Munich American Reassurance Company Automatic YRT Second Excess Reinsurance Agreement between Trinity Life Insurance Company Tulsa, Oklahoma (hereinafter referred to as the “Ceding Company”) and Munich American Reassurance Company Atlanta, Georgia...

Exhibit 10.4

Munich American Reassurance Company

Automatic YRT Second Excess
Reinsurance Agreement

between

Trinity Life Insurance Company
Tulsa, Oklahoma
                     (hereinafter referred to as the “Ceding Company”)

and

Munich American Reassurance Company
Atlanta, Georgia
                     (hereinafter referred to as “MARC”)

Effective                      February 1, 2007

Treaty #                                3545

Table of Contents

				Page
ARTICLE 1 - PREAMBLE					1
1.1		Parties to the Agreement			1
1.2		Compliance			1
1.3		Construction			1
1.4		Entire Agreement			1
1.5		Severability			1
1.6		Third Party Administrator			1
ARTICLE 2 - AUTOMATIC REINSURANCE					2
2.1		General Conditions			2
2.2		New Business			2
2.3		Retained Amounts			2
2.4		Underwriting Standards			3
ARTICLE 3 - FACULTATIVE REINSURANCE					4
ARTICLE 4 - COMMENCEMENT OF LIABILITY					5
4.1		Automatic Reinsurance			5
4.2		Facultative Reinsurance			5
ARTICLE 5 - REINSURED RISK AMOUNT					6
5.1		Life			6
ARTICLE 6 - PREMIUM ACCOUNTING					7
6.1		Premiums			7
6.2		Payment of Premiums			7
6.3		Delayed Payment			7
6.4		Failure to Pay Premiums			7
6.5		Premium Rate Guarantee			8
ARTICLE 7 - REDUCTIONS, TERMINATIONS AND CHANGES					9
7.1		Reductions and Terminations			9
7.2		Increases			9
7.3		Risk Classification Changes			10
7.4		Reinstatement			10
7.5		Nonforfeiture Benefits			10
ARTICLE 8 - CONVERSIONS, EXCHANGES, AND REPLACEMENTS					11
8.1		Conversions			11
8.2		Exchanges and Replacements			11
ARTICLE 9 - CLAIMS					13
9.1		Notice			13
9.2		Proofs			13
9.3		Amount and Payment of Reinsurance Benefits			13
9.4		Contestable Claims			13
9.5		Claim Expenses			14

				Page
9.6		Misrepresentation or Suicide			14
9.7		Misstatement of Age or Sex			14
9.8		Extra-Contractual Damages			14
ARTICLE 10 - RETENTION LIMIT CHANGES					16
ARTICLE 11 - RECAPTURE					17
ARTICLE 12 - GENERAL PROVISIONS					18
12.1		Currency			18
12.2		Premium Tax			18
12.3		Inspection of Records			18
12.4		Forms, Manuals & Issue Rules			18
12.5		Interest Rate			18
12.6		Other			18
ARTICLE 13 - DAC TAX					19
ARTICLE 14 - OFFSET					20
ARTICLE 15 - INSOLVENCY					21
15.1		Insolvency of a Party to this Agreement			21
15.2		Insolvency of the Ceding Company			21
ARTICLE 16 - ERRORS AND OMISSIONS					22
ARTICLE 17 - DISPUTE RESOLUTION					23
ARTICLE 18 - ARBITRATION					24
ARTICLE 19 - CONFIDENTIALITY					26
ARTICLE 20 - DURATION OF AGREEMENT					28
ARTICLE 21 - EXECUTION					29

Exhibits

A - Retention Limits of the Ceding Company and First Excess Limits
B - Plans Covered and Binding Limits
C - Forms, Manuals and Issue Rules
D - Reinsurance Premiums
E - Self-Administered Reporting
F - List of Risks Reinsured
G - List of Amendments
H - In Force Summary Form
I - Application for Facultative Reinsurance Form

Article 1 — PREAMBLE

1.1		Parties to the Agreement
		This is a second excess YRT agreement for indemnity reinsurance (the “Agreement”) solely between Trinity Life Insurance Company, Tulsa, Oklahoma (“the Ceding Company”), and Munich American Reassurance Company of Atlanta, Georgia (“MARC”), collectively referred to as the “parties”.
		The acceptance of risks under this Agreement will create no right or legal relationship between MARC and the insured, owner or beneficiary of any insurance policy or other contract of the Ceding Company.
		The Agreement will be binding upon the Ceding Company and MARC and their respective successors and assigns.
1.2		Compliance
		This Agreement applies only to the issuance of insurance by the Ceding Company in a jurisdiction in which it is properly licensed.
		The Ceding Company represents that, to the best of its knowledge, it is in compliance with all state and federal laws applicable to the business reinsured under this Agreement. In the event the Ceding Company is found to be in non-compliance with any law material to this Agreement, the Agreement will remain in effect and the Ceding Company will indemnify MARC for any direct loss MARC suffers as a result of the non-compliance, and will seek to remedy the non-compliance.
1.3		Construction
		This Agreement will be construed in accordance with the laws of the state of Oklahoma.
1.4		Entire Agreement
		This Agreement constitutes the entire agreement between the parties with respect to the business reinsured hereunder. There are no understandings between the parties other than as expressed in this Agreement. Any change or modification to this Agreement will be null and void unless made by amendment to this Agreement and signed by both parties.
1.5		Severability
		If any provision of this Agreement is determined to be invalid or unenforceable, such determination will not impair or affect the validity or the enforceability of the remaining provisions of this Agreement.
1.6		Third Party Administrator
		It is understood that the Ceding Company has appointed Investor’s Heritage Life Insurance Company, Frankfort, Kentucky, as its Third Party Administrator (hereinafter referred to as the “Administrator”). In connection therewith, the Ceding Company has authorized the Administrator to perform the duties of underwriting, administration and claim adjudication with the Ceding Company’s oversight and a valid Third Party Administrative Services agreement by and between the Ceding Company and the Administrator is on file with MARC.

Article 2 — AUTOMATIC REINSURANCE

2.1		General Conditions
		The Ceding Company will automatically cede to MARC new business as defined in Section 2.2 on the life insurance policies, supplementary benefits, and riders listed in Exhibit B issued on and after the effective date of this Agreement. The basis for the automatic reinsurance is shown in Exhibit B.
		MARC will automatically accept its share of the above-referenced policies up to the limits shown in Exhibit B, provided that:

	(a)		the insured, at the time of the application, must be a permanent resident of the United States, United States Protectorates or Canada;
	(b)		the Ceding Company keeps its full retention, as specified in Exhibit A, or otherwise holds its full retention on a life under previously issued inforce policies and applies the same underwriting standards it would have applied if the new policy had fallen completely within its regular retention;
	(c)		the Administrator makes all underwriting determination and the Ceding Company, through the Administrator, applies its normal underwriting guidelines in accordance with Section 2.4 of this article and Section 12.4;
	(d)		the total of new ultimate amount of reinsurance required including contractual increases, and the amount already reinsured on that life under this Agreement and all other agreements between MARC and the Ceding Company, does not exceed the Automatic Binding Limits set out in Exhibit B;
	(e)		the amount of life insurance in force in all companies, including any coverage to be replaced plus the amount currently applied for on that life in all companies, does not exceed the Jumbo Limit stated in Exhibit B;
	(f)		the application is on a life that has not been submitted facultatively to MARC or any other reinsurer unless the reason for any prior facultative submission was solely for capacity that may now be accommodated within the terms of this Agreement, and
	(g)		MARC’s underwriting manual will be used.

2.2		New Business
		New business as defined in this article and Article 8.2 are those policies on which (a) the Ceding Company, through the Administrator, has obtained complete and current underwriting evidence on the full amount issued, (b) the full normal commissions are paid by the Ceding Company, through the Administrator, for the new plan, and (c) the suicide and contestable provisions apply from the effective date of the new plan.
2.3		Retained Amounts
		The Ceding Company may not reinsure on any basis any portion of the amount it has retained on the business covered under this Agreement without prior notification to MARC.

2.4		Underwriting Standards
		The parties hereby declare and agree that all policies and benefits covered under this Agreement shall be issued in accordance with MARC’s Life Underwriting Manual, unless the Ceding Company and MARC agree to use an alternative method. The Ceding Company should discuss any proposed changes in underwriting standards, requirements, or other criteria with MARC, and will be subject to the written approval of MARC before being applied to policies and benefits to be covered by this agreement.

Article 3 — FACULTATIVE REINSURANCE

3.1		The Ceding Company, through the Administrator, may submit any application on a plan or rider identified in Exhibit B to MARC for its consideration on a facultative basis. The Ceding Company, through the Administrator, will apply for reinsurance on a facultative basis by sending to MARC an Application for Facultative Reinsurance, providing the information outlined in Exhibit I. Accompanying this Application will be copies of all underwriting evidence that is available for risk assessment including, but not limited to, copies of the application for insurance, medical examiners’ reports, attending physicians’ statements, inspection reports, and any other information bearing on the insurability of the risk. The Ceding Company, through the Administrator, also will notify MARC of any outstanding underwriting requirements at the time of the facultative submission. Any subsequent information received by the Ceding Company, through the Administrator, that is pertinent to the risk assessment will be immediately transmitted to MARC.
		After consideration of the Application for Facultative Reinsurance and related information, MARC will promptly inform the Ceding Company, through the Administrator, of its underwriting decision. MARC’s offer will expire at the end of 120 days, unless otherwise specified by MARC.
		If the underwriting decision is acceptable, the Ceding Company, through the Administrator, will notify MARC in writing of its acceptance of the offer.
		Unless the Ceding Company, through the Administrator, gives notification before the expiration date, there shall not be any reinsurance on the risk and errors and omissions, as stated in Article 16 will not apply.

Article 4 — COMMENCEMENT OF LIABILITY

4.1		Automatic Reinsurance
		For automatic reinsurance, MARC’s liability for amounts ceded hereunder will commence at the same time as the Ceding Company’s liability.
4.2		Facultative Reinsurance
		For facultative reinsurance, MARC’s liability will commence at the same time as the Ceding Company’s liability, provided that MARC has made a facultative offer and that offer was accepted, during the lifetime of the insured, in accordance with the terms of this Agreement.

Article 5 — REINSURED RISK AMOUNT

5.1		Life
		The reinsured net amount at risk of the policy is defined as the policy face amount less the cash value, account value, or terminal reserve, less the amount retained by the Ceding Company, less the first excess, and for automatic policies, multiplied by MARC’s share as stated in Exhibit B. For variable amount plans, the reinsured net amount at risk is calculated using the account value in effect at the end of the monthly reinsurance billing period.
		Any change in the net amount at risk due to changes in the policy’s cash value or account value will be shared proportionately between the Ceding Company and MARC.

Article 6 — PREMIUM ACCOUNTING

6.1		Premiums
		Reinsurance premium rates for life insurance and other benefits reinsured under this Agreement are shown in Exhibit D. The rates will be applied to the reinsured net amount at risk.
		The Ceding Company, through the Administrator, will pay MARC the percentages of the premium rates shown in Exhibit D.
6.2		Payment of Premiums
		Reinsurance premiums are payable annually and in advance. The Ceding Company, through the Administrator, will calculate the amount of reinsurance premium due and, within forty-five (45) days after the end of the month, will send MARC a statement that contains the information shown in Exhibit E, showing reinsurance premiums due for that period. If an amount is due MARC, the Ceding Company, through the Administrator, will remit that amount together with the statement. If an amount is due the Ceding Company, MARC will remit such amount within twenty (20) days of receipt of the statement.
6.3		Delayed Payment
		Premium balances that remain unpaid for more than thirty (30) days after the Remittance Date will incur interest from the end of the reporting period. The Remittance Date is defined as thirty (30) days after the end of the reporting period. Interest will be calculated using the index specified in Article 12.5.
6.4		Failure to Pay Premiums
		The payment of reinsurance premiums is a condition precedent to the liability of MARC for reinsurance covered by this Agreement. In the event that reinsurance premiums are not paid within thirty (30) days of the Remittance Date, MARC will have the right to terminate the reinsurance under all policies having reinsurance premiums in arrears. If MARC elects to exercise its right of termination, it will give the Ceding Company, through the Administrator, thirty (30) days written notice of its intention. Such notice will be sent by certified mail.
		If all reinsurance premiums in arrears, including any that become in arrears during the thirty (30) day notice period, are not paid before the expiration of the notice period, MARC will be relieved of all liability under those policies as of the last date to which premiums have been paid for each policy. Reinsurance on policies on which reinsurance premiums subsequently fall due will automatically terminate as of the last date to which premiums have been paid for each policy, unless reinsurance premiums on those policies are paid on or before their Remittance Dates.   Terminated reinsurance may be reinstated, subject to approval by MARC, within thirty (30) days of the date of termination, and upon payment of all reinsurance premiums in arrears including any interest accrued thereon. MARC will have no liability for any claims incurred between the date of termination and the date of the reinstatement of the reinsurance. The right to terminate reinsurance will not prejudice MARC’s right to collect

		premiums for the period during which reinsurance was in force prior to the expiration of the thirty (30) days notice.
		The Ceding Company, through the Administrator, will not force termination under the provisions of this Article solely to avoid the provisions regarding recapture in Article 11, or to transfer the reinsured policies to another reinsurer.
6.5		Premium Rate Guarantee
		MARC does not guarantee the premium rates for more than one (1) year; hence deficiency reserves are not required.

Article 7 — REDUCTIONS, TERMINATIONS AND CHANGES

Whenever a change is made in the status, plan, amount or other material feature of a policy reinsured under this Agreement, MARC will, upon receipt of notification of the change, provide adjusted reinsurance coverage in accordance with the provisions of this Agreement. The Ceding Company, through the Administrator, will notify MARC of any such change within thirty (30) days of its effective date.

7.1		Reductions and Terminations
		In the event of the reduction, lapse, or termination of a policy or policies reinsured under this Agreement or any other agreement, the Ceding Company, through the Administrator, 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 retention as defined under this Agreement.
		The reinsurance reduction will apply first to the policy or policies being reduced and then, on a chronological basis, to other reinsured policies on the life, beginning with the oldest policy. If a fully retained policy on a life that is reinsured under this Agreement is terminated or reduced, the Ceding Company, through the Administrator, will reduce the existing reinsurance on that life by a corresponding amount, with the reinsurance on the oldest policy being reduced first. If the amount of reduction exceeds the risk amount reinsured, the reinsurance on the policy or policies will be terminated.
		MARC will refund any unearned reinsurance premiums net of allowances. However, the reinsured portion of any policy fee will be deemed earned for a policy year if the policy is reinsured during any portion of that policy year.
7.2		Increases

	(a)		Noncontractual Increases
			If the amount of insurance is increased as a result of a noncontractual change, the increase will be underwritten by the Ceding Company, through the Administrator, in accordance with its customary standards and procedures and will be considered new reinsurance under this Agreement. MARC’s approval is required if the original policy was reinsured on a facultative basis or if the new amount will cause the reinsured amount on the life to exceed either the Automatic Binding Limits or the Jumbo Limits shown in Exhibit B.
			MARC will assume its share of the entire amount in excess of the Ceding Company’s applicable retention and the first excess. Premiums for the additional reinsurance will be at the new-issue rate from the point of increase.
	(b)		Contractual Increases
			For policies reinsured on an automatic basis, reinsurance of increases in amount resulting from contractual policy provisions will be accepted only up to the Automatic Binding Limits shown in Exhibit B.

For policies reinsured on a facultative basis, reinsurance will be limited to the ultimate amount shown in MARC’s facultative offer. Reinsurance premiums for contractual increases will be on a point-in-scale basis from the original issue age of the policy.

7.3		Risk Classification Changes
		If the policyholder requests a Table Rating reduction or removal of a Flat Extra, such change will be underwritten according to the Ceding Company’s, through the Administrator, normal underwriting practices. Risk classification changes on facultative policies will be subject to MARC’s approval.
7.4		Reinstatement
		If a policy reinsured on an automatic basis is reinstated in accordance with its terms and in accordance with Ceding Company rules and procedures, MARC will, upon notification of reinstatement, reinstate the reinsurance coverage. If a policy reinsured on a facultative basis is reinstated, approval by MARC will be required prior to the reinstatement of the reinsurance if the Ceding Company’s regular reinstatement rules, through the Administrator, indicate that more evidence than a Statement of Good Health is required.
		Upon reinstatement of the reinsurance coverage, the Ceding Company, through the Administrator, will pay the contractual reinsurance premiums plus accrued interest for the period and at the interest rate for which it receives premiums in arrears.
7.5		Nonforfeiture Benefits

	(a)		Extended Term
			If the original policy lapses and extended term insurance is elected under the terms of the policy, reinsurance will continue on the same basis as under the original policy until the expiry of the extended term period.
	(b)		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.
			Reinsurance will be reduced by the full amount of the reduction. The reinsurance premiums will be calculated in the same manner as reinsurance premiums were calculated on the original policy. If the amount of reduction exceeds the risk amount reinsured, the reinsurance on the policy will be terminated.

Article 8 — CONVERSIONS, EXCHANGES, AND REPLACEMENTS

If a policy reinsured under this Agreement is converted, exchanged or replaced, the Ceding Company, through the Administrator, will promptly notify MARC. Unless mutually agreed otherwise, policies that are not reinsured with MARC and that exchange or convert to a plan covered under this Agreement will not be reinsured hereunder.

8.1		Conversions
		MARC will continue to reinsure policies resulting from the contractual conversion of any policy reinsured under this Agreement, in an amount not to exceed the original amount reinsured hereunder. If the plan to which the original policy is converting is reinsured by MARC, either under this Agreement or under a different Agreement, reinsurance premium rates for the resulting converted policy will be those contained in the Agreement that covers the plan to which the original policy is converting. However, if the new plan is not reinsured by MARC, reinsurance premiums for a policy resulting from a contractual conversion will be agreed upon between the parties. Reinsurance premiums and any allowances for conversions will be on a point-in-scale basis from the original issue age of the policy.
		If the conversion results in an increase in the risk amount, the increase will be underwritten by the Ceding Company, through the Administrator, in accordance with its customary standards and procedures. MARC will accept such increases, subject to the new business provisions of this Agreement. Reinsurance premiums and any allowances for increased risk amounts will be first-year premiums at the agreed-upon premium rate.
8.2		Exchanges and Replacements
		A policy resulting from an internal exchange or replacement will be underwritten by the Ceding Company, through the Administrator, in accordance with its underwriting guidelines, standards and procedures for exchanges and replacements. If the Ceding Company’s guidelines treat the policy as new business, then the reinsurance will also be considered new business. For purposes of this Article, new business is defined as those policies on which:

	(a)		the Ceding Company, through the Administrator, has obtained complete and current underwriting evidence on the full amount; and
	(b)		the full normal commissions are paid by the Ceding Company, through the Administrator, for the new plan; and
	(c)		the Suicide and Contestable provisions apply from the effective date of the new plan.

		In the event of an internal exchange, if the state in which a replacement policy is issued requires waiver of the suicide and/or contestable provisions, then MARC will honor that obligation and waive the suicide and/or contestable provisions.
		MARC’s approval to exchange or replace the policy will be required if the original policy was reinsured on a facultative basis.

If the Ceding Company’s guidelines do not treat the policy as new business, the exchange or replacement will continue to be ceded to MARC. The rates will be based on the original issue age, underwriting class and duration since the issuance of the original policy.

Article 9 — CLAIMS

Claims covered under this Agreement include only death claims, which are those due to the death of the insured on a policy reinsured under this Agreement, and any additional benefits specified in Exhibit B, which are provided by the underlying policy and are reinsured under this Agreement.

9.1		Notice
		The Ceding Company, through the Administrator, will notify MARC, as soon as reasonably possible, after it receives a claim on a policy reinsured under this Agreement.
9.2		Proofs
		The Ceding Company, through the Administrator, will promptly provide MARC with proper claim proofs, including a copy of the proof of payment by the Ceding Company, a copy of the claimant statement and a copy of the insured’s death certificate. In addition, for contestable claims, the Ceding Company, through the Administrator, will send to MARC a copy of all papers in connection with the claim, including investigation papers, the underwriting file and underwriter’s notes.
9.3		Amount and Payment of Reinsurance Benefits
		As soon as MARC receives proper claim notice and proof of the claim, MARC will promptly examine the claim and pay the reinsurance benefits due the Ceding Company as appropriate. The Ceding Company’s contractual liability for policies reinsured under this Agreement is binding on MARC. However, for claims incurred during the contestable period if the total amount of reinsurance ceded to all Reinsurers on the policy is greater than the amount retained by the Ceding Company, or if the Ceding Company retained less than its usual retention on the policy, the Ceding Company, through the Administrator, will consult with MARC before conceding liability or making settlement to the claimant. The Ceding Company will wait at least ten (10) business days for MARC’s recommendation.
		The total reinsurance recoverable from all companies will not exceed the Ceding Company’s total contractual liability on the policy, less the amount retained. The maximum reinsurance death benefit payable to the Ceding Company under this Agreement is the risk amount specifically reinsured with MARC. MARC will also pay its proportionate share of the interest that the Ceding Company pays on the death proceeds until the date of settlement.
		Life benefit payments will be made in a single sum, regardless of the Ceding Company’s settlement options.
9.4		Contestable Claims
		The Ceding Company, through the Administrator, will promptly notify MARC of its intention to contest, compromise, or litigate a claim involving a reinsured policy. The Ceding Company will also promptly and fully disclose all information relating to the claim. Once notified, MARC will have fifteen (15) business days to notify the Ceding Company, through the Administrator, in writing of its decision to accept participation in the contest, compromise, or litigation. If MARC has accepted participation, the Ceding Company,

		through the Administrator, will promptly advise MARC of all significant developments in the claim investigation, including notification of any legal proceedings against it in response to denial of the claim.
		If MARC does not accept participation, MARC will then fulfill its obligation by paying the Ceding Company its full share of the reinsurance amount, and will not share in any subsequent reduction or increase in liability.
		If MARC accepts participation and the Ceding Company’s contest, compromise, or litigation results in a reduction or increase in liability, MARC will share in any such reduction or increase in proportion to its share of the risk on the contested policy.
9.5		Claim Expenses
		MARC will pay its share of reasonable claim investigation and legal expenses connected with the litigation or settlement of contractual liability claims unless MARC has discharged its liability pursuant to Section 9.4 above. If MARC has so discharged its liability, MARC will not participate in any expenses incurred thereafter.
		MARC will not reimburse the Ceding Company, through the Administrator, for routine claim and administration expenses, including but not limited to the Ceding Company’s home office expenses, compensation of salaried officers and employees, and any legal expenses other than third party expenses incurred by the Ceding Company, through the Administrator. Claim investigation expenses do not include expenses incurred by the Ceding Company, through the Administrator, as a result of a dispute or contest arising out of conflicting claims of entitlement to policy proceeds or benefits.
		Furthermore, MARC will not reimburse the Ceding Company, through the Administrator, for any expenses, if said expense was not incurred by the Ceding Company, through the Administrator, while investigating, defending or settling a claim.
9.6		Misrepresentation or Suicide
		If the Ceding Company, through the Administrator, returns premium to the policyowner or beneficiary as a result of misrepresentation or suicide of the insured, MARC will refund its proportionate share of the premium refund to the Ceding Company in lieu of any other form of reinsurance benefit payable under this Agreement.
9.7		Misstatement of Age or Sex
		In the event of a change in the amount of the Ceding Company’s liability on a reinsured policy due to a misstatement of age or sex, MARC’s liability will change proportionately. The face amount of the reinsured policy will be adjusted from the inception of the policy, and any difference will be settled without interest.
9.8		Extra-Contractual Damages
		MARC will not participate in punitive or compensatory damages that are awarded against the Ceding Company as a result of an act, omission, or course of conduct committed solely by the Ceding Company, its agents, or representatives in connection with claims covered under this Agreement. MARC will, however, pay its share of statutory penalties awarded against the Ceding Company in connection with claims covered under this Agreement if MARC elected in writing to join in the contest of the coverage in question.

		The parties recognize that circumstances may arise in which equity would require MARC, to the extent permitted by law, to share proportionately in punitive and compensatory damages. Such circumstances are difficult to define in advance, but would generally be those situations in which MARC was an active party and, in writing, recommended, consented to, or ratified the act or course of conduct of the Ceding Company that ultimately resulted in the assessment of the extra-contractual damages. In such situations, MARC and the Ceding Company will share such damages so assessed, in equitable proportions.
		For purposes of this Article, the following definitions will apply.
		“Punitive Damages” are those damages awarded as a penalty, the amount of which is neither governed nor fixed by statute.
		“Compensatory Damages” are those amounts awarded to compensate for the actual damages sustained, and are not awarded as a penalty, nor fixed in amount by statute.
		“Statutory Penalties” are those amounts awarded as a penalty, but are fixed in amount by statute.

Article 10 — RETENTION LIMIT CHANGES

10.1		If the Ceding Company changes its maximum retention limits as shown in Exhibit A, it will provide MARC with written notice of the intended changes thirty (30) days in advance of their effective date.
		A change to the Ceding Company’s maximum retention limits will not affect the reinsured policies in force except as specifically provided elsewhere in this Agreement. Furthermore, unless agreed between the parties, an increase in the Ceding Company’s retention schedule will not effect an increase in the total risk amount that it may automatically cede to MARC.

Article 11 — RECAPTURE

11.1

Whenever the Ceding Company increases its maximum retention limits over the maximum retention limits set forth in Exhibit A, the Ceding Company, through the Administrator, has the option to recapture certain risk amounts. If the Ceding Company has maintained its maximum stated retention (not a special retention limit) for the plan and the insured’s issue age, sex, and mortality classification, it may apply its increased retention limits to reduce the amount of reinsurance in force as follows.

	(a)		The Ceding Company, through the Administrator, must give MARC thirty (30) days written notice prior to the commencement of recapture.
	(b)		The reduction of reinsurance on affected policies will become effective on the policy anniversary date immediately following the notice of election to recapture; however, no reduction will be made until a policy has been in force for at least twenty (20) years.
	(c)		If any reinsured policy is recaptured, all reinsured policies eligible for recapture under the provisions of this Article must be recaptured up to the Ceding Company’s new maximum retention limits in a consistent manner and the Ceding Company must increase its total amount of insurance on each reinsured life. The Ceding Company may not revoke its election to recapture for policies becoming eligible at future anniversaries.

		If portions of the reinsured policy have been ceded to more than one reinsurer, the Ceding Company, through the Administrator, must allocate the reduction in reinsurance so that the amount reinsured by each reinsurer after the reduction is proportionately the same as if the new maximum dollar retention limits had been in effect at the time of issue.
		The amount of reinsurance eligible for recapture is based on the current amount at risk as of the date of recapture. For a policy issued as a result of exchange, conversion, or re-entry, the recapture terms of the reinsurance agreement covering the original policy will apply, and the duration period for the purpose of recapture will be measured from the effective date of the reinsurance on the original policy.
		If there is a reinsured waiver of premium claim in effect when recapture takes place, MARC will continue to pay its share of the waiver claim until it terminates. MARC will not be liable for any other benefits, including the basic life risk, that are eligible for recapture. All such eligible benefits will be recaptured as if there were no waiver claim in effect.
		After the effective date of recapture, MARC will not be liable for any reinsured policies or portions of such reinsured policies eligible for recapture that the Ceding Company has overlooked.
		No recapture will be permitted if the Ceding Company has either obtained or increased stop loss reinsurance coverage as justification for the increase in retention limits.

Article 12 — GENERAL PROVISIONS

12.1		Currency
		All payments and reporting by both parties under this Agreement will be made in United States dollars.
12.2		Premium Tax
		MARC will not reimburse the Ceding Company for premium taxes.
12.3		Inspection of Records
		MARC and the Ceding Company, or their duly authorized representatives, will have the right to inspect original papers, records, and all documents relating to the business reinsured under this Agreement including underwriting, claims processing, and administration. Such access will be provided during regular business hours at the office of the inspected party.
12.4		Forms, Manuals & Issue Rules
		The Ceding Company affirms that its retention schedule, underwriting guidelines, issue rules, premium rates and policy forms applicable to the Reinsured Policies and in use as of the effective date, have been supplied to MARC.
		It is the Ceding Company’s responsibility to ensure that its practice and applicable forms are in compliance with current Medical Information Bureau (MIB) guidelines.
12.5		Interest Rate
		If, under the terms of this Agreement, interest is accrued on amounts due either party, such interest will be calculated using the 180 day treasury rate as reported in the Wall Street Journal on the date the payment becomes due, except as it pertains to Article 9, and outlined elsewhere in this Agreement.
12.6		Other
		MARC will not participate in gross annual premiums and policy fees paid by the policyholder, expense charges, cash values, accumulation fund amounts, dividends nor any benefits not expressly referred to herein.

Article 13 — DAC TAX

13.1

The parties to this Agreement agree to the following provisions pursuant to Section 1.848-2(g)(8) of the Income Tax Regulations effective December 29, 1992, under Section 848 of the Internal Revenue Code of 1986, as amended:

	(a)		The term ‘party’ refers to either the Ceding Company or MARC, as appropriate.
	(b)		The terms used in this Article are defined by reference to Regulation Section 1.848-2, effective December 29, 1992.
	(c)		The party with the net positive consideration for this Agreement for each taxable year will capitalize specified policy acquisition expenses with respect to this Agreement without regard to the general deductions limitation of Section 848(c)(1).
	(d)		Both parties agree to exchange information pertaining to the amount of net consideration under this Agreement each year to ensure consistency, or as otherwise required by the Internal Revenue Service.
	(e)		The Ceding Company will submit a schedule to MARC by April 1 of each year with 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. MARC may contest such calculation by providing an alternative calculation to the Ceding Company in writing within thirty (30) days of MARC’s receipt of the Ceding Company’s calculation. If MARC does not so notify the Ceding Company within the required timeframe, MARC will report the net consideration as determined by the Ceding Company in MARC’s tax return for the previous calendar year.
	(f)		If MARC contests the Ceding Company’s calculation of the net consideration, the parties will act in good faith to reach an agreement as to the correct amount within thirty (30) days of the date MARC submits its alternative calculation. If the Ceding Company and MARC reach an agreement on an amount of net consideration, each party will report the agreed upon amount in its tax return for the previous calendar year.
	(g)		Both the Ceding Company and MARC represent and warrant that they are subject to United States taxation under either Subchapter L or Subpart F of Part III of Subchapter N of the Internal Revenue Code of 1986, as amended.

Article 14 — OFFSET

14.1		Any debts or credits, in favor of or against either MARC or the Ceding Company with respect to this Agreement or any other reinsurance agreement between the parties, are deemed mutual debts or credits and may be offset and only the balance will be allowed or paid.
		The right of offset will not be affected or diminished because of the insolvency of either party.

Article 15 — INSOLVENCY

15.1		Insolvency of a Party to this Agreement
		A party to this Agreement will be deemed insolvent when it:

	(a)		applies for or consents to the appointment of a receiver, rehabilitator, conservator, liquidator or statutory successor of its properties or assets; or
	(b)		is adjudicated as bankrupt or insolvent; or
	(c)		files or consents to the filing of a petition in bankruptcy, seeks reorganization to avoid insolvency or makes formal application for any bankruptcy, dissolution, liquidation or similar law or statute; or
	(d)		becomes the subject of an order to rehabilitate or an order to liquidate as defined by the insurance code of the jurisdiction of the party’s domicile.

15.2		Insolvency of the Ceding Company
		In the event of the insolvency of the Ceding Company, all reinsurance payments due under this Agreement will be payable directly to the liquidator, rehabilitator, receiver, or statutory successor of the Ceding Company, without diminution because of the insolvency, for those claims allowed against the Ceding Company by any court of competent jurisdiction or by the liquidator, rehabilitator, receiver or statutory successor having authority to allow such claims.
		In the event of insolvency of the Ceding Company, the liquidator, rehabilitator, receiver, or statutory successor will give written notice to MARC of all pending claims against the Ceding Company on any policies reinsured within a reasonable time after such claim is filed in the insolvency proceeding. While a claim is pending, MARC may investigate and interpose, at its own expense, in the proceeding where the claim is adjudicated, any defense or defenses that it may deem available to the Ceding Company or its liquidator, rehabilitator, receiver, or statutory successor.
		The expense incurred by MARC 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 MARC. Where two or more reinsurers are participating in the same claim and a majority in interest elect to interpose a defense or defenses to any such claim, the expense will be apportioned in accordance with the terms of this Agreement as though such expense had been incurred by the Ceding Company.
		MARC will be liable only for the amounts reinsured and will not be or become liable for any amounts or reserves to be held by the Ceding Company on policies reinsured under this Agreement.

Article 16 — ERRORS AND OMISSIONS

16.1		This provision will apply to oversights, misunderstandings or clerical errors relating to the administration of reinsurance covered by this Agreement. If through unintentional error, oversight, omission, or misunderstanding (collectively referred to as “errors”), MARC or the Ceding Company, through their Administrator, fails to comply with the terms of this Agreement and if, upon discovery of the error by either party, the other is promptly notified, each thereupon will be restored to the position it would have occupied if the error had not occurred, including interest, except as provided for in Article 3.
		If it is not possible to restore each party to the position it would have occupied but for the error, the parties will endeavor in good faith to promptly resolve the situation in a manner that is fair and reasonable, and most closely approximates the intent of the parties as evidenced by this Agreement.
		However, MARC will not provide reinsurance for policies that do not satisfy the parameters of this Agreement, nor will MARC be responsible for negligent or deliberate acts or for repetitive errors in administration by the Ceding Company, through their Administrator. Upon discovery of such errors, the Ceding Company, through the Administrator, will endeavor to correct such errors within ninety (90) days; otherwise, there will be no reinsurance on the affected policies. If either party discovers that the Ceding Company, through the Administrator, has failed to cede reinsurance as provided in this Agreement, or failed to comply with its reporting requirements, MARC may require the Ceding Company, through their Administrator, to audit its records for similar errors and to take the actions necessary to avoid similar errors in the future. If MARC has received no evidence that the Ceding Company, through the Administrator, has taken action to remedy such a situation, MARC’s liability is limited to correctly reported policies only.

Article 17 — DISPUTE RESOLUTION

17.1		In the event of a dispute arising out of or relating to this agreement, the parties agree to the following process of dispute resolution. Within thirty (30) days after MARC or the Ceding Company has first given the other party written notification of a specific dispute, each party will appoint a designated company officer to attempt to resolve the dispute. The officers will meet at a mutually agreeable location as soon 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 designated officers will decide the specific format for such discussions.
		If the officers cannot resolve the dispute within thirty (30) days of their first meeting, the dispute will be submitted to formal arbitration, unless the parties agree in writing to extend the negotiation period for an additional thirty (30) days.

Article 18 — ARBITRATION

18.1		It is the intention of MARC and the Ceding Company that the customs and practices of the life insurance and reinsurance industry will be given full effect in the operation and interpretation of this Agreement. The parties agree to act in all matters with the highest good faith. If MARC and the Ceding Company cannot mutually resolve a dispute that arises out of or relates to this Agreement, and the dispute cannot be resolved through the dispute resolution process described in Article 17, the dispute will be decided through arbitration.
		To initiate arbitration, either the Ceding Company or MARC will notify the other party in writing of its desire to arbitrate, stating the nature of its dispute and the remedy sought. The party to which the notice is sent will acknowledge to the notification in writing within fifteen (15) days of its receipt.
		There will be three arbitrators who will be current or former officers of life insurance or life reinsurance companies other than the parties to this Agreement, their affiliates or subsidiaries. Each of the parties will appoint one of the arbitrators and these two arbitrators will select the third. If either party refuses or neglects to appoint an arbitrator within sixty (60) days of the initiation of the arbitration, the other party may appoint the second arbitrator. If the two arbitrators do not agree on a third arbitrator within sixty (60) days of the appointment of the second arbitrator, then each arbitrator shall nominate three candidates [within ten (10) days thereafter], two of whom the other shall decline, and the decision shall be made by drawing lots for the final selection.
		Once chosen, the arbitrators are empowered to select the site of the arbitration and decide all substantive and procedural issues by a majority of votes. As soon as possible, the arbitrators will establish arbitration procedures as warranted by the facts and issues of the particular case. The arbitrators will 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 relating to the conduct of the arbitration. The arbitrators may consider any relevant evidence; they will weigh the evidence and consider any objections. Each party may examine any witnesses who testify at the arbitration hearing.
		The arbitrators will base their decision on the terms and conditions of this Agreement and the customs and practices of the life insurance and reinsurance industries rather than on strict interpretation of the law. The decision of the arbitrators will be made by majority rule and will be submitted in writing. The decision will be final and binding on both parties and there will be no appeal from the decision. Either party to the arbitration may petition any court having jurisdiction over the parties to reduce the decision to judgment. The arbitrators may not award any exemplary or punitive damages.

		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.
		This Article will survive termination of this Agreement.

Article 19 — CONFIDENTIALITY

19.1		Privacy
		MARC agrees to treat Customer Information provided by the Ceding Company as confidential, as prescribed under Federal and State laws and regulations related to privacy. Customer Information includes, but is not limited to, medical, financial, and other personal information about proposed, current, and former policyowners, insureds, applicants, and beneficiaries of policies issued by the Ceding Company. MARC may disclose such information to its retrocessionaires as necessary to perform its internal risk-management functions and to comply with retrocessionaire requirements. MARC may also disclose such information to its external auditors as necessary to comply with audit requirements. MARC will take reasonable steps to assure such outside parties maintain the confidentiality of Customer Information.
		MARC will furnish to the Ceding Company a copy of MARC’s privacy policy upon request.
19.2		Proprietary Information

	(a)		The Ceding Company and MARC acknowledge that compliance with the terms of this agreement requires that they exchange Proprietary Information with each other.
	(b)		Proprietary Information includes, but is not limited to, business plans, trade secrets, experience studies, underwriting manuals, guidelines and decisions, applications, policy forms, quote terms, actuarial data and assumptions, valuations, financial condition, and the specific terms and conditions of this agreement.
	(c)		Proprietary Information will not include information that:

	(i)		is or becomes available to the general public other than as a result of disclosure by the party receiving the information (hereinafter the “Recipient”);
	(ii)		is developed independently by the Recipient;
	(iii)		is acquired by the Recipient from a third party that is not known by the Recipient to be bound to keep the information confidential; or
	(iv)		was already within the possession of the Recipient, and not subject to a confidentiality agreement, prior to being furnished by the other party.

19.3		MARC and the Ceding Company shall hold all Proprietary Information received from the other party in confidence and will not disclose such information except to their own directors, officers, employees, affiliates, and advisors (collectively the “Representatives”) who need to know such information in connection with the proper execution of this agreement. MARC and the Ceding Company shall inform all Representatives of the confidentiality of the Proprietary Information and will direct such Representatives to treat the information accordingly.
19.4		MARC may disclose Proprietary Information to its retrocessionaires or MIB as necessary to perform its internal risk-management functions and to comply with retrocessionaire

		requirements.The Ceding Company or MARC may disclose Proprietary Information to its external auditors as necessary to comply with audit requirements. The parties will take reasonable steps to assure such outside parties maintain the confidentiality of such Proprietary Information.
19.5		Either party may disclose Proprietary Information when legally compelled to do so. In such event, the party so compelled will provide the other party with prompt notice prior to disclosure so that the other party may seek an appropriate remedy.
19.6		The provisions of this Article survive for two years beyond the termination of the last in force policy reinsured under this Agreement.

Article 20 — DURATION OF AGREEMENT

20.1		This Agreement is indefinite as to its duration. The Ceding Company or MARC may terminate this Agreement with respect to the reinsurance of new business by giving thirty (30) days written notice of termination to the other party, sent by certified mail. The first day of the notice period is deemed to be the date the document is postmarked.
		During the notification period, the Ceding Company, through the Administrator, will continue to cede and MARC will continue to accept policies covered under the terms of this Agreement. Reinsurance coverage on all reinsured policies will remain in force until the termination or expiry of the policies or until the contractual termination of reinsurance under the terms of this Agreement, whichever occurs first.

Article 21 — EXECUTION

21.1

This Agreement is effective as of February 1, 2007, and applies to all eligible policies with issue dates on or after such date and to eligible policies applied for on or after such date that were backdated for up to six (6) months to save age. This Agreement has been made in duplicate and is hereby executed by all parties.

Trinity Life Insurance Company				Munich American Reassurance Company
By:				By:
		(signature)				(signature)
		(print or type name)				(print or type name)
Title:				Title:
Date:				Date:
Location:				Location:
Attest:				Attest:
		(signature)				(signature)
Title:				Title:

Exhibit A

RETENTION LIMITS OF THE CEDING COMPANY AND FIRST EXCESS REINSURANCE LIMITS

A.1		Maximum Limits of Retention
		Trinity Life and the First Excess Reinsurer will retain the first $80,000 between them. Trinity Life will retain a maximum of $55,000 and the First Excess Reinsurer will retain a maximum of $25,000.

Exhibit B

PLANS COVERED AND BINDING LIMITS

The business automatically reinsured under this Agreement is defined as follows. Reinsurance will only be on the mortality risk portion of the Life Insurance Benefit.

B.1		Plans, Riders and Benefits
		Policies issued on plans with effective dates within the applicable period shown below may qualify for automatic reinsurance under the terms of this Agreement.

				Commencement		Termination
Plan Identification		Form No.		Date		Date
Modified Whole Life		TLIC-1 (10/06)		February 1, 2007
Riders and Benefits:
Accidental Death Benefit Rider*		TLIC-3		*The ADB Rider is not covered under this agreement, but will be reinsured on a bulk basis under a separate agreement.

B.2		Basis
		MARC’s share will be 100% of the second excess over $80,000. This amount will not exceed MARC’s share of the maximum Automatic Binding Limits specified in Exhibit B.3.

B.3

Automatic Binding Limits

(a)

Life

Issue		Standard
Ages		(Non Rated)		Tables 1 - 8		Tables 8+
0-80		$250,000		$250,000		n/a

			Issue amounts greater than $250,000 may be submitted to MARC for facultative consideration.
			The maximum autobind amount above includes the Ceding Company’s retention and the first excess retention.

Exhibit B
(continued)

B.4		Jumbo Limits
		The Ceding Company will not cede any risk automatically if, according to information available to the Ceding Company, the total amount in force and applied for on the life with all insurance companies, including any amount to be replaced, exceeds the applicable amounts shown below.

(a)

Life: $1,000,000

Exhibit C

FORMS, MANUALS AND ISSUE RULES

TRINITY LIFE INSURANCE COMPANY

Age-Amount Medical and Non-Medical Requirements

INITIAL

AMOUNT

AGE

0-20

21-35

▇▇-▇▇

▇▇-▇▇

▇▇-▇▇

▇▇-▇▇

-0- to $50,000

Non-medical

Non-medical

Non-medical

Non-medical

Non-medical

Paramedical HOS

$50,001 to $55,000

Non-medical

Non-medical

Non-medical

Non-medical

HOS

Paramedical HOS

$55,001 to $99,999

Non-medical

Non-medical

Non-medical

HOS

Paramedical HOS

Paramedical HOS

$100,000 to $250,000

HOS

HOS

Paramedical HOS Blood Profile

Paramedical HOS Blood Profile

Paramedical HOS Blood Profile

Paramedical HOS Blood Profile

$250,001 to $500,000

Paramedical HOS Blood Profile

Paramedical HOS Blood Profile

Paramedical HOS Blood Profile EKG

Paramedical HOS Blood Profile EKG

MD Exam HOS Blood Profile EKG

MD Exam HOS Blood Profile EKG

$500,001 To $1,000,000

MD Exam HOS Blood Profile EKG

MD Exam HOS Blood Profile EKG

MD Exam HOS Blood Profile EKG

MD Exam HOS Blood Profile EKG

MD Exam HOS Blood Profile EKG

MD Exam HOS Blood Profile EKG

$1,000,001 plus

Consult Underwriting

Consult Underwriting

Consult Underwriting

Consult Underwriting

Consult Underwriting

Consult Underwriting

NOTICE OF INFORMATION PRACTICES
This Notice To Be Detached and Retained by Insured

(Including Medical Information Bureau Notice and Fair Credit Reporting Act Notice)

     In considering your application, information from various sources will be considered. These include your statements, the results of your physical examination (if required), and reports we get from doctors or medical facilities which have attended you.

     Information about your insurability will be treated as confidential. We, or our reinsurer(s), may, however, make a brief report of this to the Medical Information Bureau, a nonprofit membership organization of life insurance companies, which operates an information exchange on behalf of its members. If you apply to another Bureau member company for life or health insurance coverage, or a claim for benefits is submitted to such a company, the Bureau, upon request, will supply such company with the information in its file.

     Upon the receipt of a request from you, the Bureau will arrange disclosure of any information it may have in your file. if you question the accuracy of the information in the Bureau’s file, you may contact the Bureau and seek a correction in accordance with the procedures set forth in the Federal Fair Credit Reporting Act. The address of the Bureau’s information office is Post ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telephone number(617)▇▇▇-▇▇▇▇.

TLIC 21001 OK (01-2007)

I (We) represent that all statements and answers in this application are full, complete and true to the best of my (our) knowledge and belief. I (we) understand that said statements and answers are submitted as evidence of insurability of each person insured under the policy. It is agreed that this policy will not be reinstated and the company will have no liability until (1) all money required for reinstatement of this policy has been paid; (2) this application has been approved by Trinity Life Insurance Company Home Office during the lifetime of all persons who would be insured under this policy if reinstated. It is further agreed that with regard to the statements and answers provided above, any period of contestability provided in the policy shall run anew from the effective date of reinstatement.

I HEREBY AUTHORIZE any licensed physician, medical practitioner, hospital, clinic or other medical or medically related facility, insurance company, consumer reporting agency, the Department of Motor Vehicles (or other appropriate state agency), or the Medical Information Bureau that has any records or knowledge of me or my health, to give Trinity Life Insurance Company, or its reinsurer(s), such information as may be needed to consider my application for insurance. Such information may include records or knowledge of my health, motor vehicle records, aviation activities, hazardous sports or hobbies or avocations, and occupation. A photographic copy of this authorization shall be as valid as the original. The purpose for which this information is being collect is to consider your application for insurance. You or your authorized representative is entitled to receive a copy of this authorization.

This authorization shall be valid for 24 months from the date shown below. A photographic copy shall be as valid as the original. I have the right to revoke this authorization at anytime by sending a revocation in writing to Trinity Life Insurance Company, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Attention: Underwriting Department. I have received a copy of the Notice of Information Practices.

ANY PERSON WHO KNOWINGLY PRESENTS A FALSE OR FRAUDULENT CLAIM FOR PAYMENT OF A LOSS OR BENEFIT OR KNOWINGLY PRESENTS FALSE INFORMATION IN AN APPLICATION FOR INSURANCE MAY BE GUILTY OF A CRIME AND MAY BE SUBJECT TO FINES AND CONFINEMENT IN PRISON.

DATE:
				Signature of Owner (Always Required)
WITNESS:
				Signature of Insured, if other than Owner (or Parent if insured is minor)

TLIC 21001 OK (01-2007)

     We or our reinsurer(s), may also release information to other life insurance companies to whom you apply for life or health insurance, or to whom a claim is submitted.

     In addition, we may get an investigative report from a consumer reporting agency. This report requires personal interviews with your neighbors, friends, or other acquaintances for information as to your general reputation, personal characteristics and mode of living. As part of your application, you have authorized us to do this. You have the right to be personally interviewed and to make a written request within a reasonable period about the nature and scope of this investigation. Upon written request you will be told if such a report has actually been ordered, and if it has, we will give you the name and address of the consumer reporting agency. You may contact this consumer reporting agency and ask for a copy of such report. Unless a legitimate business need exists or we are required to do so by law, the information we get in this report, as well as any other information which we later acquire, wiil not be disclosed to anyone else without your consent. You may request a copy of all information acquired by us and have a right to correct any personal information which you feel is inaccurate. We will, if required by law, give you a more detailed notice of the types of personal information which we get in considering your application, as well as any additional rights which you may have.

     If you need any assistance, please feel free to contact your agent or call or write to us at Investors Heritage Life Insurance Company, Underwriting Department, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.

TLIC 21001 OK (01-2007)

▇▇▇▇ ▇▇▇▇ ▇▇^▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇  Fax: (▇▇▇) ▇▇▇-▇▇▇▇

STATEMENT OF HEALTH AND INSURABILITY

COMPLETED AS A CONDITION TO THE DELIVERY OR CHANGE OF

POLICY NUMBER		PROPOSED INSURED

Since the date of the original application for the above policy, each person proposed for Life Insurance in such application has continued in good health and no person proposed for Life or Health Insurance or both:

	1.		has made application to another company for Life or Health Insurance (2) which has been issued, declined, postponed or modified, or (b) which is pending at the present time, or;
	2.		has consulted or been examined or treated by a physician or practitioner , or;
	3.		has had any change in health or insurability as a Life or Health Insurance risk be cause of any event or circumstance.

If there are any exceptions to any of the above statement, give full details in space provided:

The person named as the Insured and the Applicant (if other than such person) represent that the foregoing statements are true and complete and that all exceptions have been stated.

Dated at:
		(City and state)		Signature of the Insured
This                      of                     ,
DAY            MONTH           YEAR
				Signature of Applicant if Other Than the Above Person
Signature of Agent

TLIC 516 (01-2007)

TRINITY LIFE INSURANCE COMPANY

Your Privacy at Trinity Life Insurance Company

At Trinity Life Insurance Company (“Trinity,” “we,” “us,” or “our”) keeping nonpublic personal information (“Information”) about our customers secure and private is a top priority. We are sending you this Notice to help you understand what Information we collect and how we use and protect that Information.

While Information is vital to our ability to provide superior service, our most important asset is your trust. We will limit the collection and use of Information to the minimum we require to service our customers. This includes advising our customers about our products, services and other opportunities, and to administer our business.

We apply the same privacy policies to former customers as well as new customers. As required by law, we will send our current customers our privacy policy at least annually. If we amend our privacy policy you will be notified.

Our Policies and Practices to Protect Your Personal Information

I. Information Security

Trinity protects the Information it collects about you by maintaining physical, electronic and procedural safeguards that meet or exceed requirements of applicable federal and state law. Any affiliates and nonaffiliated third parties to whom Trinity provides your Information must also agree to follow appropriate standards of security and confidentiality.

II. Categories of Personal Information We Collect and May Disclose

We may collect a wide variety of Information about you and your family from the following sources:

	•		Information we receive from you on applications or other forms, such as your name, address, social security number, assets, income and beneficiaries;
	•		Information about your transactions with Trinity, our affiliates or others, such as your policy coverage, premiums, account balances and payment history;
	•		Information we receive from nonaffiliated third parties such as consumer reporting agencies.

III. What Information We Disclose and To Whom We Disclose It

The Information obtained from you will only be disclosed with your authorization, as permitted or required by law, or to conduct our business in administering your policy. The companies affiliated with Trinity may share your Information among themselves. Additionally, we may disclose all of the Information to nonaffiliated third parties that perform marketing or other services on our behalf and with whom we have joint marketing or service agreements.

IV. Verifying the Accuracy of Your Information

Maintaining accurate Information about you is very important to us. You have the right to ask Trinity to correct, amend or delete any Information about you, which you believe to be incorrect. If the Information should be corrected, Trinity will update its files. If Trinity does not agree that the information is incorrect, you have the right to submit a short statement of dispute, which we will place in your file and include in any future disclosure of Information.

We will not send you any medical information we have received about you from a doctor or other health care provider. Instead, we will forward the Information to a physician of your choice and you should contact them directly to obtain the Information you seek. Information relating to a claim or civil or criminal proceeding is not subject to the rights described above.

•

This Privacy Policy is being provided in accordance with privacy laws. If you have any questions, please contact us at Trinity Life Insurance Company, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇. Please include your name, address, policy number if applicable, and some type of personal identification.

OKLAHOMA GUARANTY ASSOCIATION ACT
NOTICE CONCERNING COVERAGE LIMITATIONS AND EXCLUSIONS UNDER THE
OKLAHOMA LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION ACT

Residents of Oklahoma who purchase life insurance, annuities or health insurance should know that the insurance companies licensed in this state to write these types of insurance are members of the Oklahoma Life and Health Insurance Guaranty Associations. The purpose of this association is to assure that Policyholders will be protected, within limits, in the unlikely event that a member insurer becomes financially unable to meet its obligations. If this should happen, the Guaranty Association will assess its other member insurance companies for the money to pay the claims of insured persons who live in this state and, in some cases, to keep coverage in force. The valuable extra protection provided by these insurers through the Guaranty Association is not unlimited, however. And, as noted below, this protection is not a substitute for consumers’ care in selecting companies that are well-managed and financially stable.

The Oklahoma Life and Health Insurance Guaranty Association may not provide coverage for this Policy. If coverage is provided, it may be subject to substantial limitations or coverage, and require continued residency in Oklahoma. You should not rely on coverage by the Oklahoma Life and Health Insurance Guaranty Association in selecting an insurance company or in selecting an insurance Policy.

Coverage is NOT provided for your Policy or any portion of it that is not guaranteed by the insurer or for which you have assumed the risk, such as a variable Contract sold by prospectus.

Insurance companies or their agents are required by law to give or send you this notice. However, insurance companies and their agents are prohibited by law from using the existence of the guaranty association to induce you to purchase any kind of insurance Policy.

The Oklahoma Life and Health Insurance Guaranty Association
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▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇

Oklahoma Department of Insurance
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The state law that provides for this safety-net coverage is called the Oklahoma Life and Health Insurance Guaranty Association Act. Below is a brief summary of this law’s coverages, exclusions and limits. This summary does not cover all provisions of the law; nor does it in any way change anyone’s rights or obligations under the act or the rights or obligations of the guaranty association.

COVERAGE

Generally, individuals will be protected by the Life and Health Insurance Guaranty Association if they live in this state and hold a life or health insurance Contract, or an annuity, or if they are insured under a group insurance Contract, issued by a member insurer. The beneficiaries, payees or assignee of insured persons are protected as well, even if they live in another state.

EXCLUSIONS FROM COVERAGE

However, persons holding such Policies are NOT protected by this Association if:

	•		they are eligible for protection under the laws of another state this may occur when the insolvent insurer was incorporated in another state whose guaranty association protects insureds who live outside that state;
	•		the insurer was not authorized to do business in this state;
	•		their Policy was issued by an HMO, a fraternal benefit society, a mandatory state pooling plan, a mutual assessment company or similar plan in which the Policyholder is subject to future assessments, or by an insurance exchange.

The Association also does not provide coverage for:

	•		Policy or portion of a Policy which is not guaranteed by the insurer or for which the individual has assumed the risk, such as a variable Contract sold by prospectus;
	•		any Policy of reinsurance (unless an assumption certificate was issued);
	•		interest rate yields that exceed an average rate;
	•		dividends;
	•		credits given in connection with the administration of a Policy by group Contract holder;
	•		employers’ plans to the extent they are self-funded (that is, not insured by an insurance company, even if an insurance company administers them);
	•		unallocated annuity Contracts (which give rights to group Contractholders, not individuals).

LIMITS ON AMOUNT OF COVERAGE

The act also limits the amount the Association is obligated to pay out. The Association cannot pay more than what the insurance company would owe under a Policy or a Contract. Also, for any one insured life, the Association will pay a maximum of $300,000 — no matter how many Policies and Contracts there were with the same company, even if they provided different types of coverages. Within this overall $300,000 limit, the Association will not pay more than $100,000 in cash surrender values, $300,000 in health insurance benefits, $300,000 in present value of annuities, or $300,000 in life insurance death benefits — again, no matter how many Policies and Contracts there were with the same company, and no matter how many different types of coverages.

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PARENTAL CONSENT AGREEMENT

We, the undersigned, who are the father and mother of

(PROPOSED INSURED)

minor, do hereby give our full consent to the issuance, and continuance in force of Policy Number                      issued by the Trinity Life Insurance Company, on the life of said minor; said Policy having been issued upon the application made by:

(NAME OF APPLICANT)

(STREET ADDRESS)		(CITY)		(STATE)

who is the                      (RELATIONSHIP) of said minor, and we hereby authorize The Trinity Life insurance Company to pay the benefits and/or proceeds under said policy to the person or persons entitled thereto according to the terms of said policy, and any riders or attachments thereto.

Witness our hands this                      (day) of                      (month),___                     (year)

(WITNESS)		(SIGNATURE OF FATHER)
(ADDRESS)		(ADDRESS)
(WITNESS)		(SIGNATURE OF MOTHER)
(ADDRESS)		(ADDRESS)

TLIC 64 (01-2007)

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CIGARETTE SMOKING QUESTIONNAIRE

PROPOSED INSURED:				BIRTHDATE

1.		Are you now a cigarette smoker?		o YES		o NO
2.		Have you ever been a cigarette smoker and quit?		o YES		o NO

3.		If yes, when did you quit?		Month: ___		Day: ___		Year: ___

4.		Did, or do, you smoke more than one pack daily?		o YES		o NO
5.		Do you use tobacco in any other form?		o YES		o NO

I hereby represent, to the best of my knowledge and belief, that all answers to all the above questions are complete and true, and I agree that they shall form a part of the application and become a part of the application and become a part of any contract of insurance issued as a result of such application.

Dated at:				Date:

Signature of Agent		Signature of Proposed Insured

TLIC 159 (01-2007)

UNDERWRITING REQUIREMENTS

TRINITY LIFE INSURANCE COMPANY

UNDERWRITING GUIDELINES
ORDINARY PLANS

Focus

Requirements for Telephone Interviews (FOCUS)
Ordinary

2 Full Units or $150,000 (whichever is less)      Telephone interview required

All amounts      An interview may be conducted for any amount at the underwriter’s discretion. Underwriter’s discretion means there is some reason or “red flag” that prompts the interview.

The following are some examples of reasons an underwriter would request an interview for 150,000/2 units or less:

	•		Amount applied for plus amount in force over 150,000
	•		MIB code received and the information pertaining to it is not listed on the application; or if it is listed, needs developing
	•		Occupation – left blank, disabled, retired at an early age, the occupation is potentially hazardous
	•		Medical condition is listed on application but no details given (i.e. dates, meds or treatment, results, names of physicians or medical facility)
	•		Medical condition listed on application that may be considered without an APS or paramed if can develop information needed for a decision from telephone interview (Treatment for high blood pressure is a common one.)
	•		Very small amounts of insurance applied for but the medical information given on the application requires an APS or paramed. The underwriter might conduct a telephone interview to try to develop enough information to eliminate the APS or paramed.

Focus Interview will be ordered on proposed insured’s that are applying for 2 units or $150,000 (whichever is less). I’m not sure they know what the face amount is per unit.

     Here are the death benefits for 2 units for selected issue ages:

Issue Age		Death Benefit
0			80,000
5			70,000
10			60,000
15			50,000
20			40,000
25			220,000
30			206,000
35			190,000
40			176,000
45			160,000
50			140,000
55			100,000
60			90,000
65			80,000
70			50,000
75			46,000
80			42,000

MOTOR VEHICLE REPORT (MVR)

Ordinary Underwriting Requirements – Motor Vehicle Report

A motor vehicle report is ordered on

	•		Any application over 100,000.
	•		Any application indicating driving criticism (speeding tickets, DUI, etc.)
	•		Any application indicating the proposed insured participates in auto racing as an avocation.
	•		Younger ages (usually age 25 or younger)

A motor vehicle report may be ordered on any application at the underwriter’s discretion.

SBSI – INSPECTION REPORTS

A Focus interview is required for 2 units or $150,000 up to $250,000. An inspection report is required for amounts over $250,000.

Below are the types of inspections reports completed by our vendor.

OVER 250,000		AMPLIFIED REPORT
		Includes more financial information and a narrative report.
ANY AMOUNT		CRIMINAL REPORT
		Would be ordered by the underwriter if any reason to believe there Would be a criminal record.

ATTENDING PHYSICIAN’S STATEMENT (APS)

An APS is ordered by the underwriter at their discretion.

Examples of why an underwriter would require an APS:

Medical condition listed on application or revealed in the phone interview that would require
Multiple doctors visits, such as diabetes, asthma, etc.

Medical condition indicated by MIB.

A combination of medical conditions.

Children – an APS is required when the proposed insured is a child and the volume is $100,000 and over.

A HIPPA Form is required before ordering an APS.

NON-MEDICAL LIMITS

The non-medical limits are published in the Underwriting Guide – Medical Requirements.

A Notice and Consent Form of AIDS Virus (HIV) Anti-body Testing is required with every blood test.

Internal Exchange/Replacement Procedures

There are no exchange programs associated with the modified whole life product covered under this reinsurance agreement; therefore, there are no Internal Exchange/Replacement Procedures to include in this Exhibit C- Forms, Manuals, and Issue Rules.

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