Exhibit 99.7 (viii)
AUTOMATIC REINSURANCE AGREEMENT
between
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
(a corporation organized under the laws of the state of Delaware,
having its principal place of business in Boston, Massachusetts;
hereinafter referred to as the CEDING COMPANY)
and
AXA CORPORATE SOLUTIONS LIFE REINSURANCE COMPANY
(a corporation organized under the laws of the state of Delaware,
having its principal place of business in New York, New York;
hereinafter referred to as the REINSURER)
EFFECTIVE DATE OF THIS AGREEMENT: JULY 1, 2001
(hereinafter referred to as the EFFECTIVE DATE)
AGREEMENT NO. 2001-47
TABLE OF CONTENTS
PREAMBLE ............................................................................................... 1
Article I. Scope of Agreement............................................................................. 1
Article II. Commencement and Termination of Liability...................................................... 2
Article III. Oversights and Clerical Errors................................................................. 3
Article IV. Net Amount at Risk............................................................................. 4
Article V. Reinsurance Premiums........................................................................... 6
Article VI. Reinsurance Administration..................................................................... 8
Article VII. Settlement of Claims.......................................................................... 10
Article VIII. Treaty Reserve................................................................................ 12
Article IX. Recapture Privileges.......................................................................... 13
Article X. Inspection of Records......................................................................... 14
Article XI. Insolvency.................................................................................... 15
Article XII. Negotiation................................................................................... 16
Article XIII. Arbitration................................................................................... 17
Article XIV. Right to Offset Balances Due.................................................................. 19
Article XV. Contract and Program Changes.................................................................. 20
Article XVI. Confidentiality............................................................................... 22
Article XVII. Other Provisions.............................................................................. 23
A. Notifications........................................................................ 23
B. Assignment........................................................................... 23
C. Severability......................................................................... 23
D. Currency............................................................................. 23
Article XVIII. Entire Agreement.............................................................................. 24
Article XIX. DAC Tax....................................................................................... 25
Article XX. Duration of Agreement......................................................................... 26
Article XXI. Execution of Agreement........................................................................ 27
SCHEDULES AND EXHIBITS
Schedule A Plans of Reinsurance
Schedule B Investment Funds
Schedule C Required Data and Suggested Data Layout
Exhibit I 1994 Variable Annuity MGDB Mortality Table
Exhibit II Reinsurance Premiums
Exhibit III Benefit Limitation Rule
Exhibit IV Confidentiality and Non-Disclosure Agreement
Exhibit V Wiring Instructions
i
PREAMBLE
This Agreement is an indemnity reinsurance agreement solely between the CEDING
COMPANY and the REINSURER. The acceptance of reinsurance hereunder shall not
create any right or legal relation whatever between the REINSURER and the
annuitant, owner, beneficiary or any other party under any contracts of the
CEDING COMPANY which may be reinsured hereunder. The CEDING COMPANY shall be and
remain solely liable to such parties under such contracts reinsured hereunder.
All provisions of this Agreement are subject to the laws of the State of
Delaware.
ARTICLE I.
SCOPE OF AGREEMENT
A. On and after the EFFECTIVE DATE of this Agreement, the CEDING COMPANY shall
automatically reinsure with the REINSURER and the REINSURER shall
automatically accept, its share of the MNAR (defined in Article IV),
generated prior to termination of the REINSURER's liability (defined in
Article II), by the Guaranteed Minimum Death Benefit (GMDB) provisions and
the Earnings Enhancement Benefit (EEB) provisions within the variable
annuity contracts issued by the CEDING COMPANY and reinsured hereunder
(defined in Schedule A).
B. The REINSURER's maximum aggregate VNAR (defined in Article IV) liability
incurred in any one calendar year shall not exceed two hundred (200) basis
points of the REINSURER's Quota Share Percentage (defined in Schedule A) of
the average aggregate account value over each respective calendar year of
coverage. This average shall be calculated by way of a trapezoidal rule as
shown in Exhibit III.
C. The REINSURER's annual aggregate FSCNAR, VSCNAR and EEMNAR (all defined in
Article IV) liability has no independently calculated annual aggregate
liability limit.
D. For contracts where cumulative deposits are less than four million dollars
($4,000,000) the REINSURER's maximum MNAR liability on any individual life
reinsured hereunder shall be limited to one million dollars ($1,000,000)
multiplied by the REINSURER's Quota Share Percentage. For contracts where
cumulative deposits are greater than or equal to four million dollars
($4,000,000) the REINSURER's maximum MNAR liability on any individual life
reinsured hereunder shall be limited to three million dollars ($3,000,000)
multiplied by the REINSURER's Quota Share Percentage.
E. This Agreement covers only the CEDING COMPANY's contractual liability for
claims paid under variable annuity contract forms specified in Schedule A
and supported by investment funds specified in Schedule B and its
Amendments, that were submitted to the REINSURER in accordance with the
terms of this Agreement set forth in Article XV, Contract and Program
Changes.
Page 1
ARTICLE II.
COMMENCEMENT AND TERMINATION OF LIABILITY
A. On reinsurance ceded under the terms of this Agreement, the liability of
the REINSURER shall commence simultaneously with that of the CEDING
COMPANY.
B. The liability of the REINSURER for all reinsured contracts under this
Agreement may terminate in accordance with
1. the Duration of Agreement provisions of this Agreement set forth in
Article XX, or
2. the termination provisions set forth within Article VI,
Administration, or
3. the Recapture Privileges set forth in Article IX.
C. For an individual contract, the liability of the REINSURER under this
Agreement will terminate either in accordance with Paragraph B, above, or
upon the earliest of the following occurrences defined in the contract(s)
reinsured hereunder:
1. the date the owner elects to annuitize;
2. surrender or termination of the contract
3. full withdrawal, including 1035 exchanges and qualified transfers when
the CEDING COMPANY terminates the contract and releases the proceeds
to the contract owner, beneficiary, annuitant or new carrier;
4. the death of the owner or annuitant where such death triggers the
payment of a contractual death benefit, except when spousal
continuance has been elected during the new business term of this
Agreement as defined in Article XX, Paragraph A. On spousal
continuance election the REINSURER's liability will be terminated upon
death of the spouse;
5. attainment of the maximum annuitization age or attained age 95, if
earlier;
6. the first day of the month following a withdrawal that causes the
Account Value of the contract to fall below one thousand five hundred
dollars ($1,500). Once reinsurance coverage ends for a specific
contract, it cannot be reinstated under this Agreement. This Paragraph
C.6. applies only to contracts for which the GMDB is reduced
dollar-for-dollar for withdrawals.
D. The REINSURER shall be liable to reimburse claims in accordance with
Article VII, only on those deaths where the actual date of death is on or
after the EFFECTIVE DATE.
Page 2
ARTICLE III.
OVERSIGHTS AND CLERICAL ERRORS
A. Should either the CEDING COMPANY or the REINSURER fail to comply with any
of the terms of this Agreement, and if this is shown to be unintentional
and the result of a misunderstanding, oversight or clerical error on the
part of either the CEDING COMPANY or the REINSURER, then this Agreement
shall not be deemed abrogated thereby, but both companies shall be restored
to the positions they would have occupied had no such oversight,
misunderstanding or clerical error occurred. Such conditions are to be
reported and corrected promptly after discovery.
B. If the CEDING COMPANY or the REINSURER discovers that the CEDING COMPANY
did not cede reinsurance on a contract it should have reinsured under this
Agreement, the CEDING COMPANY will take prompt, reasonable and necessary
steps to ensure that similar oversights do not recur. Then this Agreement
shall not be deemed abrogated thereby, but both companies shall be restored
to the positions they would have occupied had the CEDING COMPANY ceded such
reinsurance at the original date. If the REINSURER receives no evidence
that the CEDING COMPANY has taken action to remedy such a situation, the
REINSURER reserves the right to limit its liability to reported contracts
only.
C. Any negligent or deliberate acts or omissions by the CEDING COMPANY
regarding the insurance or reinsurance provided are the responsibility of
the CEDING COMPANY and its liability insurer, if any, but not that of the
REINSURER. The previous sentence does not negate the REINSURER's liability
under Article VII, Settlement of Claims, of this Agreement.
Page 3
ARTICLE IV.
NET AMOUNT AT RISK
A. The MNAR (Mortality Net Amount at Risk) for each variable annuity contract
reinsured hereunder shall be equal to the following:
MNAR = (VNAR + VSCNAR + FSCNAR + EEMNAR)
where:
- VNAR (Variable Net Amount at Risk) = Maximum (a, b) * REINSURER's
Quota Share Percentage where:
a = (GMDB Contractual Death Benefit - Account Value)
b = 0
- VSCNAR (Variable Account Surrender Charge Net Amount at Risk) =
- One-half (1/2) * (Surrender Charges allocated to Variable
Account) * REINSURER's Quota Share Percentage for issue ages
0-79
- 0 for issue ages 80-85
- FSCNAR (Fixed Account Surrender Charge Net Amount at Risk) =
- One-half (1/2) * (Surrender Charges allocated to Fixed
Account) * REINSURER's Quota Share Percentage for issue ages
0-79
- 0 for issue ages 80-85
The surrender charge will be allocated to the Variable Account and the
Fixed Account in proportion to the Variable Account value and the Fixed
Account value at the end of the month.
- EEMNAR (Earnings Enhancement Mortality Net Amount at Risk) = X% * Max
(a, b) * REINSURER's Quota Share Percentage where:
X % varies by issue age as described under the EEB Contractual
Death Benefit Reinsured section of Schedule A
a = (Account Value - Total Purchase Payments Not
Withdrawn), but no greater than total purchase
payments not withdrawn
b = 0
B. Spousal Continuances (as described in Schedule A)
The REINSURER will reimburse the CEDING COMPANY for its quota share of the
FSCNAR + VSCNAR realized upon death consistent with the manner in which the
CEDING COMPANY waives the surrender charges when death benefit is paid out.
Page 4
ARTICLE IV, NET AMOUNT AT RISK
(Continued)
Also covered under this Agreement are surrender charges arising from
additional premium deposits contributed by the spouse to the contract on or
after the spousal continuance date.
In no event will the REINSURER reimburse surrender charges arising from the
same premium deposits more than once.
C. The death benefit and the surrender charges will be as described in the
variable annuity contract forms specified in Schedule A.
Page 5
ARTICLE V.
REINSURANCE PREMIUMS
A. The total Reinsurance Premium due in any reporting period is the sum of the
GMDB reinsurance premium and the EEB reinsurance premium as defined
separately below. The reporting period is monthly.
B. The total Reinsurance Premium due and payable in the first month shall at
least equal three thousand dollars ($3,000) for this Agreement, the
complementary GMIB Agreement ▇▇. ▇▇▇▇-▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇-▇▇, ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇-▇▇ and Agreement No. 2001-41NY, combined. Thereafter, the minimum
reinsurance premium that is due and payable shall increase by nine hundred
dollars ($900) for each month after the first month until it reaches seven
thousand five hundred dollars ($7,500), for the combined agreements, six
months after the EFFECTIVE DATE. The total reinsurance premium that is due
and payable for the combined agreements in any month thereafter shall at
least equal seven thousand five hundred dollars ($7,500).
C. The reinsurance rates and the premium structure described herein are
subject to change based on the criteria described in Article XV, Contract
and Program Changes.
GMDB Reinsurance Premium
D. The total GMDB premium is equal to the sum of the fixed account reinsurance
premium and the variable account reinsurance premium calculated as
described hereunder.
E. The fixed account reinsurance premium is a monthly YRT rate which is
applied to the average FSCNAR over the reporting period on a life-by-life
attained age basis, and is equal to one-twelfth (1/12th) of one hundred
percent (100%) of the 1994 Variable Annuity MGDB Mortality Table (Exhibit
I) which is the 1994 GAM Basic Table increased by ten percent (10%) for
margins and contingencies, without projection.
F. The variable account reinsurance premium is a monthly YRT rate which is
applied to the average VNAR plus VSCNAR over the reporting period on a
life-by-life attained age basis, and is equal to one-twelfth (1/12th) of
one hundred percent (100%) of the 1994 Variable Annuity MGDB Mortality
Table (Exhibit I) which is the 1994 GAM Basic Table increased by ten
percent (10%) for margins and contingencies, without projection, subject to
minimum and maximum asset-based reinsurance premium rate limits that vary
by a defined premium class based on variable annuity product, underlying
GMDB design, issue age and cumulative deposits.
G. The minimum and maximum reinsurance premium rates, expressed in terms of
basis points, are set forth in Exhibit II, and are calculated on an
aggregate basis by premium class, as described in the following paragraphs.
With respect to the minimum asset-based premium rates, the CEDING COMPANY
shall calculate, for each premium class, the REINSURER's Quota Share
Percentage of the greater of the average aggregate GMDB value minus the
average aggregate fixed account value, and the average aggregate variable
account value for the reporting month. This value shall be applied to the
annualized minimum reinsurance premium rates per premium class on a 1/12th
basis.
Page 6
ARTICLE V, REINSURANCE PREMIUMS
(Continued)
With respect to the maximum asset-based premium rates, the CEDING COMPANY
shall calculate, for each premium class, the REINSURER's Quota Share
Percentage of the greater of the average aggregate GMDB value and the
average aggregate total account value for the reporting month. This value
shall be applied to the annualized maximum reinsurance premium rates per
premium class on a 1/12th basis.
The variable account GMDB reinsurance premium due to the REINSURER for the
month, for each premium class, shall be the greater of the YRT rate, as
described in Paragraph F., above, and the minimum asset-based premium, but
no greater than the maximum asset-based premium calculated as described
above. The total variable account GMDB reinsurance premium due for the
month is the sum of the premiums calculated for each premium class.
H. Once cumulative deposits reach four million dollars ($4,000,000) on a
contract, that contract enters the larger size reinsurance premium
structure, as set forth in Exhibit II and remains there for the duration of
coverage defined in Article II.
I. When the MNAR (excluding EEMNAR) for an individual life exceeds the
applicable individual life liability limit described in Article I, all YRT
premiums, as described in Paragraph E and Paragraph F of this Article,
shall be reduced by the ratio of the applicable individual life liability
limit to the total MNAR (excluding EEMNAR) for that life.
J. The YRT rate and the minimum and maximum premium rates shall be based on
the oldest person of a multiple life status.
EEB Reinsurance Premium
K. The EEB reinsurance premium is an asset-based reinsurance premium that
varies by a defined premium class based on variable annuity product,
underlying GMDB design and issue age. The premium rates, expressed in terms
of basis points, are set forth in Exhibit II, and are calculated on an
aggregate basis by premium class, as described in the following paragraphs.
L. The CEDING COMPANY shall calculate, for each premium class, the REINSURER's
Quota Share Percentage of the average aggregate total account value for the
reporting month. This value shall be applied to the annualized reinsurance
premium rates per premium class on a 1/12th basis. The total EEB premium
due for the month is the sum of the premiums calculated for each premium
class.
M. The asset-based premium rates shall be based on the oldest person of a
multiple life status.
Spousal Continuances
N. For Spousal Continuances, the new reinsurance premium rate applied shall be
based off the attained age of the surviving spouse at the time of election
of spousal continuance.
Page 7
ARTICLE VI.
REINSURANCE ADMINISTRATION
A. The CEDING COMPANY acknowledges the importance of supplying timely and
accurate data, as defined herein, to enable the REINSURER to manage
effectively the risk associated with the products reinsured hereunder.
Therefore, within thirty (30) days of the end of each calendar month, the
CEDING COMPANY will take all necessary steps to furnish the REINSURER with
a seriatim electronic report as detailed in Schedule C, for each contract
specified in Schedule A, valued as of the last day of that month.
B. Additionally, within thirty (30) days of the end of each calendar month,
the CEDING COMPANY will furnish the REINSURER with a separate Summary
Statement containing the following:
1. reinsurance premiums due to the REINSURER summarized separately for
each premium class as shown in Exhibit II;
2. benefit claim reimbursements due to the CEDING COMPANY in total and,
if applicable, broken down by VNAR, VSCNAR, FSCNAR and EEMNAR;
3. month end date for the period covered by the Summary Statement.
C. Payments between the CEDING COMPANY and the REINSURER shall be paid net of
any amount due and unpaid under this Agreement. If the net balance is due
to the REINSURER, the amount due shall be remitted with the Summary
Statement, but no later than thirty (30) days from the month end date for
the period covered by the Summary Statement. If the net balance is due to
the CEDING COMPANY, the REINSURER shall remit the amount to the CEDING
COMPANY within ten (10) days of receipt of the Summary Statement. Wiring
instructions are attached in Exhibit V.
D. Furthermore, the REINSURER will use the summary data in Schedule C to
calculate and monitor its maximum annual aggregate VNAR liability
throughout the calendar year. Upon the receipt of the final report for the
calendar year, the REINSURER will "true-up" benefit claim reimbursements,
if necessary, for that calendar year.
E. The payment of reinsurance premiums is a condition precedent to the
liability of the REINSURER under this Agreement. In the event the CEDING
COMPANY does not pay reinsurance premiums in a timely manner as defined
below, the REINSURER may exercise the following rights:
1. The REINSURER reserves the right to charge interest if premiums are
not paid within sixty (60) days of the due date, as defined in
Paragraph C of this Article. The interest rate charged shall be based
on the ninety-(90) day Federal Government Treasury ▇▇▇▇ as first
published by the Wall Street Journal in the month following the due
date of the reinsurance premiums plus fifty (50) basis points. The
method of calculation shall be simple interest (360-day year).
Interest will accrue from sixty (60) days following the due date shown
on the Summary Statement.
2. The REINSURER will have the right to terminate this Agreement when
premium payments are more than ninety (90) days past due the due date
described in Paragraph C of this Article, by giving ninety (90) days
written notice of termination to the CEDING COMPANY. As of the close
of the last day of this ninety-(90) day notice period, the REINSURER's
liability for all risks reinsured associated with the
Page 8
ARTICLE VI, REINSURANCE ADMINISTRATION
(Continued)
defaulted premiums under this Agreement will terminate. If all
premiums in default are received within the ninety-(90) day time
period, the Agreement will remain in effect.
F. If claims are not paid within sixty (60) days of the REINSURER's receipt of
satisfactory proof of claim liability, the CEDING COMPANY reserves the
right to charge interest, based on the ninety (90) day Federal Government
Treasury ▇▇▇▇ as first published by the Wall Street Journal in the month
following the due date shown on the Summary Statement plus fifty (50) basis
points. The method of calculation shall be simple interest (360-day year).
Interest will accrue from sixty (60) days following the due date shown on
the Summary Statement.
Page 9
ARTICLE VII.
SETTLEMENT OF CLAIMS
A. The claims that are eligible for reimbursement are only those that the
CEDING COMPANY is contractually required to pay on deaths that occur on or
after the EFFECTIVE DATE, subject to the liability limitations described in
Article I.
B. In the event the CEDING COMPANY provides satisfactory proof of claim
liability to the REINSURER, claim settlements made by the CEDING COMPANY
shall be unconditionally binding on the REINSURER. In every case of claim,
copies of the proofs obtained by the CEDING COMPANY will be taken by the
REINSURER as sufficient.
C. Within thirty (30) days of the end of each calendar month, the CEDING
COMPANY shall notify the REINSURER of the reinsured contractual death
benefits paid in that month, based on the net amount at risk definition set
forth in Article IV, and the REINSURER shall reimburse the CEDING COMPANY,
as provided in Article VI, for the reinsured benefits.
D. Settlements by the REINSURER shall be in a lump sum regardless of the mode
of payment made by the CEDING COMPANY.
E. With respect to Extra-Contractual Damages, in no event will the REINSURER
participate in punitive or compensatory damages or statutory penalties
which are awarded against the CEDING COMPANY as a result of an act,
omission or course of conduct committed solely by the CEDING COMPANY in
connection with the insurance reinsured under this Agreement.
The parties recognize that circumstances may arise in which equity would
require the REINSURER, to the extent permitted by law, to share
proportionately in certain assessed situations in which the REINSURER was
an active party and directed, consented to, or ratified the act, omission
or course of conduct of the CEDING COMPANY which ultimately resulted in the
assessment of the extra-contractual damages. In such situations, the
REINSURER and the CEDING COMPANY shall share such damages so assessed in
equitable proportions.
For the purposes of this provision, the following definitions will apply:
"Punitive Damages" are those damages awarded as a penalty, the amount
of which is neither governed nor fixed by statute
"Statutory Penalties" are those amounts awarded as a penalty, but
fixed in amount by statute
"Compensatory Damages" are those amounts awarded to compensate for the
actual damages sustained and are not awarded as a penalty, nor fixed
in amount by statute
If the REINSURER declines to be party to the contest, compromise or
litigation of a claim, it will pay its full share of the amount reinsured,
as if there had been no contest, compromise or litigation. In addition, the
REINSURER will pay its proportionate share of covered expenses incurred to
the date it notifies the CEDING COMPANY that it declines to be a party to
the contest, compromise or litigation of a claim.
Page 10
ARTICLE VII, SETTLEMENT OF CLAIMS
(Continued)
F. In no event will the REINSURER be liable for expenses incurred in
connection with a dispute or contest arising out of conflicting or any
other claims of entitlement to policy proceeds or benefits, provided the
REINSURER makes payment of the amount of reinsurance to the CEDING COMPANY,
as described in the above paragraph.
Page 11
ARTICLE VIII.
TREATY RESERVE
A. The reserves held by the REINSURER in its statutory financial statement
will be greater than or equal to those required by the state where the
statement is filed.
B. It is the intention of both the REINSURER and the CEDING COMPANY that the
CEDING COMPANY qualify for reinsurance credit in all States for reinsurance
ceded hereunder. The REINSURER, at its sole cost and expense, shall do all
that is necessary to comply with the insurance laws and regulations of all
States in order to enable the CEDING COMPANY to take credit for the
reinsurance ceded hereunder, including delivery of any reports required
thereunder.
Page 12
ARTICLE IX.
RECAPTURE PRIVILEGES
A. The CEDING COMPANY may recapture existing reinsurance in force in
accordance with the following rules:
B. The CEDING COMPANY will notify the REINSURER of its intent to recapture at
least ninety (90) days prior to any recaptures.
C. No recapture will be made unless reinsurance has been in force for fifteen
(15) years, as measured from the EFFECTIVE DATE, or on some other date if
mutually agreed to by both parties.
D. The recapture shall apply to all the reinsurance in force under the
Agreement.
E. Recapture will only be available provided the total carryforward, upon
release of treaty reserves, is in a positive position. The total
carryforward is defined as the sum of the carryforwards of this Agreement
and the complementary living benefits agreement, No. 2001-48, that
reinsures the same variable annuity contracts specified in Schedule A.
F. The carryforward for each Agreement is defined as the current period's
reinsurance premium, minus all reinsurance claims paid under this Agreement
for the current period, minus a two-and-one-half (2.5) basis point annual
expense allowance applied against the average aggregate Account Value for
the current period, minus the change in treaty reserves from the prior
period to the current period, plus the prior period's carryforward. The
monthly carryforward amount is accumulated at the ninety-(90) day Federal
Government Treasury ▇▇▇▇ rate as published in the Wall Street Journal on
the first business day of the current period plus two percent (2%).
Note: For purposes of calculating the carryforward, treaty reserves are
defined as the minimum statutory reserves required of the REINSURER in the
CEDING COMPANY's state of domicile. The CEDING COMPANY shall promptly
notify the REINSURER of any change in its state of domicile.
G. Upon election, recapture shall occur ratably over a thirty-six (36) month
period (i.e., every month the initial quota share percentage reduces 2.78%
times the initial quota share percentage). It is irrevocable once elected.
H. The CEDING COMPANY and the REINSURER agree to exchange carryforward
calculations each year-end to ensure ongoing agreement on the position of
the carryforward.
Page 13
ARTICLE X.
INSPECTION OF RECORDS
A. The REINSURER, or its duly appointed representatives, shall have the right
at all reasonable times and for any reasonable purpose to inspect at the
office of the CEDING COMPANY all records referring to reinsurance ceded to
the REINSURER.
B. Relating to the business reinsured hereunder, the CEDING COMPANY or its
duly appointed representatives shall have the right at all reasonable times
and for any reasonable purpose, to inspect at the office of the REINSURER
all records referring to reinsurance ceded from the CEDING COMPANY.
Page 14
ARTICLE XI.
INSOLVENCY
A. A party to this Agreement will be deemed insolvent when it:
a. Applies for or consents to the appointment of a receiver,
rehabilitator, conservator, liquidator or statutory successor
("Authorized Representative") of its properties or assets; or
b. Is adjudicated as bankrupt or insolvent; or
c. Files or consents to the filing of a petition in bankruptcy,
seeks reorganization or an arrangement with creditors or takes
advantage of any bankruptcy, dissolution, liquidation, or similar
law or statute; or
d. Becomes the subject of an order to rehabilitate or an order to
liquidate as defined by the insurance code of the jurisdiction of
the party's domicile.
B. In the event of the insolvency of the CEDING COMPANY, all reinsurance will
be payable on the basis of the liability of the CEDING COMPANY on the
policies reinsured directly to the CEDING COMPANY or its Authorized
Representative without diminution because of the insolvency of the CEDING
COMPANY.
C. In the event of insolvency of the CEDING COMPANY, the Authorized
Representative will, within a reasonable time after the claim is filed in
the insolvency proceeding, give written notice to the REINSURER of all
pending claims against the CEDING COMPANY on any policies reinsured. While
a claim is pending, the REINSURER may investigate such claim and interpose,
at its own expense, in the proceedings where the claim is adjudicated, any
defense or defenses which it may deem available to the CEDING COMPANY or
its Authorized Representative. The expenses incurred by the REINSURER 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 REINSURER. Where two or more reinsurers are
participating in the same claim and a majority in interest elect to
interpose a defense or defenses to any such claim, the expenses will be
apportioned in accordance with the terms of the Reinsurance Agreement as
though such expense had been incurred by the CEDING COMPANY.
D. Any debts or credits, matured or unmatured, liquidated or unliquidated, in
favor of or against either the REINSURER or CEDING COMPANY with respect to
this Agreement are deemed mutual debts or credits, as the case may be, and
will be offset, and only the balance will be allowed or paid. However, in
the event of liquidation, the REINSURER may offset against undisputed
amounts which are due and payable to the CEDING COMPANY, only those
undisputed amounts due the REINSURER which are not more than one hundred
and eighty (180) days past due at the date of the court order of
liquidation.
E. In the event of insolvency of the REINSURER, the provisions of Article IX
notwithstanding, the CEDING COMPANY may recapture immediately all ceded
benefits upon written notice to the REINSURER, its liquidator, receiver or
statutory successor. The CEDING COMPANY shall also have a claim on the
REINSURER for any reinsurance credit amounts including reserves, unearned
premiums and other amounts due the CEDING COMPANY on such reinsurance, at
the date of recapture.
Page 15
ARTICLE XII.
NEGOTIATION
A. Within ten (10) days after one of the parties has given the other the first
written notification of a specific dispute, each party will appoint a
designated officer to attempt to resolve the dispute. The officers will
meet at a mutually agreeable location within thirty (30) days of the last
appointment and as often as necessary, in order to gather and furnish the
other with all appropriate and relevant information concerning the dispute.
The officers will discuss the problem and will negotiate in good faith
without the necessity of any formal arbitration proceedings. During the
negotiation process, all reasonable requests made by one officer to the
other for information will be honored. The designated officers will decide
the specific format for such discussions.
B. If the officers cannot resolve the dispute within thirty (30) days of their
first meeting, the parties will agree to submit the dispute to formal
arbitration, as set forth in Article XIII. However, the parties may agree
in writing to extend the negotiation period for an additional thirty (30)
days.
Page 16
ARTICLE XIII.
ARBITRATION
A. It is the intention of the CEDING COMPANY and the REINSURER that the
customs and practices of the insurance and reinsurance industry will be
given full effect in the operation and interpretation of this Agreement.
The parties agree to act in all things with the highest good faith. If
after the negotiation required by Article XII, the REINSURER or the CEDING
COMPANY cannot mutually resolve a dispute that arises out of or relates to
this Agreement, the dispute will be decided through arbitration. The
arbitrators will base their decision on the terms and conditions of this
Agreement and, as necessary, on the customs and practices of the insurance
and reinsurance industry rather than solely on a strict interpretation of
the applicable law. The decision of the arbitrators shall be made within
nine (9) months of the filing of the notice of intention to arbitrate, and
the arbitrators shall agree to comply with this schedule before accepting
appointment. However, this time limit may be extended by agreement of the
parties or by the arbitrators if necessary. Once a decision is reached,
there will be no appeal of their written decision, and any court having
jurisdiction of the subject matter and the parties, may reduce that
decision to judgement. Should the arbitrators be unable to reach a decision
within nine (9) months of the filing of the notice of intention to
arbitrate and should the parties further be unable to agree upon an
extension of the time limit, then either party to this Agreement may
commence litigation proceedings.
B. To initiate arbitration, either the REINSURER or the CEDING COMPANY will
notify the other party in writing of its desire to arbitrate, stating the
nature of its dispute and the remedy sought. The party to which the notice
is sent will respond to the notification in writing within ten (10) days of
its receipt.
C. There will be three arbitrators who will be current or former officers of
life insurance or reinsurance companies other than the contracting
companies or affiliates thereof. Each of the contracting companies will
appoint one of the arbitrators within thirty (30) days from the date
notification is received and these two arbitrators will select the third
arbitrator within thirty (30) days from the date of appointment of the last
arbitrator. If either party refuses or neglects to appoint an arbitrator
within thirty (30) days of the date notification is received, the other
party may appoint the second arbitrator. If the two arbitrators do not
agree on a third arbitrator within thirty (30) days of the appointment of
the last arbitrator, then the appointment of said arbitrator shall be left
to the President of the American Arbitration Association. Once chosen, the
arbitrators are empowered to decide all substantive and procedural issues
by majority vote.
D. It is agreed that each of the three arbitrators should be impartial
regarding the dispute and should resolve the dispute on the basis described
in Section A of this Article.
E. The arbitration hearing will be held on the date fixed by the arbitrators
in New York City. In no event will this date be later than three (3) months
after the appointment of the third arbitrator. As soon as possible, the
arbitrators will establish pre-arbitration procedures as warranted by the
facts and issues of the particular case. At least ten (10) days prior to
the arbitration hearing, each party will provide the other party and the
arbitrators with a detailed statement of the facts and arguments they will
present at the arbitration hearing. The arbitrators may consider any
relevant evidence; they will give the evidence such weight as they deem it
entitled to after consideration of any
Page 17
ARTICLE XIII, ARBITRATION
(Continued)
objections raised concerning it. Each party may examine any witnesses who
testify at the arbitration hearing.
F. The cost of arbitration will be divided between the parties, unless the
arbitrators decide otherwise.
Page 18
ARTICLE XIV.
RIGHT TO OFFSET BALANCES DUE
The CEDING COMPANY and the REINSURER shall have, and may exercise at any time,
the right to offset any balance or balances due one party to the other, its
successors or assignees, against balances due to the other party under this
Agreement or under any other Agreements or Contracts previously or subsequently
entered into between the CEDING COMPANY and the REINSURER. This right of offset
shall not be affected or diminished because of the insolvency of either party to
this Agreement.
Page 19
ARTICLE XV.
CONTRACT AND PROGRAM CHANGES
A. The CEDING COMPANY may amend, substitute, add or delete variable investment
funds to the investment options supporting the annuity contract as
described in the contract general provisions. No such change shall be made
by the CEDING COMPANY without PRIOR notification to the REINSURER and
without changes being declared effective by the Securities and Exchange
Commission (SEC), if necessary. The REINSURER will approve or disapprove of
the fund change within fifteen (15) working days of the date on which they
receive notification.
The CEDING COMPANY agrees to maintain at all times a satisfactory selection
of core investment options with overall risk profile characteristics
similar to those listed in Schedule B at inception of the Agreement. As
long as this is the case, the REINSURER will approve such fund changes
within fifteen (15) working days of receiving such notification.
Should any such change result in a material change in the underlying risk,
the REINSURER shall have the right to modify, for that product line only,
any of the terms of this Agreement in order to restore, to the extent
possible, the risk profile of the business reinsured hereunder to its
original position when priced by the REINSURER. The REINSURER shall within
fifteen (15) working days of the date on which notification was received,
provide the CEDING COMPANY with notice of its intent to revise the terms of
this Agreement. The CEDING COMPANY shall have the right to approve or
disapprove of the changes proposed by the REINSURER. If both parties are
not able to reach a mutually satisfactory agreement on revised terms, then
notwithstanding Article IX, the CEDING COMPANY shall have the right of
immediate termination of this Agreement for new and inforce business
affected by the change. The CEDING COMPANY shall provide the REINSURER with
written notification of its intent to terminate. The date of termination
shall be the date that the revised terms would have become effective.
B. The CEDING COMPANY shall also give the REINSURER ADVANCE notice of any
other changes to any contract forms reinsured hereunder, such as the
annuity product design and/or death benefit design, the fees and charges,
or the addition of any riders. The REINSURER shall, within fifteen (15)
working days of the date on which notification was received, provide the
CEDING COMPANY with notice of its approval of such change or its intent to
revise the terms of this Agreement.
Should any such change affect new business to be reinsured under this
Agreement and result in a material change in the underlying risk, the
REINSURER shall have the right to modify, for that new business only, any
of the terms of this Agreement in order to restore, to the extent possible,
the risk profile of the business reinsured hereunder to its original
position when priced by the REINSURER. The REINSURER shall, within fifteen
(15) working days of the date on which notification was received, provide
the CEDING COMPANY with notice of its intent to revise the terms of this
Agreement. The CEDING COMPANY shall have the right to approve or disapprove
of the changes proposed by the REINSURER. If both parties are not able to
reach a mutually satisfactory agreement on revised terms, then the CEDING
COMPANY shall have the right of immediate termination of this Agreement for
new business only. The CEDING COMPANY shall
Page 20
ARTICLE XV, CONTRACT AND PROGRAM CHANGES
(Continued)
provide the REINSURER with written notification of its intent to terminate.
The date of termination shall be the date that the revised terms would have
become effective.
Should any such change affect inforce contracts reinsured under this
Agreement and result in a material change in the underlying risk, the
REINSURER shall have the right to modify, for that product line only, any
of the terms of this Agreement in order to restore, to the extent possible,
the risk profile of the business reinsured hereunder to its original
position when priced by the REINSURER. The REINSURER shall, within fifteen
(15) working days of the date on which notification was received, provide
the CEDING COMPANY with notice of its intent to revise the terms of this
Agreement. The CEDING COMPANY shall have the right to approve or disapprove
of the changes proposed by the REINSURER. If both parties are not able to
reach a mutually satisfactory agreement on revised terms, then
notwithstanding Article IX, the CEDING COMPANY shall have the right of
immediate termination of this Agreement for inforce business affected by
said change only. The CEDING COMPANY shall provide the REINSURER with
written notification of its intent to terminate. The date of termination
shall be the date that the revised terms would have become effective.
C. The above paragraphs notwithstanding, neither party, acting unreasonably,
will withhold agreement to revised terms for the sole purpose of
terminating this Agreement.
D. The CEDING COMPANY agrees to provide the REINSURER with all contractholder
communications produced by the CEDING COMPANY as though the REINSURER were
a contractholder in the CEDING COMPANY's state of domicile.
Page 21
ARTICLE XVI.
CONFIDENTIALITY
A. This Agreement incorporates the confidentiality agreement previously agreed
to between the parties on December 1, 1998 (the "Confidentiality
Agreement"), a copy of which is attached hereto as Exhibit IV. All matters
with respect to this Agreement require the utmost good faith of both
parties. Both the CEDING COMPANY and the REINSURER shall, in accordance
with the terms of the Confidentiality Agreement, hold confidential and not
disclose or make competitive use of any shared Confidential Information of
the other party (as such term is defined in the Confidentiality Agreement),
unless otherwise agreed to in writing, or unless the information otherwise
becomes publicly available by means other than by either party or their
agents, or unless the disclose is required for retrocession purposes, has
been mandated by law, or is duly required by external auditors.
B. The REINSURER will treat all personal policyholder information received
from the CEDING COMPANY as confidential information and will use good faith
efforts to keep such information private and secure, in accordance with the
CEDING COMPANY's commitment to its policyholders and in accordance with
federal and state privacy laws. The CEDING COMPANY recognizes that the
REINSURER may need to share certain information with auditors, regulators
and retrocessionaires in the normal course of conducting business.
Page 22
ARTICLE XVII.
OTHER PROVISIONS
A. Notifications. Any notice or communication given pursuant to this
Reinsurance Agreement must be in writing and either 1) delivered
personally, 2) sent by facsimile or other similar transmission to a number
specified in writing by the recipient, 3) delivered by overnight express,
or 4) sent by Registered or Certified Mail, Postage Prepaid, Return Receipt
Requested, as follows:
If to CEDING COMPANY: The Manufacturers Life Insurance Company of
North America
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
If to REINSURER: AXA Corporate Solutions Life Reinsurance Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Life Reinsurance Treaty Officer
All notices and other communications required or permitted under this
Reinsurance Agreement that are addressed as provided in this Section will
1) if delivered personally or by overnight express, be deemed given upon
delivery; 2) if delivered by facsimile transmission or other similar
transmission, be deemed given when electronically confirmed, and 3) if sent
by Registered or Certified mail, be deemed given when marked Postage
Prepaid by the sender's terminal. Any party from time-to-time may change
its address, but no such notice of change will be deemed to have been given
until it is actually received by the party sought to be charged with the
contents thereof.
B. Assignment. This Agreement shall be binding to the parties and their
respective successors and permitted assignees. This Agreement may not be
assigned by either party without the written consent of the other. Such
consent shall not be unreasonably withheld. It is understood that the
CEDING COMPANY, as of the writing of this Agreement, is contemplating an
internal consolidation of its business that could result in the assignment
of this Agreement to another entity within the CEDING COMPANY's corporate
family. Said assignment shall be considered approved by the REINSURER.
C. Severability. If any provision of this Agreement is determined to be
invalid or unenforceable, such determination will not affect or impair the
validity or the enforceability of the remaining provisions of this
Agreement. If said provision is deemed material to other provisions
contained within the Agreement, both parties will negotiate in good faith
to restore the Agreement to a similar position prior to said provision
being determined to be invalid or unenforceable.
D. Currency. All financial transactions under this Agreement shall be made in
U. S. dollars.
Page 23
ARTICLE XVIII.
ENTIRE AGREEMENT
This Agreement shall constitute the entire Agreement between the parties with
respect to business reinsured hereunder. There is no understanding between the
parties other than as expressed in this Agreement and any change or modification
to this Agreement shall be null and void unless made by Amendment or Addendum to
the Agreement and signed by both parties.
Page 24
ARTICLE XIX.
DAC TAX
TREASURY REGULATION SECTION 1.848-2(G)98) ELECTION
The CEDING COMPANY and the REINSURER hereby agree to the following pursuant to
Section 1.848-2(g)(8) of the Income Tax Regulations issued December 29, 1992,
under Section 848 of the Internal Revenue Code 1986, as amended. This election
shall be effective for the year this Agreement becomes effective and all
subsequent taxable years for which this Agreement remains in effect.
A. The term "party" will refer to either the CEDING COMPANY or the REINSURER
as appropriate.
B. The terms used in this Article are defined by reference to Treasury
Regulations Section 1.848-2 in effect as of December 29, 1992.
C. The party with the net positive consideration for this Agreement for each
taxable year will capitalize specified policy acquisition expenses with
respect to this Agreement without regard to the general deduction
limitation of IRC Section 848(c)(1).
D. Both parties agree to exchange information pertaining to the amount of net
consideration under this Agreement each year to ensure consistency. The
parties also agree to exchange information, which may be otherwise required
by the IRS.
E. The CEDING COMPANY will submit to the REINSURER by April 1st of each year,
a schedule of its calculation of the net consideration for the preceding
calendar year. This schedule will be accompanied by a statement signed by
an officer of the CEDING COMPANY stating that the CEDING COMPANY will
report such net consideration in its tax return for the preceding calendar
year.
F. The REINSURER may contest such calculation by providing an alternate
calculation to the CEDING COMPANY in writing within thirty (30) days of the
REINSURER's receipt of the CEDING COMPANY's calculation. If the REINSURER
does not notify the CEDING COMPANY, the REINSURER will report the net
consideration as determined by the CEDING COMPANY in the REINSURER's tax
return for the previous calendar year.
G. If the REINSURER contests the CEDING COMPANY's calculation of the net
consideration, the parties will act in good faith to reach an agreement as
to the correct amount within thirty (30) days of the date the REINSURER
submits its alternate calculation. If the REINSURER and CEDING COMPANY
reach agreement on an amount of net consideration, each party shall report
such amount in their respective tax returns for the previous calendar year.
Page 25
ARTICLE XX.
DURATION OF AGREEMENT
A. This Agreement shall be open for new business for a minimum of two (2)
years as measured from the EFFECTIVE DATE, subject to a limit of four
billion dollars ($4,000,000,000) of total new considerations to the CEDING
COMPANY on the product(s) reinsured hereunder, divided by the REINSURER's
Quota Share Percentage. Anytime on or after the second anniversary of this
Agreement, or anytime on or after attainment of the limit on total new
considerations described in this Paragraph, and upon ninety (90) days
written notice, either the CEDING COMPANY or the REINSURER may cancel this
Agreement for new business unilaterally or amend the terms of reinsurance
for new business by mutual agreement.
B. This Agreement shall be unlimited as to its duration but may be reduced or
terminated for new business as provided in this Article, above.
Page 26
ARTICLE XXI.
EXECUTION OF AGREEMENT
This Agreement may be executed by the parties in separate counterparts, each of
which when so executed and delivered shall be an original, but all such
counterparts together shall constitute one and the same instrument. Each
counterpart may consist of a number of copies hereof signed by less than both,
but together signed by both of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate by their duly authorized representatives as of the EFFECTIVE DATE.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
By: Date:
---------------------------------------- ------------------------
▇▇▇▇▇ ▇▇▇▇▇▇, Vice President & CFO
Attest:
---------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Vice President
AXA CORPORATE SOLUTIONS LIFE REINSURANCE COMPANY
By: Date:
---------------------------------------- ------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, President
By:
---------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Assistant Vice President
Attest:
---------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, Assistant Vice President
Page 27
SCHEDULE A
PLANS OF REINSURANCE
A. REINSURER's Quota Share Percentage:
100%
B. Issue Dates:
New Policies issued on or after July 1, 2001
Contractholders may, at their sole discretion, elect, revoke or make
changes to their contract within sixty (60) days (hereinafter known as
the 60-day window) of the contract issue date. The election or
termination of any optional rider within the 60-day window will be
retroactive to date of issue, and will be covered under this
Agreement. All reinsurance premiums and claims will be trued up
accordingly. The CEDING COMPANY will identify the policies covered
under the 60-day window by submitting policyholder information on a
separate data form. The CEDING COMPANY does not plan to market or
develop a program highlighting this 60-day window. (Note: A maximum of
15% of contracts reported in any month will be covered under the
60-day window for contracts that have passed their statutory free-look
period. There will be no limit for contracts that are still within
their statutory free-look period.
C. GMDB (Contractual Death Benefit) Reinsured:
Venture Basic Benefit for issue ages 0-80
Annual Ratchet to attained age 81; frozen thereafter and reduced for
withdrawals on a dollar-for-dollar basis.
Venture Basic Benefit for issue ages 81-85
Return of Net Considerations; reduced for withdrawals on a
dollar-for-dollar basis.
Vision Basic Benefit for issue ages 0-80
Rollup to attained age 81 subject to 200% of net considerations;
return of net considerations thereafter and reduced for withdrawals on
a dollar-for-dollar basis.
Venture III Basic Benefit for issue ages 0-85
Return of Net Considerations; reduced proportionately for withdrawals.
Venture III Optional Enhanced Benefit for issue ages 0-80
Annual Ratchet to attained age 81; frozen thereafter and reduced
proportionately for withdrawals.
Continued....
SCHEDULE A, PLANS OF REINSURANCE
(Continued)
D. EEB (Contractual Death Benefit) Reinsured:
Venture and Venture III GEM rider for issue ages 0-69
40% of the contract earnings, where contract earnings are subject to a
maximum of 100% of net purchase payments.
Venture and Venture III GEM rider for issue ages 70-85
25% of the contract earnings, where contract earnings are subject to a
maximum of 100% of net purchase payments.
Note:
- Partial withdrawals will reduce the GEM death benefit on a
proportional basis.
- Excluding the initial deposit, additional deposits made in the
six (6) months prior to death will not be included in determining
the cap on the total purchase payment not withdrawn.
E. Spousal Continuances
A Spousal Continuation occurs if the deceased owner's spouse is the
beneficiary. The surviving spouse continues the contract (including
any optional benefits if these benefits had been elected by the
deceased owner) as the new owner (referred to as a spousal
continuation). In such a case, the distribution rules applicable when
a contract owner dies will apply when the spouse, as the owner, dies.
In addition, a death benefit will be paid upon the death of the
spouse. For purposes of calculating the Death Benefit payable upon the
death of the surviving spouse, the death benefit paid upon the first
owner's death will be treated as a payment to the contract. In
addition, all payments made and all amounts deducted in connection
with partial withdrawals prior to the date of the first owner's death
will not be considered in determination of the Death Benefit. In
determination of the Death Benefit, the Anniversary Values for all
prior Contract Anniversaries will be set to zero as of the date of the
first owner's death.
Provided that the CEDING COMPANY can individually identify Spousal
Continuances, as shown in Schedule C, the REINSURER will cover Spousal
Continuances under this Agreement and will treat them as new issues to
the extent that, at time of continuance:
a. this Agreement is open for new business as defined in Article XX,
Paragraph A, and
b. the attained age of the surviving spouse satisfies the issue age
restrictions and benefit limitations under the Related Contracts
covered by this Agreement.
Continued....
SCHEDULE A, PLANS OF REINSURANCE
(Continued)
F. Related Contracts:
Venture, Vision and Venture III Variable Annuity policy forms and
associated rider forms specified below
Policy Forms
VENTURE.001; VENTURE.001.94; VENTURE.001.98
VENTURE.003; VENTURE.003.98
VENTURE.004
VENTURE.005; VENTURE.005.98
VISION.001; VISION.001.94; VISION.001.98; VISION.002; VISION.002.98
VENTURE.100 (Consisting of: VENTURE.100.S01V00, VENTURE.100P01V00,
VENTURE.100P02V00, VENTURE.100P03V00, VENTURE.100P04V00,
VENTURE.100P05V00, VENTURE.100P06V00, VENTURE.100P07V00,
VENTURE.100P08V001, VENTURE.100P09V00, VENTURE.100P10V00,
VENTURE.100P11V001, VENTURE.100P12V00, VENTURE.100.T01V00
GEM Rider Form
BR009.00; BR009.00G
Annual Step Rider Form
BR002.99; BR010.00; BR010.00G
SCHEDULE B
INVESTMENT FUNDS
VARIABLE FUNDS
AIM ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--- -------- -------
All Cap Growth Trust Capital Appreciation Trust Tactical Allocation Trust
Aggressive Growth Trust
Lord ▇▇▇▇▇▇ Munder
----------- ------
CGTC Mid Cap Value Trust Internet Technologies
----
Diversified Bond Trust
Income & Value Trust Manufacturers Advisor Corporation PIMCO
US Large Cap Value Trust --------------------------------- -----
Small Company Blend Trust Pacific Rim Emerging Markets Trust Global Bond Trust
Money Market Trust Total Return Trust
Quantitative Equity Trust
▇▇▇▇▇ & Steers Balanced Trust ▇▇▇▇▇▇
-------------- Quantitative Mid Cap Trust ------
Real Estate Securities Lifestyle Conservative 280 Trust Global Equity
Lifestyle Moderate 460 Trust Mid Cap Opportunities
▇▇▇▇▇ Selected Lifestyle Balanced 640 Trust
-------------- Lifestyle Growth 820 Trust ▇▇▇▇ Price -- Flem.
Financial Services Lifestyle Aggressive 1000 Trust -------------------
Fundamental Value International Index Trust International Stock Trust
Total Stock Market Index Trust
500 Index Trust Salomon
Mid Cap Index Trust -------
Dreyfus Small Cap Index Trust US Government Securities Trust
------- Strategic Bond Trust
All Cap Value Trust
Fidelity SsgA
-------- ----
Large Cap Growth Trust Growth Trust
Overseas Trust ▇▇▇▇▇▇▇ ▇▇▇▇▇
Strategic Opportunities Trust -------------
ML Basic Value Focus Trust SsgA
ML Special Value Focus Trust ----
ML Developing Capital Markets Trust Growth Trust
Founders
-------- ▇. ▇▇▇▇ Price
International Small Cap Trust -------------
MFS Equity Income Trust
--- Blue Chip Growth Trust
Franklin Strategic Growth Trust Science & Technology Trust
-------- Capital Opportunities Trust Small Company Value Trust
Emerging Small Company Trust Utilities Trust Health Sciences Trust
Investco ▇▇▇▇▇▇▇▇▇
---------
-------- ▇▇▇▇▇▇ ▇▇▇▇▇. Sher. International Value Trust
Telecommunications Trust -------------------
Mid Cap Growth Trust Value Trust
High Yield Trust Wellington
----------
Growth & Income Trust
Janus Investment Quality Bond Trust
----- Mid Cap Stock Trust
Dynamic Growth Trust
FIXED FUNDS
-----------
One Year
DCA Twelve Month
DCA Six Month
SCHEDULE C
REQUIRED DATA AND SUGGESTED DATA LAYOUT
(Page 1 of 3)
FIELD DESCRIPTION COMMENTS
Annuitant's ID: Last Name
First Name
Middle Name
Sex M or F
Date of Birth YYYYMMDD
Social Security No. / Social Insurance No.
Joint Annuitant's ID: Last Name If Applicable
First Name
Middle Name
Sex M or F
Date of Birth YYYYMMDD
Social Security No. / Social Insurance No.
Owner's ID: Last Name
First Name
Middle Name
Sex M or F
Date of Birth YYYYMMDD
Social Security No. / Social Insurance No.
Joint Owner's ID: Last Name If Applicable
First Name
Middle Name
Sex M or F
Date of Birth YYYYMMDD
Social Security No. / Social Insurance No.
Policy Number
Policy Issue Date YYYYMMDD
Policy Issue Status NI = True New Issue, SC = Spousal Continuance,
EX = 1035 Exchange
Tax Status Qualified (Q), or Non-qualified (N)
SCHEDULE C
REQUIRED DATA AND SUGGESTED DATA LAYOUT
(Page 2 of 3)
FIELD DESCRIPTION COMMENTS
GMDB/EEB SECTION (If applicable)
Mortality Risk Definition Indicator AV = VNAR; CV = VNAR + SCNAR
Death Claim Trigger A = Annuitant, O = Owner, 1 = 1st to die, 2 = 2nd to die
(e.g., A2 = payable upon death of second of joint annuitants)
Current Ratchet Value If Applicable
Current Reset Value If Applicable
Current Rollup Value If Applicable
Current Return of Premium Value If Applicable
Minimum Guaranteed Death Benefit
Contract Death Benefit Greater of Account Value and Minimum Guaranteed Death Benefit
Effective Date of the Rider
Account Value as of the Effective Date of the Rider
Mortality Risk VNAR Max [Contractual Death Benefit - Account Value), 0]
SCNAR Surrender Charge, if applicable
EEMNAR T%(AV less Net Purchase Payments), if applicable
Earnings AV less Net Purchase Payments
Earnings Cap If Applicable
Tax Percentage If Applicable
GMIB SECTION (If applicable)
GMIB Indicator Y = benefit elected, N = benefit not elected, NA = not applicable
Income Benefit Elected 01 = option 1, 02 = option 2, etc.
Expiration of Waiting Period YYYYMMDD
GMIB Annuitization Date YYYYMMDD - actual date
Most Recent GMIB Step-up / Reset Date YYYYMMDD, if applicable
Cancellation Date YYYYMMDD, if applicable
Pricing Cohort Indicator
IBB Amount
GMIB IBNAR Amount Calculated using an individual life annuity form with 10
years certain
Treasury Rate Used in IBNAR calculation
GMAB SECTION (If applicable)
GMAB Indicator Y = benefit elected, N = benefit not elected, NA = not applicable
Accumulation Benefit Elected 01 = option 1, 02 = option 2, etc.
Maturity Date YYYYMMDD
Most Recent GMAB Step-up / Rollover Date YYYYMMDD, if applicable
Cancellation Date YYYYMMDD, if applicable
Pricing Cohort Indicator
GMAB Guaranteed Value Current Value
GMAB NAR Max [ (GMAB Guaranteed Value - Account Value) , 0]
Account Value Current total value
Surrender Charge If reinsured
Cumulative Deposits Total premiums
Cumulative Withdrawals Total withdrawals
Net Purchase Payments Total premiums less total withdrawals (proportional
adjustment)
Deposits made in quarter of death dollar value
Quota Share reinsured percentage
SCHEDULE C
REQUIRED DATA AND SUGGESTED DATA LAYOUT
(Page 3 of 3)
FIELD DESCRIPTION COMMENTS
Funding Vehicle Values:
-----------------------
"MorningStar" designations (US)
Aggressive Growth
Balanced
Corporate Bond
Government Bond
Growth
Growth and Income
High Yield Bond
International Bond
International Stock
Money Market
Specialty Fund
Fixed Account
Dollar Cost Averaging
Note: total of funding vehicles should
equal account value.
Termination Information:
-------------------------
Termination Date YYYYMMDD, If applicable
Reason for Termination Death (D), Annuitization (A), 1035 Exchange (X), GMIB Election (I),
Other (O).
Cause of Death If applicable. Use your Cause of Death code, and provide translation
Summary Information: For reconciliation purposes (may be paper summary)
--------------------
Total number of records Monthly aggregate information by GMIB Design, GMAB Design, and
Pricing Cohort (if applicable)
Total of each dollar field Monthly aggregate information by GMIB Design, GMAB Design, and
Pricing Cohort (if applicable)
Note: All values to nearest dollar
EXHIBIT I
1994 VARIABLE ANNUITY MGDB MORTALITY TABLE
(applied age last birthday at attained age)
Attained Age Male Qx Female Qx Attained Age Male Qx Female Qx
1 0.000587 0.000519 60 0.010029 0.005636
2 0.000433 0.000358 61 0.011312 0.006460
3 0.000350 0.000268 62 0.012781 0.007396
4 0.000293 0.000218 63 0.014431 0.008453
5 0.000274 0.000201 64 0.016241 0.009611
6 0.000263 0.000188 65 0.018191 0.010837
7 0.000248 0.000172 66 0.020259 0.012094
8 0.000234 0.000158 67 0.022398 0.013318
9 0.000231 0.000154 68 0.024581 0.014469
10 0.000239 0.000159 69 0.026869 0.015631
11 0.000256 0.000169 70 0.029363 0.016957
12 0.000284 0.000185 71 0.032169 0.018597
13 0.000327 0.000209 72 0.035268 0.020599
14 0.000380 0.000239 73 0.038558 0.022888
15 0.000435 0.000271 74 0.042106 0.025453
16 0.000486 0.000298 75 0.046121 0.028372
17 0.000526 0.000315 76 0.050813 0.031725
18 0.000558 0.000326 77 0.056327 0.035505
19 0.000586 0.000333 78 0.062629 0.039635
20 0.000613 0.000337 79 0.069595 0.044161
21 0.000642 0.000340 80 0.077114 0.049227
22 0.000677 0.000343 81 0.085075 0.054980
23 0.000717 0.000344 82 0.093273 0.061410
24 0.000760 0.000344 83 0.101578 0.068384
25 0.000803 0.000346 84 0.110252 0.075973
26 0.000842 0.000352 85 0.119764 0.084432
27 0.000876 0.000364 86 0.130583 0.094012
28 0.000907 0.000382 87 0.143012 0.104874
29 0.000935 0.000403 88 0.156969 0.116968
30 0.000959 0.000428 89 0.172199 0.130161
31 0.000981 0.000455 90 0.188517 0.144357
32 0.000997 0.000484 91 0.205742 0.159461
33 0.001003 0.000514 92 0.223978 0.175424
34 0.001005 0.000547 93 0.243533 0.192270
35 0.001013 0.000585 94 0.264171 0.210032
36 0.001037 0.000628 95 0.285199 0.228712
37 0.001082 0.000679 96 0.305931 0.248306
38 0.001146 0.000739 97 0.325849 0.268892
39 0.001225 0.000805 98 0.344977 0.290564
40 0.001317 0.000874 99 0.363757 0.313211
41 0.001424 0.000943 100 0.382606 0.336569
42 0.001540 0.001007 101 0.401942 0.360379
43 0.001662 0.001064 102 0.422569 0.385051
44 0.001796 0.001121 103 0.445282 0.411515
45 0.001952 0.001186 104 0.469115 0.439065
46 0.002141 0.001269 105 0.491923 0.465584
47 0.002366 0.001371 106 0.511560 0.488958
48 0.002618 0.001488 107 0.526441 0.507867
49 0.002900 0.001619 108 0.536732 0.522924
50 0.003223 0.001772 109 0.543602 0.534964
51 0.003598 0.001952 110 0.547664 0.543622
52 0.004019 0.002153 111 0.549540 0.548526
53 0.004472 0.002360 112 0.550000 0.550000
54 0.004969 0.002589 113 0.550000 0.550000
55 0.005543 0.002871 114 0.550000 0.550000
56 0.006226 0.003241 115 1.000000 1.000000
57 0.007025 0.003713
58 0.007916 0.004270
59 0.008907 0.004909
EXHIBIT II
REINSURANCE PREMIUMS
FOR CONTRACTS WITH CUMULATIVE DEPOSITS < $4 MILLION:
ISSUE REINSURANCE PREMIUMS GUARANTEED
VENTURE GMDB AGES MINIMUM MAXIMUM* MAXIMUM
Annual Ratchet 0-49 5.75 8.75 22.00
50-59 11.00 19.25 48.25
60-69 20.00 40.00 100.00
70-79 33.00 74.25 185.75
Return of Premium 80-85 35.00 87.50 218.75
ISSUE REINSURANCE PREMIUMS GUARANTEED
VISION GMDB AGES MINIMUM MAXIMUM* MAXIMUM
5% Rollup 0-49 6.50 9.75 24.50
50-59 13.50 23.75 59.50
60-69 25.50 44.75 112.00
70-79 45.00 90.00 225.00
ISSUE REINSURANCE PREMIUMS GUARANTEED
VENTURE III GMDB AGES MINIMUM MAXIMUM* MAXIMUM
Return of Premium 0-49 2.75 4.25 10.75
50-59 5.75 10.25 25.75
60-69 13.00 22.75 57.00
70-79 27.00 54.00 135.00
80-85 35.00 78.75 197.00
Annual Ratchet 0-49 5.75 8.75 22.00
50-59 11.00 19.25 48.25
60-69 20.00 40.00 100.00
70-79 32.00 72.00 180.00
*The current maximum premium rate shall be in effect for a minimum of twenty
(20) years from the EFFECTIVE DATE of this Reinsurance Agreement. Thereafter, it
may be increased based on expected experience but not beyond the stated
guaranteed maximum rates shown.
EXHIBIT II, REINSURANCE PREMIUMS
(CONTINUED)
FOR CONTRACTS WITH CUMULATIVE DEPOSITS >OR = $4 MILLION:
ISSUE REINSURANCE PREMIUMS GUARANTEED
VENTURE GMDB AGES MINIMUM MAXIMUM* MAXIMUM
Annual Ratchet 0-49 5.75 11.50 22.00
50-59 11.00 24.75 48.25
60-69 20.00 50.00 100.00
70-79 33.00 90.75 185.75
Return of Premium 80-85 35.00 105.00 218.75
ISSUE REINSURANCE PREMIUMS GUARANTEED
VISION GMDB AGES MINIMUM MAXIMUM* MAXIMUM
5% Rollup 0-49 6.50 13.00 24.50
50-59 13.50 30.50 59.50
60-69 25.50 57.50 112.00
70-79 45.00 112.50 225.00
ISSUE REINSURANCE PREMIUMS GUARANTEED
VENTURE III GMDB AGES MINIMUM MAXIMUM* MAXIMUM
Return of Premium 0-49 2.75 5.50 10.75
50-59 5.75 13.00 25.75
60-69 13.00 29.25 57.00
70-79 27.00 67.50 135.00
80-85 35.00 96.25 197.00
Annual Ratchet 0-49 5.75 11.50 22.00
50-59 11.00 24.75 48.25
60-69 20.00 50.00 100.00
70-79 32.00 88.00 180.00
*The current maximum premium rate shall be in effect for a minimum of twenty
(20) years from the EFFECTIVE DATE of this Reinsurance Agreement. Thereafter, it
may be increased based on expected experience but not beyond the stated
guaranteed maximum rates shown.
EXHIBIT II, REINSURANCE PREMIUMS
(CONTINUED)
EEB PREMIUMS REGARDLESS OF CONTRACT SIZE:
REINSURANCE GUARANTEED
VENTURE GEM (EEB) ISSUE AGES PREMIUMS* MAXIMUM
0-49 3.75 9.50
50-59 8.75 22.00
60-69 16.50 41.25
70-79 18.00 45.00
80-85 40.00 100.00
REINSURANCE GUARANTEED
VENTURE III GEM (EEB) ISSUE AGES PREMIUMS* MAXIMUM
0-49 3.25 8.25
With ROP Death Benefit 50-59 7.75 19.50
60-69 15.50 38.75
70-80 16.75 42.00
With Annual Ratchet Death Benefit 0-49 3.75 9.50
50-59 8.75 22.00
60-69 16.50 41.25
70-79 18.00 45.00
80-85 40.00 100.00
*The current premium rate shall be in effect for a minimum of twenty (20) years
from the EFFECTIVE DATE of this Reinsurance Agreement. Thereafter, it may be
increased based on expected experience but not beyond the stated guaranteed
maximum rates shown.
EXHIBIT III
BENEFIT LIMITATION RULE
TRAPEZOIDAL RULE
Average Aggregate Account Value inforce in calendar year Z equals:
AV (Jan )
B +
-------------------
24
AV (Feb ) + AV (Mar ) + AV (Apr ) + AV (May )
B B B B +
--------------------------------------------------
12
AV (Jun ) + AV (Jul ) + AV (Aug ) + AV (Sep )
B B B B +
-------------------------------------------------
12
AV (Oct ) + AV (Nov ) + AV (Dec )
B B B +
------------------------------------
12
AV (Dec )
E
----------
24
where AV(Month B) is equal to the beginning of month aggregate account value of
the Related Contracts listed in Schedule A and AV(Month E) is equal to the end
of month aggregate account value of the Related Contracts listed in Schedule A.
For partial calendar years AV(Month B) for months prior to the EFFECTIVE DATE of
this Reinsurance Agreement or for months subsequent to the termination of all
business hereunder, should be set equal to zero.
EXHIBIT IV
CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT
EXHIBIT V
WIRING INSTRUCTIONS
AXA CORPORATE SOLUTIONS LIFE REINSURANCE COMPANY'S TECHNICAL ACCOUNT
Account held at: Chase Manhattan Bank, N.A.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Account Number: ABA# ▇▇▇▇▇▇▇▇▇
Account # 323-095569
Premium & Loss Account
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA'S ACCOUNT
Account held at: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇
Account Number: ABA# ▇▇▇▇▇▇▇▇▇
Account # ▇▇▇▇▇▇▇▇
MNA Transfer Account