Common use of RECAPTURE CHARGE Clause in Contracts

RECAPTURE CHARGE. In the event this Agreement is terminated in accordance with Paragraphs 3 and 4 above, or Paragraph 6 below, a Termination Value shall be calculated in good faith by the Reinsurer as of the effective date of termination according to "best practices" that are appropriate to valuing variable annuities and related cash flows and consistent with the terms of this Agreement. The Ceding Company shall have sixty (60) calendar days to either accept the Termination Value as calculated or raise objections. The parties shall cooperate with each other in order to resolve any disagreement with respect to the Termination Value. If the parties cannot mutually agree on the Termination Value, then the calculation will be submitted to a nationally recognized, independent actuarial firm or the actuarial group of a nationally recognized, independent accounting firm (hereinafter the "Actuarial Firm"), that is mutually acceptable to the parties for determination of a Termination Value which is reasonably consistent with the terms of this Agreement. If the parties cannot reach agreement as to the Actuarial Firm, then such appointment will be decided by the President of the Society of Actuaries. The decision of the Actuarial Firm with respect to the Termination Value will be final and binding upon the parties. The parties will share equally in the costs and expenses, if any, incurred by the Actuarial Firm and the Society of Actuaries. It is recognized and acknowledged by both parties that "best practices" for valuing cash flows linked to variable annuities include: i) commencing with seriatim in force data as of the effective date of termination; ii) fixing actuarial assumptions such as lapse, mortality, mortality improvement, utilization, etc. within a range deemed consistent with market standards; iii) determining market inputs for interest rates, implied volatilities, and other market inputs; and iv) valuing the present value of all the future cash flows using the inputs and assumptions determined above. The discount rate used in the present value of future cash flows described above will not reflect any credit deterioration by the Ceding Company since the Effective Date of this Agreement. If the projected Termination Value is positive, the absolute value shall be paid as a Recapture Charge to the Reinsurer by the Ceding Company. Payment of such amount will be made within thirty (30) days of receipt of the calculation. The terminal accounting date will be the effective date of termination pursuant to this Agreement.

RECAPTURE CHARGE. In the event this Agreement is terminated in accordance with Paragraphs 3 and 4 5 above, or Paragraph 6 7 below, a Termination Value an Agreement termination value shall be calculated by the Reinsurer in good faith by the Reinsurer as of the effective date of termination according to "“best practices" ” that are appropriate to valuing variable annuities and related cash flows and consistent with the terms of this Agreement. The Ceding Company shall have sixty (60) calendar days to either accept the Termination Value termination value as calculated or raise objections. The parties shall cooperate with each other in order to resolve any disagreement with respect to the Termination Valuetermination value. If the parties canCeding Company does not mutually agree on accept the Termination Valuetermination value, then the Reinsurer may submit the calculation will be submitted to a nationally recognized, independent actuarial firm or (including without limitation, the actuarial group of a nationally recognized, independent accounting firm (hereinafter the "Actuarial Firm"firm), that is mutually acceptable to the parties (hereinafter the “Actuarial Firm”) for determination of a Termination Value which is confirmation as being reasonably consistent with the terms of this Agreement. If the parties cannot reach agreement as to the termination value after receiving the results from the Actuarial Firm, then such appointment the matter will be decided by the President of the Society of Actuaries. The decision of the Actuarial Firm submitted to arbitration, in accordance with respect to the Termination Value will be final and binding upon the parties. Article X. The parties will share equally in the costs and expenses, if any, expenses incurred by the Actuarial Firm and the Society of ActuariesFirm. It is recognized and acknowledged by both parties that "“best practices" ” for valuing cash flows linked to variable annuities include: i) commencing with seriatim in force data as of the effective date of termination; ii) fixing actuarial assumptions such as lapse, mortality, mortality improvement, utilization, etc. within a range deemed consistent with market standards; iii) determining market inputs for interest rates, implied volatilities, and other market inputs; and iv) valuing the present value of all the future cash flows using the inputs and assumptions determined above. The discount rate used in the present value of future cash flows described above will not reflect any credit deterioration by the Ceding Company since the Effective Date of this Agreement. If the projected Termination Value Agreement termination value is positive, the absolute value shall be paid as a Recapture Charge to the Reinsurer by the Ceding Company. Payment of such amount will be made within thirty (30) days of receipt of the calculation. The terminal accounting date will be the effective date of termination pursuant to this Agreement.

RECAPTURE CHARGE. In Should the event this Agreement Company choose to exercise its right to recapture based on (i) the Recapture Triggering Event described in Article V, section 1(c) above where the inability of the Company to receive Reserve Credit is terminated for any reason other than the Reinsurer’s loss of its licensing or accreditation status, or (ii) the Recapture Triggering Event described in accordance with Paragraphs 3 and 4 Article V, section 1(d) above, or Paragraph 6 below, the Company and the Reinsurer shall calculate a Termination Value recapture charge which shall be calculated determined as the present value, to be not less than zero, of all cash flows (premiums and any other amounts to be paid to the Reinsurer by the Company less claims and allowances and any other amounts to be paid by the Reinsurer to the Company) representing present and future obligations under the Agreement. The calculation will, as accurately as possible, approximate the economic results of the Agreement, using current best estimate assumptions appropriate at the time of recapture for valuing the business to be recaptured, considering at least the following elements: i) historic experience of the underlying business; ii) discount rates consistent with then-current market conditions; iii) then-current assumptions of mortality and future mortality improvement utilized by the reinsurance market in the U.S.; and iv) reasonable then-current assumptions with respect to lapse and other decrements. The Company and the Reinsurer will exchange the results of these calculations and attempt in good faith by to come to agreement on the Reinsurer as of the effective date of termination according to "best practices" that are appropriate to valuing variable annuities and related cash flows and consistent with the terms of this Agreement. The Ceding Company shall have recapture charge amount within sixty (60) calendar days to either accept of exchanging the Termination Value as calculated or raise objections. The parties shall cooperate with each other in order to resolve any disagreement with respect to the Termination Valuecalculations. If the parties cannot mutually agree on are unable to resolve the Termination Valuedifferences in their calculations during such period of time, then and if the calculation will be submitted Company wishes to proceed to recapture under this section, the Company may proceed to have the evaluations reviewed by a nationally recognized, recognized independent actuarial firm or the actuarial group of a nationally recognized, independent recognized accounting firm agreed upon and appointed by the parties. This review by the independent actuarial firm shall assess which one of the two parties’ results is the more reasonable calculation in light of the evidence provided by both parties in support of their calculations. Within thirty (hereinafter 30) days after the "Actuarial Firm")commencement of this review process, that is mutually acceptable the independent actuarial firm shall pick one and only one of the calculations from the two parties and this result shall be the final and binding on both parties. No appeal or other action shall be taken in connection therewith, including, without limitation, by reference to the parties for determination of a Termination Value which is reasonably consistent with the terms other arbitral provisions of this Agreement. If the parties cannot reach agreement as to the Actuarial Firm, then such appointment will be decided by the President of the Society of Actuaries. The decision of the Actuarial Firm with respect to the Termination Value will be final and binding upon the parties. The parties will share equally in the costs cost of the actuarial firm’s fees and expenses, if any, incurred by the Actuarial Firm and the Society of Actuaries. It is recognized and acknowledged by both parties that "best practices" for valuing cash flows linked to variable annuities include: i) commencing with seriatim in force data as of the effective date of termination; ii) fixing actuarial assumptions such as lapse, mortality, mortality improvement, utilization, etc. within a range deemed consistent with market standards; iii) determining market inputs for interest rates, implied volatilities, and other market inputs; and iv) valuing the present value of all the future cash flows using the inputs and assumptions determined above. The discount rate used in the present value of future cash flows described above will not reflect any credit deterioration by the Ceding Company since the Effective Date of this Agreement. If the projected Termination Value recapture charge is positivegreater than zero, the absolute value shall be paid as a Recapture Charge to Company will pay the Reinsurer by the Ceding Company. Payment of such amount will be made within thirty (30) days of receipt agreement by the parties or selection by the actuarial firm of the calculation. The terminal accounting date will be the effective date of termination pursuant to this Agreementrecapture charge amount.