VARIABLE ANNUITY DEATH BENEFIT
REINSURANCE AGREEMENT
Effective June 30, 1998
Between
THE TRAVELERS LIFE & ANNUITY COMPANY
and
THE TRAVELERS INSURANCE COMPANY
(Hartford, Connecticut)
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
(Hartford, Connecticut)
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product [CIGNA LOGO]
Effective June 30, 1998
Treaty #103070 & 103071
Connecticut General Life Insurance Company
VARIABLE ANNUITY DEATH BENEFIT REINSURANCE AGREEMENT
between
THE TRAVELERS LIFE & ANNUITY COMPANY
and
THE TRAVELERS INSURANCE COMPANY.
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
INDEX
ARTICLE PAGE
------- ----
Access to Records XII 7
Arbitration XVII 9
Automatic Excess Reinsurance III 2
Claims VII 4
Currency XIV 7
DAC Tax Regulation Election XVIII 10
Delays, Errors, or Omissions XIII 7
Effective Date, Term and Termination XIX 10
Extra Contractual Obligations IX 6
Hold Harmless XV 8
Insolvency XVI 8
Liability of Connecticut General IV 3
Litigation X 6
Notices XXI 13
Offset XI 7
Parties to the Agreement I 1
Premium Accounting VI 3
Regulatory Compliance XX 12
Reinsurance Coverage and Amounts at Risk II 1
Reinsurance Premiums V 3
Reserves VIII 5
SCHEDULES
A Limits of Reinsurance in Connecticut General
B Contracts and Funds Subject to this Reinsurance Agreement
C Limits and Rules of Travelers and Death Benefit Value
D Reinsurance Premium
E Quarterly Reporting Format
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product [CIGNA LOGO]
Effective June 30, 1998
Treaty #103070 & 103071
Connecticut General Life Insurance Company
VARIABLE ANNUITY DEATH BENEFIT REINSURANCE AGREEMENT
(hereinafter called Agreement)
between
THE TRAVELERS LIFE & ANNUITY COMPANY
and
THE TRAVELERS INSURANCE COMPANY
(hereinafter called Travelers)
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
(hereinafter called Connecticut General or CIGNA Reinsurance)
It is agreed by the two companies as follows:
ARTICLE I - PARTIES TO THE AGREEMENT
This Agreement shall be binding upon and shall inure solely to the benefit of
Travelers and Connecticut General. This Agreement shall not and is not intended
to create any right or interest in any third party and shall not and is not
intended to create any legal relationship between either party and any third
party, including, without limitation, annuitants, insureds, certificate holders,
employees, dependents, beneficiaries, policy owners, applicants or assignees
under any policy or contract issued by Travelers.
ARTICLE II - REINSURANCE COVERAGE AND AMOUNTS AT RISK
This Agreement provides permanent coverage for all new annuity contracts issued
under the Travelers' PrimElite product on forms and funds as identified in
Schedule B written by Travelers from June 30, 1998 through March 31, 2001,
unless terminated pursuant to Article XIX.
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product [CIGNA LOGO]
Effective June 30, 1998
Treaty #103070 & 103071
Connecticut General Life Insurance Company
1
The reinsurance death benefit payable by Connecticut General upon the death of
either the annuitant or contract owner is the excess of the death benefit value
over the contract surrender value as defined in the variable annuity contracts
listed in Schedule B, less such other charges or fees as may be applicable.
Refer to Schedule C for a detailed description of the death benefit value.
The Contract Value represents the contract owner's invested assets in the funds
in Schedule B as it appears in the records of Travelers before application of
any contingent deferred sales charge on any given date. Refer to the variable
annuity contracts listed in Schedule B for the description and rates of
contingent deferred sales charge.
ARTICLE III - AUTOMATIC EXCESS REINSURANCE
A. On and after the effective date of this Agreement, subject to the limit of
Connecticut General's liability set forth in Schedule A and all other
terms, conditions and limitations set forth in this Agreement and the
Schedules attached to and made a part hereof, Travelers shall cede and
Connecticut General shall accept Travelers' death benefit liability under
the variable annuity contracts, as described in Article II.
B. This Agreement covers only Travelers' liability for claims paid under
variable annuity contracts written on forms and invested in funds that were
reviewed by Connecticut General prior to their issuance. Forms, as
supplemented by additional materials, and funds available as of the date of
this Agreement are listed on Schedule B, attached hereto and made a part
hereof. If Travelers intends to cede to Connecticut General liability with
respect to a new form or fund, or a revised version of an approved form or
fund, it must provide to Connecticut General written notice of such
intention together with a copy of the proposed form, fund or revision.
Connecticut General shall have no liability pursuant to new or revised
forms or funds unless and until Connecticut General provides written notice
to Travelers that such new or revised forms or funds are acceptable.
C. Travelers shall provide written notice to Connecticut General of any
changes in its published limits and rules identified on Schedule C, and
Connecticut General shall have no liability pursuant to revised limits and
rules which increase its exposure hereunder unless and until Connecticut
General provides written notice to Travelers that such revised limits and
rules are acceptable.
--------------------------------------------------------------------------------
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product [CIGNA LOGO]
Effective June 30, 1998
Treaty #103070 & 103071
Connecticut General Life Insurance Company
2
ARTICLE IV - LIABILITY OF CONNECTICUT GENERAL
Connecticut General's liability for reinsurance under this Agreement shall be
coincident with that of Travelers in every case, and be subject in all respects
to the general stipulations, terms, clauses, conditions, waivers and
modifications of the variable annuity contracts.
In no event shall Connecticut General have any reinsurance liability unless the
variable annuity contract issued by Travelers is in force and the underwriting
and issuance of coverage by Travelers constituted the doing of business in a
jurisdiction in which Travelers was properly licensed and authorized to do
business at the time the contract was issued.
ARTICLE V - REINSURANCE PREMIUMS
Premiums for reinsurance subject to the terms and conditions of this Agreement
shall be paid on a quarterly basis. Such premiums shall be determined by the
application of the basis points set forth in Schedule D for each annuity insured
by Travelers as calculated based on the criteria defined in Schedule D.
ARTICLE VI - PREMIUM ACCOUNTING
A. Reinsurance premiums shall be paid in advance on a Quarterly basis. On or
before the Due Date (as defined in Paragraph B), Travelers shall forward to
Connecticut General its statement of account as set forth in Schedule E
along with its remittance for the net amount due as shown therein as well
as any premium adjustments from the prior quarter. If the statement shows a
balance due Travelers, Connecticut General shall remit that amount to
Travelers on or before the Remittance Date (the date occurring thirty
days after the Due Date). All outstanding balances due and unpaid beyond
the Remittance Date shall be subject to an interest charge on the unpaid
balance from the Due Date as specified in this Article to the date of
payment at the rate charged by Connecticut General for delinquent premiums
as further described in paragraph C of this Article.
B. For the purposes of this Agreement the Due Date for Connecticut General's
receipt of the statement of account and premium due is the thirtieth day
following the close of any reporting period. The payment of reinsurance
premiums in accordance with the provisions herein shall be a condition
precedent to the liability of Connecticut General for reinsurance covered
by this Agreement. In the event that reinsurance premiums are not received
by Connecticut General as of the Due Date following the close of the
reporting period in which they fall due, Connecticut General will notify
Travelers that such premiums are due and unpaid, and Travelers will remit
the premium on or before the Remittance Date. In the event that the
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product [CIGNA LOGO]
Effective June 30, 1998
Treaty #103070 & 103071
Connecticut General Life Insurance Company
3
premiums are not paid by the Remittance Date, Connecticut General shall
have the right to give Travelers notice of termination of such reinsurance
immediately.
C. Whether or not Connecticut General exercises its right to terminate the
reinsurance as specified in the preceding paragraph, all such outstanding
premiums shall be subject to an interest charge on the unpaid balance from
the Due Date to the date of payment, at a rate coincident with the current
rate of interest charged by Connecticut General for delinquent premiums in
connection with its individual life insurance policies.
D. If reinsurance is terminated as provided in paragraph B, Connecticut
General shall thereupon be relieved automatically of future liability under
all reinsurance for which premiums and other charges remain unpaid. The
reinsurance so terminated may be reinstated at any time within sixty days
of the date of termination upon payment of all reinsurance premiums and
other charges in arrears; but in the event of such reinstatement,
Connecticut General shall have no liability in connection with any claims
incurred between the date of termination and the date of reinstatement of
the reinsurance.
E. Not withstanding termination of reinsurance as provided herein, Travelers
shall continue to be liable to Connecticut General for all unpaid
reinsurance premiums earned by Connecticut General under this Agreement.
Such premiums are subject to an interest charge as specified in paragraph C
above.
ARTICLE VII - CLAIMS
Travelers is solely responsible for payment of its claims under the underlying
variable annuity contracts identified on Schedule B.
Travelers shall provide written notice to Connecticut General within 15 days of
its decision to contest or deny a claim. Travelers shall also provide prompt
notice to Connecticut General of all subsequent significant developments
relating to such claim. Inadvertent oversight or omission in the provision of
such notice shall not relieve Connecticut General of liability provided
Travelers informs Connecticut General of such oversight or omission promptly
upon its discovery.
Travelers shall provide Connecticut General with proof of claim, proof of claim
payment and any other claim documentation requested by Connecticut General.
Reinsurance premiums submitted by Travelers shall be net of claims incurred. If
a balance is due Travelers, Connecticut General shall remit payment on or before
the Remittance Date following receipt of the quarterly reinsurance statement, as
set forth in Schedule E and in accordance with paragraph A of Article VI.
Any payment of reinsurance by Connecticut General shall be subject to the
following paragraphs:
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product [CIGNA LOGO]
Effective June 30, 1998
Treaty #103070 & 103071
Connecticut General Life Insurance Company
4
Travelers shall notify Connecticut General of its intention to contest or deny a
claim which may involve the reinsurance coverage under this Agreement before any
notice of contest or denial is provided to the claimant. Connecticut General
shall then have thirty (30) calendar days within which to advise Travelers
whether it agrees that the claim should be contested or denied. If Connecticut
General does not agree that the claim should be contested or denied, then it
shall pay to Travelers the full amount of the reinsurance on the risk reinsured,
as set forth in this Agreement, and Connecticut General shall have no further
obligation in respect to such claim. If Connecticut General agrees that the
claim should be contested or denied, then Connecticut General shall pay its
share of the following, as expenses accrue, in accordance with its share of
liability as set forth in this Agreement:
- Expenses incurred by Travelers in investigating, contesting litigating or
otherwise resisting the Claim, excluding salaries and expenses of employees
and officers of Travelers and ordinary expenses of Travelers, and costs of
third party administrators acting on behalf of Travelers; and
- Interest which is paid by Travelers in respect of the Claim.
If the denial of a Claim results in an award verdict or judgment against
Travelers, where Connecticut General has agreed with the claim denial and
Travelers intends to appeal the verdict or judgment, written notice of the
intention to appeal shall be provided to Connecticut General. Connecticut
General shall be entitled at that time to pay its share of the judgment,
together with any expenses and interest as set forth above, and to have no
further obligation in connection with such Claim. If Connecticut General does
not pay its share of the judgment and any expenses and interest due at that
time, Connecticut General shall pay its share of the expenses associated with
the appeal of the judgment or verdict, together with its share of any additional
interest charges that may accrue during the appeal.
ARTICLE VIII - RESERVES
The reserve held by Connecticut General for reinsurance of the variable annuity
death benefit will be determined in accordance with the NAIC Actuarial Guideline
XXXIV, but will, in no event, be less than the recognized statutory required
reserve. If, at any time, Travelers requests that Connecticut General hold a
reserve that includes a provision for a one-third (1/3) drop in Contract Value,
Connecticut General will hold such reserve, in exchange for an increase in the
flat rate of two (2) basis points, resulting in an increased annual rate of 10.6
basis points. The increased rate will be charged only for the length of time
that such reserve is held at Travelers' request.
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product [CIGNA LOGO]
Effective June 30, 1998
Treaty #103070 & 103071
Connecticut General Life Insurance Company
5
ARTICLE IX - EXTRA CONTRACTUAL OBLIGATIONS
A. In no event shall Connecticut General be liable for extra contractual
damages (whether they constitute Compensatory damages, Statutory penalties,
Exemplary or Punitive damages) which are awarded against Travelers as a
result of an act, omission or course of conduct by Travelers in connection
with policies subject to this Agreement, unless Connecticut General shall
have received notice of and concurred in writing with the actions taken or
not taken by Travelers which led to its liability, in which case
Connecticut General shall pay its share of such liability. For this
purpose, Connecticut General's share shall be proportionate with its risk
under the business reinsured hereunder.
B. The following definitions Shall apply:
(1) Punitive damages and Exemplary damages are those damages awarded as a
penalty.
(2) Statutory penalties are those amounts which are awarded as a penalty
but fixed in amount by statute.
(3) 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.
ARTICLE X - LITIGATION
A. In the event of any action brought against Travelers under any variable
annuity contract that is subject to the terms and conditions of this
Agreement, Travelers shall provide a copy of such action and written notice
of such action within five (5) business days to Connecticut General.
B. Except as provided in Article VII, Travelers and Connecticut General agree
that all litigation costs, excluding the salaries of employees of Travelers
and Connecticut General, shall be borne by Travelers. If Connecticut
General appoints its own counsel, Connecticut General shall be responsible
for such counsel's fees; however, if Travelers and Connecticut General
agree to jointly defend any litigation, litigation costs will be borne in
proportion to the net liability borne by each party.
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product [CIGNA LOGO]
Effective June 30, 1998
Treaty #103070 & 103071
Connecticut General Life Insurance Company
6
ARTICLE XI - OFFSET
Either party shall have, and may exercise at any time and from time to time, the
right to offset any balance or amounts whether on account of premiums or on
account of losses or otherwise, due from one party to the other under the terms
of this Agreement. However, in the event of insolvency of Travelers subject to
the provisions of Article XVI, offset shall only be allowed in accordance with
the statutes and/or regulations of the state or jurisdiction having authority
over the insolvency.
ARTICLE XII - ACCESS TO RECORDS
Connecticut General, or its duly authorized representative, shall have
reasonable access to all records of Travelers (including the right to photocopy
documents) which pertain directly to this reinsurance. The right of access shall
survive the termination of this Agreement.
ARTICLE XIII - DELAYS, ERRORS OR OMISSIONS
No accidental delay, errors or omissions on the part of Travelers shall relieve
Connecticut General of liability provided such delay, errors or omissions are
rectified as soon as possible after discovery. However, Connecticut General
shall not be liable with respect to any reinsurance which may have been
inadvertently included in the premium computation but which ought not to have
been included by reason of the terms and conditions of this Agreement. It is
expressly understood and agreed that if failure to comply with any terms of this
Agreement is hereby shown to be unintentional or the result of misunderstanding
or oversight on the part of either party, both parties shall be restored to the
position they would have occupied had no such error or oversight occurred,
subject always to the correction of the error or oversight.
ARTICLE XIV - CURRENCY
All retentions and limits hereunder are expressed in United States dollars and
all premium and loss payments shall be made in United States currency. For the
purposes of this Agreement, amounts paid or received by Connecticut General in
any other currency shall be converted into United States dollars at the rates of
exchange on the date such transactions are entered on the books of Connecticut
General.
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product [CIGNA LOGO]
Effective June 30, 1998
Treaty #103070 & 103071
Connecticut General Life Insurance Company
7
ARTICLE XV - HOLD HARMLESS
A. Connecticut General shall indemnify and hold Travelers harmless from any
and all liability, loss, damage, fines, punitive damages, penalties and
costs, including expenses and reasonable attorney's fees, which results
from any negligence or willful misconduct of Connecticut General in
fulfilling its duties and obligations under this Agreement or which results
from any action which exceeds its authority under this Agreement.
B. Travelers shall indemnify and hold Connecticut General harmless from any
and all liability, loss, damage, fines, punitive damages, penalties and
costs, including expenses and reasonable attorney's fees, which results
from any negligence or willful misconduct of Travelers in fulfilling its
duties and obligations under this Agreement or which results from any
action which exceeds its authority under this Agreement.
ARTICLE XVI - INSOLVENCY
In the event of insolvency of Travelers, the reinsurance under this Agreement
shall be payable directly by Connecticut General to Travelers or to its
liquidator, receiver, conservator or statutory successor on the basis of
Connecticut General's liability to Travelers without diminution because of the
insolvency of Travelers or because the liquidator, receiver, conservator or
statutory successor of Travelers has failed to pay all or a portion of any
claim. It is agreed, however, that the liquidator, receiver, conservator or
statutory successor of Travelers shall give prompt written notice to Connecticut
General of the pendency of a claim against Travelers within a reasonable time
after such claim is filed in the receivership, conservation, insolvency or
liquidation proceeding and that during the pendency of such claim, Connecticut
General may investigate such claim and interpose, at its own expense, in the
proceeding where such claim is to be adjudicated, any defense or defenses that
it may deem available to Travelers or its liquidator, receiver, conservator or
statutory successor. The expense thus incurred by Connecticut General shall be
chargeable, subject to the approval of the Court, against Travelers as part of
the expense of conservation or liquidation to the extent of a pro-rata share of
the benefit which may accrue to Travelers solely as a result of the defense
undertaken by Connecticut General.
Where two or more Reinsurers are involved in the same claim and a majority in
interest elect to interpose 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 Travelers.
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product [CIGNA LOGO]
Effective June 30, 1998
Treaty #103070 & 103071
Connecticut General Life Insurance Company
8
ARTICLE XVII - ARBITRATION
A. As a condition precedent to any right of action hereunder, any dispute
between the parties with respect to the interpretation of this Agreement or
any right, obligation or liability of either party, whether such dispute
arises before or after termination of this Agreement, shall be submitted to
arbitration upon the written request of either party. Each party shall
select an arbitrator within thirty (30) days of the written request for
arbitration. If either party refuses or neglects to appoint an arbitrator
within thirty (30) days of the written request for arbitration, the other
party may appoint the second arbitrator. The two arbitrators shall select
an umpire within thirty (30) days of the appointment of the second
arbitrator. If the two arbitrators fail to agree on the selection of the
umpire within thirty (30) days of the appointment of the second arbitrator,
each arbitrator shall submit to the other a list of three umpire
candidates, each arbitrator shall select one name from the list submitted
by the other and the umpire shall be selected from the two names chosen by
a lot drawing procedure to be agreed upon by the arbitrators. The two
arbitrators and the umpire shall constitute the arbitration panel.
B. The arbitrators and the umpire all shall be active or retired, executive
officers of insurance or reinsurance companies and the umpire shall be
disinterested.
C. The arbitration panel shall interpret this Agreement as an honorable
engagement rather than merely as a legal obligation and shall make its
decision considering the custom and practice of the applicable insurance
and reinsurance business. The arbitration panel is released from judicial
formalities and shall not be bound by strict rules of procedure and
evidence.
D. The decision of the arbitration panel shall be final and binding on both
parties. The arbitration panel may, at its discretion, award costs and
expenses as it deems appropriate, including, but not limited to, attorneys'
fees and interest. The arbitration panel may not award damages defined in
Article IX B. Judgment may be entered upon the final decision of the
arbitration panel in any court of competent jurisdiction.
E. All meetings and hearings before the arbitration panel shall take place in
Hartford, Connecticut unless some other place is mutually agreed upon by
both parties.
F. Each party shall bear the expense of its own arbitrator and shall jointly
and equally bear with the other party the expenses of the umpire and of the
arbitration.
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product [CIGNA LOGO]
Effective June 30, 1998
Treaty #103070 & 103071
Connecticut General Life Insurance Company
9
ARTICLE XVIII - DAC TAX REGULATION ELECTION
Connecticut General and Travelers hereby agree to make a joint election pursuant
to Internal Revenue Code Regulation Section 1.848-2(g)(8). This election shall
be effective for all taxable years for which the Reinsurance Agreement remains
in effect.
The terms used in this article are defined by reference to Regulation Section
1.848-2 promulgated on December 28, 1992.
Connecticut General and Travelers agree that the entity with net positive
consideration for the reinsurance agreement for each taxable year will
capitalize specified policy acquisition expenses with respect to the reinsurance
agreement without regard to the general deductions limitation of Section
848(c)(1) of the Internal Revenue Code of 1986, as amended.
Connecticut General and Travelers agree to exchange information pertaining to
the amount of net consideration under the reinsurance agreement each year to
ensure consistency. To achieve this, Travelers shall provide Connecticut General
with a schedule of its calculation of the net consideration for all reinsurance
agreements in force between them for a taxable year by no later than April 30 of
the succeeding year. Connecticut General shall advise Travelers if it disagrees
with the amounts provided by no later than May 31, otherwise the amounts will be
presumed correct and shall be reported by both parties in their respective tax
returns for such tax year. If Connecticut General contests Travelers'
calculation of the net consideration, the Parties agree to act in good faith to
resolve any differences within thirty (30) days of the date Connecticut General
submits its alternative calculation and report the amounts agreed upon in their
respective tax returns for such tax year.
Connecticut General represents and warrants that it is subject to U.S. taxation
under either Subchapter L or Subpart F of Part III of Subchapter N of the
Internal Revenue Code of 1986, as amended.
ARTICLE XIX - EFFECTIVE DATE AND TERMINATION
A. The effective date of this Agreement is June 30, 1998.
B. Once each calendar year, Travelers shall have the option to recapture
existing contracts beginning with the twentieth 20(th) anniversary of
their reinsurance hereunder. Recapture must be made on an issue year basis,
and no contracts can be recaptured unless all contracts with earlier issue
years are recaptured.
C. Connecticut General shall have the option of terminating this Agreement
for new business
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product [CIGNA LOGO]
Effective June 30, 1998
Treaty #103070 & 103071
Connecticut General Life Insurance Company
10
upon delivery of thirty (30) calendar days written notice to Travelers,
upon the happening of any of the following events:
(1) Travelers' A. M. Best rating is reduced to a "C" or lower.
(2) Travelers' domiciliary state's insurance regulators take any
regulatory action potentially adversely affecting its license to
conduct business, including without limitation placement on a "watch
list;"
(3) An order appointing a receiver, conservator or trustee for management
of Travelers is entered or a proceeding is commenced for
rehabilitation, liquidation, supervision or conservation of Travelers;
(4) The Securities and Exchange Commission takes any regulatory action
with respect to Travelers that potentially has a significant adverse
effect on its conduct of business.
D. Travelers shall have the option of terminating this Agreement for new and
existing business upon delivery of thirty (30) calendar days written notice
to Connecticut General, within thirty (30) days of the happening of any of
the following events:
(1) Connecticut General's A. M. Best rating is reduced to a "C" or lower;
(2) Connecticut General's domiciliary state's insurance regulators take
any regulatory action potentially adversely affecting its license to
conduct business, including without limitation placement on a "watch
list;"
(3) An order appointing a receiver, conservator or trustee for management
of Connecticut General is entered or a proceeding is commenced for
rehabilitation, liquidation, supervision or conservation of
Connecticut General;
(4) The statutory capital and surplus of Connecticut General falls below
the NAIC Authorized Control Level Risk Based Capital.
(5) Travelers loses reserve credit in a jurisdiction in which it was
licensed on the effective date of this Agreement and Travelers and
Connecticut General have not been able to correct the loss of reserve
credit within ninety (90) days after receiving notice of the loss.
E. If this Agreement is terminated for new and existing business, Connecticut
General shall be relieved of all liability to Travelers for claims incurred
following the termination date of this Agreement under such underlying
variable annuity contracts issued by Travelers; and,
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product [CIGNA LOGO]
Effective June 30, 1998
Treaty #103070 & 103071
Connecticut General Life Insurance Company
11
F. If this Agreement is terminated for new business only, Connecticut General
will remain liable, after termination, in accordance with the terms and
conditions of this Agreement, with respect to all reinsurance effective
prior to termination of the Agreement for new business.
G. Both parties shall continue to be entitled to all offset credits provided
by Article XI as long as coverage is provided under the terms of this
Agreement.
H. Neither party shall have the right to assign or transfer any portion of
the rights, duties and obligations of the other party under the terms and
conditions of this Agreement without the written approval of the other
party.
I. Connecticut General shall have the option of terminating this agreement
for new and existing business in accordance with Article VI upon delivery
of thirty (30) calendar days written notice to Travelers, within thirty
(30) days of failure by Travelers to pay premium in accordance with Article
VI. If, during the thirty (30) days notice period, Connecticut General
receives all premiums in arrears and all premiums which may become due
within the thirty (30) days notice period, the notice of termination shall
be deemed withdrawn. In the event of termination under this paragraph, this
Agreement may be reinstated upon the written consent of Connecticut General
if, at any time within sixty (60) days of termination, Travelers pays and
Connecticut General receives all premiums due and payable up to the date of
reinstatement.
J. Travelers represents and warrants that its processing and reporting of
business transactions under this Agreement shall be in an accurate and
timely manner and shall, to the extent that liabilities remain under this
Agreement into the year 2000 and beyond, maintain application functionality
and information system services for such time. In the event that Travelers
materially breaches this warranty and representation, Connecticut General
shall have the right to terminate this Agreement for new and existing
business upon 30 days written notice. In the event of such termination,
Connecticut General shall have no further liability under this Agreement.
ARTICLE XX - REGULATORY COMPLIANCE
Connecticut General agrees to maintain its state insurance licenses, provide any
required security, and/or comply with other regulations to the extent necessary
for Travelers to receive statutory reserve credit in all jurisdictions in which
Travelers is licensed as of the effective date of this Agreement for the
reinsurance ceded hereunder.
Travelers warrants that it has secured all necessary licenses and approvals for
the contracts reinsured hereunder, and that it is operating in compliance with
federal investment laws and state investment and insurance laws and regulations.
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product [CIGNA LOGO]
Effective June 30, 1998
Treaty #103070 & 103071
Connecticut General Life Insurance Company
12
ARTICLE XXI - NOTICES
All notices required to be given hereunder shall be in writing and shall be
deemed delivered if personally delivered, sent via facsimile, or dispatched by
certified or registered mail, return receipt requested, postage prepaid,
addressed to the parties as follows:
Xxxxxxx X. Xxxxxx, FSA, MAAA Phone No. 000-000-0000
Actuary Fax No. 000-000-0000
The Travelers Life & Annuity Company
The Travelers Insurance Company
Xxx Xxxxx Xxxxxx
Xxxxxxxx XX 00000-0000
Xxxxx X. Xxxxxxx, FSA, MAAA
Assistant Vice President Phone No. 000.000.0000
CIGNA Reinsurance Fax No. 000.000.0000
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Notice shall be deemed given on the date it is received in the mail or sent via
facsimile in accordance with the foregoing. Any party may change the address to
which to send notices by notifying the other party of such change of address in
writing in accordance with the foregoing.
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product [CIGNA LOGO]
Effective June 30, 1998
Treaty #103070 & 103071
Connecticut General Life Insurance Company
13
The text of this Agreement and all exhibits, schedules and amendments are
considered to be the entire contract between the parties. There are no other
understandings or agreements between the parties regarding the policies
reinsured other than as expressed in this Agreement. Either party may make
changes or additions to this Agreement, but they will not be considered to be in
effect unless they are made by means of a written amendment which has been
signed by both parties.
In witness whereof, the parties hereto have caused this Agreement to be signed
in duplicate on the dates indicated to be effective as of the date specified
above.
THE TRAVELERS LIFE & ANNUITY COMPANY
THE TRAVELERS INSURANCE COMPANY
By: -s- [ILLEGIBLE]
--------------------------------
Date: 12/30, 1998
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: -s- [ILLEGIBLE]
--------------------------------
Date: December 31, 1998
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product [CIGNA LOGO]
Effective June 30, 1998
Treaty #103070 & 103071
Connecticut General Life Insurance Company
14
SCHEDULE A
Limits of Reinsurance in Connecticut General
Connecticut General requires prior notification of any initial annuity purchase
amount in excess of $5,000,000 per contract. Upon receipt of such notification,
Connecticut General then has the obligation to notify Travelers within five days
of its decision to accept or not accept the reinsurance risk in excess of
$5,000,000 for such annuity purchase. Should Connecticut General not respond
within five days, it shall be deemed that Connecticut General does not agree to
accept the risk in excess of $5,000,000.
For contracts with initial purchase amounts in excess of the maximum of
$5,000,000, Connecticut General's percentage share of any future liability will
be equal to the ratio of the amount of the initial purchase payment Connecticut
General has agreed to accept over the total initial purchase amount. Absent
prior written consent of Connecticut General, this ratio shall not change
regardless of subsequent purchase amounts or withdrawals.
For all contracts with total purchase amounts exceeding $5,000,000 Connecticut
General requires notification of all subsequent purchase amounts of $1,000,000
or more. Upon receipt of such notification, Connecticut General then has the
obligation to notify Travelers within five days of the percentage share of any
future liability it will accept on that contract, not to be less than the total
of all purchase amounts previously accepted prior to the purchase amount in
question to the total of all purchase amounts. Should Connecticut General not
respond within five days, it shall be deemed that Connecticut General's
percentage share of any future liability shall be equal to the total purchase
amounts previously accepted prior to the purchase amount in question to the
total of all purchase amounts.
In accordance with Article IV of this Agreement, Connecticut General's limits of
reinsurance liability extend to the jurisdictions in which Travelers is properly
licensed and authorized to do business at the time that reinsured contracts were
issued.
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product SCHEDULE A [CIGNA LOGO]
Effective June 30, 1998
Treaty #103070 & 103071
Connecticut General Life Insurance Company
SCHEDULE B
Contracts Subject to This Reinsurance Agreement
Form Number Policy Description
----------- -------------------------------------
TL-14541(*) Individual Deferred Variable Annuity
Contract (Tax Qualified)
TL- 14531(*) Individual Deferred Variable Annuity
Contract (Non-Tax Qualified)
L-14541(*) Individual Deferred Variable Annuity
Contract (Tax Qualified)
L-14531(*) Individual Deferred Variable Annuity
Contract (Non-Tax Qualified)
TL-22168(*) Death Benefit Endorsement
(Tax and Non-Tax Qualified)
L-22168(*) Death Benefit Endorsement
(Tax and Non-Tax Qualified)
* The above contracts and all jurisdiction variations are subject to this
Agreement. These forms are used for products other than PrimElite. Only
PrimElite product is covered by this Agreement.
Funds Subject to This Reinsurance Agreement
Add Fund Name Eliminate
--- ----------------------------------------- ---------
Xxxxx Xxxxxx High Income
Xxxxx Xxxxxx International Equity
Xxxxx Xxxxxx Money Market
MFS Total Return
Xxxxx Xxxxxx Concert Select High Growth
Xxxxx Xxxxxx Concert Select Growth
Xxxxx Xxxxxx Concert Select Balanced
Xxxxx Xxxxxx Concert Select Conservative
Xxxxx Xxxxxx Concert Select Income
Xxxxx Xxxxxx Appreciation
Xxxxx Xxxxxx Large Cap Value
MFS Research
MFS Mid Cap Growth
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product
Effective June 30, 1998
Treaty #103070 & 103071 SCHEDULE B [CIGNA LOGO]
Connecticut General Life Insurance Company
SCHEDULE C
Limits and Rules of Travelers
Travelers will determine the death benefit value for each deceased within seven
(7) working days of receipt of due proof of death and written instructions for
payment of proceeds.
The maximum purchase payment without Travelers' approval is $1,000,000 per
contract.
The minimum initial purchase payment is $5,000 for qualified and non-qualified
plans.
Death Benefit Value
The death benefit value will be equal to the Death Proceeds Prior to Maturity
date as defined in the Contracts in Schedule B and the Schedule C-1, Death
Benefit Endorsement, less such other charges or fees as may be applicable.
Contingent Deferred Sales Charge
Contingent Deferred Sales Charge (CDSC) will be assessed if a full or partial
surrender of the contract value is made during the first eight years following a
Purchase Payment. The length of time from receipt of the Purchase Payment to the
time of surrender determines the amount of the charge. The CDSC is equal to a
percentage of the portion of the amount withdrawn which is available for charge
and is calculated as follows:
Length of Time from Contingent Deferred Sales
Purchase Payment (Number Charge
Of Years)
1 8%
2 7%
3 6%
4 5%
5 4%
6 3%
7 2%
8 1%
9 and thereafter 0%
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product
Effective June 30, 1998
Treaty #103070 & 103071 SCHEDULE B [CIGNA LOGO]
Connecticut General Life Insurance Company
SCHEDULE C-1
DEATH BENEFIT ENDORSEMENT
This endorsement is made a part of this contract as of the date it is attached
to the contract.
The "DEATH PROCEEDS PRIOR TO THE MATURITY DATE" provision is amended by deleting
the provision and replacing it with the following:
DEATH PROCEEDS PRIOR TO THE MATURITY DATE
Where Annuitant Was Younger Than Age 67 On the Contract Date and Dies before
Age 85:
The death benefit payable as of the Death Report Date will be the greatest of
(a), (b) or (c) below, less any applicable premium tax and outstanding loans:
(a) the Contract Value on the Death Report Date;
(b) the total Purchase Payments made under the contract less the total
amount of any partial surrenders; or
(c) the maximum of all Step-Up Death Benefit Values (as described below)
in effect on the Death Report Date which are associated with Contract
Date anniversaries beginning with the eighth Contract Date
anniversary, and ending with the last Contract Date anniversary
occurring on or before the Annuitant's 76(th) birthday.
We must be notified no later than six months from the date of death in order for
Us to make Payment of proceeds as described above. If notification is received
more than six months after the date of death, the death benefit payable will be
the Contract Value on the Death Report Date, less any applicable premium tax and
outstanding loans.
WHERE ANNUITANT WAS AGE 67 THROUGH 75 ON THE CONTRACT DATE AND DIES BEFORE AGE
85:
The death benefit payable as of the Death Report Date will be the greatest of
(a), (b) or (c) below less any applicable premium and outstanding loans:
(a) the Contract Value on the Death Report Date;
(b) the total Purchase Payments made under the contract less the total
amount of any partial surrenders; or
(c) the Step-Up Death Benefit Value (as described below) in effect on the
Death Report Date associated with the eighth Contract Date
Anniversary.
We must be notified no later than six months from the date of death in order for
Us to make payment of proceeds as described above. If notification is received
more than six months after the date of death, the death benefit payable will be
the Contract Value on the Death Report Date, less any applicable premium tax and
outstanding loans.
SCHEDULE C-1
WHERE ANNUITANT WAS AGE 76 OR OLDER ON THE CONTRACT DATE:
The death benefit payable as of the Death Report Date will be the Contract Value
on the Death Report Date, less any applicable premium tax and outstanding loans.
WHERE ANNUITANT DIES ON OR AFTER AGE 85:
The death benefit payable as of the Death Report Date will be the Contract
Value on the Death Report Date, less any applicable premium taxes or outstanding
loans.
STEP-UP DEATH BENEFIT VALUE
A separate Step-Up Death Benefit Value will be established on the eighth
Contract Date anniversary, and on each Contract Date anniversary
thereafter which occurs on or prior to the Death Report Date and will initially
equal the Contract Value on that anniversary. After a Step-Up Death Benefit
Value has. been established, it will be recalculated each time a Purchase
Payment is made or a partial surrender is taken until the Death Report Date.
Step-Up Death Benefit Values will be recalculated by increasing them by the
amount of each applicable Purchase Payment and by reducing them by a Partial
Surrender Reduction (as described below) for each applicable partial surrender.
Recalculations of Step-Up Death Benefit Values related to any Purchase Payments
or any partial surrenders will be made in the order that such Purchase Payments
or partial surrenders occur.
PARTIAL SURRENDER REDUCTION
The Partial Surrender Reduction referenced above is equal to:
(a) the amount of a Step-Up Death Benefit Value immediately prior to the
reduction for the partial surrender, multiplied by
(b) the amount of the partial surrender divided by the Contract Value
immediately prior to the partial surrender.
THE TRAVELERS LIFE AND ANNUITY COMPANY
-s- [ILLEGIBLE]
President
TL-22168 TLAC ED 07/97
SCHEDULE D
Reinsurance Premiums
1. The Adjusted Aggregate Contract Value is the sum of the Contract Values in
all of Travelers' variable annuities subject to this Agreement, minus
Contract Values attributable to amounts in excess of the purchase amounts
accepted by Connecticut General as described in Schedule A.
2. For all ages, the quarterly reinsurance premium due will be the equivalent
to 2.15 (.000215) basis points (bps), or an annual flat rate of 8.6
(.00086) basis points times the Adjusted Aggregate Contract Value. If at
any time, Travelers requests that Connecticut General hold a reserve that
includes a provision for a one-third (1/3) drop in Contract Value,
Connecticut General will hold such reserve, in exchange for an increase in
the flat rate of two (2) basis points, resulting in an increased annual
rate of 10.6 basis points. The increased rate will be charged only for the
length of time that such reserve is held at Travelers' request.
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product
Effective June 30, 1998
Treaty #103070 & 103071 SCHEDULE D [CIGNA LOGO]
Connecticut General Life Insurance Company
SCHEDULE E
Quarterly Reporting Format
1. Following the end of each calendar quarter, the Quarterly Input Page
(Schedule E-1) and Quarterly Transaction Summary (Schedule E-2), attached
hereto, or an exhibit of similar form, must be prepared for Qualified plans
and Non-Qualified plans separately.
2. The tabulation is on a seriatim basis, with each contract contributing
toward the totals for both exposure and aggregate contract value, death
benefit values and claims. Seriatim data must be submitted in a data file
similar to Schedule E-3 on or before the tenth business day following the
quarter.
3. At year end reporting, a tabulation of exposures by age and sex based on a
percentage decrease in account value by fund type as specified by NAIC
Actuarial Guideline XXXIV must be submitted for reserve purposes.
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product
Effective June 30, 1998
Treaty #103070 & 103071 SCHEDULE E [CIGNA LOGO]
Connecticut General Life Insurance Company
VARIABLE ANNUITY DEATH BENEFIT
QUARTERLY INPUT PAGE
Calendar Year ---------------
Reporting Quarter ---------------
Male Female Male Female Male Female Male Female
Age Band Exposure* Exposure* Annuity Value Annuity Value Claims Claims DBV DBV
0 34 -------- -------- -------- -------- -------- -------- -------- --------
35 39 -------- -------- -------- -------- -------- -------- -------- --------
40 44 -------- -------- -------- -------- -------- -------- -------- --------
45 49 -------- -------- -------- -------- -------- -------- -------- --------
50 54 -------- -------- -------- -------- -------- -------- -------- --------
55 59 -------- -------- -------- -------- -------- -------- -------- --------
60 64 -------- -------- -------- -------- -------- -------- -------- --------
65 69 -------- -------- -------- -------- -------- -------- -------- --------
70 74 -------- -------- -------- -------- -------- -------- -------- --------
75 79 -------- -------- -------- -------- -------- -------- -------- --------
80 84 -------- -------- -------- -------- -------- -------- -------- --------
85 89 -------- -------- -------- -------- -------- -------- -------- --------
Total 0-80 -------- -------- -------- -------- -------- -------- -------- --------
80+ -------- -------- -------- -------- -------- -------- -------- --------
Total Male/Female
0-80 -------- -------- -------- --------
80+ -------- -------- -------- --------
-------- -------- -------- --------
All Ages -------- -------- -------- --------
* Exposure is defined as Death Benefit Value less Annuity Cash Surrender
Value, Calculated on a seriatin basis and aggregated.
THE TRAVELERS LIFE AND ANNUITY COMPANY CIGNA REINSURANCE
VARIABLE ANNUITY DEATH BENEFIT REINSURANCE JUNE 30,1998
PRIMEELITE PRODUCT
TREATY NO. 103071
SCHEDULE E-1
VARIABLE ANNUITY DEATH BENEFIT
QUARTERLY INPUT PAGE
Calendar Year ---------------
Reporting Quarter ---------------
Male Female Male Female Male Female Male Female
Age Band Exposure* Exposure* Annuity Value Annuity Value Claims Claims DBV DBV
0 - 34 -------- -------- -------- -------- -------- -------- -------- --------
35 - 39 -------- -------- -------- -------- -------- -------- -------- --------
40 - 44 -------- -------- -------- -------- -------- -------- -------- --------
45 - 49 -------- -------- -------- -------- -------- -------- -------- --------
50 - 54 -------- -------- -------- -------- -------- -------- -------- --------
55 - 59 -------- -------- -------- -------- -------- -------- -------- --------
60 - 64 -------- -------- -------- -------- -------- -------- -------- --------
65 - 69 -------- -------- -------- -------- -------- -------- -------- --------
70 - 74 -------- -------- -------- -------- -------- -------- -------- --------
75 - 79 -------- -------- -------- -------- -------- -------- -------- --------
80 - 84 -------- -------- -------- -------- -------- -------- -------- --------
85 - 89 -------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- --------
Total 0-80 -------- -------- -------- -------- -------- -------- -------- --------
80+ -------- -------- -------- -------- -------- -------- -------- --------
Total Male/Female
0-80 -------- -------- -------- --------
80+ -------- -------- -------- --------
-------- -------- -------- --------
All Ages -------- -------- -------- --------
Please use end of the period values.
* Exposure is defined as Death Benefit Value less Annuity Cash Surrender
Value, Calculated on a seriatum basis and aggregated.
THE TRAVELERS INSURANCE COMPANY CIGNA REINSURANCE
VARIABLE ANNUITY DEATH BENEFIT REINSURANCE JUNE 30,1998
PRIME ELITE PRODUCT
XXXXXX XX. 000000
SCHEDULE E-1
VARIABLE ANNUITY DEATH BENEFIT
Quarterly Transcation Summary
Calendar Year ----------
Reporting Quarter ----------
QUARTERLY REINSURANCE PREMIUM CALCULATION
1 Adjusted Aggregate Contract Value (BOQ) ----------
2 Adjusted Aggregate Contract Value (EOQ) ----------
3 Average Annuity Value [(1+2)/2] ----------
4 Quarterly Fund Based Premium Rate 0.00021500
5 Quarterly Earned Premium [3(*)4] ----------
6 Advanced Premium Current Quarter [2(*)4] ----------
7 Advanced Premium Prior Quarter ----------
8 Net Premium Due [5+6-7] ----------
ACTUAL CLAIMS
9 Quarterly Reinsurance Amount* ----------
NET TRANSACTION
10 Premium Due Reinsurer [Sum 8] ----------
11 Quarterly Reinsurance Claims [Sum 9] ----------
12 Prior Adjustment (attach explanation) ----------
13 Amount Due to (from) Reinsurer [10-11 +12] ----------
* Quarterly Reinsurance Amount is defined as the aggregate sum of all claims
settled during a Calendar Quarter.
THE TRAVELERS LIFE AND ANNUITY COMPANY CIGNA REINSURANCE
VARIABLE ANNUITY DEATH BENEFIT REINSURANCE JUNE 30, 1998
REIME ELITE PRODUCT
XXXXXX XX. 000000
SCHEDULE E-2
VARIABLE ANNUITY DEATH BENEFIT
Quarterly Transcation Summary
Calendar Year ----------
Reporting Quarter ----------
QUARTERLY REINSURANCE PREMIUM CALCULATION
1 Adjusted Aggregate Contract Value (BOQ) ----------
2 Adjusted Aggregate Contract Value (EOQ) ----------
3 Average Annuity value [(1+2)/2] ----------
4 Quarterly Fund Based Premium Rate 0.00021500
5 Quarterly Earned Premium [3*4] ----------
6 Advanced Premium Current Quarter [2*4] ----------
7 Advanced Premium Prior Quarter ----------
8 Net Premium Due [5+6-7] ----------
ACTUAL CLAIMS
9 Quarterly Reinsurance Amount* ----------
NET TRANSACTION
10 Premium Due Reinsurer [Sum 8] ----------
11 Quarterly Reinsurance Claims [Sum 9] ----------
12 Prior Adjustment (attach explanation) ----------
13 Amount Due to (from) Reinsurer [10-11 +12] ----------
* Quarterly Reinsurance Amount is defined as the aggregate sum of all claims
settled during a Calendar Quarter.
THE TRAVELERS Insurance COMPANY CIGNA REINSURANCE
VARIABLE ANNUITY DEATH BENEFIT REINSURANCE JUNE 30, 1998
XXXXX ELITE PRODUCT
XXXXXX XX. 000000
SCHEDULE E-2
SCHEDULE E-3
SERIATIM INFORMATION
SERIATIM INFORMATION (ALL LIVES)
Date of Information
Policy Number
Product Code
Issue Date
Annuitant
Last Name
First Name
Sex
Date of Birth
Social Security Number
Owner
Last Name
First Name
Sex
Date of Birth
Social Security Number
Tax Status (Q/NQ)
Account Value
Surrender Value
Minimum Guaranteed Death Benefit
Loan Value
Funding Vehicle Values
Fund #1
Fund #N
Termination Information (Maintain for Quarter Following Applicable Event)
Termination Date
Termination Reason (Lapse = L/Death = D/Annuitization = A)
The Travelers Insurance Company and
The Travelers Life & Annuity Company
Variable Annuity Death Benefit Reinsurance
PrimElite Product
Effective June 30,1998
Treaty #103070 & 103071 SCHEDULE E
[CIGNA LOGO]
AMENDMENT NO. 1
To the Variable Annuity Death Benefit Reinsurance Agreement
Effective June 30, 1998
Between
THE TRAVELERS LIFE & ANNUITY COMPANY
And
THE TRAVELERS INSURANCE COMPANY
And
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
Through CIGNA Reinsurance
It is agreed among the companies to amend the Agreement as follows:
1. Schedule C-1 entitled "Death Benefit Endorsement" shall be deleted and
replaced with Schedule C-2 which shall be applicable to all in force and
new contracts. All references to Schedule C-1 in the Agreement shall be
deleted and replaced with Schedule C-2.
2. Schedule D entitled "Reinsurance Premiums" shall be deleted and replaced
with a new Schedule D entitled "Reinsurance Premiums Effective January 1,
2000" which shall be applicable to all in force and new contracts.
3. All references to forms TL22168 and L22168 shall be deleted and replaced
with form numbers TL22253 and L22253, respectively.
4. All other terms and conditions of the Agreement shall remain in full force
and effect.
In witness whereof, the parties hereto have caused this Amendment to be signed
in duplicate on the dates indicated and shall be effective as of January 1,
2000.
THE TRAVELERS LIFE & ANNUITY COMPANY
THE TRAVELERS INSURANCE COMPANY
By: -s- [ILLEGIBLE]
--------------------------------
Date: 1/4/2000
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: -s- [ILLEGIBLE]
---------------------------------
Date: 1/19/00
The Travelers Insurance Company and
The Travelers Life & Annuity Company
PrimElite Product
Treaty #103070 & #103071
Amendment No. 1 Effective 1/1/2000 [CIGNA LOGO]
Connecticut General Life Insurance Company
SCHEDULE D
Reinsurance Premiums Effective January 1, 2000
1. The Adjusted Aggregate Contract Value is the sum of the Contract Values in
all of Travelers' variable annuities subject to this Agreement, minus
Contract Values attributable to amounts in excess of the purchase amounts
accepted by Connecticut General as described in Schedule A.
2. For all ages, the quarterly reinsurance premium due will be the equivalent
to 2.20 (.000220) basis points (bps), or an annual flat rate of 8.8
(.00088) basis points times the Adjusted Aggregate Contract Value. If at
any time, Travelers requests that Connecticut General hold a reserve that
includes a provision for a one-third (1/3) drop in Contract Value,
Connecticut General will hold such reserve, in exchange for an increase in
the flat rate of two (2) basis points, resulting in an increased annual
rate of 10.8 basis points. The increased rate will be charged only for the
length of time that such reserve is held at Travelers' request.
The Travelers Insurance Company and
The Travelers Life & Annuity Company
PrimElite Product
Treaty #103070 & #103071
Amendment No. 1 Effective 1/1/2000 [CIGNA LOGO]
Connecticut General Life Insurance Company
SCHEDULE C-2
DEATH BENEFIT ENDORSEMENT
This endorsement is made a part of this Contract as of the date it is issued and
attached to the Contract.
The "DEATH BENEFITS PROVISIONS" section of the Contract is deleted and replaced
with the following:
DEATH BENEFIT PROVISIONS
DEATH OF ANNUITANT
A death benefit is payable to the Beneficiary upon the death of the Annuitant
before the Maturity Date, unless there is a Contingent Annuitant surviving. A
death benefit is also payable under those Settlement Options which provide for
death benefits. We will pay the Beneficiary the death benefit in a single sum as
described below upon receiving Due Proof of Death. A Beneficiary may request
that a death benefit payable under this contract be applied to a Settlement
Option subject to the provisions of this contract and the current tax laws.
DEATH OF OWNER WITH ANNUITANT SURVIVING
If the Owner is not the Annuitant, and the Owner (including the first of Joint
Owners) dies before the Maturity Date with the Annuitant surviving. We will
recalculate the value of the death benefit under the provisions of Death
Proceeds Prior To The Maturity Date below; by replacing all references to
"Annuitant" with "Owner". The value of the death benefit, as recalculated, will
be paid in a single lump sum or by other election to the party taking proceeds
under the current tax laws. The party must take distributions no later than
under the applicable elections of that provision.
DEATH PROCEEDS PRIOR TO THE MATURITY DATE
If the Annuitant is younger than age 76 on the Contract Date, the death benefit
payable as of the Death Report Date will be the greatest of a), b) or c) below,
less any applicable premium tax and outstanding loans:
a) the Contract Value on the Death Report Date
b) the total Purchase Payments less the total amount of any partial
surrenders made under this Contract; or
c) the Step-Up Value (if any, as described below).
STEP UP VALUE
WHERE ANNUITANT WAS YOUNGER THAN AGE 67 ON THE CONTRACT DATE
A Step-Up Value will be established on the eighth Contract date anniversary
which occurs on or prior to the Death Report Date. The initial Step-Up
Value will equal the Contract Value on that anniversary. Whenever a
Purchase Payment is made, the Step-Up Value will be increased by the amount
of that Purchase Payment. Whenever a partial surrender is taken, the
Step-Up Value will be reduced by a Partial Surrender Reduction as described
below. On each Contract Date anniversary that occurs before the Annuitant's
76(th) birthday and before the Annuitant's death, if the Contract Value is
greater than the Step-Up Value, the Step-Up Value will be reset to equal
the Contract Value on that date. If the Step-Up Value is greater than the
Contract Value, the Step-Up Value will remain unchanged. The Step-Up Value
will not be reduced on these anniversary recalculations (provided no
surrenders are made on that day). The only changes made to the Step-Up
Value on or after the Annuitant's 76(th) birthday will be those related to
additional Purchase Payments or partial surrenders as described above.
WHERE ANNUITANT WAS AGE 67 THROUGH 75 ON THE CONTRACT DATE
A Step-Up Value will be established on the eighth Contract date anniversary
prior to the Death Report Date. The Step-Up Value will equal the Contract
Value on that anniversary. Whenever a Purchase Payment is made, the Step-Up
Value will be increased by the amount of that Purchase Payment. Whenever a
partial surrender is taken, the Step-Up Value will be reduced by a Partial
Surrender Reduction as described below. The only changes made to the
Step-Up Value on or after the eighth Contract Date anniversary will be
those related to additional Purchase Payments or partial surrenders as
described above.
SCHEDULE C-2
TL-22253
PARTIAL SURRENDER REDUCTION
The Partial Surrender is equal to 1) the Step-up Value in effect
immediately prior to the reduction for the partial surrender, multiplied by
2) the amount of the partial surrender divided by 3) the Contract Value
immediately prior to the partial surrender.
If the Annuitant is age 76 or older on the Contract Date, the death benefit
payable as of the Death Report Date will be the Contract Value on the Death
Report Date, less any applicable premium tax and outstanding loans.
We must be notified no later than six months from the date of death in order for
Us to make payment of proceeds as described above. If notification is received
more than six months after the date of death, the death benefit payable will be
the Contract Value on the Death Report Date, less any applicable premium tax and
outstanding loans.
DEATH PROCEEDS AFTER THE MATURITY DATE
If the Annuitant dies on or after the Maturity Date, We will pay the Beneficiary
a death benefit consisting of any benefit remaining under the Annuity option
then in effect.
INTEREST ON DEATH PROCEEDS AFTER THE MATURITY DATE
Any interest on death proceeds will be paid in accordance with rules in effect
in Your state at the time of death.
SCHEDULE C-2
TL-22253
XXXXX X. XXXXXXXXXX, FSA, MAAA
Assistant Vice President and Actuary
[CIGNA LOGO]
March 31, 1999
Routing Code R-26
000 Xxxxxxx Xxxxx Xx.
Xxxxxxxx, XX 00000-0000
Telephone 000-000-0000
Facsimile 000-000-0000
Xx. Xxxx X. Xxxxxxxx, FSA, MAAA
Actuary
The Travelers Insurance Company
Xxx Xxxxx Xxxxxx-0XX
Xxxxxxxx, XX 00000-0000
BY FAX: 000.000.0000 AND CERTIFIED MAIL
Re: Notice of Termination of the Prime Elite Variable Annuity Guaranteed Death
Benefit Reinsurance Treaty Between Connecticut General Life Insurance
Company and The Travelers Insurance Company, dated June 30,1998 (the
"Treaty").
Dear Xx. Xxxxxxxx:
Connecticut General Life Insurance Company, through CIGNA Reinsurance Division
("CIGNA") is no longer assuming reinsurance of guaranteed death benefits or
income benefits under variable annuity contracts.
This letter is CIGNA's notice of termination of the Treaty effective as of March
31, 2001, (the "Expiry Date"). In accordance with the termination provision of
the Treaty, CIGNA will not reinsure new business issued on and after the Expiry
Date. Under the Treaty, in force business will remain reinsured, but we are
interested in discussing with you the conditions under which the parties may be
willing to agree to a recapture of that business.
We recognize that this notice is being sent in advance of the date provided
under the Treaty for termination. We hope that by providing this advance notice,
you may be well positioned to obtain replacement reinsurance coverage in a
timely manner.
Please let me know if we may have an opportunity to meet with you to discuss a
possible recapture. If I can provide further assistance, or if you have
questions about this letter, please call me at 000.000.0000, or Xxxx Xxxxx at
860.726.7619.
Sincerely,
-s- Xxxxx X. Xxxxxxxxxx
-----------------------
Xxxxx X. Xxxxxxxxxx
Copy: X. Xxxxx
