Common use of RECAPTURE OF REINSURANCE Clause in Contracts

RECAPTURE OF REINSURANCE. In the event the Ceding Company increases its limits of retention, it may reduce all reinsurance effected under this Agreement by giving written notice to the Pool of its desire to initiate a recapture program, subject to the following restrictions: 1. A mutually agreed-to beginning date of recapture shall be established. This beginning date of recapture may be any date on or following the date of notification by the Ceding Company of its intention to initiate a recapture program. 2. Reduction of reinsurance shall take effect on the later of (i) the anniversary of such reinsurance on or next following the beginning date of recapture and (ii) the minimum in force period as shown in Exhibit B for the plan or plans reinsured. However, reinsurance of additional benefits, such as Disability effected under a Life cession will be eligible for recapture as of the date the Life reinsurance based on the Ceding Company's same policy is eligible for recapture regardless of the beginning effective date of such benefits. 3. No reduction may be made in the reinsurance on any individual policy unless the Ceding Company retained its applicable limit of retention on the life at the time of issue. For purposes of recapture, if the Ceding Company's previous retention for a particular age or mortality classification was zero and a subsequent retention change increases the retention for that age or classification, the Ceding Company will be considered to have kept its maximum retention at issue. 4. Reduction in reinsurance will be for an amount which, when added to the proportionate reduction of recapturable reinsurance with other reinsurers on the same life, will increase the Ceding Company's retention to its new limit of retention for the age of issue and rating of the last policy issued on the life. 5. If any reduction is made in reinsurance than all recapturable reinsurance effected under this Agreement must be similarly reduced. If the Ceding Company overlooks any reduction or termination of reinsurance, subsequent acceptance of reinsurance premiums by the Pool shall not create a liability of the Pool except for refund of the unearned reinsurance premiums received. If there is in force reinsurance on policies or amounts issued under a Guaranteed Insurability Option, the Ceding Company may elect to include these policies or amounts in any particular recapture program. However, if the election is applied to any single in force Option Policy, it must be applied to all in force Option Policies to the same extend as it provided in the above restrictions.

RECAPTURE OF REINSURANCE. In the event the Ceding Company increases its limits of retention, it may reduce all reinsurance effected under this Agreement by giving written notice to the Pool of its desire to initiate a recapture program, subject to the following restrictions: 1. A mutually agreed-to beginning date of recapture shall be established. This beginning date of recapture may be any date on or following the date of notification by the Ceding Company of its intention to initiate a recapture program. 2. Reduction of reinsurance shall take effect on the later of (i) the anniversary of such reinsurance on or next following the beginning date of recapture and (ii) the minimum in force period as shown in Exhibit B for the plan or plans reinsured. However, reinsurance of additional benefits, such as Disability effected under a Life cession will be eligible for recapture as of the date the Life reinsurance based on the Ceding Company's same policy is eligible for recapture regardless of the beginning effective date of such benefits. 3. No reduction may be made in the reinsurance on any individual policy unless the Ceding Company retained its applicable limit of retention on the life at the time of issue. For purposes of recapture, if the Ceding Company's previous retention for a particular age or mortality classification was zero and a subsequent retention change increases the retention for that age or classification, the Ceding Company will be considered to have kept its maximum retention at issue. 4. Reduction in reinsurance will be for an amount which, when added to the proportionate reduction of recapturable reinsurance with other reinsurers on the same life, will increase the Ceding Company's retention to its new limit of retention for the age of issue and rating of the last policy issued on the life. 5. If any reduction is made in reinsurance than then all recapturable reinsurance effected under this Agreement must be similarly reduced. If the Ceding Company overlooks any reduction or termination of reinsurance, subsequent acceptance of reinsurance premiums by the Pool shall not create a liability of the Pool except for refund of the unearned reinsurance premiums received. If there is in force reinsurance on policies or amounts issued under a Guaranteed Insurability Option, the Ceding Company may elect to include these policies or amounts in any particular recapture program. However, if the election is applied to any single in force Option Policy, it must be applied to all in force Option Policies to the same extend extent as it provided in the above restrictions.

RECAPTURE OF REINSURANCE. In the event Whenever the Ceding Company increases its maximum limits of retentionretention over the Ceding Company’s Maximum Limits of Retention set forth in Exhibit 2, it may reduce all reinsurance effected under this Agreement by giving written notice to the Pool of its desire to initiate a recapture program, subject to the following restrictions: 1. A mutually agreed-to beginning date of recapture shall be established. This beginning date of recapture may be any date on or following the date of notification by the Ceding Company of has the option to recapture certain risk amounts. The Ceding Company may only recapture on a risk where it retained less than its intention to initiate a recapture program. 2. Reduction of reinsurance shall take effect on the later of (i) the anniversary of such reinsurance on or next following the beginning date of recapture and (ii) the minimum in force period as shown quota share percentage set forth in Exhibit B for 1, at issue, because retaining its full quota share percentage at the plan or plans reinsured. However, reinsurance time of additional benefits, such as Disability effected under a Life cession will be eligible for recapture as of the date the Life reinsurance based on issue would have exceeded the Ceding Company's same policy is eligible for recapture regardless of the beginning effective date of such benefits. 3. No reduction may be made in the reinsurance on any individual policy unless the Ceding Company retained its applicable limit ’s maximum limits of retention on the life at the time of issue. For purposes The amount of reinsurance that may be recaptured shall equal the difference between the amount originally retained and the current normal maximum retention limit, but not to exceed the original quota share percentage, set forth in Exhibit 1, at the time of issue. Note: An increase in quota share will not effect recapture. The Reinsurer shall permit the Ceding Company to recapture all or part of such existing reinsurance cessions provided: (a) The Ceding Company must give the Reinsurer written notification of its intent to recapture within 90 days of the effective date of such increase in retention. (b) The increase in retention must not be the result of an acquisition or merger by or with another company. (c) It is understood that the Ceding Company will not re-cede the business once it has been recaptured for a period of at least [redacted]. (d) The reduction of reinsurance on affected policies will become effective on the policy anniversary date immediately following the notice of election to recapture; however, if no reduction will be made until a policy has been in force for at least [redacted] for permanent plans, unless the parties to this Agreement agree upon a shorter period. (e) If any reinsured policy is recaptured, all reinsured policies eligible for recapture under the provisions of this Section must be recaptured up to the Ceding Company's previous ’s new maximum retention limits in a consistent manner and the Ceding Company must increase its total amount of insurance on each reinsured life. The Ceding Company may not revoke its election to recapture for a particular age or mortality classification was zero and a subsequent retention change increases policies becoming eligible at future anniversaries. (f) If portions of the retention for that age or classificationreinsured policy have been ceded to more than one reinsurer, the Ceding Company will be considered to have kept its must allocate the reduction in reinsurance so that the amount reinsured by each reinsurer after the reduction is proportionately the same as if the new maximum dollar retention limits had been in effect at the time of issue. 4(g) The amount of reinsurance eligible for recapture is based on the current amount at risk as of the date of recapture. Reduction in For a policy issued as a result of a conversion, the recapture terms of the reinsurance agreement covering the original policy will apply, and the duration period for the purpose of recapture will be for an amount which, when added to measured from the proportionate reduction effective date of recapturable the reinsurance with other reinsurers on the same life, will increase the Ceding Company's retention to its new limit of retention for the age of issue and rating of the last policy issued on the lifeoriginal policy. 5. If (h) After the effective date of recapture, the Reinsurer will not be liable for any reduction is made in reinsurance than all recapturable reinsurance effected under this Agreement must be similarly reduced. If reinsured policies or portions of such reinsured policies eligible for recapture that the Ceding Company overlooks any reduction or termination of reinsurance, subsequent acceptance of reinsurance premiums by the Pool shall not create a liability of the Pool except has overlooked. (i) The terms and conditions for refund of the unearned reinsurance premiums received. If there is in force reinsurance on policies or amounts issued under a Guaranteed Insurability Option, the Ceding Company may elect to include these policies or amounts recapture reinsured policies, as a result of the insolvency of the Reinsurer, are set forth in any particular Section 27. (j) No recapture program. However, will be permitted if the election is applied Ceding Company has either obtained or increased stop loss reinsurance coverage as justification for the increase in retention limits. (k) The Ceding Company shall recapture all cessions on the first policy anniversary following the reduction of the amount at risk to any single less than the Trivial Amount set forth in force Option PolicyExhibit 1, it must be applied Reinsurance Specifications. The following shall not apply to all in force Option Policies cessions recaptured due to falling below a Trivial Amount if provided for under this Agreement. Upon recapture, the Reinsurer shall transfer to the same extend Ceding Company an amount equal to the present value of future net cash flows due to the Reinsurer on the cessions to be recaptured (“Regular Recapture Amount”). In the event that the Regular Recapture Amount is positive, the transfer shall be made from the Ceding Company to the Reinsurer. The Regular Recapture Amount shall be calculated by the Reinsurer as it provided of the effective date of recapture using assumptions for mortality, expenses, lapses, and interest which were in effect as of the above restrictionseffective date of this Agreement. These assumptions shall exclude margins for adverse deviations. The Reinsurer shall notify the Ceding Company of the Regular Recapture Amount after which the Ceding Company shall have 60 days to agree to the recapture amount. Failure of the Ceding Company to respond to the Reinsurer within 60 days of being notified of the Regular Recapture Amount by the Reinsurer will result in no regular recapture.

RECAPTURE OF REINSURANCE. In the event Whenever the Ceding Company increases its maximum limits of retention, it may reduce all reinsurance effected under this Agreement by giving written notice to the Pool of its desire to initiate a recapture program, subject to the following restrictions: 1. A mutually agreed-to beginning date of recapture shall be established. This beginning date of recapture may be any date on or following the date of notification by the Ceding Company of its intention to initiate a recapture program. 2. Reduction of reinsurance shall take effect on the later of (i) the anniversary of such reinsurance on or next following the beginning date of recapture and (ii) the minimum in force period as shown in Exhibit B for the plan or plans reinsured. However, reinsurance of additional benefits, such as Disability effected under a Life cession will be eligible for recapture as of the date the Life reinsurance based on retention over the Ceding Company's same policy is eligible Maximum Limits of Retention set forth in Exhibit 2, the Ceding Company has the option to recapture certain risk amounts. If the Ceding Company has maintained its maximum stated retention (not a special retention limit) for the plan and the insured's issue age, sex, and mortality classification, it may apply its increased retention limits to reduce the amount of reinsurance in force as follows: The Reinsurer shall permit the Ceding Company to recapture regardless all or part of such existing reinsurance cessions provided: (a) The Ceding Company must give the Reinsurer written notification of its intent to recapture within ninety (90) days of the beginning effective date of such benefitsincrease in retention. 3. No reduction may (b) The increase in retention must not be made in the reinsurance on any individual policy unless result of an acquisition or merger by or with another company. (c) It is understood that the Ceding Company retained its applicable limit will not re-cede the business once it has been recaptured for a period of retention at least 3 years. (d) The reduction of reinsurance on affected policies will become effective on the life policy anniversary date immediately following the notice of election to recapture; however, no reduction will be made until a policy has been in force for at least 20 years. (e) If any reinsured policy is recaptured, all reinsured policies eligible for recapture under the provisions of this Section must be recaptured up to the Ceding Company's new maximum retention limits in a consistent manner and the Ceding Company must increase its total amount of insurance on each reinsured life. The Ceding Company may not revoke its election to recapture for policies becoming eligible at future anniversaries. (f) If portions of the reinsured policy have been ceded to more than one reinsurer, the Ceding Company must allocate the reduction in reinsurance so that the amount reinsured by each reinsurer after the reduction is proportionately the same as if the new maximum dollar retention limits had been in effect at the time of issue. (g) The amount of reinsurance eligible for recapture is based on the current amount at risk as of the date of recapture. For purposes a policy issued as a result of a conversion, the recapture terms of the reinsurance agreement covering the original policy will apply, and the duration period for the purpose of recapture will be measured from the effective date of the reinsurance on the original policy. (h) After the effective date of recapture, the Reinsurer will not be liable for any reinsured policies or portions of such reinsured policies eligible for recapture that the Ceding Company has overlooked. (i) The terms and conditions for the Ceding Company to recapture reinsured policies, as a result of the insolvency of the Reinsurer, are set forth in Section 30. (j) No recapture will be permitted if the Ceding Company's previous retention for a particular age Company has either obtained or mortality classification was zero and a subsequent retention change increases the retention for that age or classification, the Ceding Company will be considered to have kept its maximum retention at issue. 4. Reduction in increased stop loss reinsurance will be for an amount which, when added to the proportionate reduction of recapturable reinsurance with other reinsurers on the same life, will increase the Ceding Company's retention to its new limit of retention coverage as justification for the age of issue and rating of the last policy issued on the lifeincrease in retention limits. 5. If any reduction is made in reinsurance than all recapturable reinsurance effected under this Agreement must be similarly reduced. If the Ceding Company overlooks any reduction or termination of reinsurance, subsequent acceptance of reinsurance premiums by the Pool shall not create a liability of the Pool except for refund of the unearned reinsurance premiums received. If there is in force reinsurance on policies or amounts issued under a Guaranteed Insurability Option, the Ceding Company may elect to include these policies or amounts in any particular recapture program. However, if the election is applied to any single in force Option Policy, it must be applied to all in force Option Policies to the same extend as it provided in the above restrictions.

RECAPTURE OF REINSURANCE. In the event the Ceding Company increases has increased its limits of retention, it may reduce all reinsurance effected under this Agreement by giving written notice to the Pool AUL of its desire to initiate a recapture program, subject to the following restrictions: 1. A mutually agreed-agreed to beginning date of recapture shall will be established. This The beginning date of recapture may be any date on or following the date of notification by the Ceding Company of its intention to initiate a recapture program. 2. Reduction of reinsurance shall will take effect on the later of (i) the anniversary of such reinsurance on or next following the beginning date of recapture and (ii) the minimum anniversary such reinsurance meets the in force period as shown requirements set out in Exhibit B for the plan or plans reinsured. B. However, reinsurance of additional benefits, such as Disability effected under a Life cession benefits will be eligible for recapture as of the date the corresponding Life reinsurance based on the Ceding Company's same policy is eligible for recapture recapture, regardless of the beginning effective date of such benefits. If the additional benefits were ceded without any accompanying life reinsurance, then recapture will take place on the policy anniversary on or next following the beginning date of recapture. 3. No reduction may be made in the reinsurance on any individual policy unless the Ceding Company retained its applicable limit of retention on the life at the time of issue. For purposes of recapture, if the Ceding Company's previous retention for a particular age or mortality classification was zero and a subsequent retention change increases the retention for that age or classification, the Ceding Company will be considered to have kept its maximum retention at issue. 4. Reduction in reinsurance will be for an amount which, when added to the proportionate reduction of recapturable reinsurance with other reinsurers on the same life, will increase the Ceding Company's ’s retention to its new limit of retention for the age of issue and rating of the last policy issued on the life. 5. If any reduction is made in reinsurance than then all recapturable reinsurance effected under this Agreement must be similarly reduced. 6. If the risk, at the time of recapture is an active claim for waiver of premium disability, the life risk will be considered eligible for recapture. The waiver of premium reinsurance will remain in force until such time as the policy is returned to a premium paying status, at which time it, too, will be recaptured. If the Ceding Company overlooks any reduction or termination of reinsurance, subsequent acceptance of reinsurance premiums by the Pool shall AUL will not create a liability of the Pool to AUL except for the refund of the unearned reinsurance premiums received. If there is in force reinsurance on policies or amounts issued under a Guaranteed Insurability Option, the Ceding Company may elect to include these policies or amounts in any particular recapture program. However, if the election is applied to any single in force Option Policy, it must be applied to all in force Option Policies to the same extend extent as it is provided in the above restrictions.