Automatic Self Administered YRT Reinsurance Agreement between American National Insurance Company One Moody Plaza, Galveston,TX 77550 (hereinafter referred to as, the "Ceding Company") and Munich American Reassurance Company Atlanta, GA (hereinafter...
between
American
National Insurance Company
One ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,▇▇ ▇▇▇▇▇
(hereinafter
referred to as, the "Ceding Company")
and
Munich
American Reassurance Company
Atlanta,
GA
(hereinafter
referred to as the "Reinsurer")
Effective:
July 1, 2006
Treaty #:
U26
Table of
Contents
PREAMBLE 4
1.1 PARTIES
TO THE
AGREEMENT 4
1.2 COMPLIANCE 4
1.3 CONSTRUCTION 4
1.4 ENTIRE
AGREEMENT 4
1.5 SEVERABILITY 4
AUTOMATIC
REINSURANCE 4
2.1 GENERAL
CONDITIONS 4
2.2 RETAINED
AMOUNTS 5
FACULTATIVE
REINSURANCE 5
COMMENCEMENT
OF
LIABILITY 5
4.1 AUTOMATIC
REINSURANCE 5
4.2 FACULTATIVE
REINSURANCE 6
4.3 CONDITIONAL
RECEIPT OR TEMPORARY
INSURANCE 6
REINSURED
RISK
AMOUNT 6
5.1 LIFE 6
5.2 WAIVER
OF PREMIUM (IF
APPLICABLE) 6
5.3 ACCIDENTAL
DEATH BENEFIT (IF
APPLICABLE) 6
PREMIUM
ACCOUNTING 6
6.1 PREMIUMS 6
6,2 PAYMENT
OF
PREMIUMS 7
6.3 DELAYED
PAYMENT 7
6.4 FAILURE
TO PAY
PREMIUMS 7
6.5 PREMIUM
RATE
GUARANTEE 7
REDUCTIONS,
TERMINATIONS AND
CHANGES 8
7.1 REDUCTIONS
AND
TERMINATIONS 8
7.2 INCREASES 8
7.3 RISK
CLASSFICATION
CHANGES 8
7.4 REINSTATEMENT 9
7.5 NONFORFEITURE
BENEFITS 9
CONVERSIONS,
EXCHANGES AND
REPLACEMENTS 9
8.1 CONVERSIONS 9
8.2 EXCHANGES
AND
REPLACEMENTS 9
CLAIMS 10
9.1 NOTICE 10
9.2 PROOFS 10
9.3 AMOUNTAND
PAYMENT OF REINSURANCE
BENEFITS 10
9.4 CONTESTABLE
CLAIMS 11
9.5 CLAIM
EXPENSES 11
9.6 MISREPRESENTATION
OR
SUICIDE 11
9.7 MISSTATEMENT
OF AGE OR
SEX 11
9.8 EXTRA-CONTRACTUAL.
DAMAGES 11
CREDIT
FOR
RESERVES 12
10.1 RESERVE
METHODOLOGY AND
REPORTING 12
RETENTION
LIMIT
CHANGES 12
RECAPTURE 12
GENERAL
PROVISION 13
13.1 CURRENCY 13
13.2 PREMIUM
TAX [INSERT (IF APPLICABLE) AND EXCISE
TAX] 14
13.4 MINIMUM
CESSION 14
13.5 INSPECTION
OF
RECORDS 14
13.6 FORMS,
MANUALS & ISSUE
RULES 14
DAC
TAX 14
OFFSET 15
INSOLVENCY 15
16.1 INSOLVENCY
OF A PARTY TO THIS
AGREEMENT 15
16.2 INSOLVENCY
OF THE CEDING
COMPANY 15
16.3 INSOLVENCY
OF THE
REINSURER 16
ERRORS
AND
OMISSIONS 16
DISPUTE
RESOLUTION 16
ARBITRATION 17
CONFIDENTIALITY 17
DURATION
OF
AGREEMENT 18
EXECUTION 18
EXHIBITS
A
- Retention
Limits of the Ceding Company
B
- Plans Covered
and Binding Limits
C
- Reinsurance
Premiums
D
- Conversion
Premiums
E
- Self-Administered
Reporting
F
- Application
for Facultative Reinsurance Form
G
- 2001 VRT
Mortality Table
PREAMBLE
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1.1
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PARTIES
TO THE AGREEMENT
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This
is a YRT agreement for indemnity reinsurance (the "Agreement") solely
between American National Insurance Company of Texas (the "Ceding
Company"), and Munich American Reassurance Company of Georgia (the
Reinsurer collectively referred to as the
"parties".
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The
acceptance of risks under this Agreement will create no right or legal
relationship between the Reinsurer and the insured, owner or beneficiary
of any insurance policy or other contract of the Ceding
Company.
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The
Agreement will be binding upon the Ceding Company and the Reinsurer and
their respective successors and
assigns.
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1.2 COMPLIANCE
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This
Agreement applies only to the issuance of insurance, by the Ceding Company
in a jurisdiction in which it is properly
licensed.
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The
Ceding Company represents that, to the best of its knowledge, it is in
compliance with all state and federal laws applicable to the business
reinsured under this Agreement- In the event that the Ceding Company is
found to be in non-compliance with any law material to this Agreement, the
agreement will remain in effect and the Ceding Coin any will indemnify the
Reinsurer for any direct loss the Reinsurer suffers as a result the
noncompliance, and will seek to remedy the
non-compliance.
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1.3
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CONSTRUCTION
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This
Agreement will be construed in accordance with the laws of the state of
Texas.
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1.4
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ENTIRE
AGREEMENT
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This
Agreement constitutes the entire agreement between the parties with
respect to the business reinsured hereunder. There are no understandings
between the parties other than as expressed in this Agreement, Any change
or modification to this Agreement will be null and void unless made by
amendment to this Agreement and signed by both
parties.
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1.5
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SEVERABILITY
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If
any provision of this Agreement is determined to be invalid or
unenforceable, such determination will not impair or affect the validity
or the enforceability of the remaining provisions of this
Agreement.
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AUTOMATIC
REINSURANCE
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2.1
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GENERAL
CONDITIONS
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On
and after the effective date of this Agreement, (lie Ceding Company will
automatically cede to the Reinsurer a portion of the life insurance
policies, supplementary benefits, and riders listed in Exhibit B. The
insured, at the time of the application, must be a permanent resident of
the United States or Canada,
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The
Reinsurer will automatically accept its share of the above-referenced
policies up to the limits shown in Exhibit B, provided
that:
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a.
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the
Ceding Company keeps its full retention, as specified led in Exhibit A, or
otherwise holds its till retention oil a life under previously issued
inforce policie's
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b.
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the
Ceding Company applies its normal underwriting
guidelines.
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c.
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the
total of the new ultimate amount of reinsurance required including
contractual increases and the amount already reinsured or that life under
this Agreement and all other agreements between the Reinsurer and the
Ceding Company, does not exceed the Automatic Binding Limits set out in
Exhibit B
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d.
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the
amount of life insurance in force in all companies, including any coverage
to be replaced plus the amount currently applied for on that life in all
companies, does not exceed the Jumbo Limit stated in Exhibit B,
and
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e.
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the
application is on a life that has not been submitted facultatively to the
Reinsurer or any other reinsurer within the last 2 years, unless the
reason for any prior facultative submission was solely for capacity that
may now be accommodated within the terms of this
Agreement.
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2.2 RETAINED
AMOUNTS
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The
Ceding Company may not reinsure the amount it has retained on the business
coveted under this Agreement, on any basis, without prior notification to
the Reinsurer.
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FACULTATIVE
REINSURANCE
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3.1
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The
Ceding Company may submit any application on a plan or rider identified in
Exhibit 13 to the Reinsurer for its consideration on a facultative
basis.
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The
Ceding Company will apply for reinsurance on a facultative basis by
sending to the Reinsurer an Application for Facultative Reinsurance,
providing the information outlined in Exhibit F. Accompanying this
Application will be copies of all underwriting evidence that is available
for risk assessment including, but not limited to, copies of the
application for insurance, medical examiners' reports, attending
physicians' statements, inspection reports, and any other information
bearing on the insurability of the risk. The Ceding Company also will
notify the Reinsurer of any outstanding underwriting requirements at the
time of the facultative submission. Any subsequent information received by
the Ceding Company that is pertinent to the risk assessment will be
immediately transmitted to the
Reinsurer.
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After
consideration of the Application for Facultative Reinsurance and related
information, the Reinsurer will promptly inform the Ceding Company of its
underwriting decision. The Reinsurer's offer will expire at the end of 20
days, unless otherwise specified by the
Reinsurer.
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If
the underwriting decision is acceptable, the Ceding Company will notify
the Reinsurer in writing of its acceptance of the offer. The relevant
terms and conditions of this Agreement will apply to those facultative
offers made by the Reinsurer and accepted by the Ceding
Company.
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COMMENCEMENT OF
LIABILITY
4.1 AUTOMATIC
REINSURANCE
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For
automatic reinsurance, the Reinsurer's liability will commence at the same
time as the Ceding Company's
liability.
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4.2
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FACULTATIVE
REINSURANCE
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For
facultative reinsurance, the Reinsurer's liability will commence at the
same time as the Ceding Company's liability, provided that the Reinsurer
has made a facultative offer and that offer was accepted, in accordance
with the terms of this Agreement.
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4.3
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CONDITIONAL
RECEIPT OR TEMPORARY INSURANCE
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Reinsurance
coverage under a conditional receipt or temporary insurance provision is
limited to the Reinsurer's share of amounts within the Conditional Receipt
or Temporary Insurance Limits specified in Exhibit B. The Reinsurer will
accept liability provided that the Ceding Company has followed its normal
cash-with-application procedures for such
coverage.
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REINSURED RISK
AMOUNT
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5.1
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LIFE
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For
policies with the level death benefit option, the net amount at risk of
the policy is defined as the policy face amount less the terminal reserve.
For policies with the varying death benefit option, the net amount at risk
of the policy is defined as the policy face amount. The reinsured net
amount at risk for automatic policies is determined by multiplying the
total net arnount at risk on the policy by the Reinsurer's share as
defined in Exhibit B. For variable plans, the net amount at risk is
calculated using the terminal reserve at the end of annual reinsurance
billing period. The Ceding Company will maintain a quota share retention
on each policy, up to the maximum Iimits of its retention per life for the
insured's issue age and rating, as shown in Exhibit A. Risk amounts above
that limit will be reinsured under the terms of this Agreement on an
excess basis.
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The
Ceding Company's retention on the policy will remain constant. Any change
in the net amount at risk due to changes in the policy's reserve will be
allocated to the reinsured amount.
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5.2
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WAIVER
OF PREMIUM
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The
reinsured proportion of' Disability Waiver of Premium will not be greater
than the proportion reinsured on the corresponding life insurance
benefit.
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5.3
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ACCIDENTAL
DEATH BENEFIT
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Not
reinsured.
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PREMIUM
ACCOUNTING
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6.1
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PREMIUMS
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Reinsurance
premium rates for life insurance and other benefits reinsured under this
Agreement are shown in Exhibit C. The rates will be applied to the
reinsured net amount at risk.
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The
Ceding Company will pay the Reinsurer the percentages of the premium rates
shown in Exhibit C.
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6.2
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PAYMENT
OF PREMIUMS
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Reinsurance
premiums are payable annually in advance. The Ceding Company will
calculate tile amount of reinsurance premium due and, within 30 days after
the end of the month will send the Reinsurer a statement that contains the
information shown in Exhibit E, showing reinsurance premiums due for that
period- If an amount. is due the Reinsurer, the Ceding Company will remit
that amount together with the statement. If an amount is due the Ceding
Company, the Reinsurer will remit such amount within 30 days of receipt of
the statement,
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6.3
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DELAYED
PAYMENT
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The
Remittance Date is defined as 30 days after the end of the reporting
period.
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6.4
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FAILURE
TO PAY PREMIUMS
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The
payment of reinsurance premiums is a condition precedent to the liability
of the Reinsurer for reinsurance covered by this Agreement. In the event
that reinsurance premiums are not paid within 60 days of the Remittance
Date, the Reinsurer will have the right to terminate the reinsurance under
all policies having reinsurance premiums in arrears- If the Reinsurer
elects to exercise its right of termination, it will give the Ceding
Company 90 days written notice of its intention. Such notice will be sent
by certified mail.
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If
all reinsurance premiums in arrears, including any that become in arrears
during the 90 day notice period, are not paid before the expiration of the
notice period, the Reinsurer will be relieved of all liability under those
policies as of the last date to which premiums have been paid for each.
Reinsurance on policies on which reinsurance premiums subsequently all due
will automatically terminate as of the last date to which premiums have
been paid for each policy, unless reinsurance premiums on those policies
are paid on or before their Remittance
Dates.
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Terminated
reinsurance may be reinstated, subject to approval by the Reinsurer,
within 30 days of the date of termination, and upon payment of all
reinsurance premiums in arrears including any interest accrued thereon.
The Reinsurer will have no liability for any claims incurred between the
date of termination and the date of the reinstatement of the reinsurance.
The right to terminate reinsurance will not prejudice the Reinsurer's
right to collect premiums for the period during which reinsurance was in
force prior to the expiration of the 90 days
notice,
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The
Ceding Company will not force termination under the provisions of this
Article solely to avoid the provisions regarding recapture in Article 12,
or to transfer the reinsured policies to another
reinsurer.
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6.5
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PREMIUM
RATE GUARANTEE
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Although
the Reinsurer anticipates that the premium rates in Exhibit C will apply
indefinitely, they are only guaranteed for one (1) year. After one year
the Reinsurer may increase the reinsurance premium rates. If the Reinsurer
raises its reinsurance premium rates on any block of inforce business
reinsured under this Agreement on which the Ceding Company has not raised
its retail premiums or cost-of-insurance charges the Ceding Company may
recapture that block of business as of the effective date of the increase
in reinsurance premiums. The recapture will become effective on individual
policy anniversary dates beginning no sooner than 90 days after the Ceding
Company has provided notice of its intent to
recapture.
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However,
if the Coding Company has raised its retail premiums or cost-of-insurance
charges on the block of inforce business since the effective date of this
Agreement, whether before or after the Reinsurer's premium increase, the
Ceding Company's right to recapture will be as described in Article
12.
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REDUCTIONS,
TERMINATIONS AND CHANGES
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Whenever
a change is made in the status, plan, amount or other material feature of
a policy reinsured under this Agreement, the Reinsurer will, upon receipt
notification of the change, provide adjusted reinsurance coverage In
accordance with the provisions of this Agreement. The Ceding Company will
notify the Reinsurer of any such change within 60 days of its effective
date.
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7.1
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REDUCTIONS
AND TERMINATIONS
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In
the event of the reduction, lapse, or termination of a policy or policies
reinsured under this Agreement or any other agreement the Ceding Company
will reduce or terminate reinsurance on that life. The reinsured amount on
the life with all reinsurers will be reduced, effective on the same date,
by the amount required such that the Ceding Company maintains its
retention as defined under this
Agreement.
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The
reinsurance reduction will apply first to the policy or policies being
reduced and then, on a chronological basis, to other reinsured policies on
the life, beginning with the oldest policy. If a fully retained policy on
a life that is reinsured under this Agreement is terminated or reduced,
the Ceding Company will reduce the existing reinsurance on that life by a
corresponding amount, with the reinsurance on the oldest policy being
reduced first. If the amount of reduction exceeds the risk amount
reinsured the reinsurance on the policy or policies will be
terminated.
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The
Reinsurer will refund any unearned reinsurance premiums net of allowances.
However, the reinsured portion of any policy fee will be deemed earned for
a policy year if the policy is reinsured during any portion of that policy
year.
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7.2
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INCREASES
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a.
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Noncontractual
Increases
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If
the amount of insurance is increased as a result of a noncontractual
change, the increase will be underwritten by the Ceding Company in
accordance with its customary standards and procedures and will be
considered new reinsurance under this Agreement. The Reinsurer's approval
is required if the original policy was reinsured on a facultative basis or
if the new amount will cause the reinsured amount on the life to exceed
either the Automatic Binding Limits or the Jumbo Limits shown in Exhibit
B. To be reinsured, each non-contractual increase of Article 7.2(a) must
meet the minimum cession requirement of Exhibit
B.6.
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The
Ceding Company and the Reinsurer will share the increased amount
proportionately. Once the Ceding Company's maximum retention has been
reached, the remaining amount will be reinsured on an excess
basis.
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b.
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Contractual
Increases
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For
policies reinsured on an automatic basis, reinsurance of increases in
amount resulting from contractual policy provisions will be accepted only
up to the Automatic Binding Limits shown in Exhibit
B.
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For
policies reinsured on a facultative basis, reinsurance will be limited to
the ultimate amount shown in the Reinsurer's facultative offer.
Reinsurance premiums for contractual increases will be on a point-in-scale
basis from the original issue age of the
policy.
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7.3
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RISK
CLASSIFICATION CHANGES
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If
the policyholder requests a TabIe Rating reduction or removal of a Flat
Extra, such change will be underwritten according to the Ceding Company's
normal underwriting practices. Risk classification changes on facultative
policies will be subject to the Reinsurer's
approval.
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7.4 REINSTATEMENT
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If
a policy reinsured on an automatic basis is reinstated in accordance with
its terms and in accordance with Ceding Company rules and procedures, the
Reinsurer will, upon notification of reinstatement, reinstate the
reinsurance coverage. If a policy reinsured on a facultative basis is
reinstated, the Reinsurer will reinstate the reinsurance coverage upon
notification of reinstatement in accordance with Ceding Company rules and
procedures.
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Upon
reinstatement of the reinsurance coverage the Ceding Company will pay the
contractual reinsurance premiums plus accrued interest for the period and
at the interest rate which it receives on premiums in
arrears.
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7.5 NONFORFEITURE
BENEFITS
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a.
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Extended
Term
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If
the original policy lapses and extended term insurance is elected under
the terms of the policy reinsurance will continue on the same basis as
under the original policy until the expiry of the extended term
period.
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b.
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Reduced
Paid-up
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If
the original policy lapses and reduced paid-up insurance is elected under
the terms of the policy, the amount reinsured will be
reduced.
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The
amount reinsured and the amount retained will be reduced proportionately.
The reinsurance premiums will be calculated in the same manner as
reinsurance premiums were calculated on the original
policy.
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CONVERSIONS, EXCHANGES AND
REPLACEMENTS
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If
a policy reinsured under this Agreement is converted, exchanged or
replaced, the Ceding Company will promptly notify the Reinsurer. Unless
mutually agreed otherwise, policies that are not reinsured with the
Reinsurer and that exchange or convert to a plan covered under this
Agreement will not be reinsured
hereunder.
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8.1 CONVERSIONS
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The
Reinsurer will continue to reinsure policies resulting from the
contractual conversion of any policy reinsured under this Agreement, in an
amount not to exceed the original amount reinsured hereunder, If the plan
to which the original policy is converting is reinsured by the Reinsurer
either under this Agreement or under a different Agreement, reinsurance
premium rates for the resulting converted policy will be those contained
in the Agreement that covers the plan to which the original policy is
converting. However, if the new plan is not reinsured by the Reinsurer,
reinsurance premiums for a policy resulting from a contractual conversion
will use the rates shown in Exhibit D. Reinsurance premiums and any
allowances for conversions will be oil a point-in-scale basis from the
original issue age of the policy.
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If
the Conversion results in an increase in the risk amount, the increase
will be underwritten by the Ceding Company in accordance with its
customary standard and procedures. The Reinsurer will accept its share of
such increases, subject to the new business provisions of this Agreement.
Reinsurance premiums and any allowances for increased risk amounts will be
first-year premiums at the agreed-upon premium
rate.
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8.2 EXCHANGES
AND REPLACEMENTS
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A
policy resulting from an internal exchange or replacement will be
underwritten by the Ceding Company in accordance with its underwriting
guidelines, standards and procedures for exchanges and replacements. If
the Ceding Company's guidelines treat the policy as new business, then the
reinsurance will also be considered new business. For purposes of this
Article, new business is defined as those policies on
which:
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a.
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the
Ceding Company has obtained complete and current underwriting evidence on
the full amount; and
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b.
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the
full normal commissions are paid for the new plan;
and
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c.
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the
Suicide and Contestable provisions apply as if the policy were newly
issued.
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The
Reinsurer's approval to exchange or replace the policy will be required if
the original policy was reinsured on a facultative
basis.
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If
the Ceding Company's guidelines do not treat the policy as new business,
the exchange or replacement will continue to be ceded to the Reinsurer.
The rates will be based on the original issue age, underwriting class and
duration since the issuance of the original
policy.
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CLAIMS
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Claims
covered under this Agreement include only death claims, which are those
due to the death of the insured on a policy reinsured under this
Agreement, and my additional benefits specified in Exhibit B, which are
provided by the underlying policy and are reinsured under this
Agreement.
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9.1 NOTICE
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The
Ceding Company will notify the Reinsurer, as soon as reasonably possible,
after it receives a claim on a policy reinsured under this
Agreement.
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9.2
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PROOFS
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The
Ceding Company will promptly provide the Reinsurer with proper claim
proofs, including a copy of payment by the Ceding Company, and a copy of
the insured's death certificate. In addition, for contestable claims, the
Ceding Company will send to the Reinsurer a copy of all papers in
connection with the claim.
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9.3
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AMOUNT
AND PAYMENT OF REINSURANCE BENEFITS
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As
soon as the Reinsurer receives proper claim notice and proof of the claim,
the Reinsurer will Promptly ay the reinsurance benefits due the Ceding
Company. The Ceding Company's contractual liability for policies
reinsured. under this Agreement is binding on the Reinsurers. However, for
claims incurred during the contestable period, if the total amount of
reinsurance ceded to all Reinsurers on the policy is greater than die
amount retained by the Ceding Company, or if the Ceding Company retained
less than its usual retention on the policy, the Ceding Company will
consult with the Reinsurer before conceding liability or making settlement
to the claimant. The Ceding Company will wait at least 10 days for the
Reinsurer's recommendation.
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The
total reinsurance recoverable from all companies will not exceed the
Ceding Company's total contractual liability on the policy, less the
amount retained. The maximum reinsurance death benefit payable to the
Ceding Company under this Agreement is the risk amount specifically
reinsured with the Reinsurer. The Reinsurer will also pay its
proportionate share of the interest that the Ceding Company pays on the
death proceeds until the date of
settlement.
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Life
benefit payments will be made in a single sum, regardless of the Ceding
Company's settlement options.
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9.4
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CONTESTABLE
CLAIMS
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The
Ceding Company will promptly notify the Reinsurer of its intention to
contest, compromise, or litigate a claim involving a reinsured policy, The
Ceding Company will also promptly and fully disclose all information
relating to claim. Once notified, the Reinsurer will have 10 days to
notify the Ceding Company in writing of its decision to accept
participation in the contest, compromise, or litigation. If the Reinsurer
has accepted participation, the Ceding Company will promptly advise the
Reinsurer of all significant developments in the claim investigation,
including notification of any legal proceedings against it in response to
denial of the claim.
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If
the Reinsurer does not accept participation the Reinsurer will then
fulfill its obligation by paying the Ceding Company its full share of the
reinsurance amount, and will not share in any subsequent reduction or
increase in liability.
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If
the Reinsurer accepts participation and the Ceding Company's contest,
compromise, or litigation results in a reduction or increase in liability,
the Reinsurer will share in any such reduction or increase in proportion
to its share of the risk on the contested
policy.
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9.5
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CLAIM
EXPENSES
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The
Reinsurer will pay its share of reasonable claim investigation and legal
expenses connected with the litigation or settlement of contractual
liability claims unless the Reinsurer has discharged its liability
pursuant to Section 9.4 above. If the Reinsurer has so discharged its
liability, the Reinsurer will not participate in any expenses incurred
thereafter.
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The
Reinsurer will not reimburse the Ceding Company for routine claim and
administration expenses, including but not limited to the Ceding Company's
home office expenses, compensation of salaried officers and employees, and
any legal expenses other than third party expenses incurred by the Ceding
Company. Claim investigation expenses do not include expenses incurred by
the Ceding Company as a result of a dispute or contest arising out of
conflicting claims of entitlement to policy proceeds or
benefits.
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9.6
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MISREPRESENTATION
OR SUICIDE
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If
the Ceding Company returns premiums to the policyowner or beneficiary as a
result of misrepresentation or suicide of the insured, the Reinsurer will
refund net reinsurance premiums received on that policy without interest
to the Ceding Company in lieu of any other form of reinsurance benefit
payable under this Agreement.
|
|
9.7
|
MISSTATEMENT
OF AGE OR SEX
|
|
|
In
the event of a change in the amount of the Ceding Company's liability on a
reinsured policy due to a misstatement of age or sex, the Reinsurer's
liability will change proportionately. The face amount of the reinsured
policy will be adjusted from the inception of the policy, and any
difference will be settled without
interest
|
|
9.8
|
EXTRA-CONTRACTUAL
DAMAGES
|
|
|
The
Reinsurer will not participate in punitive or Compensatory damages that
are awarded against the Ceding Company as a result of an act, omission, or
course, of conduct committed solely by the Ceding Company, its agents, or
representatives in connection with claims covered under this Agreement.
The Reinsurer will, however, pay its share of statutory penalties awarded
against the Ceding Company in connection with claims covered under this
Agreement if the Reinsurer elected in writing to join in the contest of
the coverage in question
|
|
|
The
parties recognize that circumstances may arise in which equity would
require the Reinsurer, to the extent permitted by law, to share
proportionately in punitive mid Compensatory damages. Such circumstances
are difficult to define in advance, but would generally be those
situations in which the Reinsurer was all active party and in writing
recommended consented to, or ratified the act or course of conduct of the
Ceding Company that ultimately resulted in the assessment of the
extra-contractual damages. In such situations, the Reinsurer and the
Ceding Company will share such damages so assessed, in equitable
proportions.
|
|
|
For
purposes of this Article, the following definition will
apply.
|
|
|
"Punitive
Damages" are those damages awarded as a penalty, the amount of which is
neither governed nor fixed by
statute.
|
|
|
"Compensatory
Damages" are those amounts awarded to compensate for the actual damages
sustained, and are not awarded as a penalty, nor fixed in amount by
statute.
|
|
|
"Statutory
Penalties" are those amounts awarded as a penalty, but are fixed in amount
by statute.
|
|
|
Waiver
of Premium
|
|
|
The
reinsurance benefit for an approved waiver of premium claim will be the
Reinsurer's proportionate share of the annual gross premium waived on the
policy. The Ceding Company will continue to pay the life reinsurance
premium; however, it will not pay the reinsurance premium for the waiver
benefit for the duration of the waiver claim period. The Reinsurer will
pay waiver benefits annually regardless of the mode of premium payment
specified in the policy.
|
|
|
CREDIT FOR
RESERVES
|
|
10.1
|
RESERVE
METHODOLOGY AND REPORTING
|
|
|
The
parties intend that the Ceding Company will receive full statutory reserve
credit in its state of domicile for the insurance risks ceded to the
Reinsurer. The parties agree to make all reasonable efforts to ensure that
this is accomplished.
|
|
|
The
Ceding Company will provide a reserve summary for business reinsured under
this agreement to the Reinsurer on an annual basis, along with a detailed
description of its reserving assumptions and any changes in these
assumptions applicable to each calendar
year.
|
|
|
RETENTION LIMIT
CHANGES
|
|
11.1
|
If
the Ceding Company changes its maximum retention limits as shown in
Exhibit A, it will provide the Reinsurer with written notice or the
intended changes thirty (30) days in advance of their effective
date.
|
|
|
A
change to the Ceding Company's maximum retention limits will not affect
the reinsured policies in force except as specifically provided elsewhere
in this Agreement. Furthermore, unless agreed between the parties, an
increase in the Ceding Company's retention schedule will not affect all
increase in the total risk amount that it may automatically cede to the
Reinsurer.
|
|
|
RECAPTURE
|
|
12.1
|
Recapture
is not available until the end of the 10th policy year, and then must be
in conjunction with an increase in the Ceding Company's maximum schedule
of retention. The amount eligible for recapture will be the difference
between the amount originally retained and the amount the Ceding Company
would have retained on the same quota share basis had the new retention
schedule been in effect at the time of
issue.
|
|
|
a.
|
The
Ceding Company must give the Reinsurer 90 days written notice prior to its
intended date to commence
recapture.
|
|
|
b.
|
The
reduction of reinsurance on affected policies will become effective on the
policy anniversary date immediately following the notice of election to
recapture; however, no reduction will be made until a policy has been in
force for at least 10 years.
|
|
|
c.
|
If
any reinsured policy is recaptured, all reinsured policies eligible for
recapture under the provisions of this Article must be recaptured up to
the Ceding Company's new maximum retention limits in a
consistent manner; and
|
|
|
d.
|
The
Ceding Company must increase its total amount of insurance on each
reinsured life. The Ceding Company may not revoke its election to
recapture for policies becoming eligible at future
anniversaries.
|
|
|
If
portions of the reinsured policy have been ceded to more than one
reinsurer, the Ceding Company must allocate the reduction in reinsurance
so that the amount reinsured by each reinsure after the reduction is
proportionately the same as if the new maximum dollar retention limits had
been in effect at the, time of
issue.
|
|
|
The
amount of reinsurance eligible for recapture is based oil the current
amount at risk as of the date of recapture. For a policy issued as a
result of exchange, conversion, or re-entry, the recapture terms of the
reinsurance agreement covering the original policy will apply, and the
duration period for the purpose of recapture will be measured from the
effective date of the reinsurance on the original
policy.
|
|
|
If
there is a reinsured waiver of premium claim in effect when recapture
takes place, the Reinsurer will continue to pay its share of the waiver
claim until it terminates. The Reinsurer will not be liable for any other
benefits, including the basic life risk, that are eligible for recapture.
All such eligible benefits will be recaptured as if there were no waiver
claim in effect.
|
|
|
After
the effective date of recapture, the Reinsurer will not be liable for any
reinsured policies or portions of such reinsured policies eligible for
recapture that the Ceding Company has
overlooked.
|
|
|
The
terms and conditions for the Ceding Company to recapture reinsured
policies, as made necessary by the insolvency of the Reinsurer, are set
forth in Article 16.2.
|
|
|
No
recapture will be permitted if the Ceding Company has either obtained or
increased stop loss reinsurance. coverage as justification for the
increase in retention limits.
|
GENERAL
PROVISION
|
13.1
|
CURRENCY
|
|
|
All
payments and reporting by both parties under this Agreement will be made
in United States dollars.
|
|
13.2
|
PREMIUM
TAX
|
|
|
The
Reinsurer will not reimburse the Ceding Company for premium
taxes.
|
|
13.4
|
MINIMUM
CESSION
|
|
|
The
Ceding Company will not cede a policy to the Reinsurer unless the amount
to be reinsured at issue exceeds the Initial Minimum Cession amount shown
in Exhibit B.
|
|
|
Reinsurance
will be cancelled on any policy when its reinsured net amount at risk
falls below the Trivial Amount limit shown in Exhibit
B.
|
|
13.5
|
INSPECTION
OF RECORDS
|
|
|
The
Reinsurer and the Ceding Company, or their duly authorized
representatives, will have the right to inspect original papers, records,
and all documents relating to the business reinsured Under this Agreement
including underwriting, claims processing and administration. Such access
will be provided during regular business hours at the office of the
inspected party.
|
|
13-6
|
FORMS,
MANUALS & ISSUE RULES
|
|
|
The
Ceding Company affirms that its retention schedule, underwriting
guidelines, issue rules, premium rates and policy forms applicable to the
Reinsured Policies and in use as of the effective date, have been supplied
to the Reinsurer.
|
|
|
The
Ceding Company will promptly notify the Reinsuer of any proposed material
changes in its underwriting guidelines. This Agreement will not extend to
policies issued pursuant to such changes unless the Reinsurer has
consented in writing to accept policies subject to such
changes,
|
|
|
It
is the Ceding Company's responsibility to ensure that its practice and
applicable forms are in compliance with current Medical Information Bureau
(MID) guidelines.
|
|
|
DAC
TAX
|
|
14.1
|
The
parties to this Agreement agree to the following provisions pursuant to
Section 1-848-2(g)(8) of the Income Tax Regulations effective December 29,
1992, wider Section 848 of the Internal Revenue Code of 1986, as
amended:
|
|
|
a.
|
The
term 'party' refers to either the Ceding Company or the Reinsurer, as
appropriate.
|
|
|
b.
|
The
terms used in this Article are defined by reference to Regulation Section
1-848-2, effective December 29,
1992.
|
|
|
c.
|
The
party with the net positive consideration for this Agreement for each
taxable year will capitalize specified policy acquisition expenses with
respect to this Agreement without regard to the general deductions
limitation of Section 849(c)(I).
|
|
|
d.
|
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.
|
|
|
e.
|
The
Ceding Company will submit a schedule, to the Reinsurer by June 30 of each
year with its calculation of the net consideration for the preceding
calendar year. This schedule of calculations will be accompanied by a
statement signed by an officer of the Ceding Company stating that the
Ceding Company will report such net consideration in its tax return for
the preceding calendar year. The Reinsurer may contest such calculation by
providing an alteration to the Ceding Company in writing within 15 days of
the Reinsurer's receipt of Ceding Company's calculation. If the Reinsurer
does not so notify the Ceding Company within the required timefame, the
Reinsurer will report the net consideration as determined by the Ceding
Company in the Reinsurer's tax return for the previous calendar
year.
|
|
|
f.
|
If
the Reinsurer contests the Ceding Company's calculation of the net
consideration, the parties will act in good faith to reach an agreement as
to the correct amount within 15 days of the date the Reinsurer submits its
alternative calculation. If the Ceding Company and the Reinsurer reach an
agreement on an amount of net consideration, each party will report the
agreed upon amount in its tax return for the previous calendar
year.
|
|
|
g.
|
Both
the Ceding Company and the Reinsurer represent and warrant that they are
subject to United States taxation under either Subchapter L or Subpart F
of Part III of Subchapter N of the Internal Revenue Code of 1986, as
amended.
|
|
|
OFFSET
|
|
15.1
|
Any
debts or credits, in favor of or against either the Reinsurer or the
Ceding Company with respect to this Agreement or any other reinsurance
agreement between the parties, are deemed mutual debts or credits and may
be offset, and only the balance will be allowed or
paid.
|
|
|
The
right of offset will not be affected or diminished because of the
insolvency of either party.
|
|
|
INSOLVENCY
|
|
16.1
|
INSOLVENCY
OF A PARTY TO THIS AGREEMENT
|
|
|
A
party to this Agreement will be deemed insolvent when
it
|
|
|
a.
|
applies
for or consents to the appointment of a receiver, rehabilitator,
conservator, liquidator or statutory successor of its properties or
assets; or
|
|
|
b.
|
is
adjudicated as bankrupt or insolvent;
or
|
|
|
c.
|
files
or consents to the filing of a petition in bankruptcy, seeks
reorganization to avoid insolvency or makes formal application for any
bankruptcy, dissolution, liquidation or similar law or statute;
or
|
|
|
d.
|
becomes
the subject of an order to rehabilitate or an order to liquidate as
defined by the insurance code of the jurisdiction of the party's,
domicile.
|
|
16.2
|
INSOLVENCY
OF THE CEDING COMPANY
|
|
|
In
the event of the insolvency of the Ceding Company, all reinsurance
payments due under this Agreement will be payable directly to the
liquidator, rehabilitator, receiver, or statutory successor of' the Ceding
Company, without diminution because of the insolvency, for those claims
allowed against the Ceding Company by any court of competent jurisdiction
or by the liquidator, rehabilitator, receiver or statutory successor
having authority to allow such
claims.
|
|
|
In
the event of insolvency of the Ceding Company, the liquidator,
rehabilitator, receiver, or statutory successor will give written notice
to the Reinsurer of all pending claims against the Ceding Company on any
policies reinsured within a reasonable time after such claim is filed in
the insolvency proceeding. While a claim is pending, the Reinsurer, may
investigate and interpose, at its own expense, in the proceeding, where
the claim is adjudicated, any or defenses that it may deem available to
the Ceding Company or its liquidator, rehabilitator, receiver, or
statutory successor.
|
|
|
The
expense incurred by the Reinsurer will be chargeable, subject to court
approval, against the Ceding Company as part of the expense of liquidation
to the extent of a proportionate share of the benefit that may accrue to
the Ceding Company solely as a result of the defense undertaken by the
Reinsurer. Where two or more reinsurers are participating in the same
claim and a majority in interest elect to interpose a defense or defenses
to any such claim, the expense will be apportioned in accordance with the
terms of this Agreement as though such expense had been incurred by the
Ceding Company.
|
|
|
The
Reinsurer will be liable only for the amounts reinsured and will not be or
become liable for any amount,-, or reserves to be held by the Ceding
Company oil policies reinsured under this
Agreement
|
|
16.3
|
INSOLVENCY
OF THE REINSURER
|
|
|
In
the event of the Reinsurer's insolvency or the Reinsurer's RBC ratio falls
below 250% of the authorized control level, the Ceding Company may cancel
the Agreement for future new business and will notify the Reinsurer in
writing of its intent. The parties agree to waive the notification period
for this cancellation, and the effective date will be no earlier than the
effective date of the Reinsurer's
insolvency.
|
|
|
Upon
giving written notice to the Reinsurer, the Ceding Company may also
recapture all of the inforce business reinsured by the Reinsurer under
this Agreement.
|
|
|
ERRORS AND
OMISSIONS
|
|
17.1
|
If
through unintentional error, oversight, omission, or misunderstanding
(collectively referred to as 11 “errors"), the Reinsurer or the Ceding
Company fails to comply with the terms of this Agreement and if, upon
discovery of' the error by either party, the other is promptly notified,
each thereupon will be restored to the position it would have occupied if
the error had not occurred, including
interest.
|
|
|
If
it is not possible to restore each party to the position it would have
occupied but for the error, the parties will endeavor in good faith to
promptly resolve the situation in a manner that is fair and reasonable,
and most closely approximates the intent of the parties as evidenced by
this Agreement.
|
|
|
However,
the Reinsurer will not provide reinsurance for policies that do not
satisfy the parameters of' this Agreement, nor will the Reinsurer be
responsible for negligent or deliberate acts or for repetitive errors in
administration by the Ceding Company. If either party discovers that the
Ceding Company has failed to cede reinsurance as provided in this
Agreement, or failed to comply with its reporting requirements, the
Reinsurer may require the Ceding Company to audit its records for similar
errors and to take the actions necessary to avoid similar errors in the
future.
|
DISPUTE
RESOLUTION
|
18.1
|
In
the event of a dispute arising out of or relating to this agreement, the
parties agree to the following process of dispute resolution. Within 15
days after the Reinsurer or the Ceding Company has first given the other
party written notification of a specific dispute, each party will appoint
a designated company officer to attempt to resolve the dispute. The
officers will meet at a mutually agreeable location as soon as possible
and as often as necessary, in order to gather and furnish the other with
all appropriate and relevant information concerning the dispute. The
officers will discuss the problem and will negotiate in good faith without
the necessity of any formal arbitration proceedings. During the
negotiation process, all reasonable requests made by one officer to the
other for information will be honored. The designated officers will decide
the specific format for such
discussions.
|
|
|
If
the officers cannot resolve the dispute within 30 days of their first
meeting, the dispute will be submitted to formal arbitration, unless the
parties agree in writing to extend the negotiation period for another 30
days.
|
|
|
ARBITRATION
|
|
19.1
|
It
is the intention of the Reinsurer and the Ceding Company that the customs
and practices of the life insurance and reinsurance industry will be given
full effect in the operation and interpretation of this Agreement. The
parties agree to act in all matters with the highest good faith. However,
if the Reinsurer and the Ceding Company cannot mutually resolve a dispute
that arises out of or relates to this Agreement, and the dispute cannot be
resolved through the dispute resolution process described in Article 18,
the dispute will be decided through arbitration as a precedent to any
right of action hereunder.
|
|
|
To
initiate arbitration, either the Ceding Company or the Reinsurer will
notify the other party in writing of its desire to arbitrate, stating the
nature of its dispute and the remedy sought. The party to which the notice
is sent will respond to the notification in writing within fifteen (15)
days of its receipt.
|
|
|
There
will be three arbitrators who will be current or former officers of life
insurance or life reinsurance companies other than the parties to this
Agreement their affiliates or subsidiaries. Each of the parties will
appoint one of the arbitrators arid these two arbitrators will select the
third, If either party refuses or neglects to appoint an arbitrator within
sixty (60) days of the initiation of the arbitration, the other party may
appoint the second arbitrator. If the two arbitrators do not agree on a
third arbitrator within (30) days of the appointment of the second
arbitrator, then the appointment of the third arbitrator will be left to
the American Arbitration
Association.
|
|
|
Once
chosen, the arbitrators are empowered to decide all substantive and
procedural issues by a majority of votes. The arbitration proceedings will
be held in Galveston, Texas. As soon as possible the arbitrators will
establish arbitration procedures as warranted by the facts and issues of
the particular case. The arbitrators will have the power to determine all
procedural rules of the arbitration, including but not limited to
inspection of documents, examination of witnesses and any other matter
relating to the conduct of the arbitration. The arbitration may consider
any relevant evidence; they will weigh the evidence arid consider any
objections. Each party may examine any witnesses who testify at the
arbitration hearing.
|
|
|
The
arbitrators will base their decision on the terms and conditions of this
Agreement and the customs and practices of the life insurance and
reinsurance industries rather than on strict interpretation of the law.
The decision of the arbitrators will be made by majority rule and will be
submitted in writing. The decision will be final and binding on both
parties and there will be no appeal from the decision. Either party to the
arbitration may petition any court having jurisdiction over the parties to
reduce the decision to judgment.
|
|
|
Unless
the arbitrators decide otherwise, each party will bear the expense of its
own arbitration activities, including its appointed arbitrator and any
outside attorney and witness fees. The parties will jointly and equally
bear the expense of the third arbitrator arid other costs of the
arbitration.
|
|
|
This
Article will survive termination of this
Agreement.
|
|
|
CONFIDENTIALITY
|
|
20.1
|
Reinsurer
hereby acknowledges that from time to time in the performance of its
duties and obligations under the Agreement, Reinsurer may receive certain
information about policyholders or certificate holders of Insurer that may
be characterized as "Nonpublic Personal Information" under Title V of the
federal ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and/or state insurance laws and/or
regulations enacted and/or promulgated in accordance therewith
(collectively the "Privacy Act"). "Nonpublic Personal Information"
includes in personally identifiable financial and/or health information
about Insurer's customers, and any list, description or other grouping of
customers that is derived using any personally identifiable information
that is not publicly available.
|
|
|
Reinsurer
and Insurer hereby acknowledge and agree that they are "nonaffiliated
third parties" with respect to one another for purposes of the Privacy
Act. Reinsurer and Insurer further acknowledge and agree that Insurer's
disclosure of nonpublic personal information to Reinsurer under this
Agreement is made under one or more exceptions to the Privacy Act's
opt-out or opt-in requirements. Reinsurer agrees not to disclose the
nonpublic personal information received from Insurer to any other person
or to use the nonpublic personal information received pursuant to this
Agreement except: (1) as necessary in the ordinary course of business in
order to carry out Reinsurer's obligations under this Agreement; or (2) as
allowed under a recognized exception or permitted redisclosure under the
Privacy Act. This provision will remain in force for as long as there is
reinsurance in force under this
Agreement.
|
|
20.2
|
The
Ceding Company and the Reinsurer agree that Proprietary Information will
be treated as confidential- Proprietary Information includes,
but is not limited to, business plans and trade secrets, mortality and
lapse studies, underwriting manuals and guidelines, applications and
contract forms, and the specific terms and conditions of this
Agreement. Proprietary Information will not include information
that:
|
|
|
a.
|
is
or becomes available to the general public through no fault of the party
receiving the Proprietary Information (the
"Recipient");
|
|
|
b.
|
is
independently developed by the
Recipient;
|
|
|
c.
|
is
acquired by the Recipient from a third party not covered by a
confidentiality agreement; or
|
|
|
d.
|
is
disclosed under a court order, law or
regulation.
|
|
|
The
parties will not disclose such information to any other parties unless
agreed to in writing, except as necessary for retrocession purposes, as
requested by external auditors, as required by court order, or as required
or allowed by law or regulation.
|
|
|
The
Ceding Company acknowledges that the Reinsurer can aggregate data with
other companies reinsured with the Reinsurer as long as the data cannot be
identified as belonging to the Ceding
Company.
|
|
|
DURATION OF
AGREEMENT
|
|
21.1
|
This
Agreement is indefinite as to its duration. The Ceding Company or the
Reinsurer may terminate this Agreement with respect to the reinsurance of
new business by giving 90 days written notice of termination to the other
party, sent by certified mail. The first day of the notice period is
deemed to be the date the document is
postmarked.
|
|
|
During
the notification period, the Ceding Company will continue to cede and the
Reinsurer will continue to accept policies covered under the terms of this
Agreement. Reinsurance coverage on all reinsured policies will remain in
force until the termination or expiry of the policies or until the
contractual termination of reinsurance under the terms of this Agreement,
whichever occurs first,
|
|
|
EXECUTION
|
|
22.1
|
This
Agreement is effective as of July 1, 2006, and applies to all eligible
policies with issue dates on or after such date, not withstanding that
such policies may have been backdated for up to six (6) months to save
age. This Agreement has been made in duplicate and is hereby executed by
both parties.
|
EXHIBIT
A
Retention
Limits of the Ceding Company
A.
1
(a) Life
Insurance - Maximum Limits of Retention
|
Issue
Ages
|
Standard
– Table 16
|
|
All
|
$700,000
|
(b) First
Dollar Quota Share - Ceding Company's Quota Share Percentage
The
Ceding Company will retain 25.0% of each policy up to the above maximum dollar
retention limits.
A.2 WAIVER
OF PREMIUM DISABILITY BENEFITS
Same as
Life Insurance
EXHIBIT
B
Plans
Covered and Binding Limits
The
business automatically reinsured under this Agreement is defined as
follows.
B.1 PLANS,
RIDERS AND BENEFITS
Policies
issued on plans with effective dates within the applicable period shown below
may qualify for automatic reinsurance under the terms of this
Agreement.
|
Plan
Identification
|
Policy
Form
|
Commencement
Date
|
|
LTG
UL bands 3 and 4
LTG
UL band 2 - facultative only
Waiver
of Premium Disability Benefits
|
IMUL
IMUL
ULDW91
|
July
1, 1006
July
1, 2006
July
1, 2006
|
B.2 BASIS
The
Reinsurer's share will be 33.333333% of the total ceded amount on each policy on
a first dollar quota share basis. This amount will not exceed the Reinsurer's
share of the maximum Automatic, Binding Limits specified in Exhibit
B.3.
B.3 AUTOMATIC
BINDING LIMITS
(a)
Life
|
Issue
Ages
|
(Pool)
Maximum
Standard
– Table 16
|
|
All
|
$10,000,000
|
The
(pool) maximum autobind amounts above exclude the Ceding Company's
retention.
(b)
Waiver of Premium Disability Benefits: Same as for life insurance
B.4 JUMBO
LIMITS
The
Ceding Company will not cede any risk automatically if, according to information
available to the Ceding Company, the total amount in force and applied for on
the life with all insurance companies, including any amount to be replaced,
exceeds the applicable amounts shown below
(a) Life:
$25,000,000
(b)
Waiver of' Premium Disability Benefits: Same as for life insurance.
B.5 CONDITIONAL
RECEIPT OR TEMPORARY INSURANCE AGREEMENT
The
amount of such coverage provided by the Reinsurer will be limited to its share
of the following amounts provided by the Ceding Company's Conditional Receipt or
Temporary Insurance Agreement.
|
Age
|
Maximum
Amount
|
|
All
|
The
lesser of (1) Automatic Binding Limit in Exhibit B.3. and (2) the amount
of
insurance
provided by the Ceding Company's Conditional Receipt or
Temporary
Insurance
Agreement less the Ceding Company's Retention in Exhibit
A.I(b)
|
B.6
CESSION LIMITS
|
(a)
|
Minimum
Initial Cession: Total amount of reinsurance ceded to all reinsurers on an
automatic basis must equal or exceed
$375,000.
|
|
(b)
|
Minimum
Cession for Policy Increase: Underwritten increases greater than or equal
to $100,000 but less than $500,000 shall be reinsured if the original
policy was reinsured. Underwritten increases of $500,000 or more shall be
reinsured regardless of whether the original policy was
reinsured.
|
|
(c)
|
Trivial
Amount: Total amount of reinsurance ceded to all reinsurers must equal or
exceed $25,000.
|
EXHIBIT
C
Reinsurance
Premiums
C.1 LIFE
Plans
covered under this Agreement will be reinsured on a YRT basis. Reinsurance
premiums will be based on the 2001 VRT Smoker/Non-Smoker Distinct Select &
Ultimate (Male & Female) ALB rate scale shown in Exhibit G times the
following multiples in all years:
|
Plans
|
Classification
|
Band
2
|
Band
3
|
Band
4
|
|
Life
Coverage
|
Preferred
Plus NT
|
52%
|
50%
|
48%
|
|
Preferred
NT
|
60%
|
57%
|
55%
|
|
|
Preferred
TU
|
78%
|
74%
|
71%
|
|
|
Standard
Plus NT
|
72%
|
69%
|
66%
|
|
|
Standard
NT
|
85%
|
81%
|
77%
|
|
|
Standard
TU
|
86%
|
82%
|
78%
|
C.2 AGE
BASIS
Age Last
Birthday
C.3 POLICY
FEES
The
Reinsurer will not participate in any policy fees.
C.4 RECAPTURE
PERIOD
Number of
years: 10
C.5 STANDARD
RATINGS
Premiums
will be based on the standard rate increased by an extra 25% per table of
assessed rating. Multiples are the same as those for standard life
coverage.
C.6 EXTRAS
The total
premium remitted to the Reinsurer will include the flat extra premium minus the
discount shown below.
Type
of Flat Extra
Premium First
Year Renewal
Temporary
(1-5
years) 10% 10%
Permanent
(6 years &
greater) 75% 10%
C.7 RIDERS
AND BENEFITS
Waiver of
Premium Reinsurance premiums will be 10% of the Ceding Company's premiums, as
shown in this Exhibit, in the first policy year and 85% in renewal
years.
EXHIBIT
D
Conversion
Premiums
Premium
rates for conversions to plans not covered by an existing agreement with the
Reinsurer, shall be the same as the rates defined in Exhibit C of this
agreement.
EXHIBIT
E
Self-Administered
Reporting
The
Ceding Company will self-administer all reinsurance reporting. The Ceding
Company will send the Reinsurer the reports listed below at the frequency
specified.
Transaction
Reports: Monthly
1. New
Business
2. First
Year - Other than New Business
3.
Renewal Year
4.
Changes and Terminations
5.
Accounting Information
Periodic
Reports: Quarterly
6.
Statutory Reserve Information
7. Policy
Exhibit Information
8.
Inforce
A brief
description of the data requirements follows below.
Transaction
Reports
The
Ceding Company agrees to report policy data using the TA1 system.
1. New
Business
This
report will include new issues only, the first time the policy is reported to
the Reinsuer. Automatic and Facultative business will be identified
Separately.
2. First
Year - Other than New Business
This
report will include policies previously reported on the new business detail and
still in their first duration, or policies involved in first year premium
adjustments.
3.
Renewal Year
All
policies with renewal dates within the Accounting Period will be
listed.
4.
Changes arid Terminations
Policies
affected by a change during the Current reporting period will be included in
this report. Type of change or termination activity most be clearly identified
for each policy.
The
Ceding Company will identify the following transactions either by separate
listing or unique transaction codes: Terminations, Reinstatements, Changes,
Conversions, and Replacements. For Conversions and Replacements, the Ceding
Company will report the original policy date, as well is the current policy
date.
5.
Accounting Information
Premiums
and allowances will be summarized for life coverages, Benefits, and Rider's by
the following categories: Automatic and Facultative, First Year and
Renewals.
Periodic
Reports
6.
Statutory Reserve Information
Statutory
reserves will be summarized for life coverages, Benefits and Riders. The Ceding
Company will specify the reserve basis used.
7. Policy
Exhibit Information
This is a
summary of transactions during the current period and on a year-to-date basis,
reporting the number of policies and reinsured amount.
8.
Inforce
This is a
detailed report of each policy in force.
EXHIBIT
F
Applicationn
for Facultative Reinsurance
Submitted
to: [Reinsurer
1] [Reinsurer 2]
[Reinsurer
3] [Reinsurer
4]
From:
[Ceding
Company] Date:
[Enter Date]
Policy
Number: [▇▇▇▇▇ Policy
Number] Increasing
Amount: __ Yes __ No
Plan
Name: [Enter Plan
Name] If
increasing, ultimate amount: [Enter amount]
|
Last
Name
|
First
|
Middle
|
Birth
date
M/D/Y
|
Sex
|
Tobacco
Use
|
Pref
Class
|
|
[Enter
Name]
|
[Enter
Name]
|
[Enter]
|
[MM/DD/YY]
|
[M/F]
|
[Y/N]
|
[Enter]
|
Joint
Insured
|
[Enter
Name]
|
[Enter
Name]
|
[Enter]
|
[MM/DD/YY]
|
[M/F]
|
[Y/N]
|
[Enter]
|
|
Life
|
Specify
others, e.g. Second Life, Waiver, ADB, etc.
|
||
|
Previous
inforce with co.:
|
[Enter]
|
[Enter]
|
[Enter]
|
|
Of
which we retain:
|
[Enter]
|
[Enter]
|
[Enter]
|
|
Now
applying for:
|
[Enter]
|
[Enter]
|
[Enter]
|
|
Of
which we will retain:
|
[Enter]
|
[Enter]
|
[Enter]
|
|
Reins.
Amount Applied for:
|
[Enter]
|
[Enter]
|
[Enter]
|
In excess
of Jumbo: __ Yes __ No If Replacement: __ Internal __
External
Our
Motality Assessment:
[Enter] Special
Risk Features:
(table
&/or flat
extra) __
Aviation
__ Foreign/Travel
__ Occupation/Avocation
Enclosed Requirements:
[Enter]
Requirements to follow:
[Enter]
Remarks:
[Enter Remarks]
Underwriting
Contact:
[Enter] Tel
#: [Enter]
Email: [Enter]
EXHIBIT
G
2001
VBT Mortality Tables
Values
for the ALB table were calculated as follows.
Values
for mortality rates per 1000 ▇▇▇ are rounded to nearest 2 decimal
places.
Issue Age
99
Issue Age
99. qALB[99]+t
= { qANB
[99]+t +[(1- qANB
[99]+t) * qANB
[99]+1+1] / { 2- qANB
[99]+1}
Other
Issue ages and ultimate rates.
qALB
[x]+t = { qANB
[x]+t +[(1-qANB
[x]+t) *qANB
[x+1]+t]} / {2- qANB
[x]+t}
2001 VBT ALB
Tables Worksheet
Male
Composite (Select
Period) VBT
Mcomp ALB
Male
Non-Smoker (Selert
Period) VBT
MNS ALB
Male
Smoker (Select
Period) VBT
MSM ALB
Female
Composite (Select
Period) VBT
Fcomp ALB
Female
Non-Smoker (Select
Period) VBT
FNS ALB
Female
Smoker (Select
Period) VBT
FSM ALB
Ultimate
Tables VBT
UIt ALB
