Exhibit 1.A.9(a)(ii)
REINSURANCE AGREEMENT
NUMBER 3001
Between
The Guardian Insurance & Annuity Company, Inc.
Wilmington, Delaware
and
The Guardian Life Insurance Company of America
New York, New York
Reinsurance Agreement
Specifications Page
Ceding Company: The Guardian Insurance & Annuity Company, Inc.
Reinsurer: The Guardian Life Insurance Company of America
Treaty Number: 3001
Effective Date: Issues of 9/1/95 or later
Type of Business: Variable Life, Variable Universal Life and associated
riders
Reporting: Self Administered
Plan of Reinsurance: Coinsurance/Modified Coinsurance
Limit Per Life: 90% of each policy
Jumbo Limit: $15,000,000 at most ages. Refer to Exhibit C.
Minimum Cession: No minimum
Premium Tax: Not reimbursed
Recapture: After 10 policy years.
In the event of any conflict between this Specifications Page and the terms of
the Reinsurance Treaty, the terms and conditions of the Treaty shall govern.
REVISION 3 - effective 1/1/98
Table of Contents
-----------------
Article Title Page
------- ----- ----
I Reinsurance Coverage 1
II Facultative Submissions 1
III Company Data 2
IV Liability 2
V Plan of Insurance 2
VI Minimum Amounts 2
VII Premiums and Allowances 3
VIII Payments of Premiums 3
IX Policy Changes, Reductions
Terminations 3
X Reinstatements 4
XI Changes in Retention and
Recapture 4
XII Settlement of Claims 5
XIII Premium Tax Credit 6
XIV Experience Refund 6
XV Offset 6
XVI DAC Tax 7
XVII Oversights 7
XVIII Insolvency 8
XIX Assignment of Reinsurance 8
XX Arbitration 9
XXI Inspection of Records 9
XXII Parties to the Agreement 10
XXIII Agreement 10
XXIV Duration of Agreement 10
XXV Execution of Agreement 10
Exhibit Title
------- -----
A Plans Covered under this Agreement
B Retention Schedule
C Automatic & Jumbo Limits
D Allowance Schedule
E Modified Coinsurance Reserve Adjustment
F Reporting Requirements
This is an agreement between The Guardian Insurance & Annuity Company, Inc., a
corporation organized under the laws of the State of Delaware, hereafter
referred to as the "ceding company" and The Guardian Life Insurance Company of
America, a corporation organized under the laws of the State of New York,
hereafter referred to as The Guardian.
Article I: Reinsurance Coverage
The excess of Individual Life Insurance and Waiver of Premium benefits issued
directly by the ceding company on plans listed in Exhibit A shall be reinsured
with The Guardian.
The ceding company can automatically bind The Guardian under the following
conditions:
1. The ceding company retains its maximum retention as shown in Exhibit B.
2. The total amount of reinsurance ceded on a life by the ceding company to
The Guardian is not in excess of the amounts shown in Exhibit C.
3. The amount of life insurance in force plus the amount currently being
applied for on that life in all companies does not exceed the jumbo limit
set forth in Exhibit C.
4. The substandard mortality rating does not exceed 500% or its equivalent on
an extra premium basis.
5. The risk has not been submitted to another reinsurer facultatively.
6. The life insurance was issued in accordance with the ceding company's
normal underwriting rules and practices.
7. The risk is not a replacement or conversion of a policy reinsured
facultatively with another reinsurer, unless such reinsurer has released
all such covered risk.
If a risk cannot be ceded automatically under the terms of this agreement the
ceding company may submit the risk to The Guardian on a facultative basis.
Article II: Facultative Submissions
When the ceding company submits a risk to The Guardian on a facultative basis,
copies of the original application, all medical examinations, microscopical
reports, inspection reports and all other information the ceding company may
have pertaining to the insurability of the risk shall accompany the application.
The Guardian shall notify the ceding company of its decision on the risk as soon
as possible.
The Guardian shall have no liability on facultative submissions unless the
ceding company has accepted The Guardian's reinsurance offer.
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Article III: Company Data
The ceding company agrees to keep The Guardian informed of the identity and
terms of its policies, riders, and contracts reinsured under this Agreement by
furnishing The Guardian with copies of its application forms, policy forms,
supplementary agreements, rate books, plan codes, reserve tables and other
materials relevant to the coverage reinsured.
Further, the ceding company agrees to furnish The Guardian with all underwriting
manuals or criteria, requirements, and retention schedules affecting reinsurance
ceded and to keep The Guardian fully informed of all subsequent changes to said
material.
Article IV: Liability
When the ceding company is liable under the conditions of a policy or contract,
The Guardian's liability shall follow to the extent of the reinsurance effected.
In the case of facultative submissions the ceding company must have accepted The
Guardian's offer during the lifetime of the insured.
Reinsurance shall be in force and binding on The Guardian as long as (a) the
issuance of insurance by the ceding company constituted the doing of business in
a jurisdiction in which the ceding company was properly licensed and (b) the
reinsurance premiums continued to be paid in accordance with this agreement.
Article V: Plan of Insurance
The reinsurance shall be on a Modified Coinsurance basis in accordance with the
provisions of the original forms submitted to The Guardian and issued by the
ceding company.
The ceding company shall pay The Guardian monthly premiums net of allowances.
The Guardian shall reimburse the ceding company for its share of surrender,
death and disability claims.
A modified coinsurance reserve adjustment shall be computed as specified in
Exhibit E.
The ceding company shall take a reserve credit and The Guardian shall hold a
mirror reserve for miscellaneous general account reserves for this business.
Miscellaneous reserves are reserves not included in the Modified Coinsurance
Reserve Adjustment.
Article VI: Minimum Amounts
Amounts of reinsurance less than the minimum cession amount on the
Specifications Page shall not be ceded or kept in force under this agreement.
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Article VII: Premiums and Allowances
The reinsurance base premium rate shall equal the reinsurance share of the
premiums collected on the business covered under this treaty.
The reinsurance premium for the Waiver of Premium benefit shall be the
proportionate share of the ceding company's disability premium less the
following percentages of premium discount: 75% in the first year and 10% in
renewal years.
The allowances for the base plan are described in Exhibit D.
Article VIII: Payment of Premiums
The reinsurance premiums are payable monthly. The first monthly premium is due
within 45 days after the end of the month of issue. The renewal monthly premiums
are due and payable within 15 days following the end of each month. The ceding
company shall submit monthly reports on new business, first year renewals,
regular renewals, changes, terminations and reinstatements. These reports should
be in substantial accord with the reporting requirements in Exhibit F.
In the event of non-payment of any reinsurance premiums when due, The Guardian's
liability shall continue. However, The Guardian shall have the right to
terminate reinsurance coverage for in force business, but only after it has
given three months notice in writing of its intention to terminate coverage and
only if reinsurance premiums remain unpaid. Such termination cannot be made if
an Order of Liquidation of the ceding company is in effect.
Any reinsurance which has terminated for nonpayment of premiums may be
reinstated within 60 days of the termination date upon payment of all overdue
premiums with interest. Interest will be calculated using the 13 week Treasury
▇▇▇▇ rate reported in the "Money Rates" section of the Wall Street Journal or a
comparable publication. The interest rate will be the rate reported on the last
working day of the calendar month prior to the date of reinstatement.
However, The Guardian will have no liability in connection with any claim
incurred between the date of termination and the date of reinstatement of
reinsurance.
Article IX: Policy Changes, Reductions, Terminations
Whenever a change is made in the status, plan, amount or other material feature
of the policy issued by the ceding company, The Guardian shall upon notification
of the change, provide appropriately adjusted reinsurance coverage.
-3-
Conversions will be covered under the reinsurance treaty between the ceding
company and The Guardian which provides reinsurance on the policy form issued.
No reduction in policy rating may be made on facultatively reinsured business
without the consent of The Guardian.
If the amount of insurance is increased, the increase will be considered as new
reinsurance under this Agreement with appropriate underwriting evidence
provided.
If the original policy lapses and extended term insurance or reduced paid-up
insurance is granted under the terms of the policy, The Guardian shall reinsure
the adjusted amount of reinsurance and accept appropriately adjusted reinsurance
premiums calculated in the same manner as on the original reinsurance. The
Guardian shall not provide coverage for extended term insurance on policies
issued at substandard ratings greater than 150% of standard or the equivalent in
flat extra premium unless The Guardian specifically agrees in advance to do so.
Upon lapse, death or other termination of a cession, The Guardian shall refund
any unearned premiums.
Article X: Reinstatements
If a policy which has lapsed for nonpayment of premium is reinstated in
accordance with its terms and with ceding company rules, The Guardian shall,
upon notification of policy reinstatement, reinstate the pre-existing
reinsurance coverage. Upon reinstatement of the reinsurance coverage, the ceding
company shall pay the reinsurance premiums in arrears with interest at the same
rate as the ceding company receives under its policy.
Article XI: Changes in Retention and Recapture
Whenever the ceding company changes its limits of retention, it shall promptly
inform The Guardian and The Guardian shall update Exhibit B to show the new
limits. If the ceding company increases its retention limits, it shall have the
option of applying the increase in retention limits to existing reinsurance and
reducing the reinsurance in force in accordance with the following rules:
1. The ceding company shall give The Guardian written notice of its intention
to apply the new limits of retention to existing business.
2. The reduction in reinsurance shall be made on the next anniversary of each
policy affected. However, no reduction shall be made until the reinsurance
on the policy has been in force for at least 10 years.
3. All eligible policies shall be recaptured unless there is mutual agreement
to the contrary expressed in writing.
-4-
4. No reduction shall be made in the reinsurance on any life unless the
ceding company retained its maximum retention limit for the plan, age and
mortality rating at the time the policy was issued. If any reinsurance is
recaptured following a retention increase, all reinsurance which is
subject to recapture under these provisions must be similarly recaptured.
5. In determining the new retention for a particular policy, the age and
rating at issue should be used. On conversions the issue date of the
original policy should be used.
6. If at the time of recapture the risk is an active claim for Waiver of
Premium Disability, the Life risk shall still be considered eligible for
recapture. However, the Disability reinsurance shall remain in force until
such time as the policy is returned to a premium paying status. The
Disability risk shall be recaptured upon such return to premium paying
status. However, if within two years of said recapture the Waiver of
Premium claim is resumed due to an extension of the initial disablement
The Guardian shall be liable for payment of its share of premiums waived
by the ceding company subject to collection of Disability premiums on The
Guardian's share of the risk for the period in which the policy was in a
premium paying status.
7. The ceding company shall not be required to recapture a policy if to do so
would put the ceding company over its retention.
In the event the ceding company overlooks any reductions or cancellations of
reinsurance which should be made on account of an increase in its retention
limits, the acceptance by The Guardian of reinsurance premiums after the
effective dates of the reductions or cancellations shall not constitute or
determine a liability on the part of The Guardian for such reinsurance, and The
Guardian shall be liable only for a credit of the premiums so received, without
interest.
Article XII: Settlement of Claims
The ceding company shall promptly notify The Guardian of any claim submitted on
a policy reinsured under this agreement.
The Guardian's liability to the ceding company for reinsurance benefits shall
follow the ceding company's liability for such benefits under the terms of its
policies. However, The Guardian shall pay death claims in one lump sum
regardless of the mode of settlement provided in the policy. The Guardian may
pay disability waiver of premium claims according to the mode of payment used by
the ceding company.
The Guardian shall abide the issue as it is settled by the ceding company and
shall pay the amount of reinsurance in effect when the ceding company settles
with the claimant, including any required interest from date of death to date of
payment, subject only to the limitations set forth in paragraphs 1 through 3
following:
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1. In every case of loss, copies of proofs obtained by the ceding company
shall be taken as sufficient. Unless agreed otherwise, all contestable
claims will be routinely investigated. Copies of all proofs of loss,
underwriting papers and any investigation shall be furnished to The
Guardian upon request.
2. The ceding company shall consult with The Guardian before making an
admission of liability on any contestable claim on which the ceding
company retains less than its full retention.
3. Any claim may be contested or compromised by the ceding company. The
Guardian may choose not to participate in contesting a claim, and if it so
chooses, it shall pay the full amount of the reinsurance at once. If The
Guardian joins the ceding company in a contest or compromise which results
in a reduced claim settlement, then the ceding company and The Guardian
shall participate in proportion to their respective liabilities before the
reduction. If The Guardian has given written consent to participate in
defending or investigating a claim or in taking up or rescinding a policy
reinsured under this Agreement, any unusual expenses incurred by the
ceding company (aside from routine investigations and other incidental
claims settlement expenses) shall be shared in the same proportion.
In the event of an increase or decrease in the amount of the ceding company's
insurance on any policy reinsured hereunder because of a misstatement of age or
sex or other status which is established after the death of the Insured, the
ceding company and The Guardian shall share in the change in amount in
proportion to their respective net liabilities prior to the increase or
decrease. The death benefit shall be recalculated using premiums at the correct
age and sex.
The Guardian shall not participate in punitive or exemplary damages assessed
against the ceding company.
Article XIII: Premium Tax Credit
The Guardian shall not reimburse the ceding company for premium taxes on
reinsurance premiums paid The Guardian.
Article XIV: Experience Refund
The business reinsured under this contract shall not be eligible for an
experience refund.
Article XV: Offset
The ceding company and The Guardian shall have the right to offset any balance
due from one party to the other party under this contract. If either party is
then under formal insolvency proceedings, this right of offset shall be subject
to the laws of the state exercising primary jurisdiction over such proceedings.
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Article XVI: DAC Tax
The ceding company and The Guardian hereby agree to the following pursuant to
Section 1.848-2(g)(8) of the Income Tax Regulation issued December 1992, under
Section 848 of the Internal Revenue Code of 1986, as amended. This election
shall be effective for 1995 and for all subsequent taxable years for which this
agreement remains in effect.
1. The term "party" will refer to either the ceding company or The Guardian
as appropriate.
2. The terms used in this Article are defined by reference to Regulation
1.848-2 in effect December 1992.
3. The party with the net positive consideration for this Agreement for each
taxable year will capitalize specified policy acquisition expenses with
respect to this agreement without regard to the general deductions
limitation of Section 848(c)(1).
4. Both parties agree to exchange information pertaining to the amount of net
consideration under this agreement each year to ensure consistency or as
otherwise required by the Internal Revenue Service.
5. The ceding company will submit a schedule to The Guardian by May 1 of each
year of its calculation of the net consideration for the preceding
calendar year. This schedule of calculations will be accompanied by a
statement stating that the ceding company report such net consideration in
its tax return for the preceding calendar year.
6. The Guardian may contest such calculation by providing an alternative
calculation to the ceding company by June 1. If The Guardian does not so
notify the ceding company, the ceding company will report the net
consideration as determined by the ceding company in the ceding company's
tax return for the previous calendar year.
7. If The Guardian contests the ceding company's calculation of the net
considerations, the parties will act in good faith to reach an agreement
as to the correct amount by July 1. When the ceding company and The
Guardian reach agreement on an amount of the net consideration, each party
shall report such amount in their respective tax returns for the previous
calendar year.
The Guardian and the ceding company represent and warrant that they are subject
to U.S. taxation under Subchapter L of Chapter 1 of the Internal Revenue Code.
Article XVII: Oversights
Error and omissions of an accidental or unintentional nature shall be corrected
and both parties shall be restored to the positions they would have occupied had
no such errors or omissions occurred.
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Article XVIII: Insolvency
In the event of the insolvency of the ceding company, payments due the ceding
company on all reinsurance made, ceded, renewed or otherwise becoming effective
under this Agreement shall be payable by The Guardian directly to the ceding
company or to its liquidator, receiver, or statutory successor on the basis of
the liability of the ceding company under the policy or policies reinsured
without diminution because of insolvency of the ceding company.
It is understood, however, that in the event of insolvency of the ceding
company, The Guardian shall be given written notice of the pendency of a claim
against the insolvent ceding company on a policy reinsured within a reasonable
time after such claim is filed in the insolvency proceeding. During the pendency
of such claim, The Guardian may investigate such claim and interpose, at its own
expense, in the proceeding where such claim is to be adjudicated any defense or
defenses which it may deem available to the ceding company or its liquidator or
receiver or statutory successor.
It is further understood that the expense thus incurred by The Guardian shall be
chargeable, subject to a court approval, against the insolvent ceding company as
part of the expense of liquidation to the extent of a proportionate share of the
benefit which may accrue to the ceding company solely as a result of the defense
undertaken by The Guardian. Where two or more assuming reinsurers participate in
the same claim and a majority in interest elect to interpose a defense to such
claim, the expense shall be apportioned in accordance with the terms of this
Agreement as though such expense had been incurred by the ceding company.
In the event of the insolvency of The Guardian, as determined by the New York
State Insurance Department, all reinsurance ceded under this agreement may be
immediately recaptured in full by the ceding company without penalty. The
Guardian shall remain liable for the payment of any claim which had occurred
prior to the date of cancellation whether or not due proof of such claim had
actually been received.
Article XIX: Assignment of Reinsurance
If either the ceding company or The Guardian proposes to sell, assumption
reinsure or otherwise assist in the transfer of the policies or risks that are
reinsured under this Agreement to any third party, it shall require that the
third party agree in writing to an assignment of all rights and obligations of
the ceding company or The Guardian under this Agreement. Either party may object
to any assignment that would result in a material adverse economic impact to
that party. If The Guardian objects to an assignment on this basis by the ceding
company, the ceding company and The Guardian shall mutually agree on a
termination charge which shall be paid by the ceding company to The Guardian. If
the ceding company objects to an assignment on this basis by The Guardian, the
ceding company may have the option to terminate the reinsurance effective the
date of such assignment without a termination charge.
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Article XX: Arbitration
In the event of any disputes or differences arising hereafter between the
contracting parties with reference to any transaction arising from or relating
in any way to this Agreement on which agreement between the parties hereto
cannot be reached, the same shall be decided by arbitration. The following
procedures apply:
1. Three arbitrators will decide any dispute or difference. The arbitrators
must be disinterested officers or retired officers of life insurance or
life reinsurance companies other than the two parties to the Agreement or
their affiliates. Each of the contracting companies agrees to appoint one
of the arbitrators with the third, the "Umpire", to be chosen by the other
arbitrators. In the event that either party should fail to choose an
arbitrator within 30 days following a written request by the other party
to do so, the requesting party may choose an Umpire before entering upon
arbitration. In the event that the two arbitrators shall not be able to
agree on the choice of the Umpire within 30 days following their
appointment, each arbitrator shall nominate five candidates within 10 days
thereafter, four of whom the other shall decline, and the Umpire shall be
chosen by the President of the American Arbitration Association.
2. The arbitrators shall consider customary and standard practices in the
life reinsurance business. They shall decide by a majority vote of the
arbitrators. There shall be no appeal from their written decision.
Judgement may be entered on the decision of the arbitrators by any court
having jurisdiction.
3. Each party shall bear the expense of its own arbitrator and outside
attorney fees, and shall jointly and equally bear with the other party the
expense of the third arbitrator.
4. Any arbitration instituted pursuant to this Article shall be held in New
York, New York and the laws of the State of New York and, to the extent
applicable, the Federal Arbitration Act shall govern the interpretation
and application of this Agreement.
5. This Article shall survive termination of this Agreement.
6. Submission of a matter to arbitration shall be condition precedent to any
right to seek injunctive or other provisional relief pending the
arbitration of a matter subject to arbitration pursuant to this Agreement.
In any legal proceeding the laws of the State of New York will govern.
Article XXI: Inspection of Records
The Guardian shall have the right at any reasonable time to inspect, at the
office of the ceding company, all books and documents relating to any
reinsurance under this Agreement.
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Article XXII: Parties to the Agreement
This agreement is solely between the ceding company and The Guardian. The
acceptance of risks under this Agreement shall create no right or legal
relationship between The Guardian and the insured, owner or beneficiary of any
insurance policy or contract of the ceding company.
Article XXIII: Agreement
This agreement shall constitute the entire agreement between the parties with
respect to reinsuring business under this agreement. There are no understandings
between the parties other than those expressed in the agreement.
Any change or modification to the agreement shall be made by amendment to the
agreement and signed by both parties.
Article XXIV: Duration of Agreement
This agreement shall have the effective date shown on the Specifications Page
and shall be unlimited in duration. It may be terminated at any time, insofar as
it pertains to the handling of subsequent new business, by either party giving
three months notice of termination in writing. The Guardian shall continue to
accept new business during the three month period and shall continue to be
liable on all in force reinsurance granted under this agreement until the
termination or expiry of the insurance reinsured.
Article XXV: Execution of Agreement
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
in duplicate on the dates shown below.
THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC.
By /s/ [ILLEGIBLE] By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Title Vice President & Actuary Title VP & Controller
Date 12/18/95 Date 12/18/95
THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA
By /s/ ▇▇▇ ▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title Vice President & Life Actuary Title Senior Vice President, Life
Insurance
Date 12/14/95 Date 12/14/95
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EXHIBIT A
PLANS COVERED UNDER THIS AGREEMENT
Plan Name Description
--------- -----------
Park Avenue Life Variable Life, associated Yearly Renewable
Term, Waiver of Premium and Accidental
Death Benefit
Park Avenue Variable Universal Life Variable Universal Life and associated
riders
REVISION 3 - effective 1/1/98
EXHIBIT B
CEDING COMPANY'S SCHEDULE OF RETENTION LIMITS
FOR PRODUCTS ISSUED BY THE SPECIALTY LIFE BUSINESS UNIT
EFFECTIVE: January 1, 1997
1. Life
10% of each policy up to a per life maximum of $500,000.
2. Disability Waiver of Premium and Payor Benefits:
Same as Life
3. Accidental Death Benefits:
10% of each policy with an all company participation limit of $500,000.
Note: Reinsurance amounts in excess of 90% will be covered under Agreement 3002
between the ceding company and The Guardian.
REVISION 2 - effective 1/1/97
EXHIBIT C
AUTOMATIC AND JUMBO LIMITS
AUTOMATIC LIMITS ON BUSINESS CEDED TO THE GUARDIAN
1. Life:
90% of each policy up to the following maximums.
On non-aviation risks:
Ages Preferred - Class 4 Class 5 - 16
---- ------------------- ------------
0 - 15 $ 9,000,000 $4,500,000
16 - 70 13,500,000 8,500,000
71 - 75 9,000,000 2,500,000
Over 75 2,500,▇▇▇ ▇▇▇▇▇,000
On aviation risks: The lower of $7,500,000 or the limit for non-aviation
risks.
2. Disability Waiver of Premium and Payor Benefits:
90% of each policy up to a maximum of $3,000,000.
3. Accidental Death Benefits:
90% of each policy up to a maximum of $500,000 in all companies.
JUMBO LIMITS
The ceding company shall not cede automatically to The Guardian any risk on an
individual life if the all company amount of Life Insurance in force plus the
amount applied for exceeds the following:
Ages Preferred - Class 4 Class 5 - 16
---- ------------------- ------------
0-15 $10,000,000 $ 5,000,000
16-70 15,000,000 10,000,000
71-75 10,000,000 2,750,000
Over 75 2,750,000 2,750,000
REVISION 2 - effective 1/1/97
EXHIBIT D
ALLOWANCE SCHEDULE
[Information has been redacted as confidential]
EXHIBIT E
MODIFIED COINSURANCE RESERVE ADJUSTMENT
The ceding company shall establish and maintain life reserves on the policies
reinsured under this agreement. The Guardian shall share in these reserves by
means of a modified coinsurance reserve adjustment (MRA).
The Annual MRA shall be computed by deducting (a) the reserves on December 31st
of the preceding calendar year on the portions of the policies reinsured under
the terms of this contract, with one year's interest as defined below from (b)
the reserves on December 31st of the current calendar year on the portions of
the policies reinsured on that date.
Reserves in the mean reserve adjustment refer to the general account and
separate account fund balances.
The interest in the MRA calculation is defined as the investment earnings
credited to the funds.
The monthly MRA shall be estimated.
REVISION 1 - effective 9/30/96
EXHIBIT F
REPORTING REQUIREMENTS
EXHIBIT F - 1
Ceding Company: The Guardian Insurance and Annuity Company, Inc.
Reinsurer: The Guardian Life Insurance Company of America
Summary Monthly Report
For ______________, 19__
First Year Life Premiums _________________
Scheduled ____________
Unscheduled ____________
General Account ____________
First Year Disability Premiums +________________
First Year Accidental Death Benefit Premiums +________________
Renewal Life Premiums +________________
Scheduled ____________
Unscheduled ____________
General Account ____________
Renewal Disability Premiums +________________
Renewal Accidental Death Benefit Premiums +________________
First Year Allowances -________________
Renewal Allowances -________________
Cash Value Payments -________________
Death Claims Payments -________________
Interest on Death Claims -________________
Claim Expense Reimbursements -________________
Disability Claim Payments -________________
Mean Reserve Adjustment ________________
Reserve interest +____________
Reserve increase -____________
Total Amount due The Guardian or (ceding company) ________________
REVISION 2 - effective 1/1/97
EXHIBIT F - 2
Ceding Company: The Guardian Insurance and Annuity Company, Inc.
Reinsurer: The Guardian Life Insurance Company of America
Policy Exhibit for ________________, 19__
---------------------------------Current Period---------------------------------
Number Amount
of Policies of Reinsurance
----------- --------------
In-force Beg. of Period
Paid For
Revivals
Other Increases
Total Increases
Deaths
Recaptures
Expiries
Surrenders
Lapses
Conversions
Other Decreases
Total Decreases
In-Force End of Period
----------------------------------Year-to-Date----------------------------------
Number Amount
of Policies of Reinsurance
----------- --------------
In-force Beg. of Year
Paid For
Revivals
Other Increases
Total Increases
Deaths
Recaptures
Expiries
Surrenders
Lapses
Conversions
Other Decreases
Total Decreases
In-Force End of Year
EXHIBIT F - 3
Ceding Company: The Guardian Insurance and Annuity Company, Inc.
Reinsurer: The Guardian Life Insurance Company of America
Quarterly Reserve Report for Reserve Credit Taken
Reserves as of ______________, 19__
I. Statutory Reserves
Coverage Reserve Basis Reinsurance Amount Reserve
-------- ------------- ------------------ -------
Life _________________ _________________ ___________
(Show table and _________________ _________________ ___________
flat extra _________________ _________________ ___________
separately) _________________ _________________ ___________
Life Subtotal _________________ ___________
Waiver of Premium _________________ _________________ ___________
_________________ _________________ ___________
W/P Subtotal _________________ ___________
Accidental Death _________________ _________________ ___________
_________________ _________________ ___________
_________________ ___________
ADB Subtotal _________________ ___________
Miscellaneous ___________
(by type: Pre ___________
and Post Term ___________
Conversion, etc.) ___________
Grand Total ___________
II. Tax Reserves
Coverage Reserve Basis Reinsurance Amount Reserve
-------- ------------- ------------------ -------
Life _________________ _________________ ___________
(mortality table _________________ _________________ ___________
extras only) _________________ _________________ ___________
Life Total ___________
REVISION 2 - effective 1/1/97
GIAC/GUARDIAN
Treaty ▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇/▇▇▇▇ ▇▇▇▇▇▇ Variable Universal Life)
Modified Coinsurance Treaty -effective 9/l/95
Revision 1 - Modifies the Exhibit E Mean Reserve Adjustment effective 9/30/96.
Revision 2 - Adds Accidental Death Benefit to the plans covered effective
1/1/97.
Revision 3 - Adds Park Avenue Variable Universal Life to the plans covered
effective l/l/98.
Revision 4 - Modifies the allowance schedule effective 9/l/95.
Revision 5 - Modifies the allowance schedule for the S/VUL millennium series
effective 7/1/00.
Revision 6 - Modifies the allowance schedule for Millennium Park Avenue Life
effective 1/1/01.
Automatic Reinsurance Agreement dated September 1, 1995
between
The Guardian Insurance & Annuity company, Inc.
Wilmington, Delaware
and
The Guardian life Insurance Company of America
New York, New York
Revision 1
Revision 1 modifies the Exhibit E Modified Mean Reserve Adjustment in Treaty
3001 effective September 30, 1996.
The Specification Page has been revised to reflect this change.
All provisions not amended remain unchanged.
In witness whereof, both parties have executed this Amendment in duplicate as
follows:
The Guardian Life Insurance Company of America
By: /s/ ▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President & Life Actuary Title: Senior Vice President, Life
Insurance
Date: December 5, 1996
The Guardian Insurance & Annuity Company, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President & Actuary Title: Vice President & Controller
Date: December [ILLEGIBLE], 1996
Reinsurance Agreement
Specifications Page
Ceding Company: The Guardian Insurance & Annuity Company, Inc.
Reinsurer: The Guardian Life Insurance Company of America
Treaty Number: 3001
Effective Date: Issues of 9/l/95 or later
Type of Business: Variable Life and Associated Waiver of Premium
and Term riders
Reporting: Self Administered
Plan of Reinsurance: Coinsurance/Modified Coinsurance
Limit Per Life: 90% of each policy
Jumbo Limit: $15,000,000 at most ages. Refer to Exhibit C.
Minimum Cession: No minimum
Premium Tax: Not reimbursed
Recapture: After 10 policy years.
In the event of any conflict between this Specifications Page and the terms of
the Reinsurance Treaty, the terms and conditions of the Treaty shall govern.
REVISION 1 - effective 9/30/96
Automatic Reinsurance Agreement dated September 1, 1995
between
The Guardian Insurance & Annuity Company, Inc.
Wilmington, Delaware
and
The Guardian life Insurance Company of America
New York, New York
Revision 2
Revision 2 adds Accidental Death Benefit to this treaty effective January 1,
1997. This revision affects accidental death benefit on all policies reinsured
under this treaty.
Article VII is amended to include the following: The reinsurance premium for
Accidental Death Benefit shall be the proportionate share of the ceding
company's premium less the following percentages of premium discount: 75% in the
first year and 10% in renewal years.
The Specification Page, Exhibit A, Exhibit B, Exhibit C, Exhibit F-1 and Exhibit
F-3 have been revised to reflect this change.
All provisions not amended remain unchanged.
In witness whereof, both parties have executed this Amendment in duplicate as
follows:
The Guardian Life Insurance Company of America
By: /s/ ▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President & Life Actuary Title: Senior Vice President, Life
Insurance
Date: 4/21/1997
The Guardian Insurance & Annuity Company, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President & Actuary Title: Vice President & Controller
Date: April 23, 1996
Reinsurance Agreement
Specifications Page
Ceding Company: The Guardian Insurance & Annuity Company, Inc.
Reinsurer: The Guardian Life Insurance Company of America
Treaty Number: 3001
Effective Date: Issues of 9/l/95 or later
Type of Business: Variable Life and Associated Waiver of Premium,
Accidental Death Benefit and Term riders
Reporting: Self Administered
Plan of Reinsurance: Coinsurance/Modified Coinsurance
Limit Per Life: 90% of each policy
Jumbo Limit: $15,000,000 at most ages. Refer to Exhibit C.
Minimum Cession: No minimum
Premium Tax: Not reimbursed
Recapture: After 10 policy years.
In the event of any conflict between this Specifications Page and the terms of
the Reinsurance Treaty, the terms and conditions of the Treaty shall govern.
REVISION 2 - effective 1/1/97
EXHIBIT A
PLANS COVERED UNDER THIS AGREEMENT
Plan Name Description
--------- -----------
Park Avenue Life Variable Life and associated
Yearly Renewable Term,
Waiver of Premium and
Accidental Death Benefit
REVISION 2 - effective 1/1/97
Automatic Reinsurance Treaty 3001 dated September 1, 1995
between
The Guardian Insurance & Annuity company, Inc.
Wilmington, Delaware
and
The Guardian life Insurance Company of America
New York, New York
Revision 3
Revision 3 adds Park Avenue Variable Universal Life to Exhibit A effective
January 1, 1998.
The allowances will be 67% for first year premiums, 6% for excess payments and
16.7% for renewal premiums.
Article VII is amended to include the following: The reinsurance premium for
Variable Universal Life shall be the proportionate share of the ceding company's
premium for all benefits including waiver and accidental death.
The Specification Page and Exhibit A have been revised to reflect this change.
All provisions not amended remain unchanged.
In witness whereof, both parties have executed this Amendment in duplicate as
follows:
The Guardian Life Insurance Company of America
By: /s/ ▇▇▇ ▇▇▇▇▇ By: /s/ [ILLEGIBLE]
Title: Vice President & Life Actuary Title: Senior Vice President,
Individual Marketing & Group
Pensions
Date: December 16, 1998
The Guardian Insurance & Annuity Company, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇, Jr.
Title: VP & Actuary Title: Vice President
Date: December 22, 1998
Automatic Reinsurance Treaty 3001 dated September 1, 1995
between
The Guardian Insurance & Annuity company, Inc.
Wilmington, Delaware
and
The Guardian life Insurance Company of America
New York, New York
Revision 4
Revision 4 modifies the allowance schedule (Exhibit D) effective September 1,
1995
All provisions not amended remain unchanged.
In witness whereof, both parties have executed this Amendment in duplicate as
follows:
The Guardian Life Insurance Company of America
By: /s/ ▇▇▇ ▇▇▇▇▇ By: /s/ [ILLEGIBLE]
Title: Vice President & Life Actuary Title: Senior Vice President,
Individual Marketing & Group
Pensions
Date: December 16, 1998
The Guardian Insurance & Annuity Company, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇, Jr.
Title: VP & Actuaries Title: Vice President
Date: December 22, 1998
EXHIBIT D
ALLOWANCE SCHEDULE
[Information has been redacted as confidential.]
Automatic Reinsurance Treaty 3001 dated September 1, 1995
between
The Guardian Insurance & Annuity Company, Inc.
Wilmington, Delaware
and
The Guardian life Insurance Company of America
New York, New York
Revision 5
Revision 5 modifies the allowance schedule (Exhibit D) effective July 1, 2000.
All provisions not amended remain unchanged.
In witness whereof, both parties have executed this Amendment in duplicate as
follows:
The Guardian Life Insurance Company of America
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President, Title: Senior Vice President and
Life Actuarial Financials Actuary
Date: October 24, 2000
The Guardian Insurance & Annuity Company, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Second Vice President & Title: Vice President, Equity
Actuary, Equity Products Financial Management & Control
Date: October 24, 2000
EXHIBIT D
ALLOWANCE SCHEDULE
[Information has been redacted as confidential.]
Automatic Reinsurance Treaty 3001 dated September 1, 1995
between
The Guardian Insurance & Annuity company, Inc.
Wilmington, Delaware
and
The Guardian life Insurance Company of America
New York, New York
Revision 6
Revision 6 modifies the allowance schedule (Exhibit D) effective January 1,
2001.
All provisions not amended remain unchanged.
In witness whereof, both parties have executed this Amendment in duplicate as
follows:
The Guardian Life Insurance Company of America
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President, Title: Senior Vice President and
Life Actuarial Financials Actuary
Date: February 12, 2001
The Guardian Insurance & Annuity Company, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Second Vice President & Title: Vice President, Equity
Actuary, Equity Products Financial Management & Control
Date: February 12, 2001
Reinsurance Agreement
Specifications Page
Ceding Company: The Guardian Insurance & Annuity Company, Inc.
Reinsurer: The Guardian Life Insurance Company of America
Treaty Number: 3001
Effective Date: Issues of 9/l/95 or later
Type of Business: Variable Life and Associated Waiver of Premium
and Term riders
Reporting: Self Administered
Plan of Reinsurance: Modified Coinsurance
Limit Per Life: 90% of each policy
Jumbo Limit: $15,000,000 at most ages. Refer to Exhibit C.
Minimum Cession: No minimum
Premium Tax: Not reimbursed
Recapture: After 10 policy years.
In the event of any conflict between this Specifications Page and the terms of
the Reinsurance Treaty, the terms and conditions of the Treaty shall govern.
EXHIBIT A
PLANS COVERED UNDER THIS AGREEMENT
Plan Name Description
--------- -----------
Park Avenue Life Variable Life and associated
Yearly Renewable Term and
Waiver of Premium riders
EXHIBIT B
CEDING COMPANY'S SCHEDULE OF RETENTION LIMITS
FOR PRODUCTS ISSUED BY THE SPECIALTY LIFE BUSINESS UNIT
EFFECTIVE: September 1, 1995
1. Life: 10% of each policy up to a per life maximum based on the following
schedule.
Maximum Amount of Insurance in Force
Life Insurance Retained End of Prior Year
----------------------- -----------------
$400,000 $3,000,000,000 - 3,999,999,999
450,000 4,000,000,000 - 4,999,999,999
500,000 5,000,000,000 and greater
2. Disability Waiver of Premium and Payor Benefits:
Same as Life
3. Accidental Death Benefits:
$200,000
Note: Reinsurance amounts in excess of 90% will be covered under Agreement 3002
between the ceding company and The Guardian.
EXHIBIT C
AUTOMATIC AND JUMBO LIMITS
AUTOMATIC LIMITS ON BUSINESS CEDED TO THE GUARDIAN
1. Life:
90% of each policy up to the following maximums.
On non-aviation risks:
Ages Preferred-Class 4 Class 5 - 16
---- ----------------- ------------
0 - 15 $ 9,000,000 $4,500,000
16 - 70 13,500,000 8,500,000
71 - 75 9,000,000 2,500,000
Over 75 2,500,000 2,500,000
On aviation risks: The lower of $7,500,000 or the limit for non-aviation risks.
2. Disability Waiver of Premium and Payor Benefits:
90% of each policy up to a maximum of $3,000,000.
3. Accidental Death Benefits:
None
JUMBO LIMITS
The ceding company shall not cede automatically to The Guardian any risk on an
individual life if the all company amount of Life Insurance in force plus the
amount applied for exceeds the following:
Ages Preferred-Class 4 Class 5 - 16
---- ----------------- ------------
0-15 $10,000,000 $ 5,000,000
16-70 15,000,000 10,000,000
71-75 10,000,000 2,750,000
Over 75 2,750,000 2,750,000
EXHIBIT D
ALLOWANCE SCHEDULE
[Information has been redacted as confidential]
EXHIBIT E
MODIFIED COINSURANCE RESERVE ADJUSTMENT
The ceding company shall establish and maintain life reserves on the policies
reinsured under this agreement. The Guardian shall share in these reserves by
means of a modified coinsurance reserve adjustment (MRA).
The Annual MRA shall be computed by deducting (a) the reserves on December 31st
of the preceding calendar year on the portions of the policies reinsured under
the terms of this contract, with one year's interest as defined below from (b)
the reserves on December 31st of the current calendar year on the portions of
the policies reinsured on that date.
Reserves refer to statutory reserves held in the Life Insurance sections of the
general account and separate account reserve exhibits.
The interest in the MRA calculation is defined as follows: for variable
coverages the interest shall equal the investment earnings credited to the
policies; for fixed coverages the interest rate shall be the general account
rate allocated to the non-variable coverages. (The investment risk on the
non-variable coverages is insignificant. These coverages include a yearly
renewable term rider, extended term insurance and non-participating fixed
reduced paid up insurance resulting from the variable coverage.)
The monthly MRA shall be estimated.
EXHIBIT F -1
Ceding Company: The Guardian Insurance and Annuity Company, Inc.
Reinsurer: The Guardian Life Insurance Company of America
Summary Monthly Report
For ________________, 19__
First Year Life Premiums _________________
Scheduled ____________
Unscheduled ____________
General Account ____________
First Year Disability Premiums +________________
Renewal Life Premiums +________________
Scheduled ____________
Unscheduled ____________
General Account ____________
Renewal Disability Premiums +________________
First Year Allowances -________________
Renewal Allowances -________________
Cash Value Payments -________________
Death Claims Payments -________________
Interest on Death Claims -________________
Claim Expense Reimbursements -________________
Disability Claim Payments -________________
Mean Reserve Adjustment ________________
Reserve interest +____________
Reserve increase -____________
Total Amount due The Guardian or (ceding company) ________________
EXHIBIT F - 3
Ceding Company: The Guardian Insurance and Annuity Company, Inc.
Reinsurer: The Guardian Life Insurance Company of America
Quarterly Reserve Report for Reserve Credit Taken
Reserves as of ______________, 19__
I. Statutory Reserves
Coverage Reserve Basis Reinsurance Amount Reserve
-------- ------------- ------------------ -------
Life _________________ _________________ ___________
(Show table and _________________ _________________ ___________
flat extra _________________ _________________ ___________
separately) _________________ _________________ ___________
Life Subtotal _________________ ___________
Waiver of Premium _________________ _________________ ___________
_________________ _________________ ___________
_________________ _________________ ___________
W/P Subtotal _________________ ___________
Miscellaneous ___________
(by type: Pre ___________
and Post Term ___________
Conversion, etc.) ___________
Grand Total ___________
II. Tax Reserves
Coverage Reserve Basis Reinsurance Amount Reserve
-------- ------------- ------------------ -------
Life _________________ _________________ ___________
(mortality table _________________ _________________ ___________
extras only) _________________ _________________ ___________
_________________ _________________ ___________
Life Total ___________