PARTITION AND NOVATION AGREEMENT ("AGREEMENT")
THIS AGREEMENT made as of the 1st day of January, 2014 (the "Effective Date")
BY AND BETWEEN:
METLIFE INSURANCE COMPANY OF CONNECTICUT
("the Ceding Company")
-and-
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
("the Reinsurer")
-and-
METROPOLITAN LIFE INSURANCE COMPANY
("MLIC")
WHEREAS the Ceding Company and the Reinsurer entered into a Reinsurance
Agreement effective 6/30/1998 (the "Reinsurance Agreement") under which
Reinsurer assumes Variable Annuity business (the "Reinsured Business"); and
WHEREAS, the Reinsured Business includes contracts that were issued to both
contractholders resident in New York (the "NY Business") and contracts that were
issued to contractholders resident outside New York (the "U.S. Business"); and
WHEREAS the Ceding Company intends to surrender its license to sell insurance in
NY, and therefore reinsure 100% of the NY Business with MLIC a moment in time
immediately preceding the enactment of this Agreement, pursuant to an agreement
between the Ceding Company and MLIC; and
WHEREAS, as of the Effective Date of this Agreement, the Ceding Company wishes
to novate the Reinsurance Agreement with respect to the New York Business such
that MLIC will assume all of the Ceding Company's interests, rights, duties,
obligations and liabilities with respect to the NY Business as set out below,
while the Ceding Company retains all interests, rights, duties, obligations and
liabilities under the Reinsurance Agreement with respect to the U.S. Business,
which is not novated to MLIC; and
WHEREAS, MLIC wishes to assume all of the Ceding Company's interest, rights,
duties, obligations and liabilities under the Reinsurance Agreement with respect
to the NY Business; and
WHEREAS, the Reinsurer wishes to consent and agree to novation of the
Reinsurance Agreement to MLIC with respect to the New York Business.
NOW THEREFORE, THIS AGREEMENT WITNESSES THAT in consideration of the respective
covenants and agreements hereinafter contained and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged by
each of the parties hereto), the Ceding Company, the Reinsurer, and MLIC
(together, "the Parties") hereto covenant and agree as follows:
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1) As of the Effective Date of this Agreement the Parties hereby agree to a
novation of the Reinsurance Agreement with respect to the NY Business as
follows:
a) MLIC agrees with each of the Ceding Company and the Reinsurer to assume
all of the interests, rights, duties, obligations and liabilities of the
Ceding Company under the Reinsurance Agreement with respect to the NY
Business, and to be bound by all of the terms and conditions of the
Reinsurance Agreement with respect to the NY Business and to perform all of
the Ceding Company's duties, obligations and liabilities under the
Reinsurance Agreement with respect to the NY Business, including the
duties, obligations and liabilities as reflected in each arbitration award
between the Ceding Company and the Reinsurer, to the same extent as if MLIC
were an original party to the Reinsurance Agreement instead of the Ceding
Company;
b) The Reinsurer accepts MLIC's assumption of all of the interests, rights,
duties, obligations and liabilities of the Ceding Company under the
Reinsurance Agreement with respect to the NY Business in lieu of the
liability of the Ceding Company, agrees to MLIC being bound by all of the
terms and conditions of the Reinsurance Agreement with respect to the NY
Business and to MLIC performing all of the Ceding Company's duties,
obligations and liabilities under the Reinsurance Agreement with respect to
the NY Business and agrees that MLIC shall have all of the Ceding Company's
interests and rights under the Reinsurance Agreement with respect to the NY
Business, including the interests and rights as reflected in each
arbitration award between the Ceding Company and the Reinsurer, to the same
extent as if MLIC were an original party to the Reinsurance Agreement
instead of the Ceding Company;
c) The Reinsurer and MLIC hereby ratify and confirm that, from the
Effective Date, the Reinsurance Agreement as it respects the NY Business is
an agreement solely between the Reinsurer and MLIC and is in full force and
effect in accordance with its terms and conditions and the terms and
conditions of this Agreement, which shall form part of the Reinsurance
Agreement;
d) The Reinsurer and the Ceding Company mutually release and forever
discharge each other from any and all of the duties, obligations and
liabilities with respect to the NY Business under the Reinsurance
Agreement, and from all claims, demands, actions and causes of actions
which either of them ever had, now has or may hereafter have against the
other in any way arising out of, resulting from or related to the NY
Business except that such release shall not apply to any issues that relate
to the arbitration between the Reinsurer and the Ceding Company that was
commenced by the Reinsurer's October 11, 2010 arbitration demand;
e) The Ceding Company and MLIC agree that payment by the Reinsurer to
either the Ceding Company or MLIC of a debt due from the Reinsurer to one
of them satisfies the Reinsurer's obligation to the entity to whom the debt
was due. The Ceding Company and MLIC jointly and severally indemnify the
Reinsurer for and against any claim, demand, action or cause of action
relating to a debt due to the Ceding Company or MLIC that was paid by the
Reinsurer to one of them;
f) The Reinsurer, Ceding Company and MLIC agree that any dispute between
them under the Reinsurance Agreement shall be resolved in a single
arbitration between the Reinsurer on one side and the Ceding Company and
MLIC on the other side, in which the Ceding Company and MLIC act as a
single party and appoint a single party appointed arbitrator;
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g) MLIC agrees that it assumes responsibility for all claims, demands,
actions and causes of actions arising out of, resulting from or related to
the NY Business that the Reinsurer had as of the Effective Date against the
Ceding Company;
h) The Ceding Company, MLIC, and the Reinsurer agree that any actions or
omissions of Ceding Company and any payments by Reinsurance to the Ceding
Company with respect to the NY Business that were made prior to the
Effective Date hereof are binding on MLIC as if MLIC were an original party
to the Reinsurance Agreement; and
i) The Ceding Company and MLIC agree that, notwithstanding the Partition
and Novation Agreement, the Reinsurer shall be entitled to obtain, at a
single location, Access to Records under the Reinsurance Agreement to
records relating to both the NY Business and the U.S. Business, may provide
the Ceding Company and MLIC with joint notice of audits that include both
the NY Business and the US Business, and may also prepare and submit to the
Ceding Company and MLIC audit reports that include both the NY Business and
the US Business.
2) The Reinsurer and the Ceding Company hereby ratify and confirm the
Reinsurance Agreement, with respect to the U.S. Business, is an agreement solely
between them, in full force and effect in accordance with its terms and
conditions and the terms and conditions of this Agreement, and that the Ceding
Company retains the duties, obligations and liabilities as reflected in each
arbitration award between the Ceding Company and the Reinsurer, with respect to
the U.S. Business.
3) For greater certainty, the Ceding Company shall continue to be bound by the
terms and conditions of the Reinsurance Agreement in respect of both the U.S.
Business and the NY Business prior to the Effective Date of this Agreement. On
and after the Effective Date of this Agreement, the Ceding Company shall only be
bound by the terms and conditions of the Reinsurance Agreement in respect of the
U.S. Business.
4) The Ceding Company and MLIC jointly and severally indemnify and hold harmless
the Reinsurer from the increased cost or expense, including but not limited to
the actual and reasonable cost of administration, legal fees, cost of capital,
compliance costs, and taxes, incurred in good faith by the Reinsurer under the
Reinsurance Agreement that are caused by the partition and novation of the
Reinsurance Agreement to the extent that cost or expense exceeds the cost or
expense, including but not limited to the cost of administration, legal fees,
cost of capital, compliance costs, and taxes, that would have been incurred by
the Reinsurer under the Reinsurance Agreement if the partition and novation of
the Reinsurance Agreement had not occurred. The Reinsurer shall submit all bills
for such increased cost or expense to the Ceding Company and MLIC for prompt
indemnification.
5) Any notice or other communication to be made or given hereunder or under the
Reinsurance Agreement by the Ceding Company, MLIC or the Reinsurer (in each
case, "Communication") shall follow the terms of notice under the Reinsurance
Agreement and be made to:
IF TO THE CEDING COMPANY:
▇▇▇▇▇▇▇ ▇▇▇▇▇
MetLife Insurance Company of Connecticut
1095 Avenue of the Americas
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
email address: ▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
IF TO THE REINSURER:
▇▇▇▇▇ ▇▇▇▇▇▇
CIGNA Reinsurance
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
email address: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
IF TO MLIC:
▇▇▇▇▇▇▇ ▇▇▇▇▇
Metropolitan Life Insurance Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
email address: ▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Or to such other address or telecopy number as any party may from time to time
designate in accordance with this section.
6) Each party agrees to do all things as may be necessary to give full effect to
this Agreement.
7) This Agreement represents the entire agreement between the Parties with
respect to the subject matter hereof, and supersedes any prior or
contemporaneous oral or written agreements relating thereto. However, MLIC, the
Ceding Company, and the Reinsurer do not intend by this Agreement to supersede
or modify any of the terms and conditions in the Reinsurance Agreement, other
than as expressly provided in this Agreement. This Agreement shall not be
amended or modified except by written agreement signed by duly authorized
officers of the Parties hereto. This Agreement shall inure to the benefit of and
be binding upon the Parties hereto and their respective successors and permitted
assigns.
8) This Partition and Novation Agreement shall be governed by and construed in
accordance with the laws of the state of New York, excluding its choice of law
provisions, and any disputes relating to this Agreement shall be resolved in
arbitration conducted in accordance with the terms of the arbitration agreement
in the Reinsurance Agreement, except as otherwise provided herein. The
Reinsurance Agreement shall remain governed by and construed in accordance with
the laws of the state of Connecticut, excluding its choice of law provisions,
and any arbitration proceedings involving the Reinsurance Agreement shall take
place in Hartford, Connecticut.
9) Article XVI Paragraph 1 and 2 of the Reinsurance Agreement as it relates to
the obligations as described herein with respect to the New York Business only
is deleted in its entirety and replaced with the following:
If MLIC is judged insolvent, the Reinsurer will pay all reinsurance under this
Agreement directly to MLIC, its liquidator, receiver or statutory successor on
the basis of the Reinsurer's liability under the Policy or Policies reinsured
without decrease because of MLIC's insolvency. It is understood, however, that
in the event of MLIC's insolvency the liquidator, receiver or statutory
successor will give the Reinsurer 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 Reinsurer may investigate and
interpose at its own expense in the proceedings
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where the claim is to be adjudicated, any defense which the Reinsurer may deem
available to MLIC, its liquidator, receiver or statutory successor. It is
further understood that the expense the Reinsurer incurs will be chargeable,
subject to court approval, against MLIC as part of the expense of liquidation to
the extent of a proportionate share of the benefit which may accrue to MLIC
solely as a result of the defense the Reinsurer has undertaken. Where two or
more reinsurers are involved in the same claim and a majority in interest elects
to interpose defense to the claim, the expenses will be apportioned in
accordance with the terms of the Agreement as though MLIC had incurred the
expense. Should MLIC go into liquidation or should a receiver be appointed, all
amounts due to MLIC or Reinsurer under this Agreement shall be subject to the
right of offset at any time and from time to time, and upon the exercise of
same, only the net balance will be due. The application of the offset in the
event of insolvency shall not be deemed to constitute diminution.
10) All capitalized terms not defined herein shall have the meanings ascribed
thereto in the Reinsurance Agreement. All other terms of the Reinsurance
Agreement not modified shall remain in full force and effect.
11) This Agreement is conditional upon the contemplated 100% reinsurance of the
New York Business from the Ceding Company to MLIC effective January 1, 2014. If,
for whatever reason, such reinsurance is not effective on that date, this
Agreement shall be null and void and the Reinsurance Agreement shall continue in
full force and effect, unamended by this Agreement.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
in any number of counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same agreement, on the dates indicated
below.
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
Date: 12/27/2013
METLIFE INSURANCE COMPANY OF CONNECTICUT
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Date: 12/27/2013
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: AVP Risk management
Date: 20 December 2013
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