Exhibit g 1
REINSURANCE AGREEMENT #6847-1
(AUTOMATIC YRT BULK UNIVERSAL LIFE)
(hereinafter referred to as "Agreement")
between
TIAA-CREF LIFE INSURANCE COMPANY
(NEW YORK, NEW YORK)
(hereinafter referred to as the "Company")
and
LIFE REASSURANCE CORPORATION OF AMERICA
(A MEMBER OF THE SWISS RE GROUP)
(STAMFORD, CONNECTICUT)
(hereinafter referred to as "Life Re")
Effective: January 1, 2000
TABLE OF CONTENTS
Preamble
Article I Method of Reinsurance and Insurance
Article II Automatic Reinsurance
Article III Facultative Reinsurance
Article IV Procedures for Reporting
Article V Premiums
Article VI Claims
Article VII Reductions, Reinstatements & Changes
Article VII DAC Tax
Article IX Recapture
Article X Insolvency
Article XI Arbitration
Article XII General Provisions
Article XIII Duration of Agreement
Article XIV Execution
Schedule A Retention Limits and Reinsurance Specifications
Schedule B Reporting Form
Schedule C Premium Rates
Schedule D Allowances
Schedule E Sample Schedule to be Filed with Federal Tax Return
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PREAMBLE
This Reinsurance Agreement ("Agreement") is entered into by and between
TIAA-CREF Life Insurance Company, a New York insurance corporation (the
"Company") and Life Reassurance Corporation of America, a Connecticut insurance
corporation ("Life Re"). The Company and Life Re mutually agree to reinsure on
the terms and conditions set forth in this Agreement. This Agreement is solely
between the Company and Life Re, and performance of the obligations of each
party under this Agreement will be rendered solely to the other party. In no
instance will anyone other than the Company or Life Re have any rights under
this Agreement.
ARTICLE I
METHOD OF REINSURANCE AND INSURANCE
1. EFFECTIVE DATE
The reinsurance under this Agreement is effective as of January 1, 2000.
2. METHOD
Reinsurance of life insurance risks ("Life Insurance") under this
Agreement is on the yearly renewable term ("YRT") plan for the amount at risk
under the policy reinsured. The Company will cede and Life Re will accept
reinsurance under the policies or plans set forth in Schedule A. The policies
set forth in Schedule A that are reinsured under this Agreement are hereinafter
referred to collectively as "Reinsured Policies" and individually as a
"Reinsured Policy." Face amount increases will be reinsured as newly issued
policies under the terms of this Agreement. Said policies will have been
underwritten in accordance with the Company's individual ordinary life
underwriting rules and practices.
3. AMOUNTS
Life Re will reinsure a percentage of each Reinsured Policy. The
percentage associated with each Reinsured Policy is set forth in schedule A and
is hereinafter referred too as "Life Re's Share."
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For the purpose of this Agreement, the reinsured amount at risk (R)
is calculated as follows:
R = (D - A) * S, where
D = Death benefit
A = The Accumulation Fund Value
S = Life Re's Share
4. MINIMUM AMOUNTS
There is no minimum cession requirement under this Agreement.
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ARTICLE II
AUTOMATIC REINSURANCE
1. INSURANCE
The Company will cede and Life Re will accept automatically reinsurance in
face amounts not exceeding the binding limits per life in Schedule A of this
Agreement. Face amount includes the death benefit provided by base policies; any
term life insurance riders; and all future increases provided by automatic face
amount increase riders. For last survivor policies, reinsurance will be
automatic if both of the insureds do not violate the binding limit as set forth
in Schedule A. If the Company has more than one agreement with Life Re, the
total amount per life automatically ceded to Life Re under all agreements
combined will not exceed the automatic binding limit available to the Company
under the agreement with the highest binding authority. Life Re will accept
automatic reinsurance when
(a) the Company already has for its own account its maximum limit of
retention on the risk and for this reason alone is not retaining any
portion of the insurance applied for on a current application,
(b) in the Company's opinion there has been no adverse change in the
insurability of the risk since the Company's last acceptance for its
own retention, and
(c) all insureds under the policy are both citizens and residents of the
United States or Canada.
A risk as defined in the following categories is not eligible for reinsurance
under this paragraph:
(a) A jumbo risk as defined in paragraph 3 below.
(b) A risk which the Company has sent to Life Re or any other reinsurer
for facultative underwriting consideration.
(c) Life insurance resulting from a group conversion, where full
evidence of insurability has not been secured.
(d) Any risk which is not fully underwritten or any risk where the
Company has not followed its usual underwriting practice.
The liability of Life Re on any automatic reinsurance under this Agreement
begins and ends at the same time as that of the Company, provided that the
Company has not submitted such an automatic application to Life Re or to any
other reinsurer for facultative underwriting consideration.
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2. COVERAGES
Life Insurance is exclusively the coverage or risk reinsured automatically
under this Agreement. Life Re will not participate in a unilateral increase in a
policy's net amount at risk unless that increase is permitted by the policy at
issue or unless agreed to in writing prior to the granting of the increase. Life
Insurance includes basic policies, riders that affect the face amount of basic
policies, and term riders providing life insurance protection.
3. JUMBO RISK
A jumbo risk is one where the papers of the Company, including all papers
that are part of the current application, indicate that the person to be
insured has or will have total insurance in force with all companies greater
than:
All Ages $50,000,000
4. REGULAR LIMITS OF RETENTION
The Company may modify its regular limits of retention, detailed in
Schedule A, by giving thirty days written notice to Life Re. The amount of
reinsurance to be ceded and accepted automatically after the new limits take
effect will be determined by mutual written agreement by Life Re and the
Company.
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ARTICLE III
FACULTATIVE REINSURANCE
The Company may choose to submit for consideration by Life Re a request
for any amount of reinsurance of the coverages in Article II that the Company
may require. Reinsurance may be requested for any amount without regard for the
limits of retention detailed in Schedule A, but the Company will notify Life Re
promptly of any changes in its limits of retention. The Company may also submit
for consideration as facultative reinsurance any individual life insurance
issued on a policy form not specified in Schedule A provided reinsurance terms
and conditions are established and agreed upon by means of the facultative
reinsurance application process.
When the company requests facultative reinsurance, the application will be
made by submitting to Life Re a mutually agreeable form. The Company will send
to Life Re any and all information the Company has about the risk, including
without limitation, copies of the application, medical examiners' reports,
attending physicians' statements, inspection reports, and other reports and
other papers bearing on the insurability of the risk. Promptly upon receipt of
the application, Life Re will analyze the risk and notify the Company of Life
Re's decision and Life Re's classification of the risk. If the company elects to
accept Life Re's unconditional offer of acceptance for reinsurance of the risk,
the Company will notify Life Re within 120 days of Life Re's offer.
The liability of Life Re on any facultative reinsurance under this
Agreement begins and ends at the same time as that of the Company, provided
that:
(a) Life Re has given the Company an unconditional offer of acceptance
after the application for reinsurance, and
(b) the Company has notified Life Re of its acceptance of such offer
within 120 days of said offer.
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ARTICLE IV
PROCEDURES FOR REPORTING
1. GENERAL INFORMATION
Life Re will accept, on a self administered basis, automatic
reinsurance in amounts per life up to the amounts set forth in Schedule
A. Additional amounts may be reinsured facultatively.
2. SELF-ADMINISTERED REPORTING
The Company will remit a check for the balance indicated in the monthly
statements to Life Re along with the reporting form set forth in Schedule B or a
mutually agreed upon form submitted by the company. If a balance is due the
Company, it will be remitted by Life Re promptly. Within ten (10) days following
the close of each calendar month, the Company will forward to Life Re on
computer tape or other acceptable form, reports in substantial conformity with
the following:
A. Monthly New Business Report
(1) policy number (10) amount reinsured with Life Re
(2) full name(s) of insured(s) (11) automatic/facultative indicator
(3) date(s) of birth (12) state of residence
(4) sex(es) (13) table rating(s)
(5) issue age(s) (14) flat extra(s) (amount+number of yrs.)
(6) policy date (15) death benefit option (UL products)
(7) underwriting class(es) (16) amount at risk classification
(8) plan of insurance (17) transaction code
(9) face amount issued (18) currency if other than U.S.
(19) qualified pension (yes/no)
A. Monthly Conversion Report
The Company will furnish Life Re with a separate listing of
reinsurance policies that are conversions or replacements to the plan(s)
as stated in Schedule A. The listing should provide the following
information:
(1) 1 through 19 in 2.A. above (4) attained age(s)
(2) original policy date (5) duration
(3) original policy number (6) effective date if other than
policy date
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B. Monthly Premium Report
The Company will furnish Life Re with a listing of all reinsurance
policies issued or renewing during the past month/quarter accompanied by the
reinsurance premiums for such policies. The listing should be segregated into
first year issues and renewals and should provide the following information:
(1) 1 through 19 in 2.A. above
(2) current amount at risk
(3) The net reinsurance premium due for each reinsured policy.
A. Monthly Change Report
The Company will report the details of all policy terminations and
changes on the reinsured policies. In addition to the data indicated in
2.A., above, the report should provide information about the nature, the
effective date, and the financial result of the change with respect to
reinsurance.
B. Monthly Policy Exhibit Report
The Company will provide a summary of new issues, terminations,
recaptures, changes, death claims and reinstatements during the month and the
inforce reinsurance at the end of the month.
C. Quarterly Inforce and Reserve Listing
Within ten (10) days after the close of each calendar quarter, the Company
will furnish Life Re with a listing of reinsurance in force by policy, by year
of issue and include statutory reserves for the same. The listing must show
sufficient detail such that reserve calculations can be independently verified
by Life Re's auditors and examiners. The listing should be segregated into first
year issues and renewals and should provide the following information:
(1) 1 through 19 in 2.A above
For the fourth quarter, Federal Income Tax reserves must also be
furnished. They may be included in the fourth quarter statutory report or they
may be submitted separately, but in the same format as the statutory report.
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A. ELECTRONIC DATA TRANSMISSION
If the Company reports its reinsurance transactions via electron media,
the Company will consult with Life Re to determine the appropriate reporting
format. Should the Company subsequently desire to make changes in the data
format or the code structure, the Company will communicate such changes to Life
Re prior to the use of such changes in reports to Life Re.
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ARTICLE V
PREMIUMS
1. LIFE INSURANCE
For single life policies, the annual premiums per $1,000 are shown in
Schedule C-1. The annual premiums are made monthly by dividing by 12. The
monthly premiums per $1,000 are applied to the reinsured amount at risk defined
in Article 1.
For last survivor policies, the annual premiums per $1,000 for each
insured are shown in Schedule C-2. These annual premiums are converted to annual
last survivor rates using the methodology described in Schedule C-2. The minimum
annual last survivor rate will be $.12 per $1,000. The annual last survivor
rates are made monthly by dividing by 12. The monthly rates are applied to the
reinsured amount at risk defined in Article 1.
Life Re anticipates that these premiums will be continued indefinitely for
all business ceded under this Agreement. For the purpose of satisfying
requirements for deficiency reserves imposed by various state insurance
departments, Life Re will guarantee for renewal the greater of the premiums
provided in this Agreement or premiums based on the 1980 CSO Table at 2.5%
interest.
Life Re shall not unilaterally raise the Company's premium rates unless
Life Re raises the rates of all its yearly renewable term reinsurance
agreements, including reinsurance of ordinary whole life, term life, and
interest sensitive life policies; in addition, the percentage increase in the
Company's rates shall not exceed the increase for any of Life Re's other yearly
renewable term reinsurance agreements. Life Re will provide the Company ninety
days written notice of any increase in premium rates.
When the Company assesses a flat extra rating on an insured, the flat
extra rate per $1,000 less the allowance indicated in Schedule D will be added
to that insured's annual premium per $1,000. When the company assesses a table
rating on an insured, that insured's annual premium per $1,000 will be increased
by 25% for each table assessed.
In the event the reinsured policies permit the insureds to split the
policy into separate policies on each life insured thereunder, the new policies
will be the exchanges as set forth in Schedule C, point-in-scale, provided,
however, that the sum of the amount of reinsurance on the exchanges will not
exceed the amount of reinsurance on the reinsured policies before the split. Any
substandard or flat premium extras payable assessed on either life will be
payable under the appropriate exchanges policy.
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2. PREMIUM TAXES
Life Re will not reimburse the Company for state premium taxes on
reinsurance premiums received from the Company.
3. PAYMENTS
Premiums are payable monthly in arrears. If a policy's face amount is
reduced, terminated, increased or reinstated in the accounting period, pro-rata
adjustment will be made by Life Re and the Company to the reinsurance premiums.
4. NONPAYMENT OF REINSURANCE PREMIUMS
The payment of reinsurance premiums is a condition precedent to the
liability of Life Re under this Agreement. If the Company does not pay premiums
to Life Re as provided in this Agreement and such amounts are more than 120
days in arrears, Life Re will have the right to terminate the reinsurance under
this Agreement.
5. INTEREST ON DELINQUENT PAYMENTS
If the Company is more than 90 days in arrears in remitting premiums to
Life Re, such premiums will be considered delinquent and interest will be added
to the amount to be remitted. Interest will be calculated from
(a) the time the premiums are due Life Re to
(b) the date the Company pays the premium to Life Re. The rate of
interest charged on delinquent payments will be equal to the rate
listed in the Federal Reserve Statistical Release, as promulgated by
the Board of Governors of the Federal Reserve System, for the
monthly average of Corporate bonds, ▇▇▇▇▇'▇ seasoned Aaa (the
"Interest Rate").
5. MISSTATEMENTS
If the insured's age or sex was misstated and the amount of insurance on
the Company's policies is adjusted, the Company and Life Re will share the
adjustment in proportion to the amount of liability of each at the time of issue
of the policies. Premiums will be recalculated for the correct age or sex and
amounts according to the proportion as above and adjusted without interest. If
the insured is still alive, the method above will be used far past years and the
amount of reinsurance and premium will be adjusted for the future to the amount
that would have been correct at issue.
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ARTICLE VI
CLAIMS
1. NOTICE
The Company will notify Life Re promptly after receipt of any information
on a claim where reinsurance with Life Re is involved. The Company will furnish
to Life Re as soon as possible the completed reinsurance claim form and copies
of all claim papers and proofs. However, if the amount reinsured with Life Re is
more than the amount retained by the Company and the claim is contestable, all
papers in connection with such claim, including all underwriting and
investigation papers must be submitted to Life Re for its recommendation before
admission of any liability on the part of the Company.
2. CONTESTED CLAIMS
Whenever the Company has formed a preliminary opinion that a claim might
be denied or contested where reinsurance with Life Re is involved, and prior to
any final action by the Company indicating to the claimant that the claim is
being denied or contested, the Company will give Life Re the opportunity to
review the complete claim file. Life Re will review this file promptly and, at
its option,
(a) pay Life Re's full share as if the claim was not contested, in full
discharge of Life Re's obligation to the Company for that claim, or
(b) after consultation with the Company join in the contest, or ratify
the denial, in which case Life Re will communicate to the Company
in writing Life Re's decision to participate in the contest, or
ratify the denial, with respect to that claim.
3. EXPENSES
Life Re will share in the claim expense of any contest or compromise of a
claim in the same proportion that the amount at risk reinsured under this
Agreement bears to the total risk of the Company on all policies being contested
by the Company under this contest, and Life Re will share in the total amount of
any reduction in liability in the same proportion. Claim expense will include
without limitation the cost of investigation, legal fees, court costs, and
interest charges. Compensation of salaried officers and employees and any
possible extra-contractual damages will not be considered covered expenses. Life
Re will not be liable for expenses incurred in connection with a dispute or
contest arising out of conflicting claims of entitlement to policy proceeds or
benefits.
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4. MISSTATEMENTS
In the event of an increase or reduction in the amount of the Company's
insurance on any policy reinsured hereunder because of an overstatement or
understatement of age or misstatement of sex, established after the death of the
insured, the Company and Life Re will share in such increase or reduction in
proportion to their respective amounts at risk under that policy.
5. PAYMENT
Life Re will pay its share in a lump sum to the Company, without regard
to the form of claim settlement of the Company.
6. ASSISTANCE AND ADVICE
At the request of the Company, Life Re will advise the Company on any
claim concerning business reinsured under this agreement and, when such a claim
appears to be of doubtful validity, Life Re will assist the Company in its
determination of liability and in the best procedure to follow with respect to
the claim.
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ARTICLE VII
REDUCTIONS, REINSTATEMENTS & CHANGES
1. REDUCTIONS AND TERMINATIONS
Reinsurance amounts are calculated in terms of coverages on the life of a
person. If any of the Company's policies or riders on the person are reduced or
terminated, the reinsurance in force will be reduced by the corresponding
amount. The reduction will not be applied to force the Company to reassume more
than its regular retention limit at the time of the reduction for the age at
issue, mortality rating and form of the policy or policies for which reinsurance
is being terminated. The reduction first will be applied to reinsurance, if any,
on the particular policy reduced. If the reduction exceeds the amount of
reinsurance on that policy, the reduction will then be applied to reinsurance on
other policies on that life in the order in which the policies were effected,
i.e., the first effected will be the first terminated or reduced. If reinsurance
has been ceded to more than one reinsurer, the reduction in Life Re's
reinsurance will be in proportion to the reduction in the total. After the
proportion has been determined, the rules above will be used.
2. REINSTATEMENTS
(a) Automatic Reinsurance
(b) A policy of the Company, ceded to Life Re on an automatic basis,
that was reduced, terminated, or lapsed, if reinstated by the
Company under its regular rules will be reinstated automatically to
the amount that would be in force had the policy not been reduced,
terminated, or lapsed.
(c) Facultative Reinsurance
A Reinsured Policy ceded to Life Re that was reduced, terminated, or
lapsed, on a facultative basis, (i) will require approval by Life Re
prior to reinstatement if the Company has retained less than 50% of
the risk, or (ii) will be reinstated automatically by Life Re if
the Company has retained 50% or more of the risk and reinstates the
Reinsured Policy under its regular rules. Upon reinstatement,
reinsurance for the policy will be for the amount that would be in
force had the policy not been reduced, terminated, or lapsed.
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3. NONFORFEITURE BENEFITS
Life Re will not participate in nonforfeiture benefits.
4. CONTRACTUAL CONVERSIONS AND EXCHANGES
In the event of a contractual conversion or exchange (i.e., conversion
or exchange that requires no evidence of insurability) life Re will reinsure the
risk resulting from such conversion or exchange at the rates shown in Schedule C
on point-in-scale basis (using the original issue age and duration from the
original issue) and the discounts/allowance of Schedule D on a point-in-scale
basis. The reinsured amount at risk on the policy or policies being converted
may not exceed the current reinsured amount at risk on the policy or policies
being converted or exchanged. If the conversion or exchange results in an
increase of risk, the amount of increase will be subject to evidence of
insurability.
5. NON CONTRACTUAL EXCHANGES
Non contractual exchanges are subject to evidence of insurability.
Premiums for the risk resulting from the exchange will be reflected in Schedule
C.
6. PROGRAM OF INTERNAL REPLACEMENT
Should the Company, its affiliates, successors, or assigns, initiate a
program of internal replacement, as defined below, that would include any of the
risks reinsured hereunder, the Company will immediately notify the reinsurer.
For each risk reinsured hereunder that has been replaced under a program of
internal replacement, the reinsurer shall have the option at its sole
discretion, of either treating the risks reinsured as recaptured, or continuing
reinsurance on the new policy under this Agreement. The term "program of
internal replacement" shall mean any program offered to a class of policy owners
in which a policy or any portion of a policy is exchanged for another policy,
not reinsured under this Agreement, which is written by the Company, its
affiliates, successors, or assigns.
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ARTICLE VIII
DAC TAX
Life Re and the Company each acknowledge that it is subject to taxation
under Subchapter "L" of the Internal Revenue Code, the "Code", and hereby agree
to the following pursuant to Section 1.848-2(g)(8) of the Income Tax Regulation
under Section 848 of the Internal Revenue Code of 1986, as amended.
(a) The term "party" refers to either Life Re or the Company as
appropriate.
(b) The terms used in this Article are defined by reference to
Regulation 1.848-2.
(c) Any joint election by the parties under the Regulation for this
Agreement will take effect beginning with the first taxable year
ending after January 1, 2000 and will be effective for all
subsequent taxable years in which the relevant agreement is in
force, unless the parties jointly revoke any such election with the
consent of the IRS Commissioner.
(d) Each party shall attach a schedule, substantially in the form of
Schedule E hereto, to its federal income tax return for the taxable
years ending after the date the election is effective which
identifies this agreement for which the joint election under the
Regulation has been made.
(e) Unless the joint election between the parties has been revoked or
terminated under clause (c) above, the party with net positive
consideration, as defined in the Regulation promulgated under Code
Section 848, for such agreement for each taxable year, shall
capitalize specified policy acquisition expenses with respect to the
Agreement without regard to the general deductions limitation of
Section 848(c)(1).
(f) Each party agrees to exchange information pertaining to the amount
of net consideration under this Agreement each year with the other
party to ensure consistency of reporting for federal income tax
purposes.
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ARTICLE IX
RECAPTURE
1. STANDARDS FOR RECAPTURE
If the Company increases its maximum retention from the maximum limit of
retention set forth in Schedule A, the Company may elect to recapture that
portion of each Reinsured Policy equal to the difference between the Company's
new limit of retention and the Company's old limit of retention, subject to the
provisions of this Article IX. If the Company elects this type of recapture, the
Company may only recapture Reinsured Policies that meet both of the following
requirements:
(a) Reinsured Policies that have been in force for ten (10) years, and
(b) Reinsured Policies for which the Company maintained its maximum
limit of retention at the time the Reinsured Policy was issued.
However, if Life Re has given the Company ninety day written notice of a
premium rate increase, the Company may elect to recapture all Reinsurance
Policies affected by such increase before such increase takes effect regardless
of the above requirements.
2. METHOD OF RECAPTURE
If the Company elects to recapture, the Company will notify life Re in
writing within ninety days from the effective date of the increase in its limit
of retention. If the Company elects to recapture one Reinsured Policy under this
provision, the Company must recapture every Reinsured Policy that meets the
requirements set forth in Article IX, Section 1, above.
Recapture for each Reinsured Policy will occur on the later to occur of
(a) the next anniversary of the Reinsured Policy, or
(b) the tenth anniversary of the Reinsured Policy. The amount of
reinsurance on the Reinsured Policy will be reduced so that the
total amount of risk retained by the Company will be equal to the
Company's maximum limit of retention.
If two or more reinsurers have reinsurance on the same Reinsured Policy,
Life Re's portion of the reduction will be in proportion to Life Re's share of
the total reinsurance on the Reinsured Policy.
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The above guidelines notwithstanding, the Company may recapture prior to
the tenth policy anniversary if the recapture results from the Company's
exercise of its right of recapture due to a reinsurance premium rate increase as
described in Paragraph 1 of this Article. Such recapture shall apply to all
policies subject to the premium rate increase, shall be a full and complete
recapture and shall be governed by the same effective date for all such policies
affected by the recapture.
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ARTICLE X
INSOLVENCY
All reinsurance under this Agreement will be paid on demand by Life Re
directly to the Company, its liquidator, receiver, or statutory successor, on
the basis of the liability of the Company under the policy or policies reinsured
without diminution because of the insolvency of the Company. In the event of the
insolvency of the Company, the liquidator, receiver, or statutory successor of
the Company will give written notice to Life Re of a pending claim against Life
Re or the Company on any policy reinsured within a reasonable time after the
claim is filed in the conservation, liquidation, or insolvency proceedings.
While the claim is pending, Life Re may investigate and interpose, at its own
expense, in the proceedings where the claim is to be adjudicated, any defenses
which it may deem available to the Company or its liquidator, receiver, or
statutory successor. The expense incurred by Life Re will be charged, subject to
court approval, against the Company as an expense of the conservation,
liquidation, or insolvency to the extent of a proportionate share of the benefit
that accrues to the Company as a result of the defenses by Life Re. Where two or
more reinsurers are involved and a majority in interest elect to defend a claim,
the expense will be apportioned in accordance with the terms of this Agreement
as if the expense had been incurred by the Company.
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ARTICLE XI
ARBITRATION
Life Re and the Company intend that any dispute between them under or with
respect to this Agreement be resolved without resort to any litigation.
Accordingly, Life Re and the Company agree that they will negotiate diligently
and in good faith to agree on a mutually satisfactory resolution of any such
dispute; provided, however, that if any such dispute cannot be so resolved by
them within sixty (60) calendar days (or such longer period as the parties may
agree) after commencing such negotiations, Life Re and the Company agree that
they will submit such dispute to arbitration in the manner specified in, and
such arbitration proceeding will be conducted in accordance with, the rules of
the American Arbitration Association.
The arbitration hearing will be before a panel of three arbitrators, each
of whom must be a present or former officer of a life insurance or life
reinsurance company. Life Re and the Company will each appoint one arbitrator by
written notification to the other party within thirty calendar days after the
date of the mailing of the notification initiating the arbitration. These two
arbitrators will then select the third arbitrator within sixty (60) calendar
days after the date of the mailing of the notification initiating arbitration.
If either Life Re or the Company fails to appoint an arbitrator, or should
the two arbitrators be unable to agree upon the choice of a third arbitrator,
the president of the American Arbitration Association or of its successor
organization or (if necessary) the president of any similar organization
designated by lot of Life Re and the Company within thirty (30) calendar days
after the request will appoint the necessary arbitrators.
The vote or approval of a majority of the arbitrators will decide any
question considered by the arbitrators; provided, however, that if no two
arbitrators reach the same decision, then the average of the two closest
mathematical determinations will constitute the decision of all three
arbitrators. The place of arbitration will be chosen by the arbitrators. Each
decision (including without limitation each award) of the arbitrators will be
final and binding on ail parties and will be nonappealable, and (at the request
of either Life Re or the Company) any award of the arbitrators may be confirmed
by a judgment entered by any court of competent jurisdiction. No such award or
judgment will bear interest. Each party will be responsible for paying
(a) all fees and expenses charged by its respective counsel,
accountants, actuaries, and other representatives in conjunction
with such arbitration, and
(b) one-half of the fees and expenses charged by each arbitrator.
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ARTICLE XII
GENERAL PROVISIONS
1. REINSURER'S RIGHT OF NOTICE OF UNUSUAL PRACTICES
In providing reinsurance facilities to the Company under this Agreement,
Life Re has granted the Company considerable authority with respect to automatic
binding power, reinstatements, claim settlements, and the general administration
of the reinsurance account. To facilitate transactions, Life Re has required the
minimum amount of information and documentation possible, reflecting its utmost
faith and confidence in the Company. Life Re assures that, except as otherwise
notified by the Company, the underwriting, claims and other insurance practices
employed by the Company with respect to reinsurance ceded under this Agreement
are generally consistent with the customary and usual practices of the insurance
industry as a whole. If the Company changes or modifies its practices or engages
in exceptional or uncustomary practices, the Company agrees to make those
practices known to Life Re before assigning any liability to Life Re with
respect to any reinsurance issued under such practices.
2. POLICY FORMS AND RATES
Upon request, the Company will furnish Life Re with a copy of its
application forms, policy and rider forms, premium and non-forfeiture value
manuals, reserve tables, actuarial memoranda, and any other forms or tables
needed for proper handling of reinsurance under this Agreement. Life Re must
agree in writing before incurring additional liability resulting from any
changes to policies, policy riders or amendments reinsured under this Agreement
that are not permitted by the policies, riders, or amendments as issued.
3. REINSURANCE CONDITIONS
The reinsurance is subject to the same limitations and conditions as the
insurance under the policy or policies written by the Company on which the
reinsurance is based.
4. ERRORS AND OMISSIONS
If either the Company or Life Re unintentionally fails to perform an
obligation that affects this Agreement and such failure results in an error on
the part of the Company or Life Re, the error will be corrected by restoring
both the Company and Life Re to the positions they would have occupied had no
such error occurred. For
20
business reported but not covered under the provisions of this Agreement, Life
Re shall be obligated only for the return of premium paid, plus interest as
provided below.
Any amounts due under this Section 4 will bear interest at a rate agreed
upon by the Company and Life Re or at a rate equal to the Interest Rate as
described in Article V, Paragraph 6.
5. OFFSET
Any amount which either the Company or Life Re is contractually obligated
to pay to the other party may be paid out of any amount which is due and unpaid
under this Agreement. The application of this offset provision will not be
deemed to constitute diminution in the event of insolvency.
6. INSPECTION
Upon reasonable notice, Life Re may inspect any and all books, records,
documents or similar information relating to or affecting reinsurance under this
Agreement at the home office of the Company during normal business hours.
7. ENTIRE AGREEMENT
This Agreement and the Schedules attached hereto supersede all prior
discussions and written and oral agreements between the parties with respect to
the subject matter of this Agreement. This Agreement and the Schedules attached
hereto contain the sole and entire agreement between the parties hereto with
'respect to the subject matter hereof.
8. AMENDMENT
This Agreement may be modified or amended only with a written instrument
properly signed on behalf of the Company and Life Re.
9. COUNTERPARTS
This Agreement may be executed simultaneously in any number of
counterparts, each of which will be deemed an original, but all of which will
constitute one and the same instrument.
21
10. NO ASSIGNMENT
Except as otherwise provided herein, neither party hereto may assign this
Agreement or any right hereunder or part hereof without the prior written
consent of the other party hereto.
11. BINDING EFFECT
This Agreement is binding upon and will inure to the benefit of the
parties and their respective successors and permitted assignees.
12. NOTICES
Any notice, request, instruction, or other document to be given hereunder
by any party hereto to the other party hereto will be in writing and
(a) delivered personally,
(b) sent by facsimile,
(c) delivered by overnight express, or
(d) sent by registered or certified mail, postage prepaid, as follows:
If to the Company, to:
TIAA-CREF Life Insurance Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Advanced Markets Underwriting
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Life Re, to:
Life Reassurance Corporation of America
A Member of the Swiss Re Group
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President, Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address for a party as will be specified by like notice. Each
notice or other communication required or permitted under this Agreement that is
addressed as provided in this Article XII will, if delivered personally or by
overnight express, be deemed given upon delivery; will, if delivered by
facsimile or similar facsimile
22
transmission, be deemed delivered when electronically confirmed; and will, if
delivered by mail in the manner described above, be deemed given on the third
business day after the day it is deposited in a regular depository of the United
States Mail.
Please send all cash remittances to:
Life Reassurance Corporation of America
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
23
ARTICLE XIII
DURATION OF AGREEMENT
This Agreement will be effective on and after the effective date stated in
Article I. It is unlimited in duration but may be amended by mutual consent of
the Company and Life Re. This Agreement may be terminated as to new reinsurance
by either party giving 90 days written notice to the other. Termination as to
new reinsurance does not affect existing reinsurance. Existing reinsurance will
remain in force until termination of the Company's policy or policies on which
the reinsurance is based in accordance with the terms of this Agreement.
Notwithstanding the foregoing, Life Re may terminate this Agreement as to new
and existing reinsurance in the event the Company does not pay premiums to Life
Re, as provided in Article V.
24
ARTICLE XIV
EXECUTION
IN WITNESS WHEREOF, Life Re and the Company have executed this Agreement
on the dates set forth below.
TIAA-CREF LIFE INSURANCE COMPANY
Date: 9/30/00 By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------ ----------------------------
Place: New York, New York Title: V.P. Finance & Chief Actuary
------------------ ----------------------------
Witness: /s/ [Illegible]
------------------
LIFE REASSURANCE CORPORATION OF AMERICA
Date: 10/23/00 By: /s/ [Illegible]
------------------ ----------------------------
Tale: Stamford, CT Title: Vice President
------------------ ----------------------------
Witness: /s/ [Illegible]
------------------
25
SCHEDULE A
RETENTION LIMITS
REINSURANCE SPECIFICATIONS
AND
PLANS COVERED
I. Advanced Life Retention Limits
On each insured, the Company shall retain 25% of the face amount up to the
limits set forth below. Face amount includes the death benefit provided by base
policies; any term life insurance riders; and all future increases provided by
automatic face amount increase riders. For last survivor policies, the Company
shall retain based on the highest retention allowed on either insured under the
policy.
Preferred - Table D Table E - "Uninsurable"
Single Life
Issue Ages 0 - 75 $1,500,000 $ 750,000
Issue Ages 76 - 80 $ 150,000 $ 150,000
Last Survivor
Issue Ages 30 - 75 $2,500,000 $1,250,000
Issue Ages 75 - 80 $ 250,000 $ 250,000
II. Automatic Binding Limits
Preferred - Table D Table E Table F - "Uninsurable"
Single Life
Issue Ages 0 - 75 $15,000,000 $7,500,000 $0
Issue Ages 75 - 80 $ 1,500,000 $1,500,000 $0
Last Survivor
Issue Ages 30 - 75 $15,000,000 $7,500,000 $0
Issue Ages 75 - 80 $ 1,500,000 $1,500,000 $0
III. The Company's Share
The Company's Share of a policy's net amount at risk shall be set at issue as
the face amount retained by the Company on the policy divided by the total face
amount of the policy.
SCHEDULE A
(CONTINUED)
IV. Life Re's Share
For automatically reinsured policies, Life Re's Share of the net amount at risk
shall be set at issue as: 50% x (1 - the Company's Share), never to exceed 50%
of the Automatic Binding Limits set forth in Section 11, above. For
facultatively reinsured policies, Life Re's Share of the net amount at risk
shall be determined on a case by case basis.
V. Plans Covered
The preceding schedules refer to insured lives whose surnames begin with the
letters A through Z under the following plans:
Fixed Account Flexible Premium Adjustable Life Insurance
Fixed Account Last Survivor Flexible Premium Adjustable Life Insurance
SCHEDULE B
REPORTING FORM
(LIFE REASSURANCE CORPORATION OF AMERICA LOGO)
LIFE REASSURANCE CORPORATION OF AMERICA
SELF ADMINISTERED/BULK REINSURANCE SUMMARY REPORTING FORM
Ceding Company _______________________ Reinsurer ______________________________
Treaty/Account # _____________________ Period Experience is for ____________
Coin __ YRT __ Mod Co __ Other _______ Interest Sensitive: Yes __ No __
Reinsurance Premium Mode: Monthly __ Quarterly __ Annual __ In Advance __
In Arrears __
Reinsurance Reporting Mode: Monthly __ Quarterly __ Annual __
Contact _______________________ Date ________________ Phone # ________________
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SECTION I - ACCOUNTING
------------------------------------------------------------------------------------------------------------------------------------
* * * PREMIUMS * * * * * * ALLOWANCES * * *
________________________________ ________________________________ OTHER
FIRST YEAR RENEWAL YEAR FIRST YEAR RENEWAL YEAR BENEFIT TOTAL
------------------------------------------------------------------------------------------------------------------------------------
Life
------------------------------------------------------------------------------------------------------------------------------------
ADB
------------------------------------------------------------------------------------------------------------------------------------
Waiver of Premium
------------------------------------------------------------------------------------------------------------------------------------
Other
------------------------------------------------------------------------------------------------------------------------------------
TOTAL
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
SECTION II - RESERVE INFORMATION Amount of Check
------------------------------------------------------------------------------------------------------------------------------------
AMOUNT OF REIN (000) ISSUE RESERVES REINSURED
---------------------------- -----------------------------------------------------------------------------------------------
LIFE ADB YEAR LIFE ADB WAIVER SUBST'D DEFICIENCY
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
SECTION III - POLICY EXHIBIT INFORMATION
------------------------------------------------------------------------------------------------------------------------------------
CURRENT PERIOD YEAR TO DATE
_____________________________________ _____________________________________
NO. OF AMT. OF * NO. OF AMT. OF *
POLICIES REIN (000) POLICIES REIN (000)
_____________________________________ _____________________________________
A. Inforce Beg. of Period _____________________________________ A. _____________________________________
1. New Business Auto _____________________________________ 1. Auto _____________________________________
Fac _____________________________________ Fac _____________________________________
2. Conversions/Replacements - On _____________________________________ 2. _____________________________________
3. Reinstatements _____________________________________ 3. _____________________________________
4. Other Increases _____________________________________ 4. _____________________________________
5. Not Takens _____________________________________ 5. _____________________________________
a) Total Inc (1+2+3+4-5) a.
===================================== =====================================
6. Death _____________________________________ 6. _____________________________________
7. Conversions/Replacements - Off _____________________________________ 7. _____________________________________
8. Lapses _____________________________________ 8. _____________________________________
9. Surrenders _____________________________________ 9. _____________________________________
10. Expiry _____________________________________ 10. _____________________________________
11. Recapture _____________________________________ 11. _____________________________________
12. Other Decreases _____________________________________ 12. _____________________________________
b) Total Dec (6+7+8+9+10+11+12) _____________________________________ b. _____________________________________
B. Inforce End of Period (A + a - b) _____________________________________ B. _____________________________________
------------------------------------------------------------------------------------------------------------------------------------
*Specific Reinsurer's Share of Liability Form #TA1(4/91)
SCHEDULE C-1
REINSURANCE PREMIUM RATES
SINGLE LIFE PRODUCTS
(SEE DISKETTE ATTACHED ENTITLED "FINAL_SWISS_RATES.XLS")
SCHEDULE C-2
SURVIVORSHIP RATES
(SEE RATES ATTACHED TO SCHEDULE C-1)
The following describes how to convert premiums per $1,000 for each insured
into last survivor rates.
q[x]+t-1 = the premium rate for insured x in policy year t
q[y]+t-1 = the premium rate for insured y in policy year t
p[x]+t-1 = 1 - q[x]+t-1
p[y]+t-1 = 1 - q[v]+t-1
t-1p[x] = p[x] p[x]+1 p[x]+2...p[x]+t-2 for t> 1
t-1p[y] = p[y] p[y]+1 p[y]+2...p[y]+t-2 for t> 1
q[x]+t-1:[y]+t-1 = t-1 p[x] t-1p[y]q[x]+t-1q(y)+t-1 + t-1p(x)(1-t-1p(y)) q[x]+t-1 + 1-1p[y] (1-t-1p[x]) q(y) + t-1
-------------------------------------------------------------------------------------------------------------
t-1p[x] t-1p[y] + t-1p[x](1-t-1p(y)) + t-1p[y](1-t-1p(x))
.12 per thousand minimum rate in all years.
SCHEDULE D
PERCENTAGES AND ALLOWANCES
Tire following allowances* are granted on Flat Extras;
Life Insurance - Flat Extra Premiums First Year Renewal Years
Aviation Hazards 10% 10%
Temporary Extras (< = 5 years) 10% 10%
Permanent Extras (> 5 years) 75% 10%
*On cessions in excess of $ 15,000,000, Life Re reserves the right to
adjust the percentages, allowances, rates and expenses.
SCHEDULE E
SAMPLE SCHEDULE TO BE FILED WITH FEDERAL TAX RETURN
TIAA-CREF Life Insurance Company ("the Company") and Life Reassurance
Corporation of America ("Life Re") have jointly made an election pursuant to
Regulation Section 1.848-2(g)(8) promulgated under Section 848 of the Internal
Revenue Code of 1986, as amended, for the following Reinsurance Agreements:
1) Reinsurance Agreement #__________, dated ______________________
2) Reinsurance Agreement #__________, dated ______________________
Amendment No. 1 to the Reinsurance Agreement #6847-1 (Automatic YRT Bulk
Universal Life) effective January 1, 2000 between TIAA-CREF LIFE INSURANCE
COMPANY of New York, New York ("the Company") and SWISS RE LIFE & HEALTH AMERICA
INC. of Stamford, Connecticut ("the Reinsurer").
Amendment No. 1
Effective January 1, 2002, Schedule A, Retention Limits, Reinsurance
Specifications and Plans Covered, is expanded as attached to provide reinsurance
terms for the Variable Flexible Premium Adjustable Life Insurance plan of
insurance, the Variable Last Survivor Flexible Premium Adjustable Life Insurance
plan of insurance, and the Single Life Level Term Insurance Rider.
All other provisions of the Reinsurance Agreement will continue unchanged.
TIAA-CREF LIFE INSURANCE COMPANY
By: /s/ [Illegible] Attest: /s/ [Illegible]
-------------------------------------------- ------------------------------------------
Title: President/CEO TIAA-CREF URS Title: Vice President-Insurance Finance & Planning
---------------------------------------- -------------------------------------------
Date: 1/7/02 Date: 1/7/02
----------------------------------------- --------------------------------------------
SWISS RE LIFE & HEALTH AMERICA INC.
By: /s/ [Illegible] Attest: /s/ [Illegible]
------------------------------------------- ------------------------------------------
Title: Vice President Title: Second VP
---------------------------------------- -------------------------------------------
Date: 10/2/01 Date: 10/2/01
----------------------------------------- --------------------------------------------
SCHEDULE A
RETENTION LIMITS
REINSURANCE SPECIFICATIONS
AND
PLANS COVERED
I. Advanced Life Retention Limits
On each insured, the Company shall retain 25% of the face amount up to the
limits set forth below. Face amount includes the death benefit provided by base
policies; any term life insurance riders; and all future increases provided by
automatic face amount increase riders. For last survivor policies, the Company
shall retain based on the highest retention allowed on either insured under the
policy.
Preferred-Table D Table E-Uninsurable
SINGLE LIFE
Issue Ages 0 - 75 $1,500,000 $ 750,000
Issue Ages 76 - 80 $ 150,000 $ 150,000
LAST SURVIVOR
Issue Ages 30 - 75 $2,500,000 $1,250,000
Issue Ages 78 - 80 $ 250,000 $ 250,000
II. Automatic Binding Limits
Preferred-Table D Table E Table F--Uninsurable
SINGLE LIFE
Issue Ages 0 - 75 $15,000,000 $7,500,004 $0
Issue Ages 76 - 80 $ 1,500,000 $1,500,000 $0
LAST SURVIVOR
Issue Ages 30 - 75 $15,000,000 $7,500,000 $0
Issue Ages 70 - 80 $ 1,500,000 $1,500,000 $0
III. The Company's Share
The Company's Share of a policy's net amount at risk shall be set at issue
as the face amount retained by the Company on the policy divided by the
total face amount of the policy.
SCHEDULE A
(CONTINUED)
IV. The Reinsurer's Share
For Fixed Account Plans of Insurance:
For automatically reinsured policies, the Reinsurer's share of the
reinsured net amount at risk shall be set at issue as: 50% x (1 - the
Company's Share), never to exceed 50% of the Automatic Binding Limits set
forth in Section II, above. For facultatively reinsured policies, the
Reinsurer's share of the net amount at risk shall be determined on a case
by case basis.
For Variable Plans of Insurance:
For automatically reinsured policies, the Reinsurer's share of the
reinsured net amount at risk shall be set at issue as: 66 2/3% x (1 - the
Company's Share), never to exceed 66 2/3% of the Automatic Binding Limits
set forth in Section II, above. For facultatively reinsured policies, the
Reinsurer's share of the net amount at risk shall be determined on a case
by case basis.
V. Plans and Riders Covered
THE PRECEDING SCHEDULES REFER TO INSURED LIVES WHOSE SURNAMES BEGIN WITH
THE LETTERS A THROUGH Z UNDER THE FOLLOWING PLANS:
Fixed Account Flexible Premium Adjustable Life Insurance
Fixed Account Last Survivor Flexible Premium Adjustable Life Insurance
Variable Flexible Premium Adjustable Life Insurance
Variable Last Survivor Flexible Premium Adjustable Life Insurance
Single Life Level Term Insurance Rider