one party against the other are deemed mutual debts or credits,
as the case may be, and only the balance shall be allowed or paid. In
the event of insolvency of the Ceding Company or the Reinsurer, offsets
shall be allowed in accordance with applicable law.
ARTICLE VI
DURATION
1. Reinsurer's Liability. The liability of the Reinsurer with respect to
the risks reinsured hereunder will begin simultaneously with that of
the Ceding Company, but not prior to the Effective Date of this
Agreement. The Reinsurer's liability with respect to any risk reinsured
hereunder will terminate on the earlier of: (i) the date such risk is
recaptured by the Underlying Ceding Company under the Underlying
Agreement or (ii) the date this Agreement is terminated or commuted
pursuant to this Article. Termination of the Reinsurer's liability is
subject to payments in respect of such liability in accordance with the
provisions of Article VII of this Agreement.
If any event or defect occurs that would give rise to a right of any
party to terminate the Underlying Agreement, the Ceding Company shall
provide 10 days written notice of such event to the Reinsurer.
2. Period of Duration. Upon the earlier of:
----------------------------
(a) the first day of the Accounting Period immediately following
complete amortization of the Unamortized Ceding Commission,
per the Underlying Agreement;
(b) a date specified by the Reinsurer in accordance with Paragraph 3 of
this Article; and
(c) July 1, 2006
the Reinsurer shall assume all of the Ceding Company's rights and
obligations under the Underlying Agreement between the Ceding Company
and the Underlying Ceding Company (the "Assumption"). Upon the
Assumption, the parties hereto shall execute, and take all necessary
steps to cause the Underlying Ceding Company to execute, a Novation
Agreement substantially in the form attached as Schedule B, effective
as of the date of the Assumption.
Immediately following the Agreement, this Agreement shall be commuted
and the Reinsurer shall pay the Commutation Compensation to the Ceding
Company within 30 days of the Assumption. For the purposes of this
Agreement, "Commutation Compensation" shall mean the amount equal to
the sum of the following: (i) the Cumulative Loss Carryforward on the
date of commutation, (ii) any amounts otherwise due and payable by the
Reinsurer to the Ceding Company under this Agreement which have not
been settled on the date of commutation; and (iii) any interest due on
items (i) and (ii) above.
The effect of the Assumption and subsequent commutation of this
Agreement shall be that the parties agree to a commutation of this
Agreement in accordance with this Article and that the Ceding Company
and Reinsurer will be released from all liability under this Agreement.
3. Early Assumption. In accordance with Paragraph 2 of this Article,
Assumption shall occur at the Reinsurer's option upon 60 days written
notice to the Ceding Company on any date specified below, subject to
the Reinsurer satisfying the payment conditions stated therein:
(a) On a date after January 1, 2005 or the first day of any Accounting
Period when the Unamortized Ceding Commission is less than
$5,000,000, subject to the payment to the Ceding Company of the
Commutation Compensation;
(b) On a date between January 1, 2004 and December 31, 2004, including
those dates, subject to the payment to the Ceding Company of the
Commutation Compensation plus 1% of the Unamortized Ceding
Commission on the date of the commutation; or
(c) On a date between January 1, 2003 and December 31, 2003, including
those dates, subject to the payment to the Ceding Company of the
Commutation Compensation plus 2% of the Unamortized Ceding
Commission on the date of the commutation.
ARTICLE VII
TERMINAL ACCOUNTING AND SETTLEMENT
1. Terminal Accounting. In the event that this Agreement is terminated in
accordance with Article VI, or the liability of the Reinsurer with
respect to all risks reinsured hereunder is otherwise terminated in
accordance with Article VI, the Ceding Company shall furnish to the
Reinsurer a Terminal Accounting and Settlement not later than fifteen
(15) days after the Ceding Company receives the Underlying Ceding
Company's report under the Underlying Agreement for the final
Accounting Period..
2. Date. The terminal accounting date will be the effective
date of termination or any other date mutually agreed to in
writing.
3. Settlement. The Terminal Accounting and Settlement will
consist of the amounts described in Article VI, payable to
the Ceding Company
Such amount will be paid by the Reinsurer to the Ceding Company within
thirty (30) days after the receipt of the Terminal Accounting and
Settlement.
The Reinsurer and the Ceding Company each agree to pay the other simple
interest, at the prevailing 3 month U.S. Treasury ▇▇▇▇ discount rate
plus 2% as determined on the day the accounts are due, on all amounts
due and not remitted when due.
3. Supplementary Accounting and Settlement. In the event that, subsequent
to the Terminal Accounting and Settlement as provided above, a change is
made with respect to any amounts due, a supplementary accounting will
take place pursuant to Paragraph 3 above. Any amount owed to the Ceding
Company or to the Reinsurer by reason of such supplementary accounting
will be paid promptly upon the completion thereof.
ARTICLE VIII
PROXY TAX
1. Proxy Tax Reimbursement. Pursuant to IRC Section 848 as added by the
Revenue Reconciliation Act of 1990, insurance companies are required to
capitalize and amortize specified policy acquisition expenses. The amount
capitalized is determined by proxy based on a percentage of net premiums. At the
Reinsurer's request, the Ceding Company will reimburse the Reinsurer for any
positive timing cost to the Reinsurer which results from the application of IRC
Section 848 to the risks reinsured hereunder and which the Reinsurer considers
material. At the Ceding Company's request, the Reinsurer will reimburse the
Ceding Company for the absolute value of any negative timing cost to the
Reinsurer which results from the application of IRC Section 848 to the risks
reinsured hereunder and which the Ceding Company considers material. The
Reinsurer and the Ceding Company agree, however, that any timing cost which
would result from the regulations published on December 29, 1992, by the
Internal Revenue Service under IRC Section 848 would not be material and thus
not subject to reimbursement hereunder. The Ceding Company and Reinsurer agree
to negotiate in good faith if the tax circumstances of the parties change or
changes in the tax code create unanticipated adverse economic affects for one
party and offsetting favorable consequences for the other.
2. Election to Determine Specified Policy Acquisition Expenses. The Ceding
Company and the Reinsurer agree that the party with net positive consideration
under this Agreement will capitalize specified policy acquisition expenses with
respect to policies reinsured under this Agreement without regard to the general
deductions limitation of Section 848(c) (1) of the Internal Revenue Code of
1986, as amended. The Ceding Company and the Reinsurer will exchange information
pertaining to the amount of net consideration under this Agreement each year to
ensure consistency. The Reinsurer will submit a schedule to the Ceding Company
by May 1 of each year presenting its calculation of the net consideration for
the preceding taxable year. The Ceding Company may contest the calculation in
writing within thirty (30) days of receipt of the Reinsurer's schedule. Any
differences will be resolved between the parties so that consistent amounts are
reported on the respective tax returns for the preceding taxable year. This
election to capitalize specified policy acquisition expense without regard to
the general deductions limitation is effective for all taxable years during
which this Agreement remains in effect.
ARTICLE IX
ARBITRATION
1. Basis for Arbitration. The Ceding Company and Reinsurer mutually
understand and agree that the wording and interpretation of this
Agreement is based on the usual customs and practices of the insurance
and reinsurance industry. While both Parties agree to act in good faith
in its dealings with each other, it is understood and recognized that
situations may arise in which they cannot reach an agreement.
In the event that any dispute cannot be resolved to the Ceding Company
and Reinsurer's mutual satisfaction, the dispute will first be subject
to good-faith negotiation as described below in an attempt to resolve
the dispute without the need to institute formal arbitration
proceedings.
2. Negotiation. Within ten days after one of the Parties has given the
other the first written notification of the specific dispute, each of the
Parties will appoint a designated officer to attempt to resolve the dispute. The
officers will meet at a mutually agreeable location as early as possible and as
often as necessary, in order to gather and furnish the other with all
appropriate and relevant information concerning the dispute. The officers will
discuss the problem and will negotiate in good faith without the necessity of
any formal arbitration proceedings. During the negotiation process, all
reasonable requests made by one officer to the other for information will be
honored. The specific format for such discussions will be decided by the
designated officers.
If the officers cannot resolve the dispute within thirty days of their
first meeting, both Parties agree that they will submit the dispute to
formal arbitration. However, the Ceding Company and Reinsurer may agree
in writing to extend the negotiation period for an additional thirty
days.
3. Arbitration Proceedings. No later than fifteen days after the final
negotiation meeting, the officers taking part in the negotiation will
give both the Ceding Company and Reinsurer written confirmation that
they are unable to resolve the dispute and that they recommend
establishment of formal arbitration.
An arbitration panel consisting of three active or retired officers of
life insurance or reinsurance companies not affiliated with either the
Ceding Company or Reinsurer in any way will settle the dispute. Each
Party will appoint one arbitrator and the two will select a third. In
the event that the arbitrators are unable to agree on a third arbitrator
within sixty (60) calendar days from the date one of the arbitrators
sends written notice to the arbitrator requesting that the arbitrators
select a third arbitrator, then either party may petition the court to
select the third arbitrator.
Once the arbitration panel has been constituted, the third arbitrator
shall contact the parties or their counsel in writing and request a
telephone conference. The purpose of the telephone conference is to set
a date when the parties, their counsel and the arbitration panel will
meet to address organizational matters relating to the arbitration.
The arbitration proceedings will be conducted according to the
Commercial Arbitration Rules of the American Arbitration Association
that are in effect at the time the arbitration begins.
The arbitration will take place where the Reinsurer is located unless
the Ceding Company and Reinsurer mutually agree otherwise.
Within sixty days after the beginning of the arbitration proceedings the
arbitrators will issue a written decision on the dispute and a statement
of any award to be paid as a result. In resolving the merits of the
parties' difference of opinion the arbitration panel is relieved from
all judicial formalities and may abstain from following the strict rule
of law, but shall interpret this Agreement as an honourable engagement
and not merely a legal obligation. The arbitration panel shall make any
interim and final award to effectuate the general purpose of the
Agreement in a reasonable manner rather than in accordance with a
literal or strictly legal interpretation of its language.
The decision will be final and binding on both the Ceding Company and
Reinsurer and there will be no further appeal.
The Ceding Company and Reinsurer may mutually agree to extend any of the
negotiation or arbitration periods shown in this Article.
Unless otherwise decided by the arbitrators, the Ceding Company and
Reinsurer will share in their proportion of all expenses resulting from
the arbitration, including the fees and expenses for the arbitrators,
except that each Party will be responsible for its own attorneys' fees.
ARTICLE X
GOVERNING LAW
This Agreement shall be interpreted and governed by the laws of the state of
Texas without regard to its rules with respect to conflict of law.
ARTICLE XI
INSOLVENCY
The Ceding Company and the Reinsurer agree that, in the event of the insolvency
of the Ceding Company, as to all reinsurance made, ceded, renewed or otherwise
becoming effective after the Effective Date of this Agreement, the reinsurance
shall be payable by the Reinsurer on the basis of the amount of liability of the
Ceding Company under the contract or contracts reinsured, without diminution
because of the insolvency of the Ceding Company; furthermore, that such amount
shall be paid directly to the Ceding Company or its liquidator, receiver or
other statutory successor.
It is understood and agreed, however, that the obligations of the Ceding Company
as set forth in this Agreement, including, among others, the duty to
investigate, settle and defend all claims arising under risks with respect to
which reinsurance is afforded by this Agreement, shall remain unimpaired and
unaffected by the insolvency of the Ceding Company and shall be assumed by the
liquidator, receiver or statutory successor of the Ceding Company in the
liquidation or receivership proceeding and that such liquidator, receiver or
statutory successor shall give written notice to the Reinsurer of the pendency
of a claim against the Ceding Company on the policy reinsured within a
reasonable time after such claim is filed in the insolvency proceeding and that
during the pendency of such claim the Reinsurer may investigate such claim and
inter-pose, at its own expense, in the proceeding where such claim is to be
adjudicated, any defense or defenses which it may deem available to the Ceding
Company, its liquidator, receiver or statutory successor. The expense thus
incurred by the Reinsurer shall be chargeable, subject to court approval,
against the insolvent Ceding Company as part of the expense of liquidation to
the extent of a proportionate share of the benefit which may accrue to the
Ceding Company solely as the result of the defense undertaken or asserted by the
Reinsurer.
Where two or more Reinsurers are involved in the same claim and a majority in
interest elect to interpose a defense to such claim, the expense shall be
apportioned in accordance with the terms of this Agreement as though such
expense had been incurred by the Ceding Company.
Nothing hereinabove set forth in this insolvency clause shall in anywise change
the relationship or status of the parties hereto, to wit, that of Ceding Company
and Reinsurer, nor enlarge the obligations of either party to each other, except
as specifically hereinabove provided, to wit, to pay the statutory successor on
the basis of the amount of liability of the Ceding Company under the contract or
contracts reinsured, rather than on the basis of the actual amount of loss
(dividends) paid by the liquidator, receiver or statutory successor to allowed
claimants, nor shall anything in this insolvency clause in any manner create any
obligations or establish any rights against the Reinsurer in favor of any third
parties or any persons not parties to this Agreement.
ARTICLE XII
REPRESENTATIONS AND WARRANTIES
The Ceding Company and Reinsurer represent and warrant that all requisite
corporate authorizations, consents or approvals in connection with the
execution, delivery or performance of this Agreement have been obtained.
ARTICLE XIII
EXECUTION AND EFFECTIVE DATE
In order to reflect the Reinsurer's January 1, 2001 name change from The College
Life Insurance Company of America to ▇▇▇▇▇▇▇ Financial Life and Annuity
Insurance Company effective upon the same date, the former company is deleted
and the latter company is substituted.
In witness of the above, this Agreement is executed in duplicate on the dates
indicated below with an Effective Date of October 1, 2000.
MANULIFE REINSURANCE LIMITED
("Ceding Company")
BY: ____________________________ ATTEST: ______________________
TITLE: ____________________________ TITLE: ________________________
DATE: ____________________________ DATE: ________________________
▇▇▇▇▇▇▇ FINANCIAL LIFE AND ANNUITY INSURANCE COMPANY (formerly "The College Life
Insurance Company of America")
("Reinsurer")
BY: ____________________________ ATTEST: ______________________
TITLE: ____________________________ TITLE: ________________________
DATE: ____________________________ DATE: ________________________
SCHEDULE A
QUARTERLY REPORT OF ACTIVITY AND SETTLEMENTS
FROM CEDING COMPANY TO REINSURER
Accounting Period: _____________________
Date Report Completed: _____________________
1. Reinsurance Premiums (Article II) ___________________
2. Benefit Payments (Article III) ___________________
3. Override Commission (Article IV) ___________________
4. Cash Settlement = 1 - 2 - 3 ___________________
5. Loss Carry Forward ___________________
6. Loss Carry Forward Repayment ___________________
7. Cumulative Loss Carry Forward ___________________
SCHEDULE B
NOVATION
THIS NOVATION AGREEMENT is made as of [insert date of novation here] between The
College Life Insurance Company of Dallas, Texas or its successor ("College
Life"), Manulife Reinsurance Limited of ▇▇▇▇▇▇▇▇, Bermuda ("MRL"), and Employers
Reassurance Corporation of Overland Park, Kansas ( the "Company").
WHEREAS MRL and the Company are parties to a Coinsurance / Modified Coinsurance
Reinsurance Agreement dated October 1, 2000 (hereinafter referred to as the
"Reinsurance Agreement"); and WHEREAS as of [insert date here] (the "Effective
Date") the parties to this Novation Agreement have agreed to novate the
Reinsurance Agreement by substituting MRL with College Life, such that College
Life will assume all of MRL's interests, rights, duties, obligations and
liabilities under the Reinsurance Agreement and MRL will be relieved of all of
its interests, rights, duties, obligations and liabilities under the Reinsurance
Agreement; and WHEREAS the Company wishes to consent and agree to such novation.
NOW THEREFORE IN CONSIDERATION OF the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1) College Life hereby assumes all interests, rights, duties, obligations, and
liabilities of MRL under the Reinsurance Agreement. College Life further
agrees with each of MRL and the Company that on the Effective Date, College
Life shall be bound by all of the terms and conditions of the Reinsurance
Agreement.
2) The Company hereby releases MRL from all of its rights, duties, obligations
and liabilities, express or implied, arising under the terms of the
Reinsurance Agreement.
3) Upon novation of this Agreement, the Company agrees that College Life may
have the reinsurance basis converted to coinsurance by requesting that the
Company transfer the assets held in escrow for the risks reinsured under
the Reinsurance Agreement to College Life.
4) The Reinsurance Agreement is accordingly amended by deleting the name of
MRL wherever it appears and substituting therefore the name of College
Life. In all other respects, the terms of the Reinsurance Agreement remain
unaltered.
5) College Life and the Company hereby ratify and confirm the Reinsurance
Agreement is an agreement solely between them.
6) Each party agrees to do all things as may be necessary to give full
effect to this Novation Agreement.
7) This Novation Agreement shall enure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns.
8) If any provision of this Novation Agreement is held to be invalid or
unenforceable in whole or in part, such invalidity or unenforceability
shall attach only to such provision or part thereof and the remaining part
of such provision and all other provisions hereof shall continue in full
force and effect.
9) This Novation Agreement shall be governed by and construed in accordance
with the law applicable to the Reinsurance Agreement.
IN WITNESS WHEREOF the parties have executed this Novation Agreement as of
[insert date here].
THE COLLEGE LIFE INSURANCE COMPANY OF AMERICA
By: ________________________ By: _________________________
Title: ________________________ Title: _________________________
Date: ________________________ Date: _________________________
MANULIFE REINSURANCE LIMITED
By: __________________________ By: _________________________
Title: __________________________ Title: _________________________
Date: __________________________ Date: _________________________
EMPLOYERS REASSURANCE CORPORATION
By: ___________________________ By: ___________________________
Title: ___________________________ Title: ___________________________
Date: ___________________________ Date: ___________________________