Common use of Commission and Expense Allowance Clause in Contracts

Commission and Expense Allowance. The Reinsurer will pay the Ceding Company a Commission and Expense Allowance for each Accounting Period equal to the net of: (i) the product of (a) times (b), where: (a) equals the Commission Rate, as specified in the table below; and Commission Rate ---------------- Issue Age Range Choice Selections --------------- ------ ---------- 0 - 75 7.72% 7.02% 76 - 80 7.72% 5.72% 81 + 6.72% 4.42% (b) equals the Reinsurance Premiums determined in accordance with Article II, plus (ii) the product of (a) times (b), where: (a) equals the Account Value Rate, as specified in the table below, times the quota share reinsured hereunder, as described in Schedule A; and Account Value Rate ---------------- Policy Year Choice Selections ----------- ------ ---------- 1 - 6 0.03% 0.205% 7 + 0.205% 0.205% (b) equals the Average Account Value, determined in accordance with Article V, Paragraph 4, for the current Accounting Period, plus (iii) the product of (a) times (b), where: (a) equals $43.75 times the quota share reinsured hereunder, as described in Schedule A; and (b) equals the number of Base Annuities reinsured hereunder outstanding as of the end of the current Accounting Period, plus (iv) the product of (a) times (b), where: (a) equals $230 times the quota share reinsured hereunder, as described in Schedule A; and (b) equals the number of Base Annuities issued during the current Accounting Period, minus (v) the Investment Credit, as defined below. The Investment Credit, which will be paid by the Ceding Company to the Reinsurer pursuant to item (v) above, is included to offset expenses relating to the promotion of additional investments in the underlying funds and expenses relating to the maintenance of customer accounts in item (iii) above, shall equal the product of (a) times (b), where: (a) equals 0.0975 percent times the quota share reinsured hereunder, as described in Schedule A; and (b) equals the Average Account Value, determined in accordance with Article V, Paragraph 4, for the current Accounting Period. The 0.0975 percent factor shall be recalculated from time to time, but no more frequently than annually, using a methodology that is mutually acceptable to both parties.