EXHIBIT 10.47
CONFIDENTIAL TREATMENT*
*CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO THE RULES
AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION. BRACKETS AND "+" HAVE
BEEN USED TO IDENTIFY INFORMATION WHICH IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST.
AUTOMATIC POOL REINSURANCE AGREEMENT
EFFECTIVE APRIL 1, 1998
WMA LIFE INSURANCE COMPANY LIMITED
OF
▇▇▇▇▇▇▇▇, BERMUDA
REFERRED TO IN THIS AGREEMENT AS THE "CEDING COMPANY"
AND
AMERICAN PHOENIX LIFE AND REASSURANCE COMPANY
OF
HARTFORD, CONNECTICUT
SWISS RE LIFE & HEALTH AMERICA, INC.
OF
NEW YORK, NEW YORK
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
OF
FORT ▇▇▇▇▇, INDIANA
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
OF
LOS ANGELES, CALIFORNIA
COLLECTIVELY REFERRED TO IN THIS AGREEMENT AS THE "POOL REINSURERS"
TABLE OF CONTENTS
Article I Scope of the Agreement Page 1
Parties to the Agreement
Effective Date of the Agreement
Scope of the Agreement
Duration of the Agreement
Article II Reinsurance Coverage Page 2
Automatic Reinsurance
Facultative Reinsurance
Basis of Reinsurance
Article III Procedures Page 3
Article IV Liability Page 3
Article V Reinsurance Rates and Payments Page 3
Tax Reimbursement
Experience Refund
Article VI Changes to the Reinsurance Page 5
Errors and Oversights
Misstatement of Age or Sex
Changes to the Underlying Policy
Reductions, Terminations and Reinstatements
Article VII Recapture Page 7
Article VIII Claims Page 8
Article IX Arbitration Page 10
Article X Insolvency Page 12
Article XI Inspection of Records Page 12
Article XII Offset Page 13
Article XIII Execution of the Agreement Page 14
EXHIBITS
Exhibit A Reinsurance Coverage
Retention Limits
Automatic Acceptance Limits
Exclusions to Automatic Reinsurance Coverage,
including Jumbo Limits
Exhibit B Administration and Reporting Forms
Exhibit C Rates and Allowances
Net Amount at Risk Calculation
Exhibit D Reinsurance Claim Form
ARTICLE I - SCOPE OF THE AGREEMENT
1. PARTIES TO THE AGREEMENT
The Ceding Company and the Pool Reinsurers mutually agree to transact
reinsurance business according to the terms of this Agreement. This
Agreement is for indemnity reinsurance and the Ceding Company and the
Pool Reinsurers are the only parties to the Agreement. There will be no
right or legal relationship whatsoever between the Ceding Company or
the Pool Reinsurers and any other person having an interest of any kind
in policies reinsured under this Agreement.
2. EFFECTIVE DATE OF THE AGREEMENT
This Agreement will go into effect at 12:01 A.M., April 1, 1998 and
will cover policies effective on and after that date.
3. SCOPE OF THE AGREEMENT
The text of this Agreement and all Exhibits, Schedules and Amendments
are considered to be the entire agreement. There are no other
understandings or agreements regarding the policies reinsured other
than as expressed in this Agreement. Either the Ceding Company or any
of the Pool Reinsurers may make changes or additions to this Agreement,
but they will not be considered to be in effect unless they are made by
means of a written amendment which has been signed by all parties.
4. DURATION OF THE AGREEMENT
The duration of this Agreement will be unlimited. However, any of the
pool reinsurers may terminate their participation in the Agreement at
any time by giving the Ceding Company ninety days prior written notice.
The Ceding Company may terminate the entire Pool or the participation
of any Pool Reinsurer by giving ninety days prior written notice.
Reinsurance will continue to be placed during the ninety-day period.
The Ceding Company has the right, upon termination of any Pool
Reinsurer under this Agreement, to re-allocate the quota share
percentages among the remaining Pool Reinsurers, or to name a new Pool
Reinsurer to the Agreement. Existing reinsurance will not be affected
by the termination of this Agreement or by the termination of the
participation of any of the Pool Reinsurers for new reinsurance.
Existing reinsurance will remain in force until the termination or
expiry of the underlying policy on which reinsurance is based, as long
as the Ceding Company continues to pay reinsurance premiums as shown in
Article V (Reinsurance Rates and Payment). However, the Pool Reinsurers
will not be held liable for any claims or premium refunds which are not
reported to them within one hundred eighty days following the
termination or expiry of the last cession reinsured under this
Agreement.
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ARTICLE II - REINSURANCE COVERAGE
1. AUTOMATIC REINSURANCE
The Pool Reinsurers will automatically accept reinsurance of life
benefits for individually underwritten ordinary life policies on the
lives of permanent residents of the United States, United States
Territories or Canada, that the Ceding Company reinsures in its
underlying Agreement with Western Reserve Life Assurance Company of
Ohio (referred to in this Agreement as the "Issuing Company"), in
accordance with the provisions and limitations shown in Exhibit A.
The Pool Reinsurers will also automatically accept reinsurance of
riders and supplementary benefits written with the covered life
benefits, but only to the extent that the riders and supplementary
benefits are specifically shown in Exhibit A, Part I.
The Ceding Company has the right to modify its retention limits shown
in Exhibit A, Part Il at any time. If the retention limits are reduced,
the Ceding Company will notify the Pool Reinsurers in writing before
reinsurance can be ceded on the basis of the reduced retention limits.
The Pool Reinsurers have the right to amend the Automatic Acceptance
Limits shown in Exhibit A, Part III if the Ceding Company modifies its
retention limits. The Pool Reinsurers also have the right to modify the
Automatic Acceptance Limits if the Ceding Company elects to participate
in another arrangement or arrangements to secure additional automatic
binding capacity. However, the Pool Reinsurers must exercise their
option to amend the Automatic Acceptance Limits within ninety days of
notification of the change in retention limits or the placement of
additional automatic binding capacity.
2. FACULTATIVE REINSURANCE
Facultative reinsurance is not available under the provisions of this
Agreement.
3. BASIS OF REINSURANCE
Life reinsurance under this Agreement will be on the Monthly Renewable
Term plan for the net amount at risk on the portion of the original
policy that is reinsured into the Pool. The net amount at risk for any
policy period will be calculated according to Exhibit C (Reinsurance
Rates and Allowances), Part I.
Riders or supplementary benefits ceded with life benefits will be
reinsured as shown in Exhibit C. Any differences in the net amount at
risk calculation for these benefits will be shown in Exhibit C.
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ARTICLE III - PROCEDURES
1. NOTIFICATION
Individual notification for the placement of automatic reinsurance will
not be necessary. Subject to Article V (Reinsurance Rates and Payment)
and Exhibit B (Reinsurance Reporting Forms and Reinsurance
Administration), new business or changes to existing reinsurance will
be shown on the Ceding Company's periodic billing report.
2. REFERENCE MATERIALS
Upon request and subject to availability, the Ceding Company will use
its best efforts to obtain reference materials which may be required by
the Pool Reinsurers for proper administration of reinsurance under this
Agreement.
ARTICLE IV - LIABILITY
1. AUTOMATIC REINSURANCE
Subject to the provisions of Article VI, Section 4 and Article VII, the
liability of the Pool Reinsurers for reinsurance placed automatically
under this Agreement will begin and end simultaneously with that of the
Ceding Company for the underlying policy on which reinsurance is based.
2. CONDITIONAL RECEIPT LIABILITY
The Pool Reinsurers will be liable for losses under the terms of a
Conditional Receipt or Temporary Insurance Receipt to the extent that
the Ceding Company is liable in its underlying reinsurance agreement
with the Issuing Company.
3. CONTINUATION OF LIABILITY
Continuation of the Pool Reinsurers' liability is conditioned on the
Ceding Company's payment of reinsurance premiums as shown in Article V
(Reinsurance Rates and Payment) and is subject to Article VI (Changes
to the Reinsurance) and Article VII (Recapture).
ARTICLE V - REINSURANCE RATES AND PAYMENTS
1. REINSURANCE RATES
The rates that the Ceding Company will pay to the Pool Reinsurers for
reinsurance covered under this Agreement are shown in Exhibit C. The
reinsurance rate payable for any cession for any accounting period will
be calculated on the basis of the net amount at risk reinsured as of
that period.
For reasons relating to deficiency reserve requirements by the various
state insurance departments, the rates shown in Exhibit C cannot be
guaranteed for more than one year. While all parties anticipate that
reinsurance rates shown in Exhibit C will continue to be charged, it
may become necessary to charge a guaranteed rate that is the greater of
the rate from Exhibit C or the
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corresponding statutory net premium rate based on the 1980 CSO Table at
4.5% interest for the applicable mortality rating.
If the original policy is issued with interim insurance, the Ceding
Company will pay the Pool Reinsurers a reinsurance rate for the interim
period that is the same percentage of the first year premium that the
interim period bears to twelve months. The rate that the Ceding Company
pays the Pool Reinsurers for the first policy year after the interim
period will be calculated on the basis of the full annual reinsurance
rate.
Procedures and details of reinsurance rate calculation for any benefits
or riders ceded under this Agreement are shown in Exhibit C.
All financial transactions under this Agreement will be in United
States dollars, unless the parties mutually agree to use other
currencies. Specifications of the currencies and details of currency
conversion procedures will be shown in Exhibit C if necessary.
2. PAYMENTS
The Ceding Company will be responsible for administration of the
periodic reporting of its statements of account and payment of balances
due to the Pool Reinsurers as shown in Exhibit B.
Within thirty days after the close of each reporting period, the Ceding
Company will send each Pool Reinsurer a statement of account for that
period along with payment of the full balance due. If the statement of
account shows a balance due the Ceding Company, each Pool Reinsurer
will remit the appropriate amount within thirty days of receipt of the
statement of account.
In order to eliminate reporting of trivial amounts, the Ceding Company
will send statements of account to the Pool Reinsurers only when the
total balance due equals or exceeds $100.00.
The Ceding Company's timely payment of reinsurance premiums is a
condition precedent to the continued liability of the Pool Reinsurers.
If the Ceding Company has not paid the balance due to the Pool
Reinsurers by the thirty-first day following the close of the reporting
period, the Pool Reinsurers have the right to give thirty days' written
notice of their intention to terminate the reinsurance on which the
balance is due and unpaid. At the end of this thirty-day period, the
liability of the Pool Reinsurers will automatically terminate for all
reinsurance on which balances remain due and unpaid, including
reinsurance on which balances became due and unpaid during and after
the thirty-day notice period. Even though reinsurance has been
terminated, the Ceding Company will continue to be liable for the
payment of unpaid balances along with interest charges at 4.5%,
calculated from the due date shown above to the date of payment.
Reinsurance terminated for non-payment of balances due may be
reinstated at any time within sixty days of the date of termination, by
the Ceding Company's payment of all balances due and interest charged
in full to the Pool Reinsurers. However, the Pool Reinsurers will have
no liability for claims incurred between the termination date and the
reinstatement date.
3. TAX REIMBURSEMENTS
Details of any reimbursement of premium taxes that the Ceding Company
pays on behalf of reinsurance payments to the Pool Reinsurers are shown
in Exhibit C, Section VIII. (Premium Taxes).
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The parties mutually agree to the following pursuant to Section 1.848-2
(g) (8) of the Income Tax Regulation issued December 29, 1992 under
Section 848 of the internal Revenue Code of 1986, as amended. This
election will be effective for all taxable years for which this
Agreement remains in effect.
The terms used in this Section are defined in Regulation Section
1.848-2 in effect as of December 29, 1992. The term "net consideration"
will refer to either net consideration as defined in Section 1.848-2
(f) or "gross premium and other consideration" as defined in Section
1.848-3 (b), as appropriate.
a) 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 IRC
Section 848 (c) (1).
b) The parties mutually agree to exchange information pertaining
to the amount of net consideration under this Agreement by May
1 of each year to ensure consistency. The parties also
mutually agree to exchange information otherwise required by
the Internal Revenue Service. Any disputes regarding the
information provided by the parties will be resolved no later
than June 1 of each year.
4. EXPERIENCE REFUND
Details of any Experience Refund payable to the Ceding Company will be
shown in Exhibit C. Section XI. (Experience Refund).
ARTICLE VI - CHANGES TO THE REINSURANCE
1. ERRORS AND OVERSIGHTS
If any party to this Agreement fails to comply with any of the
Agreement provisions because of an unintentional oversight or
misunderstanding, the underlying status of this Agreement will not be
changed. All parties will be restored to the position they would have
occupied had no such oversight nor misunderstanding occurred.
2. MISSTATEMENT OF AGE OR SEX
If the misstatement of the age or sex of a reinsured life causes an
increase or reduction in the amount of insurance in the underlying
policy, all parties will share in the change in proportion to their
original liabilities at the time the policy was issued.
3. CHANGES TO THE UNDERLYING POLICY
a) All changes. If any change is made to the underlying policy,
the reinsurance will change accordingly. The Ceding Company
will notify the Pool Reinsurers of the change and the
appropriate premium adjustment on its periodic statement of
account.
b) Increases. If the amount at risk increases because of a change
in the underlying policy, the approval of the Pool Reinsurers
will be necessary only if the increase causes the amount
reinsured to exceed the Automatic Acceptance Limits shown in
Exhibit A, Part III. If approval is necessary, the Ceding
Company will send the Pool
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Reinsurers copies of all papers relating to the change in
coverage to the extent that they are available from the
Issuing Company.
c) Extended Term and Reduced Paid-Up Insurance. If any policy
reinsured under this Agreement converts to Extended Term
Insurance or Reduced Paid-Up Insurance, the net amount at risk
reinsured will be adjusted as appropriate and reinsurance will
be continued in accordance with the provisions of the
underlying policy. Reinsurance payments for the adjusted
policy will be calculated on the basis of the original issue
age of the insured and the duration of the original policy at
the time the adjustment became effective, i.e. point-in-scale
basis.
4. REDUCTIONS, TERMINATIONS AND REINSTATEMENTS
If any part of the underlying coverage on a life reinsured under this
Agreement is reduced or terminated, the amount reinsured will also be
reduced or terminated to the extent that the Ceding Company will
continue to maintain its appropriate retention limit as shown in
Exhibit A for the issue age and table rating of the insured. The Ceding
Company will not be required to assume amounts in excess of the
retention limit that was in force when the affected policy or policies
were issued.
The amount of the reduction will be applied on a proportional basis to
each Pool Reinsurer's net amount at risk at the same proportion that
the Pool Reinsurer's initial amount of reinsurance bore to the total
initial amount reinsured.
If a policy reinsured under this Agreement is lapsed or terminated, the
reinsurance coverage will also terminate. If additional policies on the
same life are reinsured to the Pool, and if the termination causes the
Ceding Company to maintain less than its retention limit shown in
Exhibit A, the policy(ies) issued next in sequence to the terminated
policy will be decreased until the Ceding Company maintains its full
retention on the risk.
The Ceding Company will also follow the procedures shown in the above
paragraphs when the reduction or termination applies to fully retained
policies, where the reduction or termination will cause the Ceding
Company to maintain less than its current retention for any policy or
policies reinsured.
If a policy reinsured automatically lapses and is reinstated in
accordance with the issuing company's standard rules and procedures,
reinsurance for the amount at risk effective at the time of the lapse
will be reinstated automatically at the date of reinstatement of the
policy. The Ceding Company will provide the Pool Reinsurers with copies
of reinstatement papers only upon request.
The Ceding Company will notify the Pool Reinsurers of the reinstatement
on its periodic statement of account, and it will pay all reinsurance
payments due from the date of reinstatement to the date of the current
statement of account, including a proportionate share of any interest
collected. Thereafter, reinsurance payments will be in accordance with
Article V. (Reinsurance Rates and Payments).
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ARTICLE VII - RECAPTURE
1. BASIS OF RECAPTURE
If the Ceding Company increases its retention limits shown in Exhibit
A, it may make a corresponding reduction in eligible reinsurance
cessions. Policies are eligible for recapture if
a) the Ceding Company has maintained the maximum retention limit
for the age and mortality rating of the insured when the
underlying policy was issued. Policies on which the Ceding
Company retained a reduced retention or no retention will not
be eligible for recapture; and
b) the policy has been in force under this Agreement for the
Recapture Period shown in Exhibit C, Section IX. The recapture
period will always be measured from the original policy issue
date.
2. METHOD OF RECAPTURE
The Ceding Company will give the Pool Reinsurers written notice of its
intention to recapture within ninety days of the effective date of the
retention increase. If the Ceding Company elects to recapture at a
later date, it will give the Pool Reinsurers additional written notice
before beginning the recapture.
When the Ceding Company has given the Pool Reinsurers written notice of
intent to recapture, and the date that the recapture will begin:
a) All eligible policies will be recaptured;
b) Reinsurance will be reduced on the next anniversary date of
each eligible policy;
c) Reinsurance on each eligible policy will be reduced by an
amount that will increase the Ceding Company's retention to
the then current limit set forth in Exhibit A, as amended.
d) If there is reinsurance in force in other reinsurers on any
one insured life, the reduction of the reinsurance in force
under this Agreement will be in the same proportion that the
amount reinsured with the Pool Reinsurers bears to the total
reinsurance coverage on the life;
e) If at the time of recapture the insured is disabled and
premiums are being waived under any type of Disability Benefit
Rider, only the life benefit will be recaptured. The reinsured
portion of the Disability Benefit Rider will remain in force
until the policy is returned to premium-paying status, at
which time it will be eligible for recapture.
If the Ceding Company omits or overlooks the recapture of any eligible
policy or policies, the acceptance of reinsurance payments by the Pool
Reinsurers after the date the recapture would have taken place will not
cause the Pool Reinsurers to be liable for the amount of the risk that
would have been recaptured. The Pool Reinsurers will be liable only for
a refund of reinsurance payments received, without interest.
If the Ceding Company's retention increase is due to its purchase by or
purchase of another company, or its merger, assumption or any other
affiliation with another company, no immediate
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recapture will be allowed. However, the Ceding Company may recapture
eligible policies once the Recapture Period set out in Exhibit C,
Section IX. has expired.
ARTICLE VIII - CLAIMS
1. NOTICE OF CLAIM
Subject to the provisions of Section 2 of this Article, the Ceding
Company will notify the Pool Reinsurers promptly when it receives
notice that a claim has been incurred on a policy reinsured under this
Agreement, and it will also forward copies of the death certificate and
the claimant's statement as each document becomes available. The Ceding
Company will send copies of additional information on the claim,
including copies of the application and underwriting papers, upon the
request of any of the Pool Reinsurers, and to the extent that the
information is available from the Issuing Company.
2. SETTLEMENT OF CLAIMS
For non-contestable claims on polices with face amounts or $1,500,000
or less, including compromises, the Pool Reinsurers will accept the
good faith decision of the Ceding Company. The Ceding Company will
consult with the Pool Reinsurers whenever the claim is incurred during
the contestable period of the policy. However, the consultation will
not impair the Ceding Company's freedom to determine the proper action
on the claim and the settlement made by the Ceding Company will still
be binding upon the Pool Reinsurers.
For claims on policies with face amounts in excess of $1,500,000, the
Lead Claim Reinsurer specified in Exhibit A will review the claim
papers on behalf of the other Pool Reinsurers. The Ceding Company will
consult with the Lead Claim Reinsurer before the Ceding Company makes
any admission or acknowledgment of the validity of the claim. The
action taken by the Lead Claim Reinsurer will be binding on the other
Pool Reinsurers.
Once the Pool Reinsurers have received the proofs cited in Section 1
and upon evidence of the Ceding Company's settlement with the Issuing
Company, they will discharge their net reinsurance liability by paying
one lump sum to the Ceding Company. The Pool Reinsurers will also
reimburse the Ceding Company for any unearned premiums.
The Ceding Company will consult with the Pool Reinsurers before
conceding any liability or making any settlement with the Issuing
Company whenever the claim is incurred during the contestable period of
the policy. However, the consultation will not impair the Ceding
Company's freedom to determine the proper action on the claim and the
settlement made by the Ceding Company will still be binding upon the
Pool Reinsurers.
Claim settlements will be administered in good faith, according to the
standard procedures the Ceding Company applies to all claims, whether
reinsured or not.
3. CONTESTABLE CLAIMS
The Ceding Company will immediately notify the Pool Reinsurers if it
intends to contest, compromise or litigate a claim involving
reinsurance and will give each Pool Reinsurer an opportunity to review
the claim papers. If any Pool Reinsurer prefers not to participate in
the contest, that Pool Reinsurer will notify the Ceding Company of its
decision within fifteen days of its receipt of the claim papers, and
that Pool Reinsurer will immediately pay the full amount of
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reinsurance due to the Ceding Company. Once the Pool Reinsurer has paid
its reinsurance liability, it will not be liable for legal and/or
investigative expenses, it will have no further liability for expenses
associated with the contest, compromise or litigation and it will not
share in any subsequent increase or reduction of the policy face
amount.
When the Pool Reinsurers agree to participate in a contest, compromise
or litigation involving reinsurance, the Ceding Company will give each
participating Pool Reinsurer prompt notice of the beginning of any
legal proceedings involving the contested policy. The Ceding Company
will promptly furnish the participating Pool Reinsurers with copies of
all documents pertaining to a lawsuit or notice of intent to file a
lawsuit by any of the claimants or parties to the policy.
The participating Pool Reinsurers will share in the payment of legal or
investigative expenses relating to a contested claim in the same
proportion as their liability bears to the Ceding Company's liability.
The participating Pool Reinsurers will not reimburse expenses
associated with non-reinsured policies.
If the contest, compromise or litigation results in a reduction in the
liability of the contested policy, the participating Pool Reinsurers
will share in the reduction in the same proportion that the amount
reinsured with each Pool Reinsurer bore to the amount payable under the
terms of the policy on the date of death of the insured.
If the contest, compromise or litigation results in a dismissal of the
claim and a return of the premium to the claimant and/or to the
beneficiary(ies), the participating Pool Reinsurers will refund all
premiums that the Ceding Company has paid to them.
4. CLAIM EXPENSES
The Pool Reinsurers will pay their proportionate share of the following
expenses arising out of the settlement or litigation of a claim,
providing that the expenses are reasonable:
a) investigative expenses;
b) attorneys' fees;
c) penalties and interest imposed automatically by statute and
rising solely out of a judgment rendered against the issuing
company in a suit for policy benefits;
d) interest paid to the claimant on death benefit proceeds
according to the practices of the Issuing Company and either
at the same rate as used by the Issuing Company, or at the
rate prescribed by state law.
The Pool Reinsurers' share of claim expenses will be in the same
proportion that their liability bears to the liability of the Ceding
Company.
The Ceding Company will be responsible for payment of the following
claim expenses, which are not considered items of "net reinsurance
liability" as referenced in Section 2. of this Article:
a) routine administrative expenses for the home office or
elsewhere, including the salaries of the Ceding Company's
employees;
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b) expenses incurred in connection with any dispute or contest
arising out of a conflict in claims of entitlement to policy
proceeds or benefits which the issuing Company admits are
payable.
5. EXTRA CONTRACTUAL DAMAGES
The Pool Reinsurers will not held be liable for nor will they pay any
extra contractual damages, including but not limited to consequential,
compensatory, exemplary or punitive damages which are awarded against
the Issuing Company or which may be paid voluntarily, in settlement of
a dispute or claim where damages were awarded as the result of any
direct or indirect act, omission or course of conduct undertaken by the
Issuing Company, its agents or representatives, in connection with any
aspect of the policies reinsured under this Agreement.
Special circumstances may arise in which the Pool Reinsurers should
participate to the extent permitted by law in certain assessed damages.
These circumstances are difficult to describe or define in advance but
could include those situations in which the Pool Reinsurers were an
active party in the act, omission or course of conduct which ultimately
resulted in the assessment of the damages. The extent of the
participation of any of the Pool Reinsurers is dependent upon a
good-faith assessment of the relative culpability in each case; but all
factors being equal, the division of any such assessment would
generally be in the same proportion of the net liability accepted by
each party.
ARTICLE IX - ARBITRATION
1. BASIS FOR ARBITRATION
The parties to this Agreement mutually understand and agree that its
wording and interpretation is based on the usual customs and practices
of the insurance and reinsurance industry. While all parties mutually
agree to act in good faith in dealings with each other, it is
understood and recognized that situations may arise in which an
agreement cannot be reached.
In the event that any dispute cannot be resolved to the mutual
satisfaction of the parties involved, 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 to this Agreement has given
the other the first written notification of the specific dispute, each
party 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, the parties agree that they will submit the dispute to
formal arbitration. However, the parties may agree in writing to extend
the negotiation period for an additional thirty days.
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3. ARBITRATION PROCEEDINGS
No later than fifteen days after the final negotiation meeting, the
officers taking part in the negotiation will give the concerned parties
written confirmation that they are unable to resolve the dispute and
that they recommend establishment of formal arbitration.
An arbitration panel consisting of three past or present officers of
life insurance companies not affiliated with any of the parties to this
Agreement in any way will settle the dispute. Each party will appoint
one arbitrator and the two will select a third. If the two arbitrators
cannot agree on the choice of a third, the choice will be made by the
Chairman of the American Arbitration Association.
The arbitration proceedings will be conducted according to the
Commercial Arbitration Rules of the American Arbitration Association
which are in effect at the time the arbitration begins.
The arbitration will take place at a site decided upon by the
arbitrators unless the involved parties 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. The decision will be
based on the terms and conditions of this Agreement as well as the
usual customs and practices of the insurance and reinsurance industry,
rather than on strict interpretation of the law. The decision will be
final and binding on the parties involved and there will be no further
appeal, except that either party may petition any court having
jurisdiction regarding the award rendered by the arbitrators.
The parties involved in the arbitration may agree to extend any of the
negotiation or arbitration periods shown in this Article.
Unless otherwise decided by the arbitrators, the parties involved in
the arbitration will share equally in all expenses resulting from the
arbitration, including the fees and expenses of the arbitrators, except
that each party will be responsible for its own attorneys' fees.
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ARTICLE X - INSOLVENCY
1. If the Ceding Company is judged insolvent, the Pool Reinsurers will pay
all reinsurance under this Agreement directly to the Ceding Company,
its liquidator, receiver or statutory successor on the basis of the
Ceding Company's liability under the policy or policies reinsured
without decrease because of the insolvency of the Ceding Company. It is
understood, however, that in the event of the insolvency of the Ceding
Company, its liquidator, receiver or statutory successor will give the
Pool Reinsurers written notice of a pending claim on a policy reinsured
within a reasonable time after the claim is filed in the insolvency
proceedings. While the claim is pending, the Pool Reinsurers may
investigate and interpose at their own expense in the proceedings where
the claim is to be adjudicated, any defense which they may deem
available to the Ceding Company, its liquidator, receiver or statutory
successor. It is further understood that the expense incurred by the
Pool Reinsurers 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 which may accrue to the Ceding
Company solely as a result of the defense undertaken by the Ceding
Company. Where two or more Pool Reinsurers are involved in the same
claim and a majority in interest elect to interpose defense to the
claim, the expenses will be apportioned in accordance with the terms of
the reinsurance agreement as though the Ceding Company had incurred the
expense.
2. If any of the Pool Reinsurers are judged insolvent, they will be
considered in default under this Agreement. Amounts due to the
insolvent Pool Reinsurer(s) will be paid directly to their liquidator,
receiver or statutory successor without diminution because of
insolvency of the Pool Reinsurer(s).
3. For the purpose of this Agreement, the Ceding Company or any of the
pool Reinsurers will be deemed insolvent under the following
circumstances:
a) When a cease and desist order or injunction has been issued by
the commissioner or a court in that party's state or
jurisdiction or domicile, ordering the party to cease and
desist from transacting, soliciting or writing any new
business of any kind and is reasonably expected to result in
conservatorship, rehabilitation, receivership or liquidation;
or
b) When a court order is issued voluntarily or involuntarily
placing a party into conservatorship, rehabilitation,
receivership or liquidation, or appointing a conservator,
rehabilitator, receiver or liquidator to take over the
business of the party; or
c) When a party files or consents to the filing of a petition in
bankruptcy, seeks reorganization or an arrangement with
creditors or takes advantage of any bankruptcy, dissolution,
liquidation or similar law or statute.
ARTICLE XI - INSPECTION OF RECORDS
1. INSPECTION OF RECORDS
Any party to this Agreement will have the right at any reasonable time
to inspect the papers, records, books, files or other documents
relating directly or indirectly to the reinsurance coverage under this
Agreement.
- 12 -
ARTICLE XII - OFFSET
1. The Ceding Company and any of the Pool Members will have, and may
exercise at any time, the right to offset mutually agreed-to balances
due one party from the other against mutually agreed-to balances due
the other party. The right of offset is limited to balances due under
this Agreement. Subject to state regulations, the right of offset will
not be affected nor diminished because of the insolvency of the parties
to this Agreement.
- 13 -
ARTICLE XIII - EXECUTION OF THE AGREEMENT
In witness whereof, we have caused this Agreement to be executed in
duplicate at the dates and places shown below, by our respective
officers duly authorized to do so.
WMA LIFE INSURANCE COMPANY LIMITED
▇▇▇▇▇▇▇▇, Bermuda
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Attest: /s/ Wood ▇▇▇▇▇▇▇▇▇▇
------------------------------------------- -------------------------------------------
Title: VP & Actuary Title: VP
---------------------------------------- --------------------------------------------
Date: 9/8/98 Date: 9/8/98
----------------------------------------- ---------------------------------------------
AMERICAN PHOENIX LIFE AND REASSURANCE COMPANY
Hartford, Connecticut
By: [Illegible] Attest: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------- -------------------------------------------
Title: Director, Treaties & Compliance Title: Director, Reinsurance Marketing
---------------------------------------- --------------------------------------------
Date: September 1, 1998 Date: September 1, 1998
----------------------------------------- ---------------------------------------------
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Fort ▇▇▇▇▇, Indiana
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Attest: [Illegible]
------------------------------------------- -------------------------------------------
Title: Vice President Title: Assistant Secretary
---------------------------------------- --------------------------------------------
Date: December 16, 1998 Date: 12/11/98
----------------------------------------- ---------------------------------------------
SWISS RE LIFE & HEALTH AMERICA, INC.
New York, New York
By: /s/ ▇▇▇▇▇▇ ▇. Pennichotte Attest:
------------------------------------------- -------------------------------------------
Title: Vice President Title:
---------------------------------------- --------------------------------------------
Date: April 24, 1998 Date:
----------------------------------------- ---------------------------------------------
- 14 -
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------- -------------------------------------------
Title: President, Transamerica Reinsurance Title: V.P.
---------------------------------------- --------------------------------------------
Date: Nov. 23, 1998 Date: Nov. 25, 1998
----------------------------------------- ---------------------------------------------
- 15 -
LETTER OF CREDIT ADDENDUM
This Addendum is considered to be between the Ceding Company and American
Phoenix Life and Reassurance Company ("APLAR") and is attached to and made a
part of the Agreement Prior to the original execution.
For those jurisdictions in which the Ceding Company is not permitted to take
credit on its Annual Statement for all or a part of the reinsurance ceded to
APLAR, APLAR will furnish the Ceding Company with a clean, irrevocable Letter of
Credit. The Letter of Credit will be issued by the designated bank in an amount
equal to the reserves ceded to APLAR and will be in a form acceptable to the
Ceding Company. APLAR will bear the cost of the Letter of Credit.
It is understood that the Ceding Company may draw on the Letter of Credit at any
time, notwithstanding any other provisions in this Agreement. The Ceding Company
undertakes to use and apply any amount which it may draw upon the Letter of
Credit pursuant to the terms of this Agreement under which the Letter of Credit
is held, and only for the following purposes:
a) To pay or to reimburse the Ceding Company for APLAR's share of
unearned premium or any liability for loss reinsured by this
Agreement.
b) To make refund of any sum which is in excess of the actual
amount required to pay APLAR's share of any unearned premium
or liability reinsured under this Agreement;
c) To pay other amounts due to the Ceding Company under this
Agreement.
The Ceding Company agrees to return to APLAR any amounts drawn on Letters of
Credit which are in excess of the actual amounts required for a) or b) above, or
in the case of c) above, any amounts that are subsequently determined not to be
due.
The amounts drawn under any Letter of Credit will be applied without diminution
because of the insolvency of either party. The designated bank shall have no
responsibility whatsoever in connection with the propriety of withdrawals made
by the Ceding Company or the disposition of funds withdrawn, except to see that
withdrawals are made only upon the order of properly authorized representatives
of the Ceding Company.
- 16 -
EXHIBIT A
(EFFECTIVE APRIL 1, 1998)
REINSURANCE COVERAGE
I. REINSURANCE COVERAGE
This Agreement will cover quota shares as shown below in excess of the
Ceding Company's retention for
Life Benefits;
Accidental Death Benefits issued with Life Benefits;
Other Supplementary Benefits or Riders issued with Life
Benefits and specifically listed below;
on retrocessions of the following policy forms:
Plans and Riders Form Number
Financial Freedom Builder (Variable UL) VL03
Primary Insured Rider PIR 10
Primary Insured Rider Plus PIR 11
Other Insured Rider ULR2.01.05.84
Accidental Death Benefit Rider ULB2.01.05.84
issued by Western Reserve Life Assurance Company of Ohio and ceded to
WMA Life Insurance Company Limited under a first dollar quota share
coinsurance agreement. Reinsurance coverage will provide neither loan
nor cash surrender values.
Name of Pool Reinsurer Quota Share Percentage
---------------------- ----------------------
Lincoln National Life Insurance Company 25%
American Phoenix Life and Reassurance 25%
Company (Lead Claims Reinsurer)
Swiss Re Life & Health America, Inc. 25%
Transamerica Occidental Life Insurance Company 25%
Continued...
- 17 -
EXHIBIT A - CONTINUED
(EFFECTIVE APRIL 1, 1998)
II. RETENTION LIMITS
A. LIFE
Standard through Table 4 Tables 5
Issue Ages Flat Extras up to $5.00/$1,000 through 16
---------- ------------------------------ ----------
All $100,000 $50,000
The total maximum combined retention, including that of Western Reserve
Life, is $700,000.
B. WAIVER OF PREMIUM DISABILITY
Fully Retained
C. ACCIDENTAL DEATH BENEFITS
Life limits less Life retained.
III. AUTOMATIC ACCEPTANCE LIMITS
A. LIFE AND ACCIDENTAL DEATH BENEFITS
Standard through Table 4 or Table 5
Issue Ages Flat Extras up to $5/$1,000 Through Table 16
---------- --------------------------- ----------------
0 - 75 $15,000,000 $10,000,000
76 - 80 7,500,000 5,000,000
The binding limits are exclusive of the Ceding Company's
retention.
B. WAIVER OF PREMIUM
Not reinsured under this Agreement
Continued...
- 18 -
EXHIBIT A - CONTINUED
(EFFECTIVE APRIL 1, 1998)
IV. EXCLUSIONS TO AUTOMATIC REINSURANCE COVERAGE
Automatic reinsurance coverage will not be available in the following
situations:
1. The policy has been submitted on a facultative, facultative
obligatory or initial inquiry basis to the Pool Reinsurers or
to any other reinsurer.
2. The risk is categorized as a "Jumbo Risk", where the Ceding
Company's underwriting papers indicate that the total life
insurance in force and applied for on the insured's life
exceeds $25,000,000 for ages 0 through 75 or $10,000,000 for
ages 76 through 85.
3. The policy is part of any special program offered by the
Ceding Company, including:
a) experimental or limited retention programs, including
but not limited to cancer, diabetes, aviation or
coronary risks;
b) external replacement and/or conversion programs other
than contractual conversions or exchanges of the
original policy.
4. The Ceding Company has retained an amount less than its usual
retention limits for the age and table rating of the insured.
5. The policy is a result of a conversion from group insurance,
unless the Pool Reinsurers agree otherwise.
- 19 -
MIDDLE EAST
Cyprus Iran Lebanon Qatar Yemen
Georgia Iraq Oman Syria
Issue Age Standard-Table H Table J and Higher
--------- ---------------- ------------------
0-75 $1,000,000 $1,000,000
76-85 1,000,000 1,000,000
2. Last Survivor Policies
Lincoln's Retention on last survivor Policies shall be determined by
subtracting the greatest amount retained on prior Policies on any of
the covered lives from the greatest Retention available on any of the
covered lives.
3. Last Survivor Policies with One Life Uninsurable
For last survivor Policies having one life deemed uninsurable,
Lincoln's Retention shall be on the life considered insurable using the
issue age, mortality classification and country of origin of the
insurable life.
4. First to Die Policies
Lincoln's Retention on first to die Policies shall be the least
Retention available on any of the covered lives.
5. Guaranteed Issue Policies
Lincoln's Retention shall not exceed three million dollars ($3,000,000)
for any Policy issued as guaranteed issue insurance. A Policy is issued
as "guaranteed issue insurance" if the Policy is issued without the
same full underwriting with which the Original Company would issue the
Policy if the applicant did not meet pre-established eligibility
criteria applicable to all persons of like status.
6. Waiver of Premium
Lincoln's Retention for waiver of premium benefits shall equal the
amount of premium to be waived on Lincoln's Retention of individual
life insurance-on the insured life, but in no event shall such an
amount exceed five million dollars ($5,000,000).
7. Policies with Increasing Face Amounts
For Policies with increasing net amounts at risk, Lincoln's initial
Retention shall equal an amount which, when added to its proportional
share of future increases in net amount at risk under the Policy, shall
not exceed one and one-half (1.5) times the Retention set forth above
using the appropriate issue age, mortality classification, plan of
insurance and country of origin.
- 20 -
8. Conversion of Flat Extras to Table Rating
The table rating equals the flat extra divided by one dollar and
twenty-five cents ($1.25). This conversion is for Retention management
only and not for individual case underwriting. Temporary extra premiums
payable for two (2) years or less shall be disregarded. In determining
the Retention classification for Policies with table ratings combined
with flat extras, the table rating result using the conversion table
above shall be added to the actual table rating.
9. One Year Term Additions
(a) For Policies with dividend options which include one-year term
insurance not in excess of the terminal reserve, the amount of
the basic Policy retained shall be the same as if there were
no term additions. Reinsurance shall be ceded in the sum of
(i) the excess, if any, of the basic Policy amount over the
applicable Retention limit and (ii) the prorated portion of
the term addition corresponding to the portion, if any, of the
basic Policy reinsured.
(b) Unless different guidelines were established between Lincoln
and the Original Company for Policies with dividend options
requiring that the full dividend be used to purchase one-year
term insurance, the following rule shall be used to determine
the fractional portion of the basic Policy to be retained.
For Issue Age Treat as if Ultimate Amount Will Be
------------- -----------------------------------
0-29 3 times Basic Policy Amount
30-49 1 % times Basic Policy Amount
50+ 1 times Basic Policy Amount
10. Paid-up Additions
(a) Dividend Additions: When the sum of the net amount at risk on
paid-up dividend additions and the net amount at risk on the
other direct and reinsurance life insurance on the life is
less than or equal to the limit of Retention plus one hundred
thousand dollars ($100,000), paid-up dividend additions shall
be fully retained. When the sum of the net amount at risk on
paid-up additions and the net amount at risk on other direct
and reinsurance exceeds the limit of Retention plus one
hundred thousand dollars ($100,000), the excess face amount of
the paid-up additions shall be reinsured.
(b) For paid-up additions issued as a result of other than
dividend options, the appropriate Retention for the issue age,
mortality classification, plan of insurance and country of
origin at issue of the original Policy shall apply.
11. Non-Individual Cession Reinsurance
For purposes of determining its Retention, Lincoln may ignore certain
amounts of reinsurance it accepts on a non-individual cession basis.
- 21 -
EXHIBIT B
(EFFECTIVE APRIL 1, 1998)
REINSURANCE ADMINISTRATION
Reinsurance administration and premium accounting will be on a
self-administered basis. Premiums will be paid and reported monthly. For each
reporting period the Ceding Company will submit to each Pool Reinsurer a
statement containing information in general compliance with the following:
I. MONTHLY DETAIL REPORT
Policy Number
Name of Insured
Date of Birth
Sex
Smoker/Non Smoker Code
Automatic/Facultative/Facultative Obligatory Code
YRT/Coinsurance Code
Original Issue Date
Issue Date
Flat Extra Rate
Flat Extra Duration
Flat Extra Premium
Flat Extra Allowances
Age Nearest/Last Indicator
Treaty Code
Substandard Percentage
Plan Name (Your Product Name)
Plan Type (Whole Life, Term, UL, Variable UL, etc.)
Original Amount of Insurance (amount issued)
Amount Reinsured (original amount reinsured)
Net Amount at Risk Reinsured (current amount at risk)
Continued...
-22-
EXHIBIT B - CONTINUED
(EFFECTIVE APRIL 1, 1998)
II. MONTHLY BILLING INFORMATION
Policy Number
Billing Date
Transaction Code (New Business, Lapse, Amendment, etc.)
Transaction Date
Current Net Amount at Risk
Billed Premium (Life, WP, ADB, Flat Extra, etc.)
Billed Allowances (Life, WP, ADB, Flat Extra, etc.)
III. PREMIUM SUMMARY REPORT
(Information should be summarized)
FY RY TOTAL
Life Premium
WP Premium
ADB Premium
Flat Extra Premium
Total Premium
Policy Fees
Life Allowances
WP Allowances
ADB Allowances
Flat Extra Allowances
Total Allowances
Premium Taxes (if applicable)
Total Amount Due = (Total Premium + Policy Fees) - (Total Allowances +
Premium Taxes)
The premium summary should balance to the Monthly Detail Report.
Continued...
-23-
EXHIBIT B - CONTINUED
(EFFECTIVE APRIL 1, 1998)
IV. QUARTERLY VALUATION REPORT
Statutory Tax Reserves
Reserves (annual only)
Basic
Waiver
Disabled Lives
ADB
Deficiency
Total
V. POLICY EXHIBIT
From_______________ Reporting Period:___________________
Activity For Period________________________
Case
Count Volume
----- ------
Beginning In Force
New Business
Reinstatements
Other Increases
Conversions On
Conversions Off
Not Takens
Deaths
Lapses
Cancellations
Surrenders
Recaptures
Other Decreases
Ending In Force
Continued...
-24-
SWISS RE LIFE & HEALTH
EXHIBIT B
Reinsurance Application
From: Company Name
Company Name
-----------------------------------------------------------------------------------------------------------------------------------
Last First Middle Date of Birth Age Sex
Applicant's Name
------------------------------------------------------------- -------------------- -------- -------
Plan
Preferred Smoker Nonsmoker Reunderwriting
----------------------------------------------------
Cur Residence for Premium Tax Policy Number Policy Date Preliminary Term From
------------ -------------------------------------- ----------------------- ------------------------- ---------------------
Type of Application
Facultative Automatic Placement Date Self Administered Terms YRT Coinsurance
(Bulk)
--------------------------- ----------------- ------------------ ----------------------- -------------- ---------------
Decrement Cash Values Reserves Age Basis Retention Code Full Reduced Nil
----------------- -------------- ------------ ---------------- -------------- ---------
Reinsurance Amounts Basic Coverage Additional Coverage Waiver Premium Accidental Death Other Benefits
Benefit Benefit
Previous Insurance In Force
-------------- ------------------- -------------- ---------------- --------------
Of Which We Retained -
-------------- ------------------- -------------- ---------------- --------------
Insurance Now Applied For -
-------------- ------------------- -------------- ---------------- --------------
Of Which We Retain -
-------------- ------------------- -------------- ---------------- --------------
Reinsurance This Cession
-------------- ------------------- -------------- ---------------- --------------
Extra Premium
-------------- ------------------- -------------- ---------------- --------------
Rating If Substandard -
-------------- ------------------- -------------- ---------------- --------------
Coinsurance Premium -
-------------- ------------------- -------------- ---------------- --------------
----------- ---------- ---------------- -------------------- ------------------------
*For YRT cases state Gross Premiums WP AD Other Amount of Premium Annual Decrement for
and Expiry Ages for Benefits to be Waived Amount of Risk
----------- ---------- ---------------- -------------------- ------------------------
Additional Information or Remarks
Date: By:
----------------------------------- ------------------------------------------------------------------
-25-
EXHIBIT B
PHOENIX HOME LIFE APPLICATION FOR REINSURANCE
-----------------------------------------------------------------------------------------------------------------------------------
PLEASE TYPE Send to Phoenix Home Life App. Prepared By
---------------, -------
-----------------------------------------------------------------------------------------------------------------------------------
CEDING COMPANY NUMBER OF ORIGINAL POLICY CESSION NUMBER ___ AUTOMATIC
___ FACULTATIVE
-----------------------------------------------------------------------------------------------------------------------------------
PRIMARY INSURED (LAST, FIRST, MIDDLE INITIAL) SEX STATE OF STATE OF BIRTH DATE OF BIRTH AGE OCCUPATION SMOKER
RESIDENCE YES NO
-----------------------------------------------------------------------------------------------------------------------------------
SECOND INSURED SMOKER
YES NO
-----------------------------------------------------------------------------------------------------------------------------------
PAYOR BENEFIT NAME OF PAYOR POLICY DATE PLAN OF INSURANCE RESERVE SHORT TERM
__ PD & D __ PAYOR DEATH ONLY BASIS FROM:
-----------------------------------------------------------------------------------------------------------------------------------
RATING 1ST INSURED 2ND INSURED
---------------------------------------------------------------------------------------------
LIFE DISABILITY ADB LIFE DISABILITY ADB
-----------------------------------------------------------------------------------------------------------------------------------
PREVIOUS INSURANCE IN FORCE DIS. RATE FOR $15,000 OF
BASIC INSURANCE
-----------------------------------------------------------------------------------------------------------------------------------
OF WHICH WE RETAINED PREVIOUS CESSION NUMBERS,
IF ANY
-----------------------------------------------------------------------------------------------------------------------------------
INSURANCE NOW APPLIED FOR MIB CODES BEING REPORTED
-----------------------------------------------------------------------------------------------------------------------------------
OF WHICH WE WILL RETAIN IS THIS AN AMENDMENT? YES
NO IF YES, GIVE CESSION
NUMBER:
-----------------------------------------------------------------------------------------------------------------------------------
REINSURANCE THIS APPLICATION HAS CASE BEEN OFFERED TO
OTHER COMPANIES? YES
NO
-----------------------------------------------------------------------------------------------------------------------------------
REMARKS:
FOR CANCELLATION
___ FILED AS INCOMPLETE
___ POLICY NOT PLACED
___ REINSURANCE PLACED ELSEWHERE
___ WITHIN OUR RETENTION
Pre-notice given to the proposed insured(s) and we have MIB authorization(s).
-----------------------------------------------------------------------------------------------------------------------------------
DO NOT TYPE BELOW THIS LINE
-----------------------------------------------------------------------------------------------------------------------------------
SUBST TERM OF PAYOR CO REEX- RECAP REMARKS PLAN CODE
TABLE REINS. OR DIS NUMBER TENSION CODE
CODE
--------------------------------------------------------------- ---------------------------------
RATING
-----------------------------------------------------------------------------------------------------------------------------------
POL AMOUNT POL AMOUNT POL AMOUNT POL AMOUNT POL AMOUNT AGE
AMOUNT AT RISK YR YR YR YR YR CODE
-------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
PAYOR OR DIS RATE/M DIS FLAT FLAT FLAT FLAT FLAT FLAT EXTRA
DIS GROSS 1ST RENL TERM EXTRA EXTRA EXTRA EXTRA EXTRA ------------
PREM YR AGE YRS PERM
----------------------------- ------- ------ ------- ------- ------------
-----------------------------------------------------------------------------------------------------------------------------------
PREMIUM ADB RATE/M ADB LO HI
WAIVED ---------- TERM POS POS
1ST RENL AGE
-----------------------------------------------------
-------------
-----------------------------------------------------------------------------------------------------------------------------------
-26-
EXHIBIT C
(EFFECTIVE APRIL 1, 1998)
REINSURANCE RATES AND ALLOWANCES
I. NET AMOUNT AT RISK CALCULATION
Reinsurance is on the Monthly Renewable Term basis. The Life Net Amount
at Risk in any month will be the life benefit reinsured, less the total
cash value, taken to the nearest dollar, less your retention. The
Ceding Company will maintain a level retention in all years.
II. RATES FOR LIFE REINSURANCE
The YRT Rates shown in this Exhibit are annual rates for standard risks
and are per $1,000 of the life benefit reinsured. The Ceding Company
will pay the Pool Reinsurers these rates multiplied by the following
factors and divided by twelve:
---------------------- -------------- ------------------
FIRST YEAR RENEWAL YEARS
---------------------- -------------- ------------------
Ultimate Select [+++] [+++]
Select [+++] [+++]
Ultimate Standard [+++] [+++]
Standard [+++] [+++]
---------------------- -------------- ------------------
III. POLICY FEE
[++++++++++]
IV. RATES FOR SUBSTANDARD TABLE RATINGS
For substandard risks issued at table ratings, the substandard extra
rate will be multiplied by the [++++++++++] as used for the base plan.
V. RATES FOR FLAT EXTRA RATINGS
Substandard risks issued at flat extra ratings will be coinsured. The
Ceding Company will pay the Pool Reinsurers the appropriate portion of
the flat extra premium charged the insured less the following
allowances:
---------------------- -------------- ------------------
DURATION FIRST YEAR RENEWAL YEARS
---------------------- -------------- ------------------
Over Five Year [+++] [+++]
Five Years or Less [+++] [+++]
---------------------- -------------- ------------------
Continued...
-27-
EXHIBIT C - CONTINUED
(EFFECTIVE APRIL 1, 1998)
VI. RATES FOR WAIVER OF PREMIUM DISABILITY BENEFIT
Waiver of Premium Disability Benefits are not reinsured under this
Agreement.
VII. RATES FOR ACCIDENTAL DEATH BENEFIT
Accidental Death Benefits will be reinsured on the Monthly Renewable
Term basis. The Accidental Death Benefit at risk in any month will be
the Accidental Death Benefit reinsured less the Ceding Company's
retention, if any. The Ceding Company will pay the Pool Reinsurers the
following monthly rates, based on $1,000 of Accidental Death Benefit:
Standard Risks: [+++++++]
[+++++++]
Substandard Risks: The appropriate multiples of the annual standard
rate.
VIII. PREMIUM TAXES
The Pool Reinsurers [+++++++] premium taxes for reinsurance ceded under
this Agreement.
IX. RECAPTURE PERIOD
Recapture will be allowed [+++++++].
X. CONVERSIONS
For purposes of this Agreement, and unless otherwise specifically
covered elsewhere, "conversions" will mean continuations, rollovers,
exchanges and/or internal replacements.
a) The rates charged for conversions to plans reinsured under
this Agreement will be based on the original issue age of the
insured and the current duration of the original policy at the
time of the conversion, i.e. point-in-scale basis.
Continued...
-28-
EXHIBIT C - CONTINUED
(EFFECTIVE APRIL 1, 1998)
X. CONVERSIONS - (CONTINUED)
b) Conversions from plans reinsured under this Agreement to plans
reinsured under other Reinsurance Agreements in force between
the Ceding Company and any of the Pool Reinsurers will be
subject to the provisions of the other Agreements, including
provisions covering rates, allowances and/or discounts. The
rates charged will be based on the original issue age of the
insured and the current duration of the original policy, i.e.,
point-in-scale basis.
c) Policies which are converted and which the Ceding Company does
not maintain will be terminated.
XI. EXPERIENCE REFUND
Reinsurance under this Agreement is not eligible for an Experience
Refund.
-29-
EXHIBIT C - CONTINUED
WESTERN RESERVE - NON SMOKER
Page 1
Age Nearest Birthday
POLICY YEAR
Issue Age ULT All Age
----------------------------------------------------------------------------
F M 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Prem F M
18
19
20
21
22 18
23 19
24 20
25 21
26 22
27 23
28 24
29 25
30 26
31 27
32 28
33 29
34 30
35 31
36 32
37 33 [+ + + + + + + + + +]
38 34
39 35
40 36
41 37
42 38
43 39
44 40
45 41
46 42
47 43
48 44
49 45
50 46
51 47
52 48
53 49
54 50
[+ + + + + + + + + +]
-30-
EXHIBIT C - CONTINUED
WESTERN RESERVE - NON SMOKER
Page 2
Age Nearest Birthday
POLICY YEAR
Issue Age ULT All Age
----------------------------------------------------------------------------
F M 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Prem F M
55 51
56 52
57 53
58 54
59 55
60 56
61 57
62 58
63 59
64 60
65 61
66 62
67 63
68 64
69 65
[+ + + + + + + + + +]
70 66
71 67
72 68
73 69
74 70
75 71
76 72
77 73
78 74
79 75
80 76
81 77
82 78
83 79
84 80
[+ + + + + + + + + +]
-31-
EXHIBIT C - CONTINUED
WESTERN RESERVE -SMOKER
Page 1
Age Nearest Birthday
POLICY YEAR
Issue Age ULT All Age
----------------------------------------------------------------------------
F M 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Prem F M
18
19
20
21
22 18
23 19
24 20
25 21
26 22
27 23
28 24
29 25
30 26
31 27
32 28
33 29
34 30
35 31
36 32 [+ + + + + + + + + +]
37 33
38 34
39 35
40 36
41 37
42 38
43 39
44 40
45 41
46 42
47 43
48 44
49 45
50 46
51 47
52 48
53 49
54 50
[+ + + + + + + + + +]
-32-
EXHIBIT C - CONTINUED
WESTERN RESERVE -SMOKER
Page 2
Age Nearest Birthday
POLICY YEAR
Issue Age ULT All Age
----------------------------------------------------------------------------
F M 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Prem F M
55 51
56 52
57 53
58 54
59 55
60 56
61 57
62 58
63 59
64 60
65 61
66 62
67 63
68 64
69 65
[+ + + + + + + + + +]
70 66
71 67
72 68
73 69
74 70
75 71
76 72
77 73
78 74
79 75
80 76
81 77
82 78
83 79
84 80
[+ + + + + + + + + +]
-33-
EXHIBIT C - CONTINUED
WESTERN RESERVE - JUVENILES
Age Nearest Birthday
POLICY YEAR
Issue Age ULT All Age
----------------------------------------------------------------------------
F M 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Prem F M
0 0
1 1
2 2
3 3
4 4
5 5
6 6
7 7 [+ + + + + + + + + +]
8 8
9 9
10 10
11 11
12 12
13 13
14 14
16-17 15
16
17
[+ + + + + + + + + +]
-34-
EXHIBIT 10.47
EXHIBIT D
TRANSAMERICA
REINSURANCE
CLAIM FORM
INFORMATION ABOUT THE SENDER: DATE:
-----------------------------------------
Your Name:
---------------------------------------------------------------------------------------------------------------------
Company's Name:
----------------------------------------------------------------------------------------------------------------
Your Phone Number:
-------------------------------------------------------------------------------------------------------------
Your Fax Number:
---------------------------------------------------------------------------------------------------------------
INFORMATION ABOUT THE POLICY:
Insured's Name:
----------------------------------------------------------------------------------------------------------------
Insured's Date of Birth:
-------------------------------------------------------------------------------------------------------
Transamerica Reinsurance Policy Number if Known:
-------------------------------------------------------------------------------
Has premium been to date on this policy [ ] YES [ ] NO
Reason:
------------------------------------------------------------------------------------------------------------------------
If your company submits a statement to report premium, date of last statement where policy appeared:
Your Company's Policy Number:
--------------------------------------------------------------------------------------------------
Plan of Insurance:
-------------------------------------------------------------------------------------------------------------
Policy Issue Date:
-------------------------------------------------------------------------------------------------------------
Issue Amount:
------------------------------------------------------------------------------------------------------------------
Amount Retained:
---------------------------------------------------------------------------------------------------------------
Has this policy ever lapsed? Date of Termination Date of Reinstatement
------- ---------- -----------
Transamerica Accepted Account:
-------------------------------------------------------------------------------------------------
Current NAAR:
------------------------------------------------------------------------------------------------------------------
INFORMATION ABOUT THE CLAIM:
Date of Death: Is claim contestable? [ ] YES [ ] NO
--------------------------------------------------
Liability Paid: Interest Paid: at % from to
----------------- ------------- ---- ----------- -----------
Investigation Expense Paid: Legal Expense Paid:
------------------------- ----------------------------
Liability Requested: Interest Requested: Expense Requested:
---------------- --------------- -----------
ATTACHED ARE THE FOLLOWING DOCUMENTS SO THAT YOU CAN COMPLETE THE PROCESSING OF A CLAIM.
[ ] Death Certificate [ ] Claimant's Statement
[ ] Medical Records (if claim is contestable and/or [ ] Underwriting File (if claim is contestable and/or if
if Transamerica is to provide an opinion) Transamerica is to provide an opinion)
*TO REQUEST AN ADDITIONAL FORM PLEASE CALL US AT (▇▇▇) ▇▇▇-▇▇▇▇.
Transamerica Reinsurance Claims Department Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-35-
EXHIBIT D
TRANSAMERICA
REINSURANCE
DISABILITY CLAIM FORM
INFORMATION ABOUT THE REQUEST:
This is a (check as appropriate):
[ ] Notification [ ] Change to previous Claims Notification
[ ] Payment Request [ ] Change to previous Payment Request
[ ] Request for Opinion [ ] Other, please specify:
----------------
INFORMATION ABOUT THE SENDER:
Your Name:
---------------------------------------------------------------------------------------------------------------
Company's Name:
----------------------------------------------------------------------------------------------------------
Your Phone Number:
-------------------------------------------------------------------------------------------------------
Your Fax Number:
---------------------------------------------------------------------------------------------------------
INFORMATION ABOUT THE POLICY:
Insured's Name:
----------------------------------------------------------------------------------------------------------
Insured's Date of Birth: Transamerica Reinsurance Policy Number, if known:
----------------- -----------------------------
YES NO
[ ] [ ] Our Claim has been approved for payment.
[ ] [ ] Your advice for settling this claim is requested.
[ ] [ ] Claim papers attached.
Your Company's Policy Number:
--------------------------------------------------------------------------
Plan of Insurance:
--------------------------------------------------------------------------
Issue Amount:
--------------------------------------------------------------------------
Amount Retained:
--------------------------------------------------------------------------
Transamerica Accepted Amount:
--------------------------------------------------------------------------
Transamerica Share of Liability Due:
--------------------------------------------------------------------------
INFORMATION ABOUT THE CLAIM:
Date of Disability: Date 1st Cause of
------------------- -------------- ------------------------
Notice Recvd: Disability:
We request payment of your reinsurance liability as follows:
Premium Waived from: to
----------------------------------- ---------------------------------------
Monthly Income from: to
----------------------------------- ---------------------------------------
Amount Requested from: to
----------------------------------- ---------------------------------------
ATTACHED ARE THE FOLLOWING DOCUMENTS SO THAT YOU CAN COMPLETE THE PROCESSING OF A CLAIM.
Physicians Statement [ ] Disability Form [ ]
*TO REQUEST AN ADDITIONAL FORM PLEASE CALL US AT (▇▇▇) ▇▇▇-▇▇▇▇.
Transamerica Reinsurance Claims Department Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-36-
EXHIBIT D
TRANSAMERICA
REINSURANCE
CLAIMS FAX
TO:
CLAIMS ADMINISTRATOR
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
TELEPHONE: (704) 344-
FROM:
--------------------------------------------------
TITLE:
--------------------------------------------------
COMPANY:
--------------------------------------------------
FAX:
--------------------------------------------------
TELEPHONE:
--------------------------------------------------
NUMBER OF PAGES:
(INCLUDING COVER PAGE):
--------------------------------------------------
THIS CLAIM IS (CHECK ONE): [ ] contestable
[ ] non-contestable
THIS FAX IS (CHECK ONE): [ ] initial notification
[ ] additional papers
[ ] payment request
[ ] death certificate
[ ] claimant's statement
[ ] other
--------------------------------
INSURED'S NAME:
--------------------------------------------------
INSURED'S DATE OF BIRTH:
--------------------------------------------------
INSURED'S DATE OF DEATH:
--------------------------------------------------
ISSUE DATE:
--------------------------------------------------
POLICY NUMBER:
--------------------------------------------------
IS PREMIUM PAID UP-TO-DATE: [ ] Yes [ ] No
REASON:
--------------------------------------------------
DATE OF LAST PREMIUM STATEMENT POLICY APPEARS
ON:
----------------------------------------------------------------------------
COMMENTS:
----------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Transamerica Reinsurance Claims Department Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-37-
EXHIBIT D
PHOENIX Request for Reinsurance Benefits
Send completed request to:
Phoenix Home Mutual Insurance Company Toll Free: ▇-▇▇▇-▇▇▇-▇▇▇▇ Company:
Reinsurance Claims 3E302 1-860-403-1000 [ ] Phoenix Home Life Mutual Insurance Company
_______ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ FAX: ▇-▇▇▇-▇▇▇-▇▇▇▇ [ ] American Phoenix Life and Reassurance
[ ] Phoenix Life and Reassurance of New York
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FULL NAME OF INSURED DATE OF BIRTH
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DATE OF DEATH CAUSE OF DEATH DATE OF DISABILITY CAUSE OF DISABILITY
-----------------------------------------------------------------------------------------------------------------------------------
Line of Business (Check Appropriate): [ ] Individual Life/Cession [ ] Bulk/Self Administration [ ] Group Life/ADD [ ] ADB [ ]
Waiver Premium
-----------------------------------------------------------------------------------------------------------------------------------
Rating Info: (Check Appropriate) Reinsurance Data
[ ] Smoker [ ] Standard [ ] Auto Pool Number __________
[ ] Non-Smoker [ ] Substandard Rating _____ [ ] Fac. Pool % _______
[ ] Flat Extra Date Premium Last Reported ______________
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List all policies issued on this insured, with date of termination if not in force at the date of death. Also indicate whether any
policies have been reinstated within two years prior to date of death.
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DATE OF LAPSED WITHIN PAST TWO YEARS FACE AMOUNT REINSURED
CEDING COMPANY ISSUE DATE FACE AMOUNT INSURED TERMINATION (NOT NET RISK)
POLICY NUMBER
-------------- ---------- ------------------- ----------- ------------------------------ ---------------------
LIFE ADB (CHECK ONE) DATE LIFE ADB
REINSTATED
----------------------------------------------------------------------------------------------------------------------------------
[ ] Yes [ ] No
----------------------------------------------------------------------------------------------------------------------------------
[ ] Yes [ ] No
----------------------------------------------------------------------------------------------------------------------------------
[ ] Yes [ ] No
----------------------------------------------------------------------------------------------------------------------------------
[ ] Yes [ ] No
----------------------------------------------------------------------------------------------------------------------------------
[ ] Yes [ ] No
----------------------------------------------------------------------------------------------------------------------------------
TOTAL ISSUED AMOUNT REINSURED WITH PHOENIX
------------------- ---------------------
LESS TOTAL TERMINATED REINSURED WITH OTHERS
------------------- ---------------------
AMOUNT RETAINED AT OWN RISK
------------------- ---------------------
INSURANCE NOW IN FORCE TOTAL
----------------------------------------------------------------------------------------------------------------------------------
FRAUD STATEMENT REINSURANCE CESSION PLAN NAME AMOUNT OF REINSURANCE WITH
REQUIRED BY SOME STATES NUMBER PHOENIX (CURRENT NAR)
ANY PERSON WHO KNOWINGLY AND
WITH INTENT TO DEFRAUD ANY ------------------------------------------------------------------------------------------------
INSURANCE COMPANY OR OTHER
PERSON FILES A STATEMENT OF ------------------------------------------------------------------------------------------------
CLAIM CONTAINING ANY
MATERIALLY FALSE INFORMATION ------------------------------------------------------------------------------------------------
OR CONCEALS FOR THE PURPOSE OF
MISLEADING, INFORMATION ------------------------------------------------------------------------------------------------
CONCERNING ANY FACT MATERIAL
THERETO, COMMITS A FRAUDULENT ------------------------------------------------------------------------------------------------
INSURANCE ACT, WHICH IS A
CRIME. ------------------------------------------------------------------------------------------------
TOTAL REQUESTED
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___ Contestable ___ Yes ___ No ___ Conversion, Exchange or Replacement
----------------------------------------------------------------------------------------------------------------------------------
___ Routine Investigation ___ Yes ___ No ___ Reentry List:
----------------------------------------------------------------------------------------------------------------------------------
___ Initial Notification Policy Number ___________ Plan Name___________
___ Additional Information Enclosed Original Issue Date _______ Reins. With Phoenix ___ Yes ___ No
___ Copies of all claim papers enclosed includes: Conversion or Reentry Underwritten ___ Yes ___ No
Contestable Claims - Application and all
underwriting papers, investigation, claimant
statement, death certificate and proof of payment.
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___ Non-Contestable - reinsured for $250,000 __ We have paid our claim in full on ____ and request payment of $______
plus also include application and underwriting.
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___ Waivers - application and underwriting, ___ Interest expense at _____% per annum for ____ days $______.
claimant statement, attending physician statement, ___ Investigation expense $_______
waiver premium provision and any investigation. ___ Legal Expense $______
___ Copies of investigation are enclosed.
___ We are awaiting your consultation before
completing settlement.
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COMPANY NAME PHONE NUMBER
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ADDRESS
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DATE COMPLETED BY TITLE
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-38-
SWISS RE LIFE & HEALTH EXHIBIT D
Claim for Life Reinsurance Benefits
Individual Life and ADB Individual Claims Tel ▇▇▇ ▇▇▇ ▇▇▇▇ or 1 800 268 9798
Fax ▇▇▇ ▇▇▇ ▇▇▇▇
Mailing Address: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇.▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, ▇▇▇
Requirements:
Non-Contestable Policies Contestable Policies ADB Policies
Attach: Death Certificate Attach: proofs of death Attach: proofs of death
Claimant's investigation reports investigation reports, including an
Statement application accident report
underwriting papers a copy of your accidental death
Including underwriting worksheet policy form
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Name of Insured: State of Residence Date of Birth Date of Death
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Cause of Death: Contestable:
[ ] Yes [ ] No
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Insurance Issued Insurance in Force at Death
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Life Amount ADB Amount Life Amount ADB Amount
-------------------- ----------------- --------------------- ----------------------
Total Issue
-------------------- ----------------- --------------------- ----------------------
Retention
-------------------- ----------------- --------------------- ----------------------
Reinsured Swiss Re
-------------------- ----------------- --------------------- ----------------------
Reinsured Others
-------------------- ----------------- --------------------- ----------------------
List all policies issued on this life, with date of termination if not in force at the date of death. Also indicate whether
any policies have been reinstated within two years prior to the date of death.
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Your Policy Face Amount Swiss Re Date of Lapsed within past 2 years
Policy No. Issue Date Issued Amount Termination ----------------------------
Y/N Reinstated
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------------------------------------------------------------------------------------------------------------------------------------
Plan Name:
----------------------------------------------------------------------------------------------------------------------
Is this policy a conversion [ ] exchange [ ] or replacement [ ] ? [ ] None of these
If so, what is original Plan? Original Policy Issue Date:
-------------------------------------- ------------------------------
Original reinsurer
--------------------------------------------------------------------------------------------------------------
[ ] PRELIMINARY NOTICE ONLY. Additional papers will follow.
[ ] Copies of all claim papers in connection with this claim are enclosed.
[ ] Investigation papers are attached. Will follow. [ ]
[ ] We are awaiting your approval before completing settlement.
[ ] We have paid our claim in full and request payment of the reinsurance amount detailed below.
PAYMENT DETAILS:
Swiss Re amount: ADDITIONAL COMMENTS:
---------------------------
Interest at _____ % for _____ days:
---------------------------
Expenses:
---------------------------
Total amount requested:
---------------------------
From (Company):
-------------------------------------------------
Filled out by:
-------------------------------------------------
Title:
-------------------------------------------------
Department:
-------------------------------------------------
Date:
-------------------------------------------------
Phone:
-------------------------------------------------
Fax:
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-39-