Common use of Effective Date Accounting Clause in Contracts

Effective Date Accounting. 4.5.1. No later than sixty (60) calendar days after the Effective Date, Ceding Company will prepare as of the Effective Date and deliver to Reinsurer an accounting of all Policy-Related Liabilities and Policy-Related Assets, in the same form as the Preliminary Effective Date Accounting (the “Effective Date Accounting”). In addition, the Effective Date Accounting will include a statement comparing the values set forth on the Preliminary Effective Date Accounting with the values on the Effective Date Accounting and computing the difference in such values. The Effective Date Accounting must be reviewed and accompanied by a certificate signed by Ceding Company’s chief actuary who is a Member of the American Academy of Actuaries, certifying that all items appearing on such accounting were: (i) correct to the best knowledge of such actuary and do not contain errors in calculation, methodology or application; (ii) based on the books and records of Ceding Company; (iii) calculated in accordance with applicable SAP; and (iv) prepared using the same accounting and actuarial methodologies, assumptions and procedures, and the application thereof, that Ceding Company utilized in preparing its statutory Annual Statement as of December 31, 2000, the Indemnity Accounting and the Preliminary Effective Date Accounting. Ceding Company will provide Reinsurer with a copy of all work papers and data used, and access to all personnel involved, in preparing the Effective Date Accounting. After the Effective Date, Reinsurer will provide Ceding Company with reasonable access to the books and records of the Business, and access to Reinsurer’s personnel, reasonably necessary for Ceding Company to prepare the Effective Date Accounting. 4.5.2. Reinsurer will have sixty (60) calendar days after receipt of the Effective Date Accounting to review such accounting and suggest changes or corrections thereto. On or before the end of such period, Reinsurer will notify Ceding Company in writing whether or not it accepts the Effective Date Accounting. If Reinsurer fails to so notify Ceding Company, Reinsurer will be deemed to have accepted the Effective Date Accounting. If Reinsurer notifies Ceding Company that it does not accept the Effective Date Accounting, Reinsurer will set forth in reasonable detail its objections thereto and the reasons for such objections. The parties in good faith will discuss and negotiate any such objections in an effort to reach agreement on the Effective Date Accounting. If despite good faith negotiations the parties are unable to reach agreement within thirty (30) calendar days after Ceding Company’s receipt of Reinsurer’s notice of objections, then the parties will submit the dispute to arbitration in accordance with Section 7, except that all arbitrators must be Members of the American Academy of Actuaries familiar with the types of policies included in the Reinsured Policies, and the arbitrators will determine the Effective Date Accounting in accordance with the standards set forth in items (i) through (iv) of Section 4.5.1. 4.5.3. Within ten (10) calendar days after agreement is reached on the Effective Date Accounting or the Effective Date Accounting is determined by arbitration, as the case may be, the parties will settle any differences on such accountings as follows: (i) if the Net Transfer Amount Difference is positive, then Ceding Company will pay such difference to Reinsurer in cash; and (ii) if the Net Transfer Amount Difference is negative, then Reinsurer will pay such difference to Ceding Company in cash. “Net Transfer Amount Difference” means the result of subtracting the value of the Preliminary Transfer Amount from the value of the Adjusted Transfer Amount. Payment of the Net Transfer Amount Difference will be accompanied by the payment of interest thereon from the Effective Date to and including the date of payment at an annual rate equal to the 90-Day Treasury Rate in effect on the Effective Date.

Effective Date Accounting. 4.5.1. No later than sixty (60a) calendar days after On or before the Closing Date, Ceding Company shall have prepared and delivered to Reinsurer, as of the Effective Date, Ceding Company will prepare as an accounting (the "Preliminary Effective Date Accounting") of all liabilities (except those related to death claims incurred prior to the Effective Date on the Non-Closed Block Policies, which shall remain liabilities of Ceding Company) and deliver related assets customarily arising under statutory accounting principles with respect to Reinsurer an accounting of all Policy-Related Liabilities and Policy-Related Assetsthe Coinsured Policies, substantially in the same form as set forth in Exhibit B. Such accounting shall be reviewed and certified by a Fellow of the Society of Actuaries familiar with the business of Ceding Company. It is anticipated that all liabilities and assets arising from or relating to the Coinsured Policies shall be reflected in the Preliminary Effective Date Accounting (the “Effective Date Accounting”). In addition, the Effective Date Accounting will include a statement comparing the values set forth on the Preliminary Effective Date Accounting with the values on the Effective Date Accounting and computing the difference in such values. The Effective Date Accounting must be reviewed and accompanied by a certificate signed by Ceding Company’s chief actuary who is a Member omission of the American Academy of Actuaries, certifying that all items appearing on such accounting were: (i) correct an item from Exhibit B which properly relates to the best knowledge Coinsured Policies shall not be cause for omission of such actuary and do not contain errors in calculation, methodology or application; (ii) based on the books and records of Ceding Company; (iii) calculated in accordance with applicable SAP; and (iv) prepared using the same accounting and actuarial methodologies, assumptions and procedures, and the application thereof, that Ceding Company utilized in preparing its statutory Annual Statement as of December 31, 2000, the Indemnity Accounting and item from the Preliminary Effective Date Accounting. Exhibit B will be prepared in accordance with Oregon SAP applied on a basis consistent with the Annual Statement and reflected in the Reports, will present fairly the items reflected therein in accordance with sound actuarial principles as of the date of such Preliminary Effective Date Accounting, and will be in an amount not less favorable to Reinsurer than the amount included in Ceding Company's Annual Statement. Ceding Company will provide agrees to supply Reinsurer with a copy of all computer runs, work papers and supporting data used(collectively, and access to all personnel involved, the "Supporting Data") used in preparing the Effective Date Accounting. After the Effective Date, Reinsurer will provide Ceding Company with reasonable access to the books and records of the Business, and access to Reinsurer’s personnel, reasonably necessary for Ceding Company to prepare the Preliminary Effective Date Accounting. 4.5.2. Reinsurer will have sixty (60b) calendar Within 45 days after receipt of the Closing Date, Ceding Company shall prepare and deliver to Reinsurer the "Proposed Final Effective Date Accounting to review such accounting and suggest changes or corrections thereto. On or before Accounting" in the end of such periodformat outlined as Exhibit B, Reinsurer will notify prepared in accordance with the procedures utilized by the Ceding Company in writing whether or not it accepts for purposes of preparing the Preliminary Effective Date Accounting, which shall represent the Ceding Company's proposal for the Final Effective Date Accounting. If Ceding Company agrees to supply Reinsurer fails to so notify Ceding Company, Reinsurer will be deemed to have accepted with the Supporting Data used in preparing the Proposed Final Effective Date Accounting. Reinsurer shall have 30 days after the receipt of the Proposed Final Effective Date Accounting (the "Review Period") to review the Proposed Final Effective Date Accounting and Supporting Data and to suggest changes therein. If Reinsurer notifies at the end of the Review Period, Ceding Company that it does not accept and Reinsurer are able to agree in writing on the manner in which all items in the Proposed Final Effective Date Accounting should be treated, then the resulting accounting shall be binding on both parties and shall be referred to as the "Final Effective Date Accounting." If at the end of the Review Period Ceding Company and Reinsurer are unable to agree on the Final Effective Date Accounting, Reinsurer will then all items remaining in dispute shall be submitted to Milliman & Xxxxxxxxx, Inc. (the "Neutral Auditors"). The Neutral Auditors shall act as experts and not as arbitrators to determine the resolution of those issues (and only those issues) still in dispute. The Neutral Auditors' determination shall be made within 30 days after the end of the Review Period, shall be set forth in reasonable detail its objections thereto a written statement delivered to Ceding Company and Reinsurer and shall be final, binding and conclusive, subject to any breach in the warranties set forth herein, and the reasons for Proposed Effective Date Accounting, adjusted to give effect to such objections. The parties determination and any other agreement of the parties, shall in good faith will discuss and negotiate any such objections in an effort that case be referred to reach agreement on as the Final Effective Date Accounting. If despite good faith negotiations Fees and expenses of the parties are unable to reach agreement within thirty Neutral Auditors shall be borne equally by both parties. (30c) calendar Within 5 business days after Ceding Company’s receipt of Reinsurer’s notice of objections, then the parties will submit the dispute to arbitration in accordance with Section 7, except that all arbitrators must be Members of the American Academy of Actuaries familiar with the types of policies included in the Reinsured Policies, and the arbitrators will determine the Final Effective Date Accounting in accordance with the standards set forth in items (i) through (iv) of Section 4.5.1. 4.5.3. Within ten (10) calendar days after agreement is reached on the Effective Date Accounting or the Effective Date Accounting is determined by arbitration, as the case may be, the parties will settle any differences on such accountings as followshas been agreed to: (i) if the Net Cash Transfer Amount Difference is positiveBefore Interest (as defined on Exhibit B) exceeds the Cash Transfer Amount Before Interest on the Preliminary Effective Date Accounting, then Ceding Company will shall pay such difference to Reinsurer cash in cashan amount equal to such excess; and (ii) if the Net Cash Transfer Amount Difference Before Interest is negativeless than the Cash Transfer Amount Before Interest on the Preliminary Effective Date Accounting, then Reinsurer will shall pay such difference to Ceding Company cash in cashan amount equal to such deficiency. “Net Transfer Amount Difference” means Cash transferred pursuant to clause (i) or (ii) of this Section shall be by wire transfer to the result of subtracting the value of the Preliminary Transfer Amount from the value of the Adjusted Transfer Amount. Payment of the Net Transfer Amount Difference will be accompanied bank account designated by the payment of Reinsurer or Ceding Company, as appropriate. (d) Any amount due pursuant to Section 5.01(c) shall include interest thereon from the Effective Date to through the payment date, calculated based on the rates specified on Exhibit B. (e) Ceding Company warrants that all of the entries, information, tables and including narratives contained in any and all such Accountings will be reviewed and certified by a Fellow of the Society of Actuaries familiar with the business of Ceding Company and that all such Accountings will be prepared in good faith and will be true and correct in all material respects and will be prepared in accordance with Oregon SAP applied on a basis consistent with the Annual Statement and reflected in the Reports, and will present fairly the items reflected therein in accordance with sound actuarial principles as of the date of payment at an annual rate equal to the 90-Day Treasury Rate in effect on the Effective Datesuch Accountings.