AMENDMENT NO. 2 TO
AUTOMATIC REINSURANCE AGREEMENT
EFFECTIVE AS OF DECEMBER 1, 2004
(Agreement)
between
METROPOLITAN LIFE INSURANCE COMPANY
(Cedent)
and
EXETER REASSURANCE COMPANY, LTD.
(Reinsurer)
The Agreement is hereby amended, as of November 1, 2005, as follows:
1. The attached Article I, Scope of Agreement, amends and, as amended,
restates Article I, Scope of Agreement.
2. The attached Article IV, Net Amount at Risk, amends and, as amended,
restates Article IV, Net Amount at Risk.
3. The attached Article V, Reinsurance Premiums, amends and, as amended,
restates Article V, Reinsurance Premiums.
4. The attached Article VII, Settlement of Claims, amends and, as
amended, restates Article VII, Settlement of Claims.
5. The attached Schedule A, Plans of Reinsurance, amends and, as amended,
restates Schedule A, Plans of Reinsurance.
6. The attached Exhibit II, Reinsurance Premiums, amends and, as amended,
restates Exhibit II, Reinsurance Premiums.
This Amendment No. 2 does not alter, amend or modify the Agreement other than as
set forth herein, and the terms and conditions of the Agreement, as amended
herein, continue in effect without other change.
In Witness whereof, the parties have caused this Amendment No. 2 to be signed in
duplicate counterparts as of the date first above written.
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ [signature illegible]
---------------------------------
Title: [title illegible]
------------------------------
EXETER REASSURANCE COMPANY, LTD.
By: /s/ [signature illegible]
---------------------------------
Title: President
------------------------------
ARTICLE I
SCOPE OF AGREEMENT
A. This Agreement shall be effective as of December 1, 2004. While this
Agreement continues in effect, the Cedent shall cede and the Reinsurer
shall accept, as indemnity cessions hereunder, Reinsured Contracts that are
issued by the Cedent on and after December 12, 2001.
B. Ceded Liabilities
1. Guaranteed Minimum Death Benefit and Earnings Preservation Benefit
The indemnity cession shall be the share of the MNAR (defined in
Article IV) that is generated, prior to the termination of the
Reinsurer's liability (defined in Article II), by the Guaranteed
Minimum Death Benefit ("GMDB") and Earnings Preservation Benefit
("EPB") provisions of the Reinsured Contracts, as specified in
Schedule A.
2. Guaranteed Minimum Income Benefit
The indemnity cession shall be the share of the IBNAR (defined in
Article IV) that is generated prior to the termination of the
Reinsurer's liability (defined in Article II), by the Guaranteed
Minimum Income Benefit Rider (the "Income Program") provisions of the
Reinsured Contracts, as specified in Schedule A.
3. Guaranteed Withdrawal Benefit
The indemnity cession shall be the share of the WBNAR (defined in
Article IV) that is generated prior to the termination of the
Reinsurer's liability (defined in Article II), by the Guaranteed
Withdrawal Benefit Rider (the "Withdrawal Program") provisions of the
Reinsured Contracts, as specified in Schedule A.
4. Guaranteed Minimum Accumulation Benefit
The indemnity cession shall be the share of the ABNAR (defined in
Article IV) that is generated prior to termination of the Reinsurer's
liability (defined in Article II) by the Guaranteed Minimum
Accumulation Benefit Rider (the "Accumulation" program) provisions of
the Reinsured Contracts, as specified in Schedule A.
C. This Agreement covers only the Cedent's contractual liability for reinsured
claims paid under variable annuity contract forms specified in Schedule A.
D. There are no aggregate or individual claim limits applicable to the
benefits ceded.
E. Spousal Continuances will be covered under this Agreement to the extent
provided by the insured contract.
ARTICLE IV
NET AMOUNT AT RISK
GMDB AND EPB
------------
A. The MNAR (Mortality Net Amount at Risk) for each variable annuity contract
ceded hereunder shall be equal to the following:
MNAR = VNAR + SCNAR + EEMNAR
in which:
VNAR (Variable Net Amount at Risk) = Maximum (a,b) multiplied by the
Reinsurer's Percentage (defined in Schedule A) in which:
a = (Contractual Death Benefit - Account Value) and
b = 0
SCNAR (Surrender Charge Net Amount at Risk) = Surrender Charges multiplied
by the Reinsurer's Percentage
EEMNAR (Earnings Enhancement Mortality Net Amount at Risk) = x% * Maximum
(a,b) multiplied by the Reinsurer's Percentage where:
x% varies by issue age and is as described in the Reinsurance
Contracts specified in Schedule A
a = (Contractual Death Benefit - Total Purchase Payments Not
Withdrawn) b = 0
B. The death benefit and the surrender charges will be as described in the
variable annuity contract forms specified in Schedule A.
GMIB
----
C. The IBNAR (Income Benefit Net Amount at Risk) for each variable annuity
contract ceded hereunder shall be equal to the following:
(i) The Guaranteed Principal Adjustment as defined in the rider *
Reinsurer's Percentage if the Income Benefit contains a Guaranteed
Principal Option and the option is exercised; or
(II) IBNAR = Maximum [(IBB * (MAPR/SAPR) - Account Value), 0] * Reinsurer's
Percentage
where:
. IBB equals the INCOME BASE as defined in the rider;
. MAPR is the MINIMUM ANNUITY PURCHASE RATE from the GMIB Annuity Table
defined in the rider; and
. SAPR is the SETTLEMENT ANNUITY PURCHASE RATE per $1000 which is used
at time of annuitization for reinsurance claims settlement and shall
be equal to the fixed annuity purchase rate that the Cedent would
provide to an annuitant in the same class.
D. Premium taxes will be applied on a consistent basis between the MAPR and
SAPR to calculate the IBNAR.
E. The IBNAR for each contract ceded hereunder shall be calculated as of the
last day of each calendar month prior to the termination of liability
contingencies set forth in Article II.
GWB
---
F. The WBNAR (Withdrawal Benefit Net Amount at Risk) for each variable annuity
contract ceded hereunder shall be equal to the following:
WBNAR = Maximum [(GWB Benefit Base - Account Value), 0] * Reinsurer's
Percentage (defined in Schedule A).
A claim is incurred when the Account Value equals zero and is paid out in
installments consistent with the reinsured contract.
GMAB
----
G. The ABNAR (Accumulation Benefit Net Amount at Risk) for each variable
annuity contract ceded hereunder shall be equal to the following:
ABNAR = Maximum [(GMAB Guaranteed Accumulation Amount - Account Value),0] *
Reinsurer's Percentage.
A claim is incurred at the maturity date of the GMAB rider if the GMAB
Guaranteed Accumulation Amount exceeds the Account Value.
ARTICLE V
REINSURANCE PREMIUMS
A. The Cedent shall pay the Reinsurer an Initial Reinsurance Premium equal to
$4,250,302.
B. The total Reinsurance Premium for the business ceded hereunder is the sum
of the GMDB Reinsurance Premium, the EPB Reinsurance Premium, the GMIB
Reinsurance Premium, the GWB Reinsurance Premium, and the GMAB Reinsurance
Premium, each of which is defined separately in this article.
C. The Reinsurance Premium rates and structure described above are subject to
change in accordance with the criteria described in Article XV.
D. The Reinsurance Premium rates are expressed in terms of basis points and
are defined in Exhibit II.
GMDB Reinsurance Premium
------------------------
E. The Cedent shall calculate, for each premium class, the Reinsurer's
Percentage of the average aggregate separate account value for the
reporting month. This value shall be applied to the GMDB Reinsurance
Premium rates per premium class on a 1/12th basis.
EPB Reinsurance Premium
-----------------------
F. The Cedent shall calculate the Reinsurer's Percentage of the average
aggregate separate account value for the reporting month. This value shall
be applied to the annualized EPB reinsurance premium rates per premium
class on a 1/12th basis.
A.
GMIB Reinsurance Premium
------------------------
G. The Cedent shall calculate, for each premium class, the Reinsurer's
Percentage of the average aggregate IBB value for the reporting month. This
value shall be applied to the annualized GMIB cession premium rates on a
1/12th basis.
GWB Reinsurance Premium
-----------------------
H. The Cedent shall calculate the Reinsurer's Percentage of the Guaranteed
Withdrawal Amount for the reporting month. This value shall be applied to
the annualized GWB Reinsurance Premium rates per premium class on a 1/12th
basis.
GMAB Reinsurance Premium
------------------------
I. The Cedent shall calculate for the reporting month the Reinsurer's
Percentage of the Guaranteed Accumulation Amount. This value shall be
applied to the annualized GMAB cession premium rates on a 1/12th basis.
ARTICLE VII
SETTLEMENT OF CLAIMS
A. The Reinsurer shall indemnify the Cedent under this Agreement only for
benefit claims that the Cedent paid as contractually required under a
Reinsured Contract with respect to claims that occur on or after the
Effective Date.
For GMIB, the Reinsurer shall indemnify the Cedent under this Agreement
only for benefit claims that the Cedent paid as contractually required
under a Reinsured Contract upon exercise of benefits under the terms of the
Income Program where such events occur on or after the Effective Date.
B. In the event that the Cedent provides satisfactory proof of claim liability
to the Reinsurer, benefit claim settlements made by a Cedent and accepted
by the Reinsurer shall be unconditionally binding on the Reinsurer. The
Cedent shall report all approved benefit claims in bordereau including
cause of death, as available, in such format as may be agreed to from time
to time.
C. Within thirty (30) days after the end of each calendar month, the Cedent
shall notify the Reinsurer of the ceded contractual benefit claims paid in
respect of Reinsured Contracts in that month, based on the definition, set
forth in Article IV, and the Reinsurer shall indemnify the Cedent as
provided in Article VI for the ceded benefit claim liabilities.
D. In no event will the Reinsurer be liable for expense incurred in connection
with a dispute or contest arising out of conflicting or any other claims of
entitlement to Reinsured Contract proceeds or benefits.
SCHEDULE A
PLANS OF REINSURANCE
A. Reinsurer's Percentage:
100% of the business described herein.
B. Effective Date:
December 1, 2004
C. Reinsured Contracts:
METROPOLITAN LIFE INSURANCE COMPANY
DEFERRED ANNUITY CONTRACTS
--------------------------
Preference Plus Select Variable Annuity - All Share Classes
FORM NUMBERS
------------
Guaranteed Minimum Death Benefits Ceded:
----------------------------------------
Standard Death Benefit - Fifth Year Step-up: Form ML-535 (07/01)
Optional Death Benefit - Annual Step-Up: Form ML-550 (07/01)
Optional Death Benefit - Greater of Annual Step-Up and 5% Rollup: Form
ML-540(07/01)
Additional Death Benefit - Earnings Preservation Benefit (EPB): ML-570
(07/01)
Guaranteed Minimum Income Benefits Ceded:
-----------------------------------------
Guaranteed Minimum Income Benefit Form ML-560 (07/01)
Guaranteed Minimum Income Benefit II Form ML-560-1 (03/03)
Guaranteed Minimum Income Benefit Plus: Form ML-560-2 (05/05)
Guaranteed Withdrawal Benefits Ceded:
-------------------------------------
Guaranteed Withdrawal Benefit: Form ML-690-1 (7/04)
Guaranteed Withdrawal Benefit: Form ML-690-2 (11/05)
Guaranteed Minimum Accumulation Benefits Ceded:
-----------------------------------------------
Guaranteed Minimum Accumulation Benefit: Form ML-670-1 (11/05)
EXHIBIT II
REINSURANCE PREMIUMS
A. GMDB PROGRAM
REINSURANCE PREMIUM
GMDB PROGRAM PRODUCTS COVERED (BASIS POINTS)
----------------------------- ------------------------------------------- -------------------
Fifth Year Step-up All Products 10.00
Annual Step-up Plan Codes: 225010, 225011, 225020, 225021, 10.00
225030, 225031, 225050, 225110, and 225150
Annual Step-up Other Plan Codes 20.00
Greater of Annual Step-Up and Plan Codes: 225010, 225011, 225020, 225021, 25.00
5% Rollup 225030, 225031, 225050, 225110, and 225150
Greater of Annual Step-Up and Other Plan Codes 35.00
5% Rollup
Earnings Preservation All Products 25.00
Benefit
B. INCOME PROGRAM
REINSURANCE
PREMIUM (BASIS
INCOME PROGRAM PRODUCTS COVERED POINTS)
----------------------------- ------------------------------------------- -------------------
GMIB All Products sold prior to May 1, 2003 35.00
GMIB & GMIB II Plan codes 225080, 225090, 2250A0, 2250A1, 45.00
2250B0, 2250B1, 2250C0, 2250C1, 2250D0,
2250D1, 2250E0, 2250E1, 2250L0, 2250L1,
225180, and 2251B0 sold after April 30,
2003 and before May 1, 2005 if GMDB program
is Annual Step or Max of Annual Step and
Rollup
GMIB & GMIB II All other Products sold after April 30, 50.00
2003 and before May 1, 2005 and for All
Products sold after April 30, 2005
GMIB Plus All Products sold after April 30, 2005 75.00
C. WITHDRAWAL PROGRAM
REINSURANCE PREMIUM
WITHDRAWAL PROGRAM PRODUCTS COVERED (BASIS POINTS)
----------------------- ---------------- -------------------
Guaranteed Withdrawal All Products 50.00
Benefit
D. ACCUMULATION PROGRAM
REINSURANCE PREMIUM
ACCUMULATION PROGRAM PRODUCTS COVERED (BASIS POINTS)
----------------------- ---------------- -------------------
Guaranteed Accumulation All Products 75.00
Benefit