Exhibit 10.46
MATERIAL IN
THIS DOCUMENT HAS BEEN OMITTED
PURSUANT TO A CONFIDENTIALITY
REQUEST. OMITTED MATERIALS HAVE
BEEN FILED SEPARATELY WITH THE
COMMISSION.
ANNUITY AND LIFE REASSURANCE LTD.
CUMBERLAND HOUSE 1
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▇▇▇▇▇▇▇▇ ▇▇ 11
BERMUDA
RETROCESSION AGREEMENT
OLD MUTUAL IMMEDIATE ANNUITIES
LR00002A00
RECITALS
INTRODUCTION
This Agreement is between ANNUITY AND LIFE REASSURANCE LTD., a company
incorporated in Bermuda and whose registered office is at ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ 11, Bermuda (hereinafter, "the Retrocessionaire")
And XL MID OCEAN REINSURANCE LTD, a company incorporated in Bermuda and whose
registered office is at ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, PO Box HM 1066, ▇▇▇▇▇▇▇▇
▇▇ EX, Bermuda (hereinafter, "XL Mid Ocean")
The Agreement Number is LR00002A00
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MASTER AGREEMENT
1 INTRODUCTION
1.1 This Agreement is made between the Parties identified in the Recitals.
1.2 This Agreement consists of the Recitals, the Master Agreement and the
Schedules.
1.3 XL Mid Ocean agrees to retroceed, and the Retrocessionaire agrees to
accept, the Business Covered by this Agreement on the terms and
conditions of this Agreement.
2 DEFINITIONS
2.1 The following definitions are used in this Agreement and are defined
below:
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Account The accounts to be submitted to the Retrocessionaire by XL Mid Ocean in accordance with
clause 6.
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Account Balance The amount of the Claims less the Retrocession Premiums at the last Account Settlement Date.
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Account Notification Date The date on which XL Mid Ocean's Appointed Actuary notifies the Retrocessionaire that he has
reviewed and accepted the Benefit Payments under the Reinsurance Agreement for the period
up to the last Pre-Payment Date.
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Account Settlement Date 15 Business Days after the Account Notification Date.
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Settlement Date Agreement The terms and conditions set out in this document and the Recitals and the Schedules attached
to this agreement.
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Appointed Actuary An actuary appointed by either the Retrocessionaire or XL Mid Ocean in accordance with the
relevant legislation governing the appointment of an actuary in Bermuda.
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Base Rate The base rate publicly quoted as such by Barclays Bank plc, London, UK.
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Benefit Payments The payments made by XL Mid Ocean under the terms of the Reinsurance Agreement.
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Business Covered The Retrocessionaire's Share of the Benefit Payments for the closed portfolio of immediate
annuity policies as described in the Reinsurance Agreement.
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Business Day Any day of the week excluding Saturdays and Sundays and any other day officially recognised
as a public holiday in the United Kingdom or Bermuda.
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Claims The Claims as defined in clause 5.
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Effective Date 17 December 1999.
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GBP The lawful currency for the time being of the United Kingdom.
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Late Payment Interest Rate The yearly rate of 2% above the Base Rate or any comparable rate in use should the Base Rate
cease to be published.
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Parties The signatories to this Agreement as specified in the Recitals and 'Party' shall mean any one
of them as the context may indicate.
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Pre-Payment Date The Pre-Payment Date as defined in the Reinsurance Agreement.
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Pre-Payment Period The Pre-Payment Period as defined in the Reinsurance Agreement.
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Reinsurance Agreement The Reinsurance Agreement LT00023A99 appended to this Agreement in Schedule 1, between Old
Mutual Life Assurance Company Limited and XL Mid Ocean.
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Retrocessionaire Annuity and Life Reassurance Ltd.
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Retrocession Premiums The Retrocession Premiums as defined clause 4.
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Retrocession Premium Rates The table of Retrocession Premium Rates appended to this Agreement in Schedule 3.
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Retrocessionaire's Share 35%
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Schedules The Schedules attached to this Agreement.
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Security Agreement The Security Agreement, appended to this Agreement in Schedule 2, which was executed
between Old Mutual Life Assurance Company Limited and XL Mid Ocean in accordance with the
Reinsurance Agreement.
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XL Mid Ocean XL Mid Ocean Reinsurance Ltd.
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2.2 Headings in this Agreement are inserted for convenience only and shall
not be taken into account in its interpretation.
2.3 Where applicable, the provisions of clause 2.1 shall impose substantive
obligations on the Parties as provided in the provision concerned.
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2.4 Any reference to:-
i) the singular includes plural and vice versa;
ii) a natural person includes legal persons and vice versa;
iii) a gender includes other genders; and
iv) a clause, paragraph or schedule, unless the context otherwise
requires, is a reference to a clause or paragraph of, or
Schedule to, this Agreement.
2.5 Words and expressions defined in any sub-clause shall, for the purposes
of the clause of which that sub-clause forms part, bear the meaning
assigned to such words and expressions in that sub-clause.
2.6 A document in the "agreed form" is a reference to a document in a form
approved and for the purposes of identification initialled by or on
behalf of each Party.
3 RETROCESSION
3.1 XL Mid Ocean agrees to cede and the Retrocessionaire agrees to accept
the Business Covered with effect from the Effective Date according to
the terms of this Agreement.
3.2 The Retrocessionaire hereby agrees to be liable according to the terms
of this Agreement and will follow the fortunes and settlements of XL
Mid Ocean in respect of the Business Covered, except that:
3.2.1 The Retrocessionaire does not indemnify and shall not be liable for
any extracontractual damages or liability of any kind whatsoever of
XL Mid Ocean's resulting from, but not limited to: negligent,
reckless or intentional wrongs; fraud; oppression; bad faith; or
strict liability.
3.2.2 XL Mid Ocean will advise the Retrocessionaire of its intention to
contest, compromise, or litigate benefit payments involving
annuities reinsured hereunder. The Retrocessionaire may pay its
Retrocessionaire's Share of the Unusual Expenses of such contests,
in addition to its share of benefit payments, or it may choose not
to participate. Unusual Expenses exclude routine investigative and
administrative expenses, including salaries of home office
personnel and interpleader expenses. If the Retrocessionaire
chooses not to participate, it will discharge its liability by
payment to XL Mid Ocean of the full amounts of its liability, prior
to any contests, on the annuity reinsured hereunder. Any decision
by the Retrocessionaire not to participate must be communicated to
XL Mid Ocean within 60 days after receipt from XL Mid Ocean of
their advice to contest, compromise, or litigate benefit payments
hereunder.
3.3 The Retrocessionaire's liability in respect of the Business Covered
will commence on the Effective Date and liability will cease as
contemplated in clause 9.1.
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3.4 The reinsurance of the Business Covered, as contemplated in clause 3.1,
is a retrocession of a closed book and is limited solely to the
Business Covered as defined in this Agreement and shall not apply to
any other business of XL Mid Ocean.
4 RETROCESSION PREMIUMS
4.1 Retrocession Premiums are payable in accordance with the table of
Retrocession Premium Rates appended to this Agreement in Schedule 3.
4.2 The Retrocession Premium Rates are fixed and may not be amended other
than as contemplated in clause 14.
4.3 Retrocession Premiums are payable from the Effective Date until this
Agreement is terminated as contemplated in clause 9.
4.4 Retrocession Premiums are payable by XL Mid Ocean to the
Retrocessionaire on the Account Settlement Date in respect of the
relevant Pre-Payment Period.
5 CLAIMS
5.1 The Retrocessionaire shall pay to XL Mid Ocean the Retrocessionaire's
Share of the Benefit Payments from the Effective Date until this
Agreement is terminated as contemplated in clause 9.
5.2 Claims are payable by the Retrocessionaire to XL Mid Ocean on the
Account Settlement Date in respect of the relevant Pre-Payment Period.
6 ADMINISTRATION
6.1 XL Mid Ocean shall on each Account Notification Date prepare and
deliver an Account in such format as the Retrocessionaire may
reasonably require. If the Retrocessionaire disagrees with the Account
prepared, such dispute shall be resolved mutatis mutandis in accordance
with the provisions of clause 10.
6.2 Responsibility for the costs associated with the administration of the
Business Covered rests solely with XL Mid Ocean. This includes, but is
not restricted to, maintaining appropriate records, verifying that
benefits are being paid in accordance with the Reinsurance Agreement
and the provision of information to the Retrocessionaire in accordance
with clause 6.1 and/or clause 7, as the case may be.
6.3 All payments made by XL Mid Ocean are binding on the Retrocessionaire,
provided any such payments are in respect of the Business Covered and
are made strictly in accordance with the relevant terms of the
Reinsurance Agreement and do not violate the terms of this Agreement.
6.4 All payments due to or from the Retrocessionaire will be settled in
cash in GBP and transferred, by means of electronic funds transfer.
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7 INFORMATION
7.1 XL Mid Ocean shall, upon request from the Retrocessionaire from time to
time, provide the Retrocessionaire with such information during normal
business hours in respect of the Business Covered as the
Retrocessionaire may reasonably request and in such format as the
Retrocessionaire may reasonably require.
7.2 Except as may be impermissible at law, the Retrocessionaire may appoint
representatives to inspect, during normal business hours, any relevant
information under clause 6.1 or this clause 7 and such representatives
may make copies (at the cost of the Retrocessionaire) of any such
relevant documents and information, including without limitation any
such information stored on any computer or in any other electronic
form.
8 LATE PAYMENT INTEREST
Any amounts due by either XL Mid Ocean or the Retrocessionaire under
this Agreement, which are outstanding after the due date for payment
thereof, will bear interest at the Late Payment Interest Rate from the
due date to the date of payment (both days inclusive), and which
interest shall be capitalised monthly in arrears.
9 TERM AND TERMINATION
9.1 This Agreement takes effect from the Effective Date and, unless
terminated pursuant to the remaining provisions of the clause 9, shall
remain in force until the natural expiry of the Business Covered.
9.2 XL Mid Ocean or the Retrocessionaire may terminate this Agreement with
immediate effect by written notice to the other Party on or at any time
after the performance of the whole or any material part of this
Agreement being prohibited or rendered impossible in consequence of any
law, regulation or decision of a regulatory authority; in which event
the Parties shall use their reasonable endeavours to reach agreement on
the continuance of this Agreement on whatever basis or the basis upon
which the retrocession arrangement contemplated by this Agreement will
be terminated. If the Parties are unable to reach agreement within 30
Business Days of the date upon which this Agreement becomes prohibited
or rendered impossible, such dispute shall be determined, mutatis
mutandis, in accordance with clause 10.
9.3 XL Mid Ocean may terminate this Agreement with immediate effect by
written notice to the Retrocessionaire on or at any the after the
Retrocessionaire passes a resolution for its winding up, a court of
competent jurisdiction making an order for the Retrocessionaire's
winding up or dissolution, the making of an administration order in
relation to the Retrocessionaire, the appointment of a receiver over,
or an encumbrancer taking possession of or selling, all or
substantially all of the assets of the Retrocessionaire, the
Retrocessionaire making an arrangement or composition with its
creditors generally or making an application to a court of competent
jurisdiction for protection from its creditors generally, upon which
event the provisions of clause 10.4 shall apply hereto.
9.4 If this Agreement is terminated in accordance with the provisions of
clause 9.3:
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9.4.1 The Retrocessionaire's liability under this Agreement in respect of
the Business Covered shall be calcu1ated pro rata up to and
including the date of termination; and
9.4.2 The retrocessionaire shall pay an amount equal to 50 times the most
recent Account Balance save that if this sum should be less than
zero then no payment will be required from the retrocessionaire.
10 DISPUTE RESOLUTION
10.1 If the Retrocessionaire or its Appointed Actuary does not approve any
calculation performed by XL Mid Ocean or XL Mid Ocean's Appointed
Actuary under clause 4 or 5 (or any other dispute which is to be
determined in accordance with this clause 10) then the remaining
provisions of this clause 10 shall apply.
10.2 If the Retrocessionaire or its Appointed Actuary does not approve any
one or more of the calculations performed by XL Mid Ocean or its
Appointed Actuary, the Retrocessionaire shall deliver a notice in
writing to XL Mid Ocean, specifying the calculation of which it does
not approve and setting out in reasonable detail, the basis of the
objection. Where a dispute is required to be determined elsewhere in
this Agreement in accordance with this clause 10, either Party shall be
entitled to deliver a notice to the other Party, setting out the
details of the dispute in reasonable detail.
10.3 XL Mid Ocean and the Retrocessionaire shall, within 10 Business Days of
delivery of the notice referred to in clause 10.2 attempt, in good
faith, to resolve the dispute.
10.4 If the respective Appointed Actuaries of XL Mid Ocean and the
Retrocessionaire are unable to reach agreement within the time period
contemplated in clause 10.3, XI, Mid Ocean and the Retrocessionaire
shall agree upon an independent actuary. If XL Mid Ocean and the
Retrocessionaire are unable to reach agreement on the identity of the
independent actuary within a period of 10 Business Days of expiry of
the period referred to in clause 10.3, such independent actuary shall
be appointed by the President, for the time being, of the Institute of
Actuaries in England and Wales.
10.5 XL Mid Ocean and the Retrocessionaire shall make all reasonable
endeavours to procure that the independent actuary performs the
disputed calculation within 15 Business Days of his appointment. Any
calculation undertaken by the independent actuary shall be in his
capacity as an expert and not as an arbitrator or quasi-arbitrator and
his decision shall be final and binding on XL Mid Ocean and the
Retrocessionaire.
10.6 All other disputes and differences between the Reinsurer and the
Retrocessionaire on which an agreement cannot be reached will be
decided by arbitration, regardless of the insolvency of either party,
unless the conservator, receiver, liquidator, or statutory successor is
specifically exempted from an arbitration proceeding by the Governing
Law in accordance with clause 12. Either party may initiate arbitration
by providing written notification to the other party. Such written
notice shall contain a brief statement of the issue(s), the failure on
behalf of the parties to reach amicable agreement and the date of
demand for arbitration. The arbitrators will regard this Agreement from
the standpoint of practical business and equitable principles rather
than that of strict law. The arbitrators shall be solely responsible
for determining what shall be considered and what
8
procedure they deem appropriate and necessary in the gathering of such
facts or data to decide such dispute. Both parties agree that the
decision of the arbitrators is final and binding and that no appeal
shall be made from that decision. Should either party fail to comply
with the decision of the arbitrators, the other party shall have the
right to seek and receive the assistance of an appropriate court to
enforce the decision of the arbitrators. The costs of the arbitration
are to be borne equally by both parties unless the arbitrators decide
otherwise.
10.7 An arbitration panel consisting of three arbitrators will be formed in
accordance with the provisions of clauses 10.7.1 to 10.7.3 and from
that point on all other matters whether procedural or factual will be
decided solely at the discretion of the arbitration panel. Members of
the arbitration panel must be, or have been, officers of life insurance
or reinsurance companies other than the two parties to this Agreement
or any company owned by, or affiliated with, either party.
10.7.1 One of the arbitrators is to be appointed by XL Mid Ocean, another by
the Retrocessionaire, and they shall select a third before arbitration
begins. The arbitrators picked by the parties shall be contacted by the
party that so chose the arbitrator. They may share the notice of
arbitration letter, this clause of this Agreement and briefly explain
the nature of the dispute, such as the types of policies involved and
the reinsurance issues in dispute, so that the candidate may make an
informed decision as to his/her technical qualifications to serve, but
no more than that. They should in no way be "canvassing" the candidate
for his/her sympathies with their side of the dispute, nor take any
action that would compromise the candidate's impartiality. Should one
party fail to comply with the notice to arbitrate and fail to select an
arbitrator within the time allotted below, the other party shall have
the right to appoint such arbitrator on their behalf. The appointments
shall be made in the following manner: the Reinsurer and the
Retrocessionaire shall each present an initial list of five prospective
arbitrators to the other party within 25 calendar days of the postmark
on the mailing of the notification initiating the arbitration. The
Reinsurer and the Retrocessionaire shall select one arbitrator each
from the list supplied by the other party. Should the selected
arbitrator decline to serve, another name shall be selected from the
respective list the entire process of selection of the first two
arbitrators shall be accomplished within 45 calendar days of the
postmark on the mailing of the notification initiating the arbitration.
The party who initiated the list will submit as many additional names
within 5 calendar days, as necessary, so that at all times there will
be a pool of five names from which the other party may make its
selection.
10.7.2 The two arbitrators, once selected, shall then select the third
arbitrator from the remaining eight names on the two lists within 20
calendar days of the second arbitrator's date of appointment. Should
the two arbitrators be unable to agree on a choice for the third
arbitrator, the remaining eight names shall be placed in a pool and the
final arbitrator shall be drawn at random from such pool by the two
arbitrators within 5 additional calendar days from the expiry of the
date such third arbitrator should have been appointed. If the
prospective arbitrator so chosen shall decline to serve as the third
arbitrator, another prospective arbitrator shall be randomly selected
until the original pool is exhausted. The parties shall continue
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to replace the pool within 5 calendar days from the date the last name
is exhausted, with an additional eight names until an arbitrator is
found.
10.7.3 Once the panel is selected, the party initiating the arbitration will
submit in writing it's understanding of the dispute and the outstanding
issues surrounding such dispute, their attempt(s) to rectify such
dispute, and their proposed solution to settle the dispute within 20
calendar days after the final arbitration panel member has been
selected. The other party shall be provided with a copy of this initial
statement and shall respond in writing with it's understanding of the
dispute within 30 calendar days after the final arbitration panel
member has been selected.
11 NOTICES
11.1 Any notice, request, instruction or other document (notices etc),
mentioned in this Agreement must be made in writing. Writing includes
facsimile and other electronic means. Notices etc, must be sent to the
address of the relevant Parties given in the Recitals, unless another
address has been agreed in writing between the Parties.
11.2 For the purposes of this Agreement, notices etc, are deemed to have
been served:
11.2.1 At the time of delivery, if they have been delivered by hand during
office hours, or
11.2.2 48 hours after posting or 7 days if overseas, if they have been sent by
post, or
11.2.3 12 hours after transaction confirmation, if they have been sent by
facsimile or other electronic means.
11.3 However, if service occurs on a weekend or public holiday, the above
notice periods do not start until the next Business Day.
12 GOVERNING LAW AND JURISDICTION
12.1 This Agreement is governed by, and shall be construed in accordance
with, Bermudan law.
12.2 Except as contemplated in clause 10, the courts of Bermuda shall have
exclusive jurisdiction to settle any dispute arising from or connected
with this Agreement.
12.3 The Parties agree that the documents which start any legal proceedings
and any other documents required to be served in relation to any such
proceedings may be served in accordance with the provisions of clause
16. These documents may, however, be served in any other manner allowed
by law. This clause applies to all proceedings wherever started.
13 COSTS
Except where this Agreement provides otherwise, each Party shall pay
its own costs relating to the negotiation, preparation, execution and
performance by it of this Agreement and of each document referred to in
it.
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14 AMENDMENTS
No variation in this Agreement will be effective unless evidenced in
writing and duly signed on behalf of each Party. Variations sent by
instantaneous means of communication are also effective provided they
are capable of being shown by means of permanent or retrievable record
to have been agreed by each Party.
15 GENERAL
15.1 Each Party warrants to the other that it has the power, authority and
legal right to sign and perform this Agreement and that it has been duly
authorised by all necessary actions of its directors and constitutes
valid and binding obligations on it in accordance with this Agreement.
15.2 The failure to exercise or delay in exercising a right or remedy
provided by this Agreement or by law does not impair or constitute a
waiver of the right or remedy or an impairment of or a waiver of other
rights or remedies. No single or partial exercise of a right or remedy
provided by this Agreement or by law prevents further exercise of the
right or remedy or the exercise of another right or remedy.
15.3 The Parties rights and remedies contained in this Agreement are
cumulative and not exclusive of rights or remedies provided by law.
16 ENTIRE AGREEMENT
16.1 This Agreement constitute the entire agreement and supersede any
previous agreements between the Parties relating to the subject matter
of this Agreement.
16.2 The Parties acknowledge that they have not relied on or been induced to
enter into this agreement by a representation other than the warranties
or otherwise set out in this Agreement.
16.3 Neither Party is liable to the other for a representation that is not
set out in this Agreement.
16.4 Nothing in this clause 16 shall have the effect of limiting or
restricting any liability arising as a result of fraud, wilful
misconduct or wilful concealment.
17 ASSIGNMENT
Neither Party shall assign or transfer any of its rights under this
Agreement in whole or in part without the express written consent of
the other Party.
18 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which when executed and delivered is an original and all of which
together evidence the same agreement.
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EXECUTED BY THE PARTIES
SIGNATORIES
Signed at Hamilton, Bermuda for and on behalf of XL Mid Ocean Reinsurance Ltd.
Date
XL
MID OCEAN
/s/ not legible RE 13th December 2000
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Signed at Hamilton, Bermuda for and on behalf of Annuity and Life Reassurance
Ltd.
Date
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ December 13, 2000
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/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ December 13, 2000
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SCHEDULE 1
Reinsurance Agreement - LT00023A99
13
OLD MUTUAL LIFE ASSURANCE COMPANY LIMITED
▇ ▇▇▇▇▇▇▇ ▇▇▇
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REINSURANCE AGREEMENT
IMMEDIATE ANNUITIES
LT00023A99
21ST DECEMBER 1999
RECITALS
INTRODUCTION
This Agreement is between OLD MUTUAL LIFE ASSURANCE COMPANY LIMITED, a company
incorporated in the United Kingdom and whose registered office is at ▇ ▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (hereinafter, "the Cedant")
And XL MID OCEAN REINSURANCE LTD, a company incorporated in Bermuda and whose
registered office is at ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, PO Box HM 1066, ▇▇▇▇▇▇▇▇
▇▇ EX, Bermuda (hereinafter, "XL Mid Ocean")
The Agreement Number is LT00023A99
The Cedant conducts life assurance and annuity business
It is intended that XL Mid Ocean should provide 100% reinsurance of the Business
Covered and to maintain such reinsurance following transfer of the Business
Covered.
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MASTER AGREEMENT
1. INTRODUCTION
1.1 This Agreement is made between the Parties identified in the Recitals.
1.2 This Agreement consists of the Recitals, the Master Agreement and the
Schedules.
1.3 XL Mid Ocean agrees to reinsure, and the Cedant agrees to cede, the
Business Covered by this Agreement on the terms and conditions of this
Agreement.
2. DEFINITIONS
2.1 The following definitions are used in this Agreement and are defined
below:
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Account The accounts to be submitted by the Cedant to XL Mid Ocean reflecting the Pre-Payment
Due, in accordance with clause 9.
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Accrued Investment Return The amount (gross of tax) of any interest, dividends or other income and nominal
capital received by the Cedant in respect of the Agreed Assets that would accrue to
Mid Ocean if title to the Agreed Assets had been transferred to XL Mid Ocean at the
close of business on the Business Day prior to the Transfer Date.
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Act The United Kingdom's Insurance Companies Act of 1982.
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Adjusted Accrued Investment Return The Accrued Investment Return as adjusted by virtue of the acquisition and/or disposal
of Agreed Assets in the period between the Transfer Date and the Deferred Premium
Payment Date pursuant to the Trading Instructions Letter.
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Adjusted Agreed Assets The Agreed Assets as adjusted in the period between the Transfer Date and the Deferred
Premium Payment Date pursuant to the Trading Instructions letter.
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Adjustment Premium [***]
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Adjustment Premium Payment Date 10 Business days after delivery of the Policy File.
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Agreed Assets The bonds listed in Schedule 'A' of this Agreement.
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Agreement The terms and conditions set out in this document and the Recitals and
the Schedules attached to this agreement.
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Annuitant A holder of a Policy.
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[***] -- THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
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Appointed Actuary An actuary appointed by either the Cedant in accordance with the Act or XL Mid Ocean in
accordance with the relevant legislation governing the appointment of an actuary in
Bermuda.
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Approved Bond Dealers (1) Greenwich NatWest (3) HSBC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
(▇) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Read (4) Barclays Capital
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇
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Base Rate The base rate publicly quoted as such by Barclays Bank plc.
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Business Covered The closed portfolio of Policies as at the Transfer Date and as listed in the Policy
File.
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Business Day Any day of the week excluding Saturdays and Sundays and any other day officially
recognized as a bank holiday in the United Kingdom or Bermuda.
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Cedant Old Mutual Life Assurance Company Limited.
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Deferred Premium The value of the Agreed Assets, which Agreed Assets will be valued by the Approved Bond
Dealers in accordance with the provisions of clause 6.1, the payment of which is due on
the Transfer Date but which shall be delivered on the Deferred Premium Payment Date as
contemplated in clause 7.2, free of any Encumbrance (as defined in clause 8.2).
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Deferred Premium Payment Date The date on which the Adjusted Agreed Assets are delivered to a custodian appointed
by XL Mid Ocean from Lloyds TSB plc, as contemplated in clause 3.
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Deposit Premium The amount of L100.
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Deposit Taker A registered bank nominated for that purpose by XL Mid Ocean in the United Kingdom.
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Expected Benefit Payments The projected benefit payments from the Business Covered over any relevant Pre-Payment
Period, excluding any allowance for mortality, from a relevant Pre-Payment Date, gross
of any tax.
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GBP The lawful currency for the time being of the United Kingdom.
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Interest Rate The yearly rate of 1% above the Base Rate or any comparable rate in use should the Base
Rate cease to be published.
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Late Payment Interest Rate The yearly rate of 2% above the Base Rate.
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Liability Outgo The expected future liability payments from the Business Covered.
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Parties The signatories to this Agreement as specified in the Recitals and 'Party' shall mean
any one of them as the context may indicate.
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Policy or Policies The annuity contract or contracts issued by the Cedant to individuals, in force and in
payment at the Transfer Date, (but not in respect of any individual who has died before
the Transfer Date and of whose death the Cedant has notice before the date of delivery
of the Policy File).
------------------------------------------------------------------------------------------------------------------------------------
Policy Conditions The terms and conditions applicable to each Policy as at the Transfer Date.
------------------------------------------------------------------------------------------------------------------------------------
Policy File The compact disc recording all the Policies to be delivered by the Cedant to XL Mid
Ocean pursuant to clause 9.5.
------------------------------------------------------------------------------------------------------------------------------------
Pre-Payment Date The first pre-payment date is the first Business Day following the Deferred Premium
Payment Date. The second pre-payment date is 1 April 2000. Subsequent pre-payment dates
will follow at intervals equal to the Pre-Payment Period. Should any Pre-Payment Date
fall on a non-Business Day, then the Pre-Payment Date will be the nearest preceding
Business Day.
------------------------------------------------------------------------------------------------------------------------------------
Pre-Payment Due The Pre-Payment Due is an amount due and payable by XL Mid Ocean in respect of any
relevant Pre-Payment Period, being the sum of the Expected Benefit Payments over a
relevant Pre-Payment Period less the current balance on the Pre-Payment Fund as at any
relevant Pre-Payment Date, other than the first Pre-Payment Due contemplated in
clause 9.1.
------------------------------------------------------------------------------------------------------------------------------------
Pre-Payment Fund [***]
------------------------------------------------------------------------------------------------------------------------------------
Pre-Payment Period The first pre-payment period will be from the Transfer Date to 31 March 2000. Subsequent
pre-payment periods will be periods of 3 months in duration thereafter, ending on the
last Business Day of the last month of any such 3 month period.
------------------------------------------------------------------------------------------------------------------------------------
Required Amount The Required Amount as defined in the Security Agreement.
------------------------------------------------------------------------------------------------------------------------------------
[***] -- THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
- 5 -
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Schedules The Schedules attached to this Agreement.
------------------------------------------------------------------------------------------------------------------------------------
Security Agreement The Security Agreement, in the agreed form, to be executed between the Parties on the
Deferred Premium Payment Date granting a fixed charge over the Agreed Assets in favour
of the Cedant.
------------------------------------------------------------------------------------------------------------------------------------
Subsequent Investment Return Any Adjusted Accrued Investment Return received by the Cedant after the Deferred
Premium Payment Date.
------------------------------------------------------------------------------------------------------------------------------------
Trading Instructions Letter An undertaking by the Cedant and XL Mid Ocean regarding the trading instructions of XL
Mid Ocean entered into by the Parties on the date of this Agreement.
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Transfer Date 17 December 1999.
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Transfer Interest Rate [***]
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Transfer Mortality Basis [***]
------------------------------------------------------------------------------------------------------------------------------------
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Transfer Premium [***]
------------------------------------------------------------------------------------------------------------------------------------
Transfer Reserve The net present value of the Liability Outgo calculated as at the Transfer Date as more
fully contemplated in clause 6.3.
------------------------------------------------------------------------------------------------------------------------------------
Warranty Side Letter A deed between OMLA Holdings Limited, Old Mutual plc and XL Mid Ocean entered into on
the date of this Agreement pursuant to which OMLA Holdings Limited (whose obligations
are in turn guaranteed by Old Mutual plc) grants various warranties and undertakings in
favour of XL Mid Ocean.
------------------------------------------------------------------------------------------------------------------------------------
XL Mid Ocean XL Mid Ocean Reinsurance Ltd.
------------------------------------------------------------------------------------------------------------------------------------
[***] -- THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
- 6 -
2.2 Headings in this Agreement are inserted for convenience only and shall
not be taken into account in its interpretation.
2.3 Where applicable, the provisions of clause 2.1 shall impose substantive
obligations on the Parties as provided in the provision concerned.
2.4 Any reference to:-
(i) the singular includes plural and vice versa;
(ii) a natural person includes legal persons and vice versa;
(iii) a gender includes other genders; and
(iv) a clause, paragraph or schedule, unless the context otherwise
requires, is a reference to a clause or paragraph of, or
Schedule to, this Agreement.
2.5 Words and expressions defined in any sub-clause shall, for the purposes
of the clause of which that sub-clause forms part, bear the meaning
assigned to such words and expressions in that sub-clause.
2.6 A document in the "agreed form" is a reference to a document in a form
approved and for the purposes of identification initialled by or on
behalf of each Party.
3. APPOINTMENT OF CUSTODIAN
XL Mid Ocean undertakes to use all reasonable efforts to procure the
appointment (in its sole and absolute discretion) of a custodian in the
United Kingdom in respect of the Adjusted Agreed Assets as won as
reasonably possible after the Transfer Date, but in any event, by not
later than 17 January 2000, or such later date as may be agreed between
the Parties in writing.
4. SECURITY ARRANGEMENTS
4.1 [***]
4.2 On the Deferred Premium Payment Date and against compliance by the
Cedant with its obligations set out in clause 7.2, XL Mid Ocean shall
enter into the Security Agreement.
5. REINSURANCE CESSION
5.1 The Cedant agrees to cede the Business Covered and XL Mid Ocean agrees
to accept by way of l00% reinsurance of the Business Covered with
effect from the Transfer Date according to the terms of this Agreement.
5.2 XL Mid Ocean hereby agrees to be liable as reinsurer according to the
terms of this Agreement and will follow the fortunes and settlements of
the Cedant in respect of the Business Covered.
[***] -- THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
- 7 -
5.3 XL Mid Ocean's liability in respect of the Business Covered will
commence on the Transfer Date and liability will cease as contemplated
in clause 15.1.
5.4 The reinsurance of the Business Covered, as contemplated in clause 5.1,
is reinsurance of a closed book and is limited solely to the Business
Covered as defined in this Agreement and shall not apply to any
policies issued by the Cedant at any time which are not Policies and
listed in the Policy File, and they will not become cessions under this
Agreement.
5.5 For the avoidance of doubt, where any increase in payment in relation
to any Policy is not recorded in the Policy File and/or any attached
information to the Policy File, such increase shall not be covered
under this Agreement.
6. DETERMINATION PROVISIONS
6.1 DEFERRED PREMIUM
6.1.1 The value of the Agreed Assets is the bid value of the Agreed
Assets, being the average of the valuations provided by the
Approved Bond Dealers at the close of business on the Business
Day immediately prior to the Transfer Date.
6.1.2 XL Mid Ocean and the Cedant undertake to co-operate, in good
faith, to procure that the Approved Bond Dealers value the
Agreed Assets in accordance with the provisions of this clause
6.1.
6.1.3 The average of the valuations provided by the Approved Bond
Dealers in accordance with this clause 6.1 will be final and
binding on the Parties.
6.2 THE TRANSFER INTEREST RATE
6.2.1 In respect of the Transfer Interest Rate, the internal rate of
return will be based on the bid values of the Agreed Assets as
at the close of business on the Business Day immediately prior
to the Transfer Date.
6.2.2 The Transfer lnterest Rate will be calculated by a duly
authorised representative of the Cedant. The Cedant undertakes
to procure that the Transfer Interest Rate is determined
timeously for it to comply with its obligations as
contemplated in clause 7.3.
6.2.3 The Transfer Interest Rate is subject to approval by a duly
authorised representative of XL Mid Ocean. If XL Mid Ocean
fails in writing to approve the calculation contemplated in
clause 6.2.2 within 10 Business Days of receipt of the
calculation from the Cedant such dispute will be determined in
accordance with the provisions of clause 6.6. If XL Mid Ocean
fails to object in writing to the calculation within the time
period contemplated by this clause 6.2.3, XL Mid Ocean shall
be deemed to have approved same.
6.3 TRANSFER RESERVE
6.3.1 For the purposes of determining the Transfer Reserve, the
Liability Outgo will be calculated using the Transfer
Mortality Basis, discounted by the Transfer Interest Rate.
6.3.2 The Transfer Reserve shall be calculated by the Cedant's
Appointed Actuary. The Cedant undertakes to procure that such
Appointed Actuary shall perform
- 8 -
such calculation not later than 10 Business Day following
delivery of the Policy File to XL Mid Ocean and forthwith
thereafter, deliver a copy of the calculation, together with
all relevant working papers, to XL Mid Ocean's Appointed
Actuary.
6.3.3 The calculation of the Transfer Reserve by the Cedant's
Appointed Actuary is subject to approval by XL Mid Ocean's
Appointed Actuary. If XL Mid Ocean's Appointed Actuary does
not approve the calculation of the Transfer Reserve within 10
Business Days of receipt of the calculation from the Cedant's
Appointed Actuary, such dispute will be determined in
accordance with the provisions of clause 6.6. If XL Mid Ocean
fails to object in writing to the calculation within the time
period contemplated by this clause 6.3.3, XL Mid Ocean shall
be deemed to have approved the same.
6.4 ADJUSTMENT PREMIUM
6.4.1 The Adjustment Premium will be calculated by the Cedant's
Appointed Actuary. The Cedant undertakes to procure that its
Appointed Actuary performs such calculation within the time
period contemplated in clause 6.3.2.
6.4.2 The Adjustment Premium is subject to approval by XL Mid
Ocean's Appointed Actuary and the Cedant undertakes to procure
that its Appointed Actuary delivers to XL Mid Ocean's
Appointed Actuary all relevant working papers of its Appointed
Actuary in respect of his calculation of the Adjustment
Premium. If XL Mid Ocean's Appointed Actuary does not approve
the calculation by the Cedant's Appointed Actuary within 10
Business Days of receipt of the calculation, such dispute will
be determined in accordance with the provisions of clause 6.6.
If XL Mid Ocean fails to object in writing to the calculation
within the time period contemplated by this clause 6.4.2, XL
Mid Ocean shall be deemed to have approved same.
6.5 EXPECTED BENEFIT PAYMENTS
6.5.1 The Cedant undertakes to procure that its Appointed Actuary
performs the calculation in respect of any Expected Benefit
Payments as soon as reasonably possible in relation to any
Pre-Payment Date (other than in respect of the first
Pre-Payment Due contemplated in clause 11.l), but in any event
not less than 30 Business Days prior to any relevant
Pre-Payment Date.
6.5.2 The Cedant shall procure that its Appointed Actuary delivers a
copy of the calculation (and all relevant working papers) of
any Expected Benefit Payments performed to XL Mid Ocean or its
Appointed Actuary within the time period contemplated in
clause 6.5.1.
6.6 DISPUTE RESOLUTION
6.6.1 If XL Mid Ocean or its Appointed Actuary does not approve any
calculation performed by the Cedant or the Cedant's Appointed
Actuary under any of clauses 6.2,6.3,6.4 and 6.5 (or any other
dispute which is to be determined in accordance with this
clause 6.6) then the remaining provisions of this clause 6.6
shall apply.
6.6.2 If XL Mid Ocean or its Appointed Actuary does not approve any
one or more of the calculations performed by the Cedant or its
Appointed Actuary, XL
- 9 -
Mid Ocean shall deliver a notice in writing to the Cedant,
specifying the calculation of which it does not approve and
setting out in reasonable detail, the basis of the objection.
Where a dispute is required to be determined elsewhere in this
Agreement in accordance with this clause 6.6, either Party
shall be entitled to deliver a notice to the other Party,
setting out the details of the dispute in reasonable detail.
6.6.3 The Cedant and XL Mid Ocean shall, within 10 Business Days of
delivery of the notice referred to in clause 6.6.2 attempt, in
good faith, to resolve the dispute.
6.6.4 If the Cedant and XL Mid Ocean are unable to resolve the
dispute within the time period contemplated in clause 6.6.3,
such dispute shall be referred to the respective Appointed
Actuaries of the Cedant and XL Mid Ocean, who shall further
attempt to resolve the dispute amicably within 10 Business
Days of expiry of the period referred to in 6.6.3.
6.6.5 If the respective Appointed Actuaries of the Cedant and XL Mid
Ocean are unable to reach agreement within the time period
contemplated in clause 6.6.4, the Cedant and XL Mid Ocean
shall agree upon an independent actuary. If the Cedant and XL
Mid Ocean are unable to reach agreement on the identity of the
independent actuary within a period of 10 Business Days of
expiry of the period referred to in clause 6.6.4, such
independent actuary shall be appointed by the President, for
the time being, of the Institute of Actuaries in England and
Wales.
6.6.6 The Cedant and XL Mid Ocean shall make all reasonable
endeavours to procure that the independent actuary performs
the disputed calculation within 15 Bushes Days of his
appointment. Any calculation undertaken by the independent
actuary shall be in his capacity as an expert and not as an
arbitrator or quasi-arbitrator and his decision shall be final
and binding on the Cedant and XL Mid Ocean.
6.6.7 In the event any one of the matters contemplated in clauses
6.2, 6.3, 6.4 or 6.5 become the subject matter of a dispute to
be determined in accordance with the provisions of this clause
6.6 and as a result thereof the Cedant or XL Mid Ocean (as the
case may be) shall not be able to make payment of the
Adjustment Premium on the Adjustment Premium Payment Date, the
Adjustment Premium Payment Date shall be the date upon which
the dispute is settled or determined (as the case may be) in
accordance with this clause 6.6.
7. REINSURANCE PREMIUM
7.1 On the date of signature of this Agreement, the Cedant shall pay the
Deposit Premium to XL Mid Ocean.
7.2 On the Deferred Premium Payment Date, the Cedant shall deliver the
Adjusted Agreed Assets and the Adjusted Accrued Investment Returns to
XL Mid Ocean's appointed custodian as contemplated in clause 3.
7.3 On the Adjustment Premium Payment Date, the Adjustment Premium shall be
paid in cash (in GBP) by 12 noon by means of electronic transfer by
Cedant (if the Adjustment Premium is a positive figure) or by XL Mid
Ocean (if the Adjustment Premium is a negative figure).
- 10 -
7.4 The Cedant shall from time to time pay to XL Mid Ocean any Subsequent
Investment Returns forthwith upon receipt of the same from time to time
by the Cedant.
8. CONTRACTUAL WARRANTIES
8.1 Each of the Agreed Assets is, and each of the Adjusted Agreed Assets
will be:
8.1.1 legally and beneficially owned solely by the Cedant free from
any Encumbrance (as defined in clause 8.2); and
8.1.2 in the possession or under the control of the Cedant.
8.2 For purposes of this clause 8, "Encumbrance" means a mortgage, charge,
pledge, lien, option, restriction, right of first refusal, right of
pre-emption, third-party right or interest, other encumbrance or
security interest of any kind, or another type of preferential
arrangement (including without limitation, a title transfer or
retention arrangement) having similar effect.
9. ADMINISTRATION
9.1 XL Mid Ocean shall procure the creation of the Pre-Payment Fund with
the Deposit Taker as soon as reasonably practicable, but in any event
not later than the Business Day preceding the Deferred Premium Payment
Date.
9.2 The Business Covered will continue to be administered by the Cedant in
accordance with the business standards of the Cedant as at the Transfer
Date.
9.3 Without limiting the provisions of clause 12.1, the Cedant shall, on
each Pre-Payment Date (other than in respect of the first Pre-Payment
Due as contemplated in clause 11.1) deliver to XL Mid Ocean the
information specified in Schedule 'B' and all relevant documents
reasonably requested in relation thereto in respect of the Business
Covered.
9.4 The Cedant shall not later than 5 Business Days before any Pre-Payment
Date prepare an Account in such format as XL Mid Ocean may reasonably
require. If XL Mid Ocean disagrees with the Account prepared, such
dispute shall be resolved mutatis mutandis in accordance with the
provisions of clause 6.6.
9.5 The Cedant shall deliver the Policy File to XL Mid Ocean's Appointed
Actuary as won as reasonably possible after the Transfer Date, but in
any event not later than 31 January 2000. If within 10 Business Days of
delivery of the Policy File to XL Mid Ocean's Appointed Actuary, XL Mid
Ocean or its Appointed Actuary disputes any information recorded on the
Policy File, such dispute shall be determined, mutatis mutandis, in
accordance with the provisions of clause 6.6.
10. AMENDMENTS
The Cedant shall notify XL Mid Ocean, in writing, on the last Business
Day of each calendar quarter of any amendment, pursuant to Policy
Conditions, to any Policy that has occurred in that preceding calendar
quarter. No other amendment whatsoever shall increase or extend the
liability, potential liability or exposure of XL Mid Ocean under this
Agreement.
- 11 -
11. PRE-PAYMENTS DUE AND ANNUITY PAYMENTS
11.1 Subject to the Cedant having complied in all respects with its
obligation under clause 7.2, the first Pre-Payment Due is an amount of
[****], which amount shall be paid by XL Mid Ocean into the Pre-Payment
Fund, in cash, by close of business on the Business Day next following
the Deferred Premium Payment Date.
11.2 Responsibility for the costs associated with the administration of the
Business Covered rests solely with the Cedant. This includes, but is
not restricted to, maintaining appropriate Policy records, verifying
that benefits are being paid in accordance with the Policy Conditions
and the provision of information to XL Mid Ocean in accordance with
clause 9 and/or clause 12, as the case may be.
11.3 All payments made by the Cedant are binding on XL Mid Ocean, provided
any such payment is in respect of the Business Covered and are made
strictly in accordance with the relevant terms applicable to any Policy
and in accordance with the Policy Conditions and do not violate the
terms of this Agreement.
11.4 On each and every Pre-Payment Date, the Pre-Payment Due will be settled
in cash in GBP and transferred, by means of electronic funds transfer,
into (or out of in the case of negative amounts) the Pre-Payment Fund.
11.5 [***]
11.6 The Cedant undertakes to use all reasonable efforts to ensure that it
is advised of the death of any Annuitant and shall, in any event,
inform XL Mid Ocean on the first Business Day of the month following
each calendar quarter after the date of signature of this Agreement of
the death of an Annuitant since the last such advice. The Cedant will
include an adjustment in respect of any overpaid Pre-Payments Due made
by XL Mid Ocean in the next available Account, together with interest
at the Interest Rate.
11.7 No ex-gratia or compromise payment made by the Cedant (and no payment
above the binding award limit of an Insurance Ombudsman or his
equivalent) will be binding on XL Mid Ocean unless XL Mid Ocean gives
its prior written consent, which consent shall not be unreasonably
withheld.
11.8 In addition to clause 11.7, if an annuity payment is proposed on an
ex-gratia or compromise basis to an Annuitant, XL Mid Ocean will not be
liable for that payment, unless the Cedant gives XL Mid Ocean all
information known to it regarding any such payment and continues to
keep XL Mid Ocean fully informed, to the extent reasonably practicable,
of all developments relating to the payment as soon as is practicably
possible.
[***] -- THE INFORMATION CONTAINED IN THIS PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
- 12 -
12. INFORMATION
12.1 The Cedant shall, upon request from XL Mid Ocean from time to time,
provide XL Mid Ocean with such information during normal business hours
in respect of the Business Covered as XL Mid Ocean may reasonably
request from the Cedant and in such format as the Cedant may reasonably
require.
12.2 Except as may be impermissible at law, XL Mid Ocean may appoint
representatives to inspect, during normal business hours, any relevant
information under clause 9 or this clause 12 and such representatives
may make copies (at the cost of XL Mid Ocean) of any such relevant
documents and information, including without limitation any such
information stored on any computer or in any other electronic form.
13. MAJOR BUSINESS CHANGES
13.1 This Agreement is made on the basis of the Cedant's current business
standards and general terms and conditions as disclosed to XL Mid Ocean
prior to commencement of this Agreement.
13.2 No business administered under any standards other than the Cedant's
business standards as at the Transfer Date is accepted by XL Mid Ocean
under this Agreement, unless those new or differing business standards
have been agreed to in writing by XL Mid Ocean in advance.
13.3 This clause 13 only applies to changes which may increase or extend the
liability, potential liability or the exposure of XL Mid Ocean in
respect of the Business Covered.
14. LATE PAYMENT INTEREST
Any amounts due by either the Cedant or XL Mid Ocean under this
Agreement, which are outstanding after the due date for payment
thereof, will bear interest at the Late Payment Interest Rate from the
due date to the date of payment (both days inclusive), and which
interest shall be capitalised monthly in arrears.
15. TERM AND TERMINATION
15.1 This Agreement takes effect from the Transfer Date and, unless
terminated pursuant to the remaining provisions of this clause 15,
shall remain in force until the natural expiry of all the Policies
constituting the Business Covered.
15.2 This Agreement will terminate immediately if the Cedant fails or
neglects to deliver the Adjusted Agreed Assets to XL Mid Ocean's
custodian on the Deferred Premium Payment Date. To the extent this
Agreement has been implemented in part or in full, the Parties shall be
restored, so far as same is reasonably possible, to their status quo
ante. If any dispute arises between the Parties in respect of the
termination of this Agreement in terms of this clause 15.2, such
dispute shall be determined, mutatis mutandis, in accordance with
clause 6.6.
15.3 The Cedant or XL Mid Ocean may terminate this Agreement with immediate
effect by written notice to the other Party on or at any time after the
performance of the whole or any material part of this Agreement being
prohibited or rendered impossible in consequence of any law, regulation
or decision of a regulatory authority; in which event the Parties shall
use their reasonable endeavours to reach agreement on the continuance
of this Agreement on whatever basis or the basis upon which the
reinsurance arrangement contemplated by this Agreement will be
terminated. If the
- 13 -
Parties are unable to reach agreement within 30 Business Days of the
date upon which this Agreement becomes prohibited or rendered
impossible, such dispute shall be determined, mutatis mutandis, in
accordance with clause 6.6.
15.4 The Cedant may terminate this Agreement with immediate effect by
written notice to XL Mid Ocean on or at any time after XL Mid Ocean
passes a resolution for its winding up, a court of competent
jurisdiction making an order for XL Mid Ocean's winding up or
dissolution, the making of an administration order in relation to XL
Mid Ocean, the appointment of a receiver over, or an encumbrance taking
possession of or selling, all or substantially all of the assets of XL
Mid Ocean, XL Mid Ocean making an arrangement or composition with its
creditors generally or making an application to a court of competent
jurisdiction for protection from its creditors generally, upon which
event the provisions of clause 15.5 shall apply hereto.
15.5 If this Agreement is terminated in accordance with the provisions of
clause 15.4:
15.5.1 XL's liability under this Agreement in respect of the Business
Covered shall be calculated pro rata up to and including the
date of termination; and
15.5.2 XL Mid Ocean shall pay an amount equal to the Required Amount
to the Cedant.
16. NOTICES
16.1 Any notice, request, instruction or other document (notices etc),
mentioned in this Agreement must be made in writing. Writing includes
facsimile and ether electronic means. Notices etc, must be sent to the
address of the relevant Parties given in the Recitals, unless another
address has been agreed in writing between the Parties.
16.2 For the purposes of this Agreement, notices etc, are deemed to have
been served:
16.2.1 At the time of delivery, if they have been delivered by hand
during office hours, or
16.2.2 48 hours after posting or 7 days if overseas, if they have
been sent by post, or
16.2.3 12 hours after transaction confirmation, if they have been
sent by facsimile or other electronic means.
16.3 For the purposes of this clause 16, the Parties' respective facsimile
numbers are:
16.3.1 XL Mid Ocean : 001 ▇▇▇ ▇▇▇ ▇▇▇▇, or such substituted number as
may be notified to the Cedant in writing from time to time,
marked for the attention of President and Chief Executive
Officer;
16.3.2 the Cedant : ▇▇▇(▇) ▇▇▇▇ ▇▇▇▇▇▇, or such substituted number as
may be notified to the XL Mid Ocean in writing from time to
time, marked for the attention of :The Deputy Chief Executive.
16.4 However, if service occurs on a weekend or public holiday, the above
notice periods do not start until the next Business Day.
- 14 -
17. GOVERNING LAW AND JURISDICTION
17.1 This Agreement is governed by, and shall be construed in accordance
with, English law.
17.2 Except as contemplated in clause 6.6, the courts of England shall have
exclusive jurisdiction to settle any dispute arising from or connected
with this Agreement.
17.3 The Parties agree that the documents which start any legal proceedings
and any other documents required to be served in relation to any such
proceedings may be served in accordance with the provisions of clause
16. These documents may, however, be served in any other manner allowed
by law. This clause applies to all proceedings wherever started.
18 COSTS
Except where this Agreement provides otherwise, each Party shall pay
its own costs relating to the negotiation, preparation, execution and
performance by it of this Agreement and of each document referred to in
it.
19. AMENDMENTS
No variation in this Agreement will be effective unless evidenced in
writing and duly signed on behalf of each Party. Variations sent by
instantaneous means of communication are also effective provided they
are capable of being shown by means of permanent or retrievable record
to have been agreed by each Party.
20. GENERAL
20.1 Each Party warrants to the other that it has the power, authority and
legal right to sign and perform this Agreement and that it has been
duly authorised by all necessary actions of its directors and
constitutes valid and binding obligations on it in accordance with this
Agreement.
20.2 The failure to exercise or delay in exercising a right or remedy
provided by this Agreement or by law does not impair or constitute a
waiver of the right or remedy or an impairment of or a waiver of other
rights or remedies. No single or partial exercise of a right or remedy
provided by this Agreement or by law prevents further exercise of the
right or remedy or the exercise of another right or remedy.
20.3 The Parties rights and remedies contained in this Agreement are
cumulative and not exclusive of rights or remedies provided by law.
21. ENTIRE AGREEMENT
21.1 This Agreement, the Warranty Side Letter and the Trading Instructions
Letter constitute the entire agreement and supersede any previous
agreements between the Parties relating to the subject matter of this
Agreement and such Letters.
21.2 The Parties acknowledge that they have not relied on or been induced to
enter into this agreement by a representation other than the warranties
or otherwise set out in this Agreement.
- 15 -
21.3 Neither Party is liable to the other (in equity, contract or tort,
under the ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ or in any other way) for a
representation that is not set out in this Agreement.
21.4 Nothing in this clause 21 shall have the effect of limiting or
restricting any liability arising as a result of fraud, wilful
misconduct or wilful concealment.
22. ASSIGNMENT
Neither Party shall assign or transfer any of its rights under this
Agreement in whole or in part without the express written consent of
the other Party.
23. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which when executed and delivered is an original and all of which
together evidence the same agreement.
EXECUTED BY THE PARTIES
SIGNATORIES
Signed at ▇▇▇▇▇▇▇▇, Bermuda for and on behalf of XL Mid Ocean Reinsurance Ltd on
the day of December 1999
Date
/s/ not legible 21st December 1999
---------------------
Date
/s/ not legible 21st December 1999
---------------------
Signed at London, United Kingdom for and on behalf of Old Mutual Life Assurance
Company Limited on the 21st day of December 1999
Date
/s/ not legible 21st December 1999
---------------------
Date
/s/ not legible 21st December 1999
---------------------
- 16 -
SCHEDULE 'A' - AGREED ASSETS
STOCK TITLE NOMINAL AMOUNT
GBP
Abbey National 6.5% 21/10/2030 750,000
Abbey National plc 10-3/4% 1/12/2006 3,290,000
AEGON 6.125% 31/2031 3,000,000
Alliance & Leicester 6.5% 9/9/2015 3,740,000
AMP Int'l Fin Services 7.125% 6/8/2009 3,500,000
Anglian Water 6.375% BDS 15/01/2029 2,650,000
Annington 0% 7/12/2022 7,000,000
Annington Finance 8% 02/10/21 2,500,000
Argyll Group 8.125% 4/10/2002 1,500,000
Asda 6.625% 17/07/2015 2,000,000
ASDA Group 10-7/8% 20/4/2010 500,000
Asda Prop 10-5/16% 1/10/2011 500,000
Asda Properties 9.125% 31/12/2020 1,000,000
Aust (Commonwealth) 11-3/8% 26/10/15 860,000
Austral & N.Z. Bank 12-5/8% 16/5/2001 2,000,000
Australia 9-1/2% 14/10/2012 Br 55,000
Australia 9-1/2% 14/10/2012 Rg 161,000
Autolink M6A FSA 8.39% 15/6/2022 1,000,000
BAA 6.375% 04/08/2028 Plc 2,350,000
Bank America Corp 6.125% 2010 1,250,000
Bank ▇▇▇ Gemeenten 5.375% 07/06/20021 2,500,000
Bank of American Credit Cards Corp 7.125% 15/09/2002 1,500,000
Bank of Ireland 9.75% 21/03/2005 300,000
Bank of West Aust 9% 20/12/2006 2,500,000
Barclays Bank 12% 15/7/2010 3,160,000
Bayerische Vereinsbank 8-5/8% 15/06/05 2,750,000
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇-▇/▇% 5/1/2006 1,850,000
BMW 6.375% 22/05/2009 2,560,000
BOC 12-1/4% 2/10/2012-17 1,800,000
Bradford & Bingley 7-5/8% 30/12/99 270,000
Bradford & Bingley 8-3/8% 29/12/2006-11 3,000,000
Bristol & West 10-3/4% 22/6/2018 1,500,000
Bristol & West B.S. 10-7/8% 30/9/2000 760,000
British Columbia 7.5% 31/12/2003 1,000,000
British Energy 6.202% 11/06/2016 1,580,000
British Land 8-7/8% 24/9/2035 291,500
British Telecom 5.75% 7/12/2028 4,800,000
Brixton Estates 10-3/4% 31/12/2025 150,000
Brixton Estates 11-1/4% 31/12/2023 1,929,500
Brixton Estates 9-1/2% 31/12/2026 801,400
Cable & Wireless 10-3/8% 27/3/2002 550,000
Cadbury Schweppes 8% 2000 1,400,000
Cambridge Water 13% 31/12/2004 100,000
Canary Wharf Finance 5% 22/10/2027 2,000,000
Cap & Co 9-7/8 31/12/2027 2,000,000
Capital Shopping Centre 6.875% 5/3/2013 1,500,000
Care Homes No2 5.75% 15/02/2023 2,000,000
Care Homes No1 8% 9/4/2021 2,000,000
Carlsberg 7% 26/02/2013 2,000,000
- 17 -
Carlton Communication 7.625% BDS 06/06/07 650,000
Catalyst Health (AMBAC) 5.87% 31/12/2030 1,500,000
Citigroup 6.25% 02/09/2019 3,500,000
City Greenwich Rail Link 9-3/8 11/10/2020 500,000
City of Salford 7% 25/01/2019 200,000
Coca Cola 6.5% 07/06/2021 1,500,000
Commercial Union 10-3/4% 20/3/2002 1,250,000
Commercial Union 9-1/2% 20/6/2016 1,495,000
Commerzbank 6.625% 30/08/2019 1,000,000
Commerzbank 7.875% 7/12/2007 2,000,000
Consols 2-1/2% (1923) 5/4/2069 (51.00) 12,410,000
Consols 4% (1957) 1/2/2069 (79.00) 500,000
Co-op Wholesale Society 7-5/8 31/12/2018 1,850,000
Coventry 8-1/4% 5/1/2026 1,000,000
Daimler Benz 7% 25/02/2000 600,000
Denmark (Kingdom of) 5.875% 28/06/2004 1,500,000
Denmark (Kingdom of) 13% 31/12/2005 2,130,000
Derwent Valley 10.125% 31/07/19 1,500,000
▇▇▇▇▇▇▇▇ ▇▇ 7.75% 7/12/07 2,000,000
▇▇▇▇▇▇▇▇ ▇▇ 7-5/8% 31/12/2003 100,000
ECSC 6.875% 25/1/2019 700,000
EIB 6% 7/12/2028 3,000,000
Enterprise Inns plc 6% 2/3/2014 1,500,000
European Investment Bank 5% 15/04/2039 1,500,000
Export Import Bank of Japan 8% 5/2/2007 500,000
▇▇▇▇▇▇ ▇▇▇ 5.375% 7/12/2028 2,000,000
Finland 11.5 2009 960,000
Fitzwilton 9-3/4% 11/10/2006 1,000,000
Fresh class(A) 8.639(11.126)% 5/10/2049 3,000,000
General Electric 5.25% 07/12/2028 2,150,000
General Electric Capital Corp 6.25% 01/09/2009 1,400,000
Granada Grp 10% 18/02/2018 1,000,000
Granchester 7-3/8 30/04/2020 500,000
Great Portland Est 9-1/2% 31/3/2016 1,000,000
Greenalls 10-1/2% 23/6/2017 1,500,000
Guardian Royal Exchange 6.625% 21/8/2023 4,500,000
Halifax 13.625% 29/06/2049 250,000
Halifax (Leeds Perm B.S.) 10-1/2% 16/02/2018 930,000
Halifax B.S. 11% 17/1/2014 380,000
Helaba 9% 6/9/2004 850,000
HMC MBIA 7.181% 30/09/2027 1,000,000
Housing Ass Fund 8-1/4% 07/06/2027 3,700,000
Housing Securities 8 3/8% 25/1/2019 575,000
HSBC Midland Bank 6.5% 07/07/2023 1,000,000
Iceland 14-1/2% 31/1/2016 1,177,000
Iceland 8 3/4% 12/05/2003 747,000
III Group 6.875% 09/03/2023 3,200,000
III Group plc 5.75% 3/12/2032 1,000,000
International Finance Corp 5.5% 7/6/2021 1,000,000
Intl Bk Recon & Dev 4.875% 7/12/2028 1,000,000
Ireland 12 1/2% 12/10/2008 1 276,317
Ireland 12 1/2% 12/10/2008 2 2,925,000
Italy (Republic of) 6% 04/08/2028 3,040,000
Italy 10.5% 28/04/2014 1,000,000
J ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇ ▇/▇% ▇▇ ▇/▇/▇▇ ▇▇▇,▇▇▇
- ▇▇ -
▇▇▇▇▇ Financial Mun. 5.75% 09/08/2019 2,000,000
Japanese Finance Municipal Enterprise 8.375% 07/12/2006 1,000,000
▇▇▇▇ ▇▇▇▇▇ 10 1/4% 6/5/2006 1,000,000
▇▇▇▇ ▇▇▇▇▇ 10-1/2% 23/1/2014 2,000,000
Keystone I.T. 11-3/8% 1/10/2010-15 136,250
KFW International 6% 07/12/2028 4,250,000
Kingfisher Plc 6.875% 23/03/2010 2,250,000
Land Securities 10-3/4% 31/07/04 830,000
Lb.Sch.Holstein 8% 28/12/06 1,300,000
LCR Finance 4.5% 7/12/2038 6,000,000
LGS Investments 8.75% 22/05/2020 1,300,000
Lloyds (TSB) 10-5/8% 21/10/2008 1,605,000
Lloyds Bank 9-5/8% 6/4/2023 1,600,000
Local Authority Bond 8-1/8% 31/01/14 1,600,000
London & Manchester 8 1/8% 30/11/2004 875,000
Lynton 10-1/4% 31/7/2017 1,500,000
Mansfield Brewery 6.875% 28/02/2028 1,000,000
MEPC 8-3/4% 07/12/2006 520,000
Mutual Group 7.25% 12/01/2004 2,100,000
Mutual Sec 7.3917 30/9/2012 800,000
Mutual Sec 7.5873 30/9/2022 500,000
Nat West Bank 8-1/8% 29/12/06-11 2,700,000
National Grid 5.875% 2024 4,750,000
National Power Plc 8.375% 02/08/06 1,000,000
Nationwide B.S. 10-1/2% 30/07/2002-07 3,000,000
Natwest 6.5% 07/09/2021 1,100,000
NB Housing Assn 6.625% 30/09/2038 2,000,000
NBH Assoc (FSA) 8 5/8% 26/09/2016-20 500,000
NEC Finance Plc 13.625 30/09/2016 360,000
New Zealand (BEARER)) 11.25% 04/05/2008 235,000
New Zealand (REG) 11-1/4 4/5/2008 575,000
Newcastle 11 1/4% 30/9/2017 250,000
Newport Borough 8-7/8% 10/04/2019 1,000,000
Nippon T&T 7.375% 02/12/2003 1,650,000
Nordic Investment Bank 5.25% 26/11/2019 2,000,000
Northavon inv 8.12% 5/10/2026 1,500,000
Northern Counties FSA 9-1/8% 31/1/2025 3,000,000
Northern Ireland Electricity 6.875% 18/9/2018 1,950,000
Northern Rock 6.375% 2/12/2019 2,500,000
Northumbrian Water 6.875% 06/02/2023 1,500,000
▇▇▇▇▇▇ Kontrollbank 5.75% 7/12/2028 2,450,000
Pavilion Housing AMBAC 5-1/2%/ 24/4/27 2,000,000
Peabody (AMBAC) 10-1/4% 17/8/2023 1,450,000
PHF Sec No 7.1825% 10/07/2025 1,200,000
Portugal (Rep of) (BR) 9% 20/05/2016 535,000
Portugal (Rep of) (REG) 9% 20/05/2016 2,000,000
Powergen 6.25% 29/04/2024 1,600,000
Powergen 8-1/2% 03/07/2006 500,000
Province Of Quebec 8-5/8 04/11/11 1,041,000
Prudential 5.875% 11/05/2029 2,961,000
Pub Master Finance 7.369% 30/06/2022 1,000,000
Punch Taverns 7.274% 15/04/2022 500,000
Quadrant Housing Trust AMBAC 4.94%-7.93% 10/2/2033 2,500,000
Railtrack 7 3/8% 18/11/2022 2,425,000
Rank 8.75% 28/07/2003 2,100,000
- 19 -
Roadchef 7.418% 31/10/2023 2,000,000
Rodamco Jersey 6.25% 24/06/2024 4,500,000
Royal Bank of Scotland 10-1/2% 1/3/2013 3,130,000
S.W Water 10-5/8% 05/02/2012 2,400,000
Sainsbury 8-1/4% 22/12/2000 2,950,000
Sanctuary Housing 8-3/8 1/9/2031 2,000,000
▇▇▇▇ Metropol Prop 10-1/4% 15/8/2016 1,276,000
▇▇▇▇ & South Energy 5.875% 22/09/2022 3,500,000
Sec Trust Scotland 12% 30/9/2013 218,440
▇▇▇▇▇▇ ▇▇▇▇▇ Water 6.125% 26/02/2024 3,000,000
Shaftesbury Plc 8-1/2% 31/03/24 750,000
Siemens 6.875% 24/2/2000 1,000,000
Slough Estates 11-1/4% 31/12/2019 400,000
Slough Estates 12-3/8% 31/12/2009 1,650,000
Smithkline ▇▇▇▇▇▇▇ 8-3/8% 29/12/2000 700,000
SNCB 9-3/8% 21/02/2020 500,000
Soc Gen De Belgique 11.31% 1/5/07 440,000
South Somerset Homes (AMBAC) 5.955 2034 2,000,000
Southern Water 6.842% 26/3/2008 3,100,000
Spain (Kingdom of) 5.25% 06/04/2029 1,760,000
Statoil 6.125% 27/11/2028 2,790,000
Stirling Water (MBIA) 5.822% 26/09/2026 1,000,000
Summit Finance Law AMBAC 6.484% 31/03/2028 1,000,000
Swiss Bank 8.75% 20/06/2005 2,000,000
Takare 11.8% 30/6/2014 500,000
Tesco 6% 14/12/2029 2,000,000
Tesco 8.75% 20/2/2003 1,210,000
Thames Water 6.75% 16/11/2028 2,500,000
Thistle Hotels 7-7/8% 20/06/2022 1,000,000
Tiara Securities 5.9% 10/07/2027 2,000,000
Tokyo Elec Power 11% 05/06/2001 1,000,000
Town Centre 10-1/2% 01/04/21 1,000,000
Toyota Motor Finance 7.25 29/12/99 650,000
Transcanada Pipe 16-1/2% 1/9/2007 1,250,000
Treasury 2-1/2% (1975) 1/4/2069 (49.75) 15,128,674
Treasury 3% 29/12/2069(60.00) 1,367,000
Treasury 6% 7/12/2028 4,330,000
Treasury 7 1/2% 7/12/2006 500,000
Treasury 8% 07/12/2015 280,000
Treasury 9% 13/10/2008 145,000
Treasury Principle Strip 0% 07/06/2021 6,647,500
Trust Union Finance 8.125% 30/11/08 250,000
Tussauds Finance 7.078% 15/3/2020 1,000,000
Tyseley Finance FSA 6.675% 30/07/2018 1,700,000
UBS 7.375% 26/11/2004 920,000
UBS 8% 08/01/2007 580,000
Unique Public Finance 6.542% 30/03/2021 1,000,000
University of Greenwich (AMBAC) 6.367% 31/07/2028 650,000
Varsity Funding FSA 6.4175-8.7195% 24/07/2026 500,000
Vaux 9-7/8% 26/09/2015 250,000
Vodafone Grp 7-7/8% 6/11/2001 2,350,000
Welcome Break (Class A3)7.95% 1/9/2015 1,500,000
Wellington Pub Co. 6.735% 15/01/2029 2,500,000
Welsh Water 7-5/8% 21/03/2014 1,000,000
Wessex Water 5.875% 30/03/2009 500,000
- 20 -
West Deutsche LB 8-1/2% 2/6/03 1,050,000
Westland 12-3/8% 30/9/2008 500,000
Wolverhampton & ▇▇▇▇▇▇ 6.5% 18/06/2019 500,000
Woolwich B.S. 10-1/8% 21/12/2012 1,930,000
Yorkshire Water 6.875% 23/4/2010 3,000,000
- 21 -
SCHEDULE 'B' - DATA REQUIREMENTS
The following information should be provided by the Cedant to XL Mid Ocean as at
the Transfer Date and then on each Pre-Payment Date:
In force policy listing ANNUITANT'S NAME
DATE OF BIRTH (1)
JOINT ANNUITANT'S NAME
DATE OF BIRTH (2)
CURRENT ANNUITY AMOUNT
ANNUITY AMOUNT AT ISSUE
FREQUENCY
IN ADVANCE/ARREARS
ESCALATION RATE
REDUCTION IN BENEFIT ON REVERSION
GUARANTEE OUTSTANDING
FIRST OR JOINT ANNUITANT BEING PAID
NEXT PAYMENT DUE DATE
REMAINING TERM
POLICY NUMBER
Schedule of Deaths notified since the previous Pre-Payment Date, together with
copies of Death Certificates.
Schedule of Reversions notified since the previous Pre-Payment Date.
Pre-Payment Due and supporting calculations, including a summary of actual
payments made over the previous Pre-Payment Period.
- 22 -
SCHEDULE 2
Security Agreement
14
DATED 2000
----------------------------------------
OLD MUTUAL LIFE ASSURANCE COMPANY LIMITED (1)
AND
XL MID OCEAN REINSURANCE LTD (2)
------------------------------------------
SECURITY AGREEMENT
------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇
CONTENTS
CLAUSE PAGE
1 Definitions and interpretation........................................... 1
2 Covenant and charge...................................................... 4
3 Delivery of additional Collateral and improved Collateral ............... 4
4 Return of Collateral..................................................... 5
5 Rounding, minimum transfers and information.............................. 6
6 Exchange and substitution of Collateral.................................. 6
7 Appointment of new Custodian or Sub-custodian............................ 6
8 Dispute Resolution....................................................... 6
9 Power of sale............................................................ 7
10 Application of Cash collateral........................................... 7
11 Further assurance........................................................ 8
12 Power of attorney........................................................ 8
13 Receiver................................................................. 8
14 Effectiveness of Collateral.............................................. 8
15 Subsequent interests and accounts........................................ 9
16 Representations and warranties relating to the Chargor................... 9
17 Negative pledge.......................................................... 10
18 Costs and expenses....................................................... 10
19 The transferred Collateral............................................... 10
20 Currency conversion...................................................... 10
21 Notices.................................................................. 10
22 successors............................................................... 11
23 Client money rules....................................................... 11
24 Valuation agent.......................................................... 11
25 Law and jurisdiction..................................................... 11
26 Amendments............................................................... 11
27 Counterparts............................................................. 11
28 Third Party Rights....................................................... 11
Annex 1 Notice to Custodian/Deposit Taker .............................................. 13
Annex 2 Custodian Agreement............................................................. 14
Annex 3 The Accounts ................................................................... 15
THIS SECURITY AGREEMENT is made on 2000
BETWEEN:
(1) OLD MUTUAL LIFE ASSURANCE COMPANY LIMITED (No. 943621) whose registered
address is ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (the "SECURED
PARTY"); and
(2) XL MID OCEAN REINSURANCE LTD a company incorporated under the laws of
Bermuda whose principal place of business is ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇
▇▇▇▇▇▇, PO Box HM 1066, ▇▇▇▇▇▇▇▇ ▇▇ EX, Bermuda (the "CHARGOR").
IT IS AGREED as follows:
1 DEFINITIONS AND INTERPRETATION
1.1 In this Security Agreement
"ACCOUNTS" means the designated accounts of the Chargor with the
Custodian, each sub-custodian, investment manager and any other
relevant person under the Custodian Agreement in which the Non-Cash
Collateral and Cash Collateral (other than the balance of the Pre-
Payment Fund from time to time) subject to this Security Agreement are
held and as specified in Annex 3;
"ADJUSTED ASSET REGULATIONS" means the Asset Regulations except that
(i) any admissibility percentage applicable for determining admissible
assets set out in Part II of Schedule 12 to the Asset Regulations shall
be deemed not to exceed 5 per cent, and (ii) the application of any
such admissibility percentage shall not give rise to any admissibility
limit of less than GBP one million; and (iii) the aggregate admissible
value of Non-GBP Assets will not exceed 20% of the Required Amount; and
(iv) the aggregate admissible value of Unhedged Non-GBP Assets will not
exceed one per cent of the Required Amount; and (v) Currency Hedge
Assets shall be deemed to be assets for the purposes of efficient
portfolio management provided that such assets hedge a Non-GBP Asset
back into GBP. For the avoidance of doubt Currency Hedge Assets
contained within the Collateral shall be aggregated with all other
Collateral to determine whether individual counterparty limits have
been exceeded;
"APPOINTED ACTUARY" shall have the meaning set out in the Reinsurance
Agreement;
"ASSET REGULATIONS" means the Insurance Companies Regulations 1994 and
all other relevant regulations and professional guidance from time to
time relating to the valuation and/or admissibility of the long term
business assets of United Kingdom insurance companies provided that,
for the purpose of this definition, references to long term business
amount in such regulations and guidance shall be deemed to be
references to the Required Amount;
"BANKING DAY" means any day on which commercial banks are open for
business (including dealings in foreign exchange and foreign currency
deposits) in (i) London and Bermuda and (ii) in the case of a delivery
of Permitted Collateral (a) the location of the account into which such
delivery is to be made, and (b) either, in the case of a delivery of
Cash, the principal financial centre of the currency of such Cash or,
in the case of a delivery of Non-Cash Assets, the location of the
account out of which such delivery shall be made, and, if different,
the place where the delivery will be registered (if applicable);
"BUSINESS COVERED" shall have the meaning set out in the Reinsurance
Agreement;
"CALL AMOUNT" means on any Valuation Date the GBP amount (rounded
pursuant to clause 5.1) by which the Required Amount exceeds the
aggregate Value (calculated as at the close of business on the Banking
Day immediately preceding the Valuation Date) of the Collateral held by
the Custodian on behalf of the Secured Party on such date;
"CASH" means any Deposits denominated in GBP and such other currency or
currencies as may from time to time be agreed in writing between the
parties together with the balance from
1
time to time of the Pre-Payment Fund;
"CASH COLLATERAL" means Collateral comprising Cash;
"COLLATERAL" means all the assets whether Cash or Non-Cash which stand
to the credit of the Accounts from time to time delivered pursuant to
this Security Agreement together with all Proceeds, interest earned on
Cash Collateral (which interest shall accrue for the benefit of the
Chargor at such rates) as shall be agreed between the Chargor and the
Custodian and the Custodian and Sub-Custodian in accordance with the
Custodian's and/or Sub-Custodian's (as the case may be) normal
practice), substitutions for and additions to the foregoing and which
have not been redelivered to the Chargor;
"COLLATERAL RIGHTS" means all rights, powers and remedies of the
Secured Party provided by this Security Agreement or by law;
"CURRENCY HEDGE ASSETS" means a foreign exchange contract (or such
other financial instrument as may from time to time be agreed between
the parties thereto) the effect of which is to forward sell either EURO
or USD and to forward purchase GBP, at a rate and future date
determined when such contract is entered into;
"CUSTODIAN" means the bank or other custodian chosen by the Chargor (in
its absolute discretion) which will hold the Collateral on behalf of
the Secured Party;
"CUSTODIAN AGREEMENT" means the agreement between the Chargor and the
Custodian substantially in the form of Annex 2;
"DEFERRED PREMIUM PAYMENT DATE" shall have the meaning given to it in
the Reinsurance Agreement;
"DEPOSIT" means each credit balance from time to time on an Account and
all rights, benefits and proceeds in respect thereof;
"EURO" means the lawful currency widely adopted in the European Common
Currency Area and, wherever mentioned in this Security Agreement, shall
also include any successor thereto;
"EVENT OF DEFAULT" means in relation to the Chargor:
(i) the passing of a resolution for its winding up, a court of
competent jurisdiction making an order for the Chargor's
winding up or dissolution, the making of an administration
order in relation to the Chargor, the appointment of a
receiver over, or an encumbrance taking possession of or
selling, all or substantially all of the assets of the
Chargor, the Chargor making an arrangement or a composition
with its creditors generally or making an application to a
court of competent jurisdiction for protection from its
creditors generally or any analogous proceedings being
undertaken or occurring under the courts of any other relevant
jurisdiction; or
(ii) any breach by the Chargor of (A) clause 15 (Term and
Termination) of the Reinsurance Agreement, (B) any provision
of the Reinsurance Agreement which is not capable of remedy or
(C) any provision of the Reinsurance Agreement which, being
capable Of remedy, is not remedied within 30 Banking Days of
such breach; or
(iii) any breach by the Chargor of any provision of this Security
Agreement;
"GBP" means the lawful currency of the United Kingdom and, wherever
mentioned in this Security Agreement, shall also include any successor
currency thereto;
"GBP ASSET" means an asset which is denominated in GBP;
"HEDGED NON-GBP ASSETS" means the Non-GBP Assets in respect of which
Currency Hedge Assets are held which have the effect of removing the
exposure of those Non-GBP Assets to
2
future changes in the exchange rates of the Euro or USD against GBP;
"LIBOR" means the six monthly London Inter-Bank Offered rate of
Barclays Bank plc;.
"LIABILITY REGULATIONS" means the Insurance Companies Regulations 1994
and all other relevant regulations and professional guidance from time
to time relating to the valuation of liabilities of the long term
business of United Kingdom insurance companies;
"NON-CASH ASSETS" means such GBP Assets or such Non-GBP Assets as shall
accord with the criteria set out in the Adjusted Asset Regulations;
"NON-CASH COLLATERAL" means Collateral comprising Non-Cash Assets;
"NON-GBP ASSETS" means an asset which is denominated in EURO or an
asset which is denominated in USD;
"OBLIGATIONS" means all obligations owing to the Secured Party by the
Chargor under the Reinsurance Agreement and this Security Agreement,
whether present or future, actual or contingent;
"PERMITTED COLLATERAL" means collectively Cash and Non-Cash Assets;
"PRE-PAYMENT FUND" shall have the meaning given to it in the
Reinsurance Agreement;
"PROCEEDS" means all principal, interest, dividends and other payments
and distributions of cash or other property paid or distributed in
connection with all Non-Cash Collateral and all rights privileges and
other securities of every kind distributed with respect thereto or in
exchange therefor. For the avoidance of doubt, Proceeds will not
include any item of property acquired by the Secured Party upon any
disposition or liquidation of Collateral;
"REINSURANCE AGREEMENT" means the Reinsurance Agreement between the
Secured Party and the Chargor dated 20 December 1999;
"REQUIRED AMOUNT" means, on any Valuation Date, 100% of the net present
value of the future projected annuity cash flows (calculated as at the
close of business on the day immediately preceding the Valuation Date)
such amount to be determined by the Valuation Agent in the context of
the Business Covered only and in accordance with the Liability
Regulations in respect of the relevant block of Business Covered. To
the extent that a resilience reserve, when calculated in respect of
such block of Business Covered, would exceed GBP five million, then any
such excess over GBP five million shall be included for the purposes of
this calculation;
"RETURN AMOUNT" means, on any Valuation Date, the GBP amount (rounded
pursuant to clause 5.2) by which the aggregate Value (calculated as at
the dose of business on the Banking Day immediately preceding the
Valuation Date) of the Collateral held by the Custodian on behalf of
the Secured Party exceeds the then current Required Amount;
"SUB-CUSTODIAN" means the bank or other sub-custodian chosen by the
Custodian (in its absolute discretion) which will hold the Collateral
on behalf of the Custodian for the Secured party;
"SUB-CUSTODIAN AGREEMENTS" means the agreements between the Custodian
and the Sub-Custodians;
"UNHEDGED NON-GBP ASSETS" means Non-GBP Assets other than Hedged
Non-GBP Assets;
"USD" means the lawful currency of the United States of America and,
wherever mentioned in this Security Agreement, shall also include any
successor thereto;
"VALUATION AGENT" means an actuary who would, if the Chargor were a
life insurance company subject to the Insurance Companies Act 1982
(United Kingdom) be entitled to be appointed as
3
an actuary to an insurance company in the terms of section 19 of such
Act;
"VALUATION DATE" means (i) the Deferred Premium Payment Date and (ii)
the final Banking Day in each calendar quarter during the term of the
Reinsurance Agreement and (iii) each Banking Day on which the Call
Amount or the Return Amount exceeds GBP 2 million; and
"VALUE" means in relation to any Collateral on any date, the admissible
value of such Collateral as determined by the Valuation Agent on such
date in accordance with the Adjusted Asset Regulations provided that,
in determining "VALUE", the Valuation Agent shall only include such
part(s) of the Pre-Payment Fund and the Accounts in respect of which
the requirements of clause 2.4 have been met.
1.2 In this Security Agreement, any reference to (a) a "CLAUSE" is, unless
otherwise stated, a reference to a clause hereof and (b) "THIS SECURITY
AGREEMENT" and the "REINSURANCE AGREEMENT" is a reference to this
Security Agreement or (as the context requires) the Reinsurance
Agreement as amended, varied or supplemented from time to time. Clause
headings are for ease of reference only. Terms used but not defined
herein shall bear the respective meanings ascribed to them in the
Reinsurance Agreement.
2 COVENANT AND CHARGE
2.1 The Chargor shall discharge each of the Obligations in the manner
provided for in the Reinsurance Agreement and this Security Agreement
and pay to the Secured Party when due and payable and in the manner
provided for in the Reinsurance Agreement and this Security Agreement
each sum owing by the Chargor to the Secured Party in respect of the
Obligations.
2.2 On the Deferred Premium Payment Date, the Chargor shall transfer to the
Accounts, Permitted Collateral, having an aggregate Value at least
equal to the Required Amount.
2.3 The Chargor charges with full title guarantee and by way of first fixed
charge all of the Collateral the balance from time to time of the
Pre-Payment Fund and all of its rights under the Custodian Agreement
(insofar as the same relate to the Collateral) in favour of the Secured
Party as security for the payment and discharge of all of the
Obligations.
2.4 The Chargor shall deliver a notice to (and use its reasonable
endeavours to procure acknowledgement from) the Custodian and any other
relevant person under the Custodian Agreement and each relevant Deposit
Taker of the security interest over each of the Accounts and (as the
context requires) the Pre-Payment Fund, in the form set out in Annex 1.
2.5 The Chargor hereby agrees that the security provided by the terms of
the covenant and charge in this Security Agreement shall be a
continuing security for each of its Obligations and shall not be
satisfied by any intermediate payment or satisfaction of the whole or
any part of the Obligations.
2.6 The Chargor hereby waives any right it may have of first requiring the
Secured Party to proceed against or claim payment from any other person
or enforce any guarantee or security before enforcing this Security
Agreement.
2.7 Where any discharge (whether in respect of the security constituted by
this Security Agreement, any other security or otherwise) is made on
the faith of any payment, security or other disposition which is
avoided or any amount paid pursuant to any such discharge or
arrangement must be repaid on bankruptcy or liquidation (or otherwise)
of the Chargor, the security constituted by this Security Agreement and
the liability of the Chargor under this Security Agreement shall
continue as if there had been no such discharge or arrangement.
3 DELIVERY OF ADDITIONAL COLLATERAL AND IMPROVED COLLATERAL
3.1 If a Call Amount exists on a Valuation Date, the Chargor shall by 12
p.m. London time on the second Banking Day following such Valuation
Date, at the cost and expense of the Chargor,
4
arrange for the delivery to the Accounts of further Permitted
Collateral with a Value as at the relevant Valuation Date of not less
than the Call Amount (and which, for the avoidance of doubt, shall be
subject to the charge in clause 2 of this Agreement).
3.2 If the Collateral (including, without limitation, the Pre-Payment Fund)
has, on any day (the "Relevant Day"), an average Standard & Poor's
rating of below A (such rating to be of (i) the relevant asset(s) in
respect of Non-Cash Assets and (ii) the Custodian and Deposit Taker(s)
in respect of Cash), the Chargor shall (notwithstanding that the Call
Amount is equal to or less than zero on the Relevant Day) deliver
Permitted Collateral to the Account. Such Permitted Collateral shall be
delivered on the second Banking Day following the Relevant Day and
shall ensure that the average Standard & Poor's rating of the
Collateral (including, without limitation, the Pre-Payment Fund) after
delivery is equal to or greater than A. If a Return Amount exists after
such delivery, the provisions of clause 4 shall apply.
4 RETURN OF COLLATERAL
4.1 If a Return Amount exists on a Valuation Date, the Chargor may at any
time, by giving written notice (a "REQUEST FOR RETURN") to the Secured
Party and the Custodian, require the Secured Party to comply with the
provisions of clause 4.2 or 4.3.
4.2 If a Return Amount exists on a Valuation Date, and the Secured Party
receives a Request for Return, by 10 a.m. London time, the Secured
Party shall, by 12 p.m., London time, on the second Banking Day
following the date of receipt of the Request for Return, at the cost
and expense of the Chargor, arrange with the Custodian for the
redelivery of a portion of the Collateral having a Value as at the
relevant Valuation Date, equal to the Return Amount (rounded pursuant
to clause 5.2) to the Chargor, whereupon that portion of the Collateral
shall be released from the security interest constituted by this
Security Agreement.
4.3 If a Return Amount exists on a Valuation Date, and the Secured Party
receives a Request for Return after 10 a.m. London time, the Secured
Party shall by close of business on the third Banking Day following the
date of receipt of the Request for Return at the cost and expense of
the Chargor, arrange with the Custodian for the redelivery of a portion
of the Collateral having a Value as at the relevant Valuation Date,
equal to the Return Amount (rounded pursuant to clause 5.2) to the
Chargor, whereupon that portion of the Collateral shall be released
from the security interest constituted by this Security Agreement.
4.4 When all Obligations have been paid, discharged and performed in full,
the Secured Party will, upon the request and at the reasonable expense
of the Chargor, release the security interest created pursuant to
clause 2 and procure that the Custodian shall redeliver all Collateral
(together with any interest each pursuant to clause 8) to the Chargor.
Any such release shall be conditional upon no security, disposition or
payment to the Secured Party by the Chargor being void, set aside or
ordered to be refunded pursuant to any law relating to insolvency or
for any other reason whatsoever and, if such condition is not
fulfilled, the Secured Party will be entitled to enforce this Security
Agreement as if such release had not occurred.
4.5 Any notice given by the Chargor in accordance with clause 4.1 shall
specify:
4.5.1 the Value of the Collateral in the Accounts as of the close of business
on the Banking Day immediately preceding the relevant Valuation Date;
4.5.2 the Return Amount;
4.5.3 any other information necessary for the effective redelivery of
Collateral in accordance with clause 4.2 or 4.3; and
4.5.4 the type of Collateral the Chargor wishes to have returned (where more
than one type of Permitted Collateral has been delivered to the
Accounts pursuant to this Security Agreement).
5
5 ROUNDING, MINIMUM TRANSFERS AND INFORMATION
5.1 All Call Amounts shall be rounded up to the nearest integral multiple
of GBP 1,000,000.
5.2 All Return Amounts shall be rounded down to the nearest integral
multiple of GBP 1,000,000.
5.3 The Chargor will procure that the Valuation Agent will notify each
party within 5 Banking Days following a Valuation Date (each such day
being a "Notification Date") of the existence of a Call Amount or a
Return Amount (if any) as the case may be.
5.4 On each Notification Date, on the first Banking Day of each month and
on the First Banking Day after which the aggregate market value of
assets exchanged out of the Collateral since the last such account
exceeds 5% of the Required Amount as at the last such account and from
time to time at the reasonable request of the Secured Party, the
Chargor will provide to the Secured Party an account detailing all
Collateral then held in the Accounts in a form and content
substantially similar to the list of Agreed Assets as set out in
Schedule A to the Reinsurance Agreement (but including, in addition,
the market value of those assets) and such other details as may be
agreed between the parties from time to time. Where the Secured Party
requests additional information, the Chargor shall not unreasonably
deny access to the Valuation Agent if the Secured Party so requests the
Valuation Agent to provide such information.
5.5 At the reasonable request of the Secured Party and at reasonable
intervals, the Chargor will provide to the Secured Party evidence in a
form satisfactory to the Secured Party, that the Collateral is not
subject to any Encumbrance other than the charge hereby created.
6 EXCHANGE AND SUBSTITUTION OF COLLATERAL
6.1 The Chargor may from time to time sell or dispose of all or any part of
the Collateral and replace such Non-Cash Collateral with Cash
Collateral or Non-Cash Collateral of equal Value provided only that
such sale or disposal is carried out on a delivery against payment
basis, save in the case of any Currency Hedge Assets where payment is
not made against delivery but is due in accordance with the terms of
such Currency Hedge Asset.
6.2 The Chargor may from time to time sell or dispose of all or any part of
the Collateral and replace such Cash Collateral with Non-Cash
Collateral of equal Value.
7 APPOINTMENT OF NEW CUSTODIAN OR SUB-CUSTODIAN
In the event that the Chargor shall appoint a new Custodian, or in
event that the Chargor becomes aware of the appointment of any new
Sub-Custodian, the Chargor shall give written notice of such
appointment to the Secured Party as soon as is reasonably practicable
thereafter.
8 DISPUTE RESOLUTION
8.1 If the Secured Party or its Appointed Actuary does not approve any
calculation performed by the Chargor or the Valuation Agent under this
Security Agreement (or any other dispute which is to be determined in
accordance with this clause 8) then the remaining provisions of this
clause 8 shall apply.
8.2 If the Secured Party or its Appointed Actuary does not approve any one
or more of the calculations performed by the Chargor or the Valuation
Agent, the Secured Party shall deliver a notice in writing to the
Chargor, specifying the calculation of which it does not approve and
setting out in reasonable detail, the basis of the objection. Where a
dispute is required to be determined elsewhere in this Security
Agreement in accordance with this clause 8, either party shall be
entitled to deliver a notice to the other party, setting out the
details of the dispute in reasonable detail.
6
8.3 The Chargor and the Secured Party shall, within ten (10) Banking Days
of delivery of the notice referred to in clause 8.2 attempt, in good
faith, to resolve the dispute.
8.4 If the Chargor and the Secured Party are unable to resolve the dispute
within the time period contemplated in clause 8.3, such dispute shall
be referred to the respective Appointed Actuaries of the Chargor and
the Secured Party, who shall further attempt to resolve the dispute
amicably within ten (10) Banking Days of expiry of the period referred
to in clause 8.3.
8.5 If the respective Appointed Actuaries of the Chargor and the Secured
Party are unable to reach agreement within the time period contemplated
in clause 8.4, the Chargor and the Secured Party shall agree upon an
independent actuary. If the Chargor and the Secured Party are unable to
reach agreement on the identity of the independent actuary within a
period of ten (10) Banking Days of expiry of the period referred to in
clause 8.4, such independent actuary shall be appointed by the
President, for the time being, of the Institute of Actuaries in England
and Wales.
8.6 The Chargor and the Secured Party shall use all reasonable endeavours
to procure that the independent actuary performs the disputed
calculation within fifteen (15) Banking Days of his appointment. Any
calculation undertaken by the independent actuary shall be in his
capacity as an expert and not as an arbitrator or quasi-arbitrator and
his decision shall be final and binding on the Chargor and the Secured
Party.
8.7 In the event that any of the matters contemplated in clauses 3.1 or 4.1
becomes the subject matter of a dispute to be determined in accordance
with the provisions of this clause 8, and as a result thereof, the
Chargor or the Secured Party (as the case may be) shall not be able to
make payment of a Call Amount or a Return Amount within the period
required after the relevant Valuation Date, the Valuation Date shall be
the date upon which the dispute is settled or determined (as the case
may be) in accordance with this clause 8.
9 POWER OF SALE
9.1 If at any time an Event of Default has occurred and is continuing, the
Secured Party shall be entitled, without prior notice to the Chargor or
prior authorisation from any court, to sell or otherwise dispose of in
any manner permitted by law, all or any part of the Collateral. The
Secured Party shall be entitled to apply the proceeds of such sale or.
other disposal in paying the costs of that sale or disposal and in or
towards the discharge of the Obligations. The Secured Party shall be
entitled to treat any Cash Collateral as if it were the proceeds of
such sale or other disposal.
9.2 The power of sale or other disposal in clause 9.1 shall operate as a
variation and extension of the statutory power of sale under s1O1 of
the Law of Property ▇▇▇ ▇▇▇▇ and the Secured Party may exercise any
power available to it by virtue of this Security Agreement or
available to a secured creditor. The restrictions contained in s93 and
s103 of the Law of Property Act 1925 shall not apply to this Security
Agreement or to any exercise by the Secured Party of its right to
consolidate mortgages or its power of sale.
9.3 In favour of a purchaser of all or any part of the Collateral, a
certificate in writing by an officer, attorney or agent of the Secured
Party that any power of sale or other disposal has arisen and is
exercisable shall be conclusive evidence of that fact and no purchaser
shall be concerned to enquire whether any power exercised or purported
to be exercised by the Secured Party has become exercisable or whether
any Obligation remains due.
10 APPLICATION OF CASH COLLATERAL
In respect of Cash Collateral, the Secured Party may at any time after
an Event of Default with respect to the Chargor has occurred and is
continuing, without prior notice to the Chargor, apply or appropriate
the Cash Collateral in or towards the payment or discharge of any
amounts payable by the Chargor with respect to any Obligation in such
order as the Secured Party sees fit; or set off all or any part of any
amount payable by the Chargor with respect to any Obligation against
any obligation of the Secured Party to repay any amount to the Chargor
in respect of
7
the Permitted Collateral; and for these purposes the Secured Party
shall be entitled to make any currency conversions or effect any
transaction in currencies which it thinks fit and to do so at such
times and rates as it thinks proper.
11 FURTHER ASSURANCE
On demand by the Secured Party, the Chargor shall promptly upon notice
from the Secured Party execute all documents and do or procure all
things (including the delivery, transfer, assignment or payment of all
or part of the Collateral to the Custodian or Sub-Custodian on behalf
of the Secured Party) that the Secured Party may reasonably specify for
the purpose of (a) exercising the Collateral Rights when the relevant
Collateral Rights become exercisable or (b) securing and perfecting its
security over or title to all or any part of the Collateral or (c)
enabling the Secured Party to vest all or part of the Collateral in its
name or in the name(s) of its nominee(s), agent or any purchaser when
the Collateral Rights become exercisable.
12 POWER OF ATTORNEY
The Chargor, by way of security, irrevocably appoints the Secured Party
as its attorney and in its name, on its behalf and as its attorney to
execute, deliver and perfect all documents and do all things in the
name of the Chargor or the Secured Party (as the attorney may decide)
that the Secured Party may consider to be requisite for (a) carrying
out any obligation imposed on the Chargor under this Security Agreement
or (b) exercising any of the Collateral Rights. The Chargor shall
ratify and confirm all things done and all documents executed by the
Secured Party in the exercise of that power of attorney.
13 RECEIVER
13.1 If at any time, an Event of Default has occurred and is continuing, the
Secured Party may by writing (acting through an authorised officer of
the Secured Party) without notice to the Chargor appoint one or more
persons to be receiver of the whole or any part of the Collateral (each
such person being (a) entitled to act individually as well as jointly
and (b) for all purposes deemed to be the agent of the Chargor).
13.2 In addition to the powers of the Secured Party conferred by clause 13,
each person appointed pursuant to clause 13.1 shall have, in relation
to the part of the Collateral in respect of which he is appointed, all
the powers (as varied and extended by the provisions hereof) conferred
by the lnsolvency ▇▇▇ ▇▇▇▇ and the Law of Property ▇▇▇ ▇▇▇▇ on
mortgagors and mortgagees in possession, administrators, receivers and
administrative receivers appointed under those Acts (whether or not
such person is such).
14 EFFECTIVENESS OF COLLATERAL
14.1 The collateral constituted by this Security Agreement and the
Collateral Rights shall be cumulative, in addition to and independent
of every other security which the Secured Party may at any time hold
for the Obligations or any rights, powers and remedies provided by law.
No prior security held by the Secured Party over the whole or any part
of the Collateral shall merge into the collateral hereby constituted.
14.2 This Security Agreement shall remain in full force and effect as a
continuing arrangement:
14.2.1 unless and until the Secured Party discharges it; or
14.2.2 unless terminated by agreement between the parties.
14.3 No failure on the part of the Secured Party to exercise, or delay on
its part in exercising, any Collateral Right shall operate as a waiver
thereof, nor shall any single or partial exercise of a Collateral Right
preclude any further or other exercise of that or any other Collateral
Right. The obligations of the Chargor under this Security Agreement
shall not be affected by any act,
8
omission or circumstance which, but for this provision, might operate
to release or otherwise exonerate the Chargor from its obligations
hereunder.
14.4 If, at any time, any provision of this Security Agreement is or becomes
illegal, invalid or unenforceable in any respect under the law of any
jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Security Agreement nor of such provision
under the law of any other jurisdiction shall in any way be affected or
impaired thereby.
14.5 In relation to any share in a company which is for the time being part
of the Collateral, the rights attached to such share shall be
exercisable by the Secured Party only for the purpose of preserving the
value of such share or of realising it, and unless there is an Event of
Default with respect to the Chargor, shall be exercisable only in
accordance with the Chargor's instructions or otherwise in its
interests.
15 SUBSEQUENT INTERESTS AND ACCOUNTS
15.1 If the Secured Party at any time receives notice of any subsequent
mortgage, assignment, charge or other interest affecting all or any
part of the Collateral, all payments which would otherwise have been
made by the Chargor to an Account shall thereafter be treated as having
been credited to a new account of the Chargor and not as having
been applied in reduction of the Obligations as at the time when the
Secured Party received notice.
15.2 All monies received, recovered or realised by the Secured Party under
this Security Agreement (including the proceeds of any conversion of
currency) may in its discretion be credited to and held in any suspense
or impersonal account pending their application from time to time in or
towards the discharge of any of the Obligations.
16 REPRESENTATIONS AND WARRANTIES RELATING TO THE CHARGOR
16.1 The Chargor represents and warrants to the Secured Party that:
16.1.1 the Collateral is beneficially owned by the Chargor free from any
mortgage, charge, pledge, lien, option, restriction, right of first
refusal, right of pre-emption, third-party right or interest, other
encumbrance or security interest of any kind, or another type of
preferential arrangement having similar effect ( "ENCUMBRANCE") other
than the security interest granted under clause 2;
16.1.2 it has the power to grant a security interest in any Collateral it
transfers to the Secured Party under this Security Agreement and all
the necessary corporate authority has been obtained and action taken
for the Chargor to grant a security interest in any Collateral it
transfers to the Secured Party under this Security Agreement and
execute and deliver and perform the covenants and obligations contained
in this Security Agreement;
16.1.3 upon the transfer of any Collateral by the Chargor to the Secured
Party, the Secured Party shall have a valid security interest in such
Collateral;
16.1.4 the performance by the Chargor of any of its obligations contained in
this Security Agreement will not result in the creation of any
Encumbrance on any Collateral transferred to the Secured Party other
than the security interest created under this Security Agreement; and
16.1.5 it is not unable to pay its debts within the meaning of s123 of the
Insolvency ▇▇▇ ▇▇▇▇, s162 of the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ or
otherwise and that it has not and will not become unable to pay its
debts within the meaning of either section or otherwise in consequence
of its entering into, or doing any act or thing contemplated or
permitted or required to be done by it under this Security Agreement
and the assets of the Chargor are now and will remain immediately after
the date hereof greater than its liabilities (taking into account the
actuarial value of its contingent and prospective liabilities) for the
purposes of s123(2) and s241 of the Insolvency ▇▇▇ ▇▇▇▇.
9
17 NEGATIVE PLEDGE
17.1 The Chargor covenants that it will not during the subsistence of this
Security Agreement, except with the prior written consent of the
Secured Party create, grant or permit to exist any Encumbrance, as
defined in clause 16.1.1, other than the charge hereby created, on or
over all or any part of the Collateral or any interest therein; or
18 COSTS AND EXPENSES
All the Secured Party's costs and expenses (including legal fees and
any value added tax) incurred in connection with (a) the enforcement of
the Collateral hereby constituted or (b) the exercise of any Collateral
Right, shall be reimbursed to the Secured Party by the Chargor on
demand on a full indemnity basis together with interest from the date
the same were incurred to the date of payment at LlBOR plus 2% per
annum.
19 THE TRANSFERRED COLLATERAL
19.1 All calls or other payments which may become due in respect of the
Collateral transferred to the Secured Party shall be paid by the
Chargor, and any failure on the part of the Chargor to make such
payment will result in the Secured Party having the right to elect to
make such payment on behalf of the Chargor and demand immediate
repayment by the Chargor of such payment to itself (and such payment
shall be so repayable by the Chargor), provided that (for so long as
the value of the Collateral is equal to or greater than the Required
Amount), the Secured Party, by written notice to the Chargor, has given
the Chargor a reasonable period of time to discharge any such calls or
other payments.
19.2 At any time after the occurrence of an Event of Default and without any
further consent or authority on the part of the Chargor, the Secured
Party may exercise, at its discretion (in the name of the Chargor or
otherwise) in respect of any of the Collateral transferred to it, any
voting rights and any powers or rights which may be exercised by the
person or persons in whose name or names such Collateral is registered
or who is the bearer or holder of them.
19.3 The Secured Party shall have no liability to perform or fulfill any
obligation of the Chargor in respect of the Collateral transferred to
the Secured Party.
20 CURRENCY CONVERSION
For the purpose of or pending the discharge of any of the Obligations,
the Secured Party may convert any money received, recovered or realised
or subject to application by it under this Security Agreement from one
currency to another, as the Secured Party may think fit and any such
conversion shall be effected at Barclays Bank plc's spot rate of
exchange for the time being far obtaining such other currency with the
first currency.
21 NOTICES
21.1 Any notice or demand to be served by one person on another pursuant to
this Security Agreement may be served by leaving it at the address
specified on page 1 hereof (or such other address as such person may
previously have specified in writing) or by letter posted by prepaid
first-class past to such address (which shall be deemed to have been
served on the tenth day following the date of posting), or by fax to
the fax number specified on page 1 hereof (or such other number as such
person may previously have specified) (which shall be deemed to have
been received when transmission has been completed).
21.2 The Chargor hereby irrevocably appoints NacRe International Limited as
its agent to receive service of any notice or demand to be served on
it pursuant to this Security Agreement. The registered address of NacRe
International Limited is ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇.
21.3 For the purposes of this clause 21,the parties' respective facsimile
numbers are:
10
21.3.1 XL Mid Ocean: 001 ▇▇▇ ▇▇▇ ▇▇▇▇ or such other facsimile number as may be
notified to the Secured Party in writing from time to time;
21.3.2 the Secured Party: + ▇▇ (▇) ▇▇▇▇ ▇▇▇ ▇▇▇ or such other facsimile number
as may be notified to the Secured Party in writing from time to time;
and
21.3.3 NacRe International Limited: + ▇▇ (▇) ▇▇▇ ▇▇▇ ▇▇▇▇, or such other
facsimile number as may be notified to the Secured Party in writing
from time to time.
22 SUCCESSORS
This Security Agreement shall remain in effect despite any amalgamation
or merger (however effected) relating to the Secured Party and
references to the Secured Party shall be deemed to include any assignee
or successor in title of the Secured Party and any person who, under
the laws of its jurisdiction of incorporation or domicile, has assumed
the rights and obligations of the Secured Party hereunder or to which
under such laws the same have been transferred.
23 CLIENT MONEY RULES
23.1 Each party hereby agrees that:
23.1.1 the Secured Party is not treating the Chargor as a client as defined in
the Financial Services (Client Money) Regulations 1991 (the "RULES");
and
23.1.2 money transferred to the Secured Party pursuant to this Security
Agreement will not be subject to the protections conferred by the Rules
to which the Secured Party is subject.
24 VALUATION AGENT
The Chargor shall procure that all calculations carried out by the
Valuation Agent shall be determined in a commercially reasonable
manner.
25 LAW AND JURISDICTION
This Security Agreement shall be governed by English law and the
English courts shall have non-exclusive jurisdiction to settle any
dispute which may arise from or in connection with it.
26 AMENDMENTS
No amendment, modification or waiver in respect of this Security
Agreement will be effective unless in writing (including writing
evidenced by facsimile transmission) and executed by each of the
parties or confirmed by an exchange of telexes or electronic messages
on an electronic messaging system.
27 COUNTERPARTS
This Security Agreement may be executed in one or more counterparts and
by the different parties on separate counterparts, each of which when
executed shall be an original, but all the counterparts together shall
constitute one and the same instrument.
28 THIRD PARTY RIGHTS
A person that is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ to enforce a term of this
Agreement, provided that this clause 28 does not affect any right or
remedy of a third party which exists or is available apart from that
Act.
11
IN WITNESS WHEREOF this Security Agreement has been executed as a Deed by the
parties on the date specified above.
EXECUTED AS A DEED BY )
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and )
_______________ for and )
on behalf of )
OLD MUTUAL LIFE ASSURANCE )
COMPANY LIMITED ) /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Director
/s/ not legible
-------------------------
Director/Company Secretary
EXECUTED AS A DEED BY )
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and )
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ for and )
on behalf of )
XL MID OCEAN )
REINSURANCE LTD. ) /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
Authorized Signatory
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Authorized Signatory
12
ANNEX I
NOTICE TO CUSTODIAN/DEPOSIT TAKER
TO: *
Copy to: OLD MUTUAL LIFE ASSURANCE COMPANY LIMITED
We refer to (i) the Security Agreement (the "SECURITY AGREEMENT") dated 20
December 1999 entered into by us in favour of OLD MUTUAL LIFE ASSURANCE COMPANY
LIMITED of ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ("OLD MUTUAL") and (ii) the
Reinsurance Agreement (the "REINSURANCE AGREEMENT") dated 20 December 1999
entered into between us and Old Mutual, a copy of each such agreement is annexed
to this notice. Terms defined in the Security Agreement shall have the same
meanings in this notice.
Notice is hereby given by us to you that, by and pursuant to the Security
Agreement, we have charged in favour of the Secured Party all of the Collateral
and the Pre-Payment Fund.
We hereby instruct that you shall accept instructions from OLD MUTUAL in
relation to the [Collateral][Pre-Payment Fund] to OLD MUTUAL in accordance with
the provisions of the Security Agreement and the Reinsurance Agreement.
Yours faithfully
_____________________________
For and on behalf of
XL MID OCEAN REINSURANCE LTD.
Date ___________________
Acknowledged by *
_____________________________
Date ___________________
13
ANNEX 2
CUSTODIAN AGREEMENT
14
ANNEX 3
THE ACCOUNTS
(1) XL Mid Ocean - Old Mutual XLR F0802252
Type: Pounds Sterling Cash Transfer Account
(2) XL Mid Ocean - Old Mutual XLR F0802262
Fixed Income Portfolio
15
SCHEDULE 3
OLD MUTUAL ANNUITIES RETROCESSION TREATY NUMBER LR00002A00
FIXED RETROCESSION PREMIUMS
--------------------------------
RETROCESSION
PREMIUM
PAYABLE
PERIOD DATE GBP
--------------------------------
1 Dec-99 470,762
2 Jan-00 919,644
3 Feb-00 895,103
4 Mar-00 906,566
5 Apr-00 943,123
6 May-00 934,499
7 Jun-00 932,376
8 Jul-00 939,420
9 Aug-00 910,382
10 Sep-00 901,745
11 Oct-00 920,742
12 Nov-00 923,902
13 Dec-00 923,757
14 Jan-01 917,525
15 Feb-01 891,226
16 Mar-01 901,537
17 Apr-01 938,012
18 May-01 929,593
19 Jun-01 926,590
20 Jul-01 933,942
21 Aug-01 903,985
22 Sep-01 894,631
23 Oct-01 914,238
24 Nov-01 917,042
25 Dec-01 914,462
26 Jan-02 908,994
27 Feb-02 885,906
28 Mar-02 895,228
29 Apr-02 932,145
30 May-02 924,412
31 Jun-02 919,210
32 Jul-02 924,877
33 Aug-02 897,331
34 Sep-02 889,259
35 Oct-02 908,320
36 Nov-02 913,387
37 Dec-02 911,716
38 Jan-03 905,377
39 Feb-03 882,176
40 Mar-03 889,760
41 Apr-03 926,444
42 May-03 920,440
43 Jun-03 915,423
44 Jul-03 920,685
45 Aug-03 893,127
46 Sep-03 885,829
47 Oct-03 904,725
48 Nov-03 910,086
49 Dec-03 908,349
50 Jan-04 901,277
51 Feb-04 878,084
52 Mar-04 885,821
53 Apr-04 922,643
54 May-04 916,282
55 Jun-04 910,955
56 Jul-04 915,541
57 Aug-04 887,919
58 Sep-04 881,306
59 Oct-04 899,727
60 Nov-04 905,607
61 Dec-04 903,976
62 Jan-05 895,949
63 Feb-05 872,678
64 Mar-05 880,257
65 Apr-05 916,892
66 May-05 910,151
67 Jun-05 904,632
68 Jul-05 908,683
69 Aug-05 881,089
70 Sep-05 875,340
71 Oct-05 893,482
72 Nov-05 899,485
73 Dec-05 897,787
74 Jan-06 889,030
75 Feb-06 865,741
76 Mar-06 873,268
77 Apr-06 909,658
78 May-06 902,476
79 Jun-06 896,662
80 Jul-06 900,026
81 Aug-06 872,519
82 Sep-06 867,605
83 Oct-06 885,336
84 Nov-06 890,568
85 Dec-06 889,189
86 Jan-07 881,019
87 Feb-07 857,788
88 Mar-07 865,191
89 Apr-07 901,210
90 May-07 893,614
91 Jun-07 887,472
92 Jul-07 890,112
93 Aug-07 862,776
94 Sep-07 858,650
95 Oct-07 875,890
96 Nov-07 881,642
97 Dec-07 880,279
98 Jan-08 871,161
99 Feb-08 848,055
100 Mar-08 855,283
101 Apr-08 890,850
102 May-08 882,891
103 Jun-08 876,367
104 Jul-08 878,230
105 Aug-08 851,183
106 Sep-08 847,822
107 Oct-08 864,513
108 Nov-08 870,825
109 Dec-08 869,418
110 Jan-09 859,326
111 Feb-09 836,438
112 Mar-09 843,417
113 Apr-09 878,407
114 May-09 870,143
115 Jun-09 863,193
116 Jul-09 864,250
117 Aug-09 837,595
118 Sep-09 834,943
119 Oct-09 851,028
120 Nov-09 857,942
121 Dec-09 856,437
122 Jan-10 845,355
123 Feb-10 822,775
124 Mar-10 829,436
125 Apr-10 863,735
126 May-10 855,233
127 Jun-10 847,819
128 Jul-10 848,056
129 Aug-10 821,908
130 Sep-10 819,898
131 Oct-10 835,329
132 Nov-10 842,878
133 Dec-10 841,219
134 Jan-11 829,141
135 Feb-11 806,962
136 Mar-11 813,240
137 Apr-11 846,439
138 May-11 837,770
139 Jun-11 830,156
140 Jul-11 829,579
141 Aug-11 804,051
142 Sep-11 802,605
143 Oct-11 817,339
144 Nov-11 825,543
145 Dec-11 823,674
146 Jan-12 810,611
147 Feb-12 788,923
148 Mar-12 794,761
149 Apr-12 827,040
150 May-12 818,281
151 Jun-12 810,152
152 Jul-12 808,783
153 Aug-12 783,990
154 Sep-12 783,017
155 Oct-12 797,021
156 Nov-12 805,885
157 Dec-12 803,751
158 Jan-13 789,729
159 Feb-13 768,622
160 Mar-13 773,971
161 Apr-13 805,221
162 May-13 796,446
163 Jun-13 787,795
164 Jul-13 785,677
165 Aug-13 761,725
166 Sep-13 761,130
167 Oct-13 774,382
168 Nov-13 783,890
169 Dec-13 781,439
170 Jan-14 766,505
171 Feb-14 746,063
172 Mar-14 750,888
173 Apr-14 781,008
174 May-14 772,289
175 Jun-14 763,121
176 Jul-14 760,313
177 Aug-14 737,301
178 Sep-14 736,987
179 Oct-14 749,475
180 Nov-14 759,590
-----------------------------
15
SCHEDULE 3
OLD MUTUAL ANNUITIES RETROCESSION TREATY NUMBER LR00002A00
FIXED RETROCESSION PREMIUMS
--------------------------------
RETROCESSION
PREMIUM
PAYABLE
PERIOD DATE GBP
--------------------------------
181 Dec-14 756,777
182 Jan-15 740,995
183 Feb-15 721,296
184 Mar-15 725,578
185 Apr-15 754,480
186 May-15 745,883
187 Jun-15 736,216
188 Jul-15 732,792
189 Aug-15 710,809
190 Sep-15 710,678
191 Oct-15 722,407
192 Nov-15 733,067
193 Dec-15 729,853
194 Jan-16 713,312
195 Feb-16 694,425
196 Mar-16 698,161
197 Apr-16 725,768
198 May-16 717,354
199 Jun-16 707,221
200 Jul-16 703,266
201 Aug-16 682,384
202 Sep-16 682,348
203 Oct-16 693,333
204 Nov-16 704,455
205 Dec-16 700,807
206 Jan-17 683,619
207 Feb-17 665,601
208 Mar-17 668,806
209 Apr-17 695,062
210 May-17 686,881
211 Jun-17 676,327
212 Jul-17 671,933
213 Aug-17 652,210
214 Sep-17 652,189
215 Oct-17 662,461
216 Nov-17 673,936
217 Dec-17 669,835
218 Jan-18 652,131
219 Feb-18 635,029
220 Mar-18 637,733
221 Apr-18 662,599
222 May-18 654,695
223 Jun-18 643,776
224 Jul-18 639,037
225 Aug-18 620,514
226 Sep-18 620,443
227 Oct-18 630,044
228 Nov-18 641,746
229 Dec-18 637,180
230 Jan-19 619,111
231 Feb-19 602,960
232 Mar-19 605,208
233 Apr-19 628,667
234 May-19 621,073
235 Jun-19 609,855
236 Jul-19 604,865
237 Aug-19 587,565
238 Sep-19 587,395
239 Oct-19 596,375
240 Nov-19 608,163
241 Dec-19 603,132
242 Jan-20 584,867
243 Feb-20 569,688
244 Mar-20 571,534
245 Apr-20 593,588
246 May-20 586,333
247 Jun-20 574,886
248 Jul-20 569,734
249 Aug-20 553,665
250 Sep-20 553,361
251 Oct-20 561,778
252 Nov-20 573,504
253 Dec-20 568,018
254 Jan-21 549,735
255 Feb-21 535,541
256 Mar-21 537,047
257 Apr-21 557,715
258 May-21 550,821
259 Jun-21 539,221
260 Jul-21 533,987
261 Aug-21 519,142
262 Sep-21 518,686
263 Oct-21 526,600
264 Nov-21 538,114
265 Dec-21 532,195
266 Jan-22 514,077
267 Feb-22 500,871
268 Mar-22 502,101
269 Apr-22 521,419
270 May-22 514,903
271 Jun-22 503,226
272 Jul-22 497,981
273 Aug-22 484,341
274 Sep-22 483,729
275 Oct-22 491,197
276 Nov-22 502,358
277 Dec-22 496,038
278 Jan-23 478,265
279 Feb-23 466,043
280 Mar-23 467,056
281 Apr-23 485,073
282 May-23 478,952
283 Jun-23 467,274
284 Jul-23 462,074
285 Aug-23 449,611
286 Sep-23 448,849
287 Oct-23 455,925
288 Nov-23 466,604
289 Dec-23 459,926
290 Jan-24 442,671
291 Feb-24 431,421
292 Mar-24 432,271
293 Apr-24 449,044
294 May-24 443,333
295 Jun-24 431,726
296 Jul-24 426,617
297 Aug-24 415,295
298 Sep-24 414,399
299 Oct-24 421,128
300 Nov-24 431,218
301 Dec-24 424,232
302 Jan-25 407,650
303 Feb-25 397,357
304 Mar-25 398,090
305 Apr-25 413,679
306 May-25 408,394
307 Jun-25 396,926
308 Jul-25 391,941
309 Aug-25 381,718
310 Sep-25 380,710
311 Oct-25 387,124
312 Nov-25 396,542
313 Dec-25 389,310
314 Jan-26 373,533
315 Feb-26 364,177
316 Mar-26 364,828
317 Apr-26 379,292
318 May-26 374,448
319 Jun-26 363,185
320 Jul-26 358,345
321 Aug-26 349,176
322 Sep-26 348,082
323 Oct-26 354,201
324 Nov-26 362,891
325 Dec-26 355,480
326 Jan-27 340,616
327 Feb-27 332,174
328 Mar-27 332,766
329 Apr-27 346,162
330 May-27 341,774
331 Jun-27 330,775
332 Jul-27 326,091
333 Aug-27 317,929
334 Sep-27 316,775
335 Oct-27 322,605
336 Nov-27 330,540
337 Dec-27 323,025
338 Jan-28 309,150
339 Feb-28 301,595
340 Mar-28 302,141
341 Apr-28 314,520
342 May-28 310,601
343 Jun-28 299,922
344 Jul-28 295,397
345 Aug-28 288,192
346 Sep-28 287,005
347 Oct-28 292,540
348 Nov-28 299,718
349 Dec-28 292,176
350 Jan-29 279,339
351 Feb-29 272,641
352 Mar-29 273,146
353 Apr-29 284,548
354 May-29 281,106
355 Jun-29 270,801
356 Jul-29 266,431
357 Aug-29 260,132
358 Sep-29 258,939
359 Oct-29 264,159
360 Nov-29 270,603
-----------------------------
16
SCHEDULE 3
OLD MUTUAL ANNUITIES RETROCESSION TREATY NUMBER LR00002A00
FIXED RETROCESSION PREMIUMS
--------------------------------
RETROCESSION
PREMIUM
PAYABLE
PERIOD DATE GBP
--------------------------------
361 Dec-29 263,115
362 Jan-30 251,331
363 Feb-30 245,458
364 Mar-30 245,919
365 Apr-30 256,378
366 May-30 253,419
367 Jun-30 243,536
368 Jul-30 239,314
369 Aug-30 233,869
370 Sep-30 232,690
371 Oct-30 237,571
372 Nov-30 243,319
373 Dec-30 235,965
374 Jan-31 225,228
375 Feb-31 220,142
376 Mar-31 220,553
377 Apr-31 230,095
378 May-31 227,615
379 Jun-31 218,200
380 Jul-31 214,118
381 Aug-31 209,471
382 Sep-31 208,327
383 Oct-31 212,837
384 Nov-31 217,942
385 Dec-31 210,801
386 Jan-32 201,079
387 Feb-32 196,740
388 Mar-32 197,091
389 Apr-32 205,737
390 May-32 203,728
391 Jun-32 194,821
392 Jul-32 190,868
393 Aug-32 186,963
394 Sep-32 185,869
395 Oct-32 189,977
396 Nov-32 194,500
397 Dec-32 187,643
398 Jan-33 178,889
399 Feb-33 175,251
400 Mar-33 175,534
401 Apr-33 183,302
402 May-33 181,746
403 Jun-33 173,383
404 Jul-33 169,552
405 Aug-33 166,330
406 Sep-33 165,298
407 Oct-33 168,974
408 Nov-33 172,979
409 Dec-33 166,471
410 Jan-34 158,624
411 Feb-34 155,639
412 Mar-34 155,846
413 Apr-34 162,755
414 May-34 161,627
415 Jun-34 153,836
416 Jul-34 150,122
417 Aug-34 147,523
418 Sep-34 146,561
419 Oct-34 149,783
420 Nov-34 153,333
421 Dec-34 147,227
422 Jan-35 140,217
423 Feb-35 137,833
424 Mar-35 137,960
425 Apr-35 144,033
426 May-35 143,300
427 Jun-35 136,102
428 Jul-35 132,503
429 Aug-35 130,464
430 Sep-35 129,577
431 Oct-35 132,331
432 Nov-35 135,485
433 Dec-35 129,823
434 Jan-36 123,580
435 Feb-36 121,740
436 Mar-36 121,785
437 Apr-36 127,051
438 May-36 126,675
439 Jun-36 120,081
440 Jul-36 116,600
441 Aug-36 115,056
442 Sep-36 114,247
443 Oct-36 116,531
444 Nov-36 119,342
445 Dec-36 114,153
446 Jan-37 108,603
447 Feb-37 107,250
448 Mar-37 107,216
449 Apr-37 111,711
450 May-37 111,649
451 Jun-37 105,659
452 Jul-37 102,303
453 Aug-37 101,191
454 Sep-37 100,457
455 Oct-37 102,281
456 Nov-37 104,794
457 Dec-37 100,094
458 Jan-38 95,168
459 Feb-38 94,243
460 Mar-38 94,134
461 Apr-38 97,906
462 May-38 98,108
463 Jun-38 92,717
464 Jul-38 89,495
465 Aug-38 88,750
466 Sep-38 88,089
467 Oct-38 89,474
468 Nov-38 91,727
469 Dec-38 87,518
470 Jan-39 83,154
471 Feb-39 82,594
472 Mar-39 82,419
473 Apr-39 85,521
474 May-39 85,941
475 Jun-39 81,131
476 Jul-39 78,055
477 Aug-39 77,615
478 Sep-39 77,021
479 Oct-39 78,002
480 Nov-39 80,023
481 Dec-39 76,297
482 Jan-40 72,435
483 Feb-40 72,181
484 Mar-40 71,950
485 Apr-40 74,445
486 May-40 75,032
487 Jun-40 70,779
488 Jul-40 67,863
489 Aug-40 67,667
490 Sep-40 67,135
491 Oct-40 67,753
492 Nov-40 69,566
493 Dec-40 66,304
494 Jan-41 62,894
495 Feb-41 62,886
496 Mar-41 62,610
497 Apr-41 64,567
498 May-41 65,274
499 Jun-41 61,546
500 Jul-41 58,804
501 Aug-41 58,796
502 Sep-41 58,318
503 Oct-41 58,625
504 Nov-41 60,246
505 Dec-41 57,419
506 Jan-42 54,418
507 Feb-42 54,597
508 Mar-42 54,289
509 Apr-42 55,781
510 May-42 56,562
511 Jun-42 53,323
512 Jul-42 50,769
513 Aug-42 50,896
514 Sep-42 50,468
515 Oct-42 50,516
516 Nov-42 51,957
517 Dec-42 49,533
518 Jan-43 46,900
519 Feb-43 47,215
520 Mar-43 46,886
521 Apr-43 47,985
522 May-43 48,801
523 Jun-43 46,009
524 Jul-43 43,655
525 Aug-43 43,872
526 Sep-43 43,486
527 Oct-43 43,332
528 Nov-43 44,604
529 Dec-43 42,545
530 Jan-44 40,247
531 Feb-44 40,649
532 Mar-44 40,311
533 Apr-44 41,089
534 May-44 41,904
535 Jun-44 39,518
536 Jul-44 37,372
537 Aug-44 37,638
538 Sep-44 37,291
539 Oct-44 36,987
540 Nov-44 38,098
-----------------------------
17
SCHEDULE 3
OLD MUTUAL ANNUITIES RETROCESSION TREATY NUMBER LR00002A00
FIXED RETROCESSION PREMIUMS
--------------------------------
RETROCESSION
PREMIUM
PAYABLE
PERIOD DATE GBP
--------------------------------
541 Dec-44 36,365
542 Jan-45 34,372
543 Feb-45 34,819
544 Mar-45 34,482
545 Apr-45 35,006
546 May-45 35,790
547 Jun-45 33,768
548 Jul-45 31,834
549 Aug-45 32,117
550 Sep-45 31,804
551 Oct-45 31,401
552 Nov-45 32,357
553 Dec-45 30,911
554 Jan-46 29,195
555 Feb-46 29,654
556 Mar-46 29,327
557 Apr-46 29,655
558 May-46 30,387
559 Jun-46 28,686
560 Jul-46 26,965
561 Aug-46 27,241
562 Sep-46 26,958
563 Oct-46 26,498
564 Nov-46 27,309
565 Dec-46 26,112
566 Jan-47 24,650
567 Feb-47 25,091
568 Mar-47 24,781
569 Apr-47 24,967
570 May-47 25,630
571 Jun-47 24,212
572 Jul-47 22,700
573 Aug-47 22,949
574 Sep-47 22,695
575 Oct-47 22,217
576 Nov-47 22,891
577 Dec-47 21,908
578 Jan-48 20,673
579 Feb-48 21,078
580 Mar-48 20,791
581 Apr-48 20,877
582 May-48 21,463
583 Jun-48 20,290
584 Jul-48 18,980
585 Aug-48 19,192
586 Sep-48 18,964
587 Oct-48 18,494
588 Nov-48 19,044
589 Dec-48 18,243
590 Jan-49 17,212
591 Feb-49 17,567
592 Mar-49 17,306
593 Apr-49 17,327
594 May-49 17,832
595 Jun-49 16,871
596 Jul-49 15,750
597 Aug-49 15,919
598 Sep-49 15,715
599 Oct-49 15,275
600 Nov-49 15,713
601 Dec-49 15,064
602 Jan-50 14,214
603 Feb-50 14,513
604 Mar-50 14,281
605 Apr-50 14,262
606 May-50 14,688
607 Jun-50 13,907
608 Jul-50 12,960
609 Aug-50 13,086
610 Sep-50 12,906
611 Oct-50 12,509
612 Nov-50 12,848
613 Dec-50 12,327
614 Jan-51 11,635
615 Feb-51 11,876
616 Mar-51 11,674
617 Apr-51 11,634
618 May-51 11,985
619 Jun-51 11,357
620 Jul-51 10,568
621 Aug-51 10,653
622 Sep-51 10,496
623 Oct-51 10,149
624 Nov-51 10,405
625 Dec-51 9,989
626 Jan-52 9,434
627 Feb-52 9,621
628 Mar-52 9,447
629 Apr-52 9,399
630 May-52 9,683
631 Jun-52 9,184
632 Jul-52 8,533
633 Aug-52 8,583
634 Sep-52 8,447
635 Oct-52 8,153
636 Nov-52 8,339
637 Dec-52 8,010
638 Jan-53 7,571
639 Feb-53 7,710
640 Mar-53 7,563
641 Apr-53 7,516
642 May-53 7,741
643 Jun-53 7,349
644 Jul-53 6,819
645 Aug-53 6,840
646 Sep-53 6,724
647 Oct-53 6,480
648 Nov-53 6,610
649 Dec-53 6,352
650 Jan-54 6,010
651 Feb-54 6,107
652 Mar-54 5,986
653 Apr-54 5,942
654 May-54 6,119
655 Jun-54 5,814
656 Jul-54 5,386
657 Aug-54 5,387
658 Sep-54 5,288
659 Oct-54 5,091
660 Nov-54 5,178
661 Dec-54 4,978
662 Jan-55 4,714
663 Feb-55 4,778
664 Mar-55 4,679
665 Apr-55 4,641
666 May-55 4,779
667 Jun-55 4,546
668 Jul-55 4,203
669 Aug-55 4,189
670 Sep-55 4,108
671 Oct-55 3,951
672 Nov-55 4,006
673 Dec-55 3,852
674 Jan-56 3,652
675 Feb-56 3,691
676 Mar-56 3,612
677 Apr-56 3,580
678 May-56 3,686
679 Jun-56 3,510
680 Jul-56 3,238
681 Aug-56 3,215
682 Sep-56 3,148
683 Oct-56 3,027
684 Nov-56 3,058
685 Dec-56 2,941
686 Jan-57 2,791
687 Feb-57 2,812
688 Mar-57 2,750
689 Apr-57 2,724
690 May-57 2,807
691 Jun-57 2,676
692 Jul-57 2,461
693 Aug-57 2,435
694 Sep-57 2,380
695 Oct-57 2,287
696 Nov-57 2,303
697 Dec-57 2,215
698 Jan-58 2,104
699 Feb-58 2,113
700 Mar-58 2,065
701 Apr-58 2,044
702 May-58 2,109
703 Jun-58 2,013
704 Jul-58 1,843
705 Aug-58 1,817
706 Sep-58 1,774
707 Oct-58 1,704
708 Nov-58 1,709
709 Dec-58 1,644
710 Jan-59 1,563
711 Feb-59 1,563
712 Mar-59 1,527
713 Apr-59 1,510
714 May-59 1,562
715 Jun-59 1,493
716 Jul-59 1,360
717 Aug-59 1,335
718 Sep-59 1,302
719 Oct-59 1,249
▇▇▇ ▇▇▇-▇▇ 1,249
-----------------------------
18