FACULTATIVE RATE LIMIT Clause Samples
The Facultative Rate Limit clause sets a maximum amount of insurance coverage that can be provided on a facultative basis for a particular risk or policy. In practice, this means that the insurer will only consider offering facultative reinsurance up to a specified monetary threshold, and any requests for coverage above this limit may be declined or require special approval. This clause helps insurers manage their exposure to large or unusual risks by capping the amount of facultative reinsurance they are willing to provide, thereby controlling potential losses and maintaining balanced risk portfolios.
FACULTATIVE RATE LIMIT. The automatic reinsurance rates in this Agreement can be used for facultative reinsurance up to the limits shown below. If either limit would be exceeded, then the reinsurance rates shall be mutually agreed upon. SCHEDULE B, Continued
a. The total individual in force and applied for in all companies does not exceed $30,000,000.
b. The total amount reinsured with the Reinsurer for the subject life (or either life for joint policies) does not exceed the following: ------------------------------------------------------- Issue Age Std - Table 8 Tables 9-12 Tables 13-16 ------------------------------------------------------- 0-65 $17,000,000 $13,000,000 $10,000,000 ------------------------------------------------------- 66-75 17,000,000 6,000,000 3,000,000 ------------------------------------------------------- 76-80 8,000,000 0 0 ------------------------------------------------------- 81+ 0 0 0 ------------------------------------------------------- For joint Second-to-Die policies, the maximum amount in the table above shall be determined by the life which produces the largest amount. For policies where one life is uninsurable, if the healthier life is rated above Table 8, the Reinsurer can offer only its retention of $1,000,000, if available. REINSURANCE RATES AFTER CONVERSION Annual Premiums per $1,000 Reinsured - Yearly Renewal Term Basis Age Nearest Birthday - Male Nonsmoker REINSURANCE RATES AFTER CONVERSION Annual Premiums per $1,000 Reinsured - Yearly Renewal Term Basis Age Nearest Birthday - Male Nonsmoker -------------------------------------------------------------------------------------------------------------------------------- Policy Year Issue ------------------------------------------------------------------------------------------------------------------ Attnd Age 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Ult Age -------------------------------------------------------------------------------------------------------------------------------- 45 0.00 1.41 1.68 1.89 2.06 2.20 2.33 2.47 2.71 3.01 3.01 3.40 4.03 4.72 5.48 6.65 60 46 0.00 1.55 1.82 2.05 2.23 2.40 2.55 2.72 2.93 3.26 3.26 3.70 4.39 5.14 6.01 7.34 61 47 0.00 1.70 1.97 2.21 2.42 2.62 2.80 2.93 3.18 3.54 3.54 4.04 4.78 5.61 6.59 8.10 62 48 0.00 1.79 2.06 2.33 2.57 2.79 3.00 3.18 3.47 3.87 3.92 4.52 5.30 6.18 7.17 8.91 63 49 0.00 1.86 2.16 2.44 2.71 2.97 3.21 3.45 3.80 4.25 4.38 5.07 5.89 6.79 7.78 9.79 64 ----------------------------------------------------------------------------------------...
FACULTATIVE RATE LIMIT. The automatic reinsurance rates in this Agreement can be used for facultative reinsurance amounts up to $20,000,000 at issue ages 0-75, so long as the total amount of insurance in force and applied for, per life, with all companies, does not exceed $35,000,000. If either limit would be exceeded, then the reinsurance rates will be mutually agreed upon. Exhibit B1 (8 pages omitted) SCHEDULE C REPORTING INFORMATION INFORMATION ON RISKS REINSURED 1. Type of Transaction 2. Effective Date of Transaction 3. Automatic/Facultative Indicator 4. Policy Number 5. Full Name of Insured 6. Date of Birth 7. Sex 8. Smoker/Nonsmoker 9. Policy Plan Code 10. Insured's State of Residence 11. Issue Age 12. Issue Date 13. Duration from Original Policy Date 14. Face Amount Issued 15. Reinsured Amount (Initial Amount) 16. Reinsured Amount (Current Amount at Risk) 17. Change in Amount at Risk Since Last Report 18. Death Benefit Option (For Universal Life Type Plans) 19. ADB Amount (If Applicable) 20. Substandard Rating 21. Flat Extra Amount Per Thousand 22. Duration of Flat Extra 23. ▇▇ ▇▇▇▇▇ (Yes or No) 24. Previous Policies (Yes or No) 25. Premiums SAMPLE POLICY EXHIBIT SUMMARY (LIFE REINSURANCE ONLY) (1 page omitted) 4 SAMPLE RESERVE CREDIT SUMMARY (1 page omitted) 5 SAMPLE ACCOUNTING SUMMARY (1 PAGE OMITTED) 6 SCHEDULE D FACULTATIVE FORMS Application for Reinsurance Notification of Reinsurance NOTIFICATION OF REINSURANCE FORM (2 pages omitted) AMENDMENT 1 EFFECTIVE AUGUST 1, 2000 TO THE AUTOMATIC AND FACULTATIVE YEARLY RENEWABLE TERM REINSURANCE AGREEMENT Effective January 1, 2000 (the "Agreement") between FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY ("Ceding Company") And SECURITY LIFE OF DENVER INSURANCE COMPANY ("Reinsurer")
FACULTATIVE RATE LIMIT. The automatic reinsurance rates in this Agreement can be used for facultative reinsurance up to the limits shown below.
a. The total amount of insurance in force and applied for, per life, with all companies, does not exceed $50,000,000.
b. The total amount reinsured with the Reinsurer, per life, does not exceed the following: For joint First-to-Die policies, the maximum amount in the table above is determined by the life that produces the smallest amount. For joint Second-to-Die policies, the maximum amount in the table above is determined by the life that produces the largest amount. For policies where one life is uninsurable, if the healthier life is rated above Table 8, the Reinsurer can offer only $1,500,000, if available. If either limit is exceeded, then rates shall be 110% times the automatic reinsurance rates in this Agreement. 1990-95 Basic Select and Ultimate Table with Manulife's High Issue Age Extension (See Attached)
FACULTATIVE RATE LIMIT. The automatic reinsurance rates in this Agreement can be used for facultative reinsurance up to the limits shown below.
a. The total amount of insurance in force and applied for, per life, with all companies, does not exceed $50,000,000. SCHEDULE B, CONTINUED
FACULTATIVE RATE LIMIT. The life reinsurance rates in this Agreement can be used for facultative reinsurance up to the limits shown in the table below. If either limit would be exceeded, then the reinsurance rates will be mutually agreed upon.
a. The total individual inforce and applied for in all companies does not exceed $25,000,000.
b. The total amount reinsured with for the subject life (or either life for joint policies) does not exceed the following: For Single Life Policies ------------------------ ISSUE STANDARD TBL. 5 TBL. 9 ▇▇▇. ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇. ▇ ▇▇▇▇ ▇B. 8 THRU TBL. 12 THRU TBL. 16 ------ ------------ ------------ ------------ ------------ 0-65 $ 19,500,000 $ 15,600,000 $ 15,600,000 $ 11,700,000 66-70 $ 19,500,000 $ 15,600,000 $ 7,800,000 0 71-75 $ 19,500,000 $ 7,800,000 $ 7,800,000 0 76-80 $ 9,750,000 0 0 0 For joint policies, the maximum amount in the table above will be determined by the life which produces the smallest amount. Second To Die Policies ISSUE STANDARD TBL. 5 TBL. 9 ▇▇▇. ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇. ▇ ▇▇▇▇ TBL. 8 THRU ▇▇▇. ▇▇ ▇▇▇▇ ▇▇▇. ▇▇ ------ ------------ ------------ ------------ ------------ 0-65 $ 11,400,000 $ 9,120,000 $ 9,120,000 $ 6,840,000 66-70 $ 11,400,000 $ 9,120,000 $ 6,840,000 0 71-75 $ 11,400,000 $ 6,840,000 $ 4,560,000 0 76-80 $ 5,700,000 0 0 0 The maximum amount in the table above will be determined by the life which produces the smallest amount. SCHEDULE C INFORMATION ON RISKS REINSURED
1. Type of Transaction 2. Effective Date of Transaction 3. Automatic/Facultative Indicator 4. Policy Number 5. Full Name of Insured 6. Date of Birth 7. Sex 8. Smoker/Nonsmoker 9. Policy Plan Code 10. Insured's State of Residence 11. Issue Age 12. Issue Date 13. Duration from Original Policy Date 14. Face Amount Issued 15. Reinsured Amount (Initial Amount) 16. Reinsured Amount (Current Amount at Risk) 17. Change in amount at Risk Since Last Report 18. Death Benefit Option (For Universal Life Type Plans) 19. ADB Amount (If Applicable) 20. Substandard Rating 21. Flat Extra Amount Per Thousand 22. Duration of Flat Extra 23. PW Rider (Yes or No) 24. Premiums SCHEDULE C, CONTINUED SAMPLE ACCOUNTING SUMMARY
FACULTATIVE RATE LIMIT. The automatic reinsurance rates in this Agreement can be used for facultative reinsurance. SCHEDULE C REPORTING INFORMATION INFORMATION ON RISKS REINSURED
1. Type of Transaction 2. Effective Date of Transaction 3. Automatic/Facultative Indicator 4. Policy Number 5. Full Name of Insured 6. Date of Birth 7. Sex 8. Smoker/Nonsmoker 9. Policy Plan Code 10. Insured's State of Residence 11. Issue Age 12. Issue Date 13. Duration from Original Policy Date 14. Face Amount Issued 15. Reinsured Amount (Initial Amount) 16. Reinsured Amount (Current Amount at Risk) 17. Change in Amount at Risk Since Last Report 18. Death Benefit Option (For Universal Life Type Plans) 19. ADB Amount (If Applicable) 20. Substandard Rating 21. Flat Extra Amount Per Thousand 22. Duration of Flat Extra 23. PW Rider (Yes or No) 24. Previous Policies (Yes or No) 25. Premiums SCHEDULE C, CONTINUED SAMPLE POLICY EXHIBIT SUMMARY (LIFE REINSURANCE ONLY)
FACULTATIVE RATE LIMIT. The automatic reinsurance rates in this Agreement can be used for facultative reinsurance up to the limits shown below. If either limit would be exceeded, then the reinsurance rates shall be mutually agreed upon.
a. The total individual in force and applied for in all companies does not exceed $35,000,000.
b. The total amount reinsured with for either life does not exceed the following: AGES STD-TABLE 4 TABLES 5-8 TABLES 9-12 TABLES 13-16 0-75 $20,000,000 $15,000,000 $10,000,000 $10,000,000 76-80 $15,000,000 $10,000,000 $5,000,000 $5,000,000 81-85 $5,000,000 $0 $0 $0 The maximum amount in the table above shall be determined by the life that produces the smallest amount. For policies where one life is uninsurable, if the healthier life is rated about Table 8, SECURITY can offer only its retention of $1,500,000, if available.
c. The rate limit for facultative cases in excess of the $35,000,000 in force and applied for limit is $10,000,000.
FACULTATIVE RATE LIMIT. The reinsurance rates in this Agreement shall be used for facultative reinsurance up to the limits shown below. If either limit would be exceeded, then the reinsurance rates shall be mutually agreed upon.
a. The total amount in force and applied for, for either life, in all companies does not exceed
b. The total amount reinsured with SECURITY, for either life, does not exceed the following:
1. Second-To-Die reinsurance rates are calculated on a case by case basis using the actual age, sex, smoking status and rating of each insured. The calculation begins with the single life base rates shown in Attachment 1.
2. Table rated substandard ratings are reflected by taking the actual table multiple of the single life base rates.
3. Applicants who are deemed uninsurable may be reinsured. However, the insurable life must be rated less than or equal to table four. For calculation purposes, cost of insurance rates for uninsurable risks are a flat $800 per $1,000 at risk.
4. The single life base rates are combined into a joint second-to-die rate using F▇▇▇▇▇▇’▇ Method: Let: x = issue age of one insured y = issue age of other insured z = joint life status t = policy duration tPx = probability of x living to end of policy year t tPy = probability of y living to end of policy year t tPz = probability of z (i.e. either x or y) living to end of policy year t tRz = rate for joint status z and policy duration t Then: tPz = tPx + tPy - (tPx) (tPy) tRz = 1 - tPz tRz = 1 - (tPz)/(t-1Pz)
FACULTATIVE RATE LIMIT. The automatic reinsurance rates in this Agreement can be used for facultative reinsurance up to the limits shown below. If either limit would be exceeded, then the reinsurance rates shall be mutually agreed upon.
a. The total individual in force and applied for in all companies does not exceed $35,000,000.
b. The total amount reinsured with Reinsurer for either life does not exceed the following: AGES STD-TABLE 4 TABLES 5-8 TABLES 9-12 TABLES 13-16 0-75 $20,000,000 $15,000,000 $10,000,000 $10,000,000 76-90 $15,000,000 $10,000,000 $5,000,000 $5,000,000 90+ $0 $0 $0 $0 EXHIBIT I Male Elite Preferred Nonsmoker 324 6 050 01 Male Preferred Nonsmoker 321 6 050 01 Male Standard Nonsmoker 318 6 050 01 Male Preferred Smoker 321 3 050 01 Male Smoker 318 3 050 01 Female Elite Preferred Nonsmoker 325 6 050 01 Female Preferred Nonsmoker 322 6 050 01 Female Standard Nonsmoker 319 6 050 01 Female Preferred Smoker 322 3 050 01 Female Smoker 319 3 050 01 Unisex Elite Preferred Nonsmoker 326 8 050 01 Unisex Preferred Nonsmoker 323 8 050 01 Unisex Standard Nonsmoker 320 8 050 01 Unisex Preferred Smoker 323 7 050 01 Unisex Smoker 320 7 050 01 The plan code will change to a paid up plan code on the first policy anniversary. This structure is required because there is not a uniform mathematical relationship between gross and net premiums. EXHIBIT II Male Elite Preferred Nonsmoker 315 6 050 05 Male Preferred Nonsmoker 312 6 050 05 Male Standard Nonsmoker 309 6 050 05 Male Preferred Smoker 312 3 050 05 Male Smoker 309 3 050 05 Female Elite Preferred Nonsmoker 316 6 050 05 Female Preferred Nonsmoker 313 6 050 05 Female Standard Nonsmoker 310 6 050 05 Female Preferred Smoker 313 3 050 05 Female Smoker 310 3 050 05 Unisex Elite Preferred Nonsmoker 317 8 050 05 Unisex Preferred Nonsmoker 314 8 050 05 Unisex Standard Nonsmoker 311 8 050 05 Unisex Preferred Smoker 314 7 050 05 Unisex Smoker 311 7 050 05 EXHIBIT III Male Elite Preferred Nonsmoker 306 6 050 10 Male Preferred Nonsmoker 303 6 050 10 Male Standard Nonsmoker 300 6 050 10 Male Preferred Smoker 303 3 050 10 Male Smoker 300 3 050 10 Female Elite Preferred Nonsmoker 307 6 050 10 Female Preferred Nonsmoker 304 6 050 10 Female Standard Nonsmoker 301 6 050 10 Female Preferred Smoker 304 3 050 10 Female Smoker 301 3 050 10 EXHIBIT IV Male Elite Preferred Nonsmoker 306 6 050 15 Male Preferred Nonsmoker 303 6 050 15 Male Standard Nonsmoker 300 6 050 15 Male Preferred Smoker 303 3 050 15 Male Smoker 300 3 050 15 Female Elite Preferred ...