Exhibit (g)(12)
FIRST AMENDMENT TO AUTOMATIC YRT AGREEMENT
("AMENDMENT")
Reference is made to the Automatic YRT Reinsurance Agreement, dated effective
August 30, 2005, and identified as Treaty Number 1321 (herein the "Agreement"),
by and between IDS Life Insurance Company ("Ceding Company") and [name of
reinsurance company] ("Reinsurer"). The undersigned parties hereby agree that
the Agreement shall be and is hereby amended as follows:
1. Exhibit B and Exhibit D of the Agreement are replaced by the
attached Exhibit B and Exhibit D, each marked "Revised January 24,
2006", in order to include coverage under the Agreement for certain
universal life insurance plans as specified in the revised exhibits
(herein "Universal Life Plans"). Coverage under the Agreement for
variable universal life plans as specified in the original exhibits
("Variable Universal Life Plans") remains in force in accordance
with the terms of the Agreement. Schedule D-1 remains unchanged.
2. The Agreement shall apply to all eligible policies issued on
Universal Life Plans with effective dates on or after January 24,
2006 including any policies applied for on or after such date that
were backdated up to six months.
3. Article 12 relating to Recapture shall apply separately to Variable
Universal Life Plans and Universal Life Plans. This means the Ceding
Company shall have the option under Article 12 to exercise its
recapture rights for Variable Universal Life Plans without
recapturing Universal Life Plans, or vice-versa, provided the Ceding
Company otherwise exercises such rights in accordance with the terms
of the Agreement.
4. With respect to Article 8.3 relating to Transition, introduction of
Universal Life Plans into any jurisdiction shall be treated as
separate from introduction of Variable Universal Life Plans, such
that in both instances there shall be a transition period as set
forth in Article 8.3. For purposes of the introduction of the
Universal Life Plans, the free look period administered by the
Ceding Company will be sixty (60) days.
Capitalized terms not otherwise defined herein have the meaning ascribed to them
in the Agreement. Except as expressly amended above, all other terms of the
Agreement, together with all exhibits and attachments thereto, remain in full
force and effect. This Amendment is effective immediately upon execution by both
of the undersigned parties. This Amendment is made in duplicate and executed
below by authorized representatives of both parties.
IDS LIFE INSURANCE COMPANY [NAME OF REINSURANCE COMPANY]
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: [signature]
--------------------------------
(signature) (signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ [name]
(print or type name) (print or type name)
Title: President Title: [title]
Date: 1/25/06 Date: 1/25/06
--------------------------------
Attest: /s/ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Attest:[signature]
--------------------------------
(signature) (signature)
Title: Reinsurance Officer Title: [title]
2 of 2
IDSL - [redacted]
VUL IV and Foundations
EXHIBIT B
(REVISED JANUARY 24, 2006)
PLANS COVERED AND BINDING LIMITS
The business reinsured under this Agreement is defined as follows:
B.1 PLANS AND RIDERS
Policies issued on plans with effective dates on or after the Commencement
Date shown below qualify for reinsurance under the terms of this
Agreement. It is understood that policies may be backdated by up to six
(6) months from the date shown below.
A. VARIABLE UNIVERSAL LIFE PLANS: The following variable universal life
plans including any of the following riders when attached to one of the
following plans (to be referred to in this Exhibit B and D as "VUL
Plans"):
COMMENCEMENT
PLAN IDENTIFICATION DATE
-----------------------------------------------------------
VUL-IV (Form 30061 with Aug. 30, 2005
endorsements 132024 and
130701)
RIDERS:
Automatic Increasing Benefit
Rider (AIBR) (Form 30965) Aug. 30, 2005
Base Insured Rider (BIR) Aug. 30, 2005
(Form 132023)
Other Insured Rider (OIR) Aug. 30, 2005
(Form 30450)
Exchange of Insured Rider (EOI)
(Form 132114)
B-1
IDSL - [redacted]
VUL IV and Foundations
B. UNIVERSAL LIFE PLANS: The following universal life plans including any
of the following riders when attached to one of the following plans (to be
referred to in this Exhibit B and D as "UL Plans"):
COMMENCEMENT
PLAN IDENTIFICATION DATE
-----------------------------------------------------------
Foundations UL Form 30080C Jan. 24, 2006
with Endorsement 133080
Foundations Protector Form Jan. 24, 2006
133078 and 133078-ES
RIDERS:
Automatic Increasing Benefit Jan. 24, 2006
Rider (AIBR) (Form 30965)
Exchange of Insured Rider (EOI)
It is understood and agreed the Agreement also covers other VUL Plan and
UL Plan policy form and endorsement numbers for the above plans that may
vary for specific states.
B.2 BASIS
Cessions may be automatic, capacity facultative, or non-capacity
facultative. Only mortality risk will be reinsured under this Agreement.
Automatic cessions shall be on a first dollar quota share basis with the
Ceding Company retaining its Retained Share as described in Exhibit A. For
automatic cessions, Net Amount at Risk in excess of the Retained Share
will be ceded to a pool of reinsurers, subject to the Automatic Binding
Limits and Jumbo Limits set forth herein.
For VUL Plans, Reinsurer's Percentage Share for purposes of calculating
the Reinsured Net Amount at Risk is [percentage]. For UL Plans,
Reinsurer's Percentage Share for purposes of calculating the Reinsured Net
Amount at Risk is [percentage]. Reinsured Net Amount at Risk is as defined
in Article 5.
Facultative cessions will be negotiated on a case-by-case basis. Ceding
Company at its discretion may submit any policy for facultative
consideration rather than automatic cession or in cases where automatic
capacity has been exhausted. For facultative cessions, the Ceding
B-2
IDSL - [redacted]
VUL IV and Foundations
Company's Retained Share and the Reinsured Net Amount at Risk shall be
determined in the manner described in Exhibit A.
Reinsurer may choose not to provide a facultative quote. However,
Reinsurer will honor any facultative offer made, and any subsequent
reduction in proposed or actual face amount will not affect the validity
of a facultative offer made by or facultative coverage placed with the
Reinsurer.
B.3 AUTOMATIC BINDING LIMITS
Life
------------------------------------------------------------------------
Issue Age Standard - Table D Table E - H Table I -P
------------------------------------------------------------------------
[ages] [dollar amount] [dollar amount] [dollar amount]
------------------------------------------------------------------------
[ages] [dollar amount] [dollar amount] [dollar amount]
------------------------------------------------------------------------
[ages] [dollar amount] [dollar amount] [dollar amount]
------------------------------------------------------------------------
The Ceding Company may not cede reinsurance automatically if the sum of
all amounts in force and applied for on the same life with the Ceding
Company, excluding amounts being internally replaced, exceeds the above
Automatic Binding Limits. These Automatic Binding Limits include any
amounts within the Ceding Company's retention.
Increased policy amounts elected under the terms of the Automatic
Increasing Benefit Rider will not be taken into account for automatic and
jumbo limits, provided that the total of all increases to the Specified
Amount of a single policy cannot exceed [dollar amount].
If an applicant has existing joint life coverage inforce with Ceding
Company, the full face amount of the joint life policy will be included in
the total inforce risk on the life for the purposes of the application of
automatic and jumbo limits.
B.4 JUMBO LIMITS
-----------------------------------
Issue Age Jumbo Limit
-----------------------------------
[ages] [dollar amount]
-----------------------------------
[ages] [dollar amount]
-----------------------------------
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 above.
B-3
IDSL - [redacted]
VUL IV and Foundations
B.5 CONDITIONAL RECEIPT OR TEMPORARY INSURANCE AGREEMENT
The Reinsurer's liability will not exceed its proportionate share of
a) [dollar amount], or
b) [dollar amount] if the amount is ordered by court of competent
jurisdiction or the result of a settlement with the beneficiary.
B.6 CESSION LIMITS
Minimum Initial Cession: None.
B.7 INTERNATIONAL RISKS
Ceding Company may automatically cede risk on any international client in
accordance with the eligibility criteria and application requirements set
forth in the Ceding Company's "Guidelines for Underwriting International
Clients". The parties acknowledge that the guidelines in use as of the
effective date have been supplied to and approved by the Reinsurer.
The Ceding Company will promptly notify the Reinsurer of any proposed
material changes in its "Guidelines for Underwriting International
Clients". This Agreement will not extend to policies issued pursuant to
such changes unless the Reinsurer has consented in writing to accept
policies subject to such changes.
B-4
IDSL - [redacted]
VUL IV and Foundations
EXHIBIT D
(REVISED JANUARY 24, 2006)
REINSURANCE PREMIUMS
D.1 PREMIUMS AND ALLOWANCES
Plans covered under this Agreement will be reinsured on a YRT basis.
Reinsurance premium rates per $1000 Net Amount at Risk shall equal the
2001 Valuation Basic Mortality (VBT) ALB Select and Ultimate rates, as
modified by the Ceding Company and expressed in the table attached hereto
as Schedule D-l, less the following allowances:
For VUL Plans:
------------------------------------------------------
UNDERWRITING CLASS ALL AGES/ALL YEARS
------------------------------------------------------
Super Preferred Non-Tobacco [percentage]
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Preferred Non-Tobacco [percentage]
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Standard Non-Tobacco [percentage]
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Preferred Tobacco [percentage]
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Standard Tobacco [percentage]
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For UL Plans:
a. For issue ages 0-69 through attained age 99:
----------------------------------------------------------------------------------------------
Total Preferred Standard
Specified Super Non- Non- Preferred Standard
Amount Preferred tobacco tobacco Tobacco Tobacco
----------------------------------------------------------------------------------------------
Under $100,000 [percentage] [percentage] [percentage] [percentage] [percentage]
----------------------------------------------------------------------------------------------
$100,000-$249,999 [percentage] [percentage] [percentage] [percentage] [percentage]
----------------------------------------------------------------------------------------------
$250,000-$999,999 [percentage] [percentage] [percentage] [percentage] [percentage]
----------------------------------------------------------------------------------------------
Over $1,000,000 [percentage] [percentage] [percentage] [percentage] [percentage]
----------------------------------------------------------------------------------------------
D-1
IDSL - [redacted]
VUL IV and Foundations
b. For issue ages 70-85 through attained age 99:
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Total Preferred Standard
Specified Super Non- Non- Preferred Standard
Amount Preferred tobacco tobacco Tobacco Tobacco
----------------------------------------------------------------------------------------------
Under $100,000 [percentage] [percentage] [percentage] [percentage] [percentage]
----------------------------------------------------------------------------------------------
$100,000-$249,999 [percentage] [percentage] [percentage] [percentage] [percentage]
----------------------------------------------------------------------------------------------
$250,000-$999,999 [percentage] [percentage] [percentage] [percentage] [percentage]
----------------------------------------------------------------------------------------------
Over $1,000,000 [percentage] [percentage] [percentage] [percentage] [percentage]
----------------------------------------------------------------------------------------------
c. For attained ages 100 and above:
100% allowance (i.e., there will be no cost to the Ceding Company to
continue reinsurance coverage beyond age 99)
Total Specified Amount shall be the sum of the Specified Amounts of the
Base Policy and any Base Insured Rider. Total Specified Amount will be
recalculated whenever there is a policy change that increases or decreases
Specified Amount.
To determine the amount of reinsurance premium to be paid by the Ceding
Company to the Reinsurer, these reinsurance premium rates will be applied
to the Reinsured Net Amount at Risk for each policy determined as of the
last policy anniversary or subsequent policy change date if applicable.
For juvenile policies up to attained age of twenty years old, Standard
Non-Tobacco rates shall be used for purposes of calculating premiums and
allowances.
D.2 AGE BASIS
Age Last Birthday
D.3 POLICY FEES
The Reinsurer will not participate in any policy fees.
D.4 SUBSTANDARD PREMIUMS
Substandard multiple ratings will be applied to increase the underlying
reinsurance premium rates by [percentage] per table of assessed rating,
and the normal base allowance will be paid on the entire amount.
D-2
IDSL - [redacted]
VUL IV and Foundations
When flat extras are applied, the following allowances will be paid on the
extra premium portion:
Temporary (five years or less): [percentage] for first year and all
renewal years Permanent (over five years): [percentage] for first year and
[percentage] for all renewal years
D.5 RIDERS AND BENEFITS
AIBR (Automatic Increase Benefit Rider) - Elected increases will be
proportionately reinsured using the premiums for the base coverage, at
point-in-scale.
BIR (Base Insured Rider) and OIR (Other Insured Rider) - These riders will
be proportionately reinsured using the same premium rates scale as used
for the base coverage.
ACCELERATED DEATH BENEFIT - If IDS Life pays an accelerated death benefit
under the terms of the policy contract, the reinsurance coverage will
continue unaffected until the death of the insured.
EXCHANGE OF INSURED RIDER - Exercise of rider to replace insured life
subject to full underwriting; reinsurance coverage, whether automatic or
facultative, to be provided for same amount of coverage as new business.
The following benefits are not reinsured under this Agreement:
Waiver of Monthly Deduction Rider (WMD)
Children's Insurance Rider (CIR)
Accidental Death Benefit Rider (ADB)
D-3
IDSL - [redacted]
VUL IV and Foundations