Common use of Buy-Out Settlement Evaluation Process Clause in Contracts

Buy-Out Settlement Evaluation Process. The Ceding Company shall maintain its settlement practices and policies with respect to buy-outs, lapses, surrenders and settlement offers of Reinsured Policies in the ordinary course of business and consistent in all material respects with past practices and shall at all times comply and shall (and shall cause its applicable Affiliates and service providers to) continue to implement Buy-Out Settlement offers in accordance with the guidelines previously provided by the Ceding Company to the Reinsurer as of the date hereof in respect of any buy-outs, lapses or surrenders of the Reinsured Policies. The Ceding Company shall not deviate from such guidelines without the prior written consent of the Reinsurer, except to the extent required by Applicable Law. In the event that a payment is made under a Reinsured Policy in exchange for a complete buy-back in accordance with such guidelines of such Reinsured Policy and complete discharge of the Ceding Company’s obligations in respect of such Reinsured Policy (each, a “Buy-Out Settlement”), the Reinsurer shall pay to the Ceding Company an amount in cash equal to the settlement amount with respect to such Reinsured Policy (a “Buy-Out Settlement Payment”) in accordance with Section 5.03. Upon a Buy-Out Settlement in respect of any Reinsured Policy, such policy, including any amendments, riders or endorsements attached thereto, shall cease to be a Reinsured Policy under this Agreement, and with the exception of the Buy-Out Settlement Payment described in this Section 2.09, the Reinsurer shall have no further liability with respect to such policy and any amendments, riders or endorsements attached thereto. The Ceding Company shall (i) provide a report to the Reinsurer in respect of such Buy-Out Settlement offers in accordance with Section 5.06(g) and (ii) consult with representatives of the Reinsurer as reasonably requested by the Reinsurer on a quarterly basis with respect to such matters, including future prospects and plans in respect of the Buy-Out Settlement Offers. In addition, the Reinsurer shall be permitted to audit and inspect the Ceding Company’s compliance with this Section 2.09 as set forth in Section 6.02.