Common use of Modified Coinsurance Reserve Adjustment Clause in Contracts

Modified Coinsurance Reserve Adjustment. a) The Modified Coinsurance Reserve Adjustment will be computed each Accounting Period equal to the result of i) minus ii) plus iii) minus iv) minus v) minus vi), where: i) equals the Modified Coinsurance Reserve, determined in accordance with Paragraph 2 below, at the end of the current Accounting Period; ii) equals a quota share of the amount transferred from the fixed account to the Variable Separate Accounts for the annuities reinsured hereunder during the current Accounting Period; iii) equals a quota share of the amount transferred from the Variable Separate Accounts to the fixed account for the annuities reinsured hereunder during the current Accounting Period; iv) equals the Modified Coinsurance Reserve, determined in accordance with Paragraph 2 below, at the end of the preceding Accounting Period; v) equals the Modified coinsurance Reserve Investment Credit, as described in Schedule C. vi) equals a quota share of the Living Benefits allocated to the Separate Account during the current Accounting Period for annuities reinsured hereunder that are inforce at the end of the Accounting Period. For the purposes of this adjustment, Living Benefits paid for annuities that are terminated during the Accounting Period are excluded. b) For any Accounting Period in which the amount computed in a) above is positive, the Reinsurer will pay the Ceding Company such amount. For any Accounting Period in which the amount computed in a) above is negative, the Ceding Company will pay the Reinsurer the absolute value of such amount.