Common use of FIXED ACCOUNT OPTIONS Clause in Contracts

FIXED ACCOUNT OPTIONS. (a) Subject to the provisions of this Section 2.06, the Company may in its discretion, from time to time, establish fixed account options under "Fixed Account I” with varying durations for certain of the Policies ceded under this Agreement (the "Fixed Account Options") and, subject to the minimum guaranteed interest rate set forth in each such Policy, set the current rates for the Fixed Account Options (the "Crediting Rates''). (b) During the Reinsurance Period, the Company agrees to establish the Fixed Account Options and the Crediting Rates and the effective dates thereof only on recommendations of the Reinsurer. To the extent that Reinsurer's recommendations with respect to (i) the Fixed Account Options are of the kind and duration offered by the Company prior to the Effective Date, and (ii) the Crediting Rates are no greater than those being offered by other insurers under insurance policies similar to the Policies, the Company's acceptance and implementation of such recommendations shall not be unreasonably withheld or delayed. Otherwise, the Company may reject the recommendation in its sole discretion. (c) To the extent permitted by Applicable aw, the Company agrees to allow the Reinsurer to notify policyholders and contractholders of the availability of Fixed Account Options and the Crediting Rates and the effective dates thereof. (d) Notwithstanding any other provision of this Agreement to the contrary, in the event that the Company establishes any Fixed Account Option or Crediting Rate other than (i) on recommendation of the Reinsurer, (ii) as required by Applicable Law, or (iii) as required by the express terms and conditions of the Policies (including any express terms and conditions of the Policies that operate to establish the applicable Crediting Rates under the Policies), the risks assumed under the Policy relating to such Fixed Account Option may, at the sole option of the Reinsurer and on notice by the Reinsurer to the Company within 30 days of the Reinsurer becoming aware of the availability of such Fixed Account Option or Crediting Rate, be excluded from the Policy Liabilities assumed by the Reinsurer under Section 2.01 of this Agreement and all other provisions of this Agreement shall be appropriately adjusted to take into account to such exclusion. (e) In the event that the aggregate account value of fixed account investment options under the Policies which are invested in the General Account (including Fixed Account I) (the "Aggregate Account Value") at any time exceeds $20 million, the Reinsurer agrees to secure the Aggregate Account Value, by (i) entering into a trust agreement to establish a trust account for the benefit of the Company that meets the requirements of a reinsurance trust for reinsurance credit under the Pennsylvania Insurance Code and regulations in an amount equal to or greater than the Aggregate Account Value; (ii) providing to the Company one or more letters of credit that meet the requirements of reinsurance letters of credit for reinsurance credit under the Pennsylvania Insurance Code and regulations in an amount equal to or greater than the Aggregate Account Value; or (iii) a combination of (i) and (ii); provided that, once the Aggregate Account Value becomes less than $10 million: (x) the Reinsurer shall be relieved of the security obligation under this Section 2.06(e), (y) the Company will not draw down on the trust assets or the letter of credit pending termination of the trust or letter of credit, and (z) the Company will permit release of the trust assets to the Reinsurer; and provided further if the Aggregate Account Value subsequently exceeds $20 million, the Reinsurer shall re-establish a trust account or provide letters of credit as required under this Section 2.06(e).