Common use of RESERVE CREDIT Clause in Contracts

RESERVE CREDIT. The parties intend that the Ceding Company will receive statutory reserve credit in its state of domicile for reinsurance provided under this Agreement. The parties agree to use reasonable efforts to ensure that such reserve credit will remain available to the Ceding Company. If the Ceding Company loses statutory reserve credit in part or in total due to a change in law or regulation (or a change in the interpretation or application of existing law or regulation by a regulator) or due to a failure by the Reinsurer to maintain in effect a required license or accreditation in the Ceding Company’s state of domicile (hereinafter a “Reserve Credit Event”), then the parties will take the steps specified below. The parties will provide prompt notice of the occurrence of any Reserve Credit Event. Upon the occurrence of any Reserve. Credit Event, the Reinsurer shall establish on behalf of the Ceding Company such trust accounts, letters of credit, premiums withheld by the Ceding Company, or a combination thereof as may be required by applicable law in order to permit the Ceding Company to obtain credit for such reinsurance. The Reinsurer will have the option of determining the method of funding to be utilized so long as the Ceding Company is satisfied that such method will provide such statutory financial statement credit. The Reinsurer also agrees to take any additional action as may be required so as to comply with the requirements imposed by the insurance laws and regulations of the State of Minnesota and of any other State or jurisdiction having jurisdiction over the Ceding Company in order to give the Ceding Company at all times full statutory financial statement credit for the reinsurance being provided under this Agreement, including by amending this Agreement to add required credit for reinsurance provisions. If a Reserve Credit Event is not cured and the Reinsurer fails to establish or maintain collateral as set forth above, then the Ceding Company may recapture the business ceded under this Agreement as set forth in Article 11. In that event, the Ceding Company and the Reinsurer will negotiate in good faith the terms of a mutually agreed recapture of the reinsurance provided hereunder, including payment of the appropriate amount of benefit reserves to be held in respect of the reinsured amounts being recaptured, determined as of the effective date of the recapture, based on U.S. generally accepted accounting principles (“GAAP”) consistent with FASB Statement 60 computed using the Reinsurer’s original pricing assumptions without provision for adverse deviation, less any amount of unamortized deferred acquisition cost assets related thereto and excluding any provisions for adverse deviations or similar deficiency or special reserves.

RESERVE CREDIT. The parties intend that the Ceding Company will receive statutory reserve credit in its state of domicile for reinsurance provided under this Agreement. The parties agree to use reasonable efforts to ensure that such reserve credit will remain available to the Ceding Company. If the Ceding Company loses statutory reserve credit in part or in total due to a change in law or regulation (or a change in the interpretation or application of existing law or regulation by a regulator) or due to a failure by the Reinsurer to maintain in effect a required license or accreditation in the Ceding Company’s state of domicile (hereinafter a “Reserve Credit Event”), then the parties will take the steps specified below. The parties will provide prompt notice of the occurrence of any Reserve Credit Event. Upon the occurrence of any Reserve. Reserve Credit Event, the Reinsurer shall establish on behalf of the Ceding Company such trust accounts, letters of credit, premiums withheld by the Ceding Company, or a combination thereof as may be required by applicable law in order to permit the Ceding Company to obtain credit for such reinsurance. The Reinsurer will have the option of determining the method of funding to be utilized so long as the Ceding Company is satisfied that such method will provide such statutory financial statement credit. The Reinsurer also agrees to take any additional action as may be reasonably required so as to comply comply, with the requirements imposed by the insurance laws and regulations of the State of Minnesota and of any other State or jurisdiction having jurisdiction over the Ceding Company in order to give the Ceding Company at all times full statutory financial statement credit for the reinsurance being provided under this Agreement, pursuant to Section 15.2 above, including by amending working in good faith to amend this Agreement to add reasonably required credit for reinsurance provisions. If a Reserve Credit Event is not cured within ninety (90) days and the Reinsurer fails to establish or maintain collateral as set forth above, then the Ceding Company may recapture the business ceded under this Agreement as set forth in Article 11Agreement. In that event, the Ceding Company and the Reinsurer will negotiate in good faith the terms of a mutually agreed recapture of the reinsurance provided hereunder, including such recapture to include the payment by the Reinsurer to the Ceding Company of the appropriate unearned reinsurance premiums (if any) and the amount of benefit reserves to be held in respect of the reinsured amounts being recaptured, determined any pending undisputed claims and claims incurred but not reported as of the effective date of the recapture that is reported to the Reinsurer within one hundred eighty (180) days of the effective date of the recapture, based on U.S. generally accepted accounting principles (“GAAP”) consistent with FASB Statement 60 computed using the Reinsurer’s original pricing assumptions without provision for adverse deviation, less any amount of unamortized deferred acquisition cost assets related thereto and excluding any provisions for adverse deviations or similar deficiency or special reserves.

RESERVE CREDIT. The parties intend that the Ceding Company will receive statutory reserve credit in its state of domicile for reinsurance provided under this Agreement. The parties agree to use reasonable efforts to ensure that such reserve credit will remain available to the Ceding Company. If the Ceding Company loses statutory reserve credit in part or in total due to a change in law or regulation (or a change in the interpretation or application of existing law or regulation by a regulator) or due to a failure by the Reinsurer to maintain in effect a required license or accreditation in the Ceding Company’s state of domicile (hereinafter a “Reserve Credit Event”), then the parties will take the steps specified below. The parties will provide prompt notice of the occurrence of any Reserve Credit Event. Upon the occurrence of any Reserve. Reserve Credit Event, the Reinsurer shall establish on behalf of the Ceding Company such trust accounts, letters of credit, premiums withheld by the Ceding Company, or a combination thereof as may be required or permitted by applicable law in order to permit the Ceding Company to obtain credit for such reinsurance. The Reinsurer will have the option of determining the method of funding to be utilized so long as the Ceding Company is satisfied that such method will provide such statutory financial statement credit. The As an alternative to the measures described directly above, the Reinsurer also agrees may: i. Cure the Reserve Credit Event by modifying the settlement terms of this Agreement during the Reserve Credit Event to take any additional action as may be required so as to comply with provide for monthly settlements in arrears during the requirements imposed by the insurance laws and regulations pendency of the State Reserve Credit Event; or ii. Propose the assignment and novation of Minnesota its position as reinsurer under this Agreement to another reinsurer within the reinsurer’s group and of any other State or jurisdiction having jurisdiction over transfer the reinsurer’s obligations under this Agreement to such reinsurer, provided the Ceding Company is in order agreement that transfer to give the other reinsurer would allow the Ceding Company at all times to obtain full statutory financial statement reserve credit for the reinsurance being provided under this Agreement, including by amending this Agreement to add required credit for reinsurance provisionsof the policies reinsured hereunder. If a Reserve Credit Event is not cured and the Reinsurer fails to establish or maintain collateral as set forth above, then the Ceding Company may recapture the business ceded under this Agreement as set forth in Article 11Agreement. In that event, if the Ceding Company and elects to recapture reinsurance under this Article, unearned premiums, net of outstanding balances, will be paid by the party with the positive balance. In the event business ceded under this Agreement becomes eligible for recapture pursuant to the provisions of this Article, written notice of the Ceding Company’s intent to recapture will be given to the Reinsurer will negotiate in good faith the terms of a mutually agreed recapture within ninety (90) days of the reinsurance business first becoming recapture eligible. Recapture will become effective no earlier than the first date on which the business became eligible for recapture and no later than one hundred twenty (120) days after written notice to recapture is provided hereunder, including payment of the appropriate amount of benefit reserves to be held in respect of the reinsured amounts being recaptured, determined as of the effective date of the recapture, based on U.S. generally accepted accounting principles (“GAAP”) consistent with FASB Statement 60 computed using the Reinsurer’s original pricing assumptions without provision for adverse deviation, less any amount of unamortized deferred acquisition cost assets related thereto and excluding any provisions for adverse deviations or similar deficiency or special reserves.

RESERVE CREDIT. The parties intend that the Ceding Company will receive statutory reserve credit in its state of domicile for reinsurance provided under this Agreement. The parties agree to use reasonable efforts to ensure that such reserve credit will remain available to the Ceding Company. If the Ceding Company loses statutory reserve credit in part or in total due to a change in law or regulation (or a change in the interpretation or application of existing law or regulation by a regulator) or due to a failure by the Reinsurer to maintain in effect a required license or accreditation in the Ceding Company’s state of domicile (hereinafter a “Reserve Credit Event”), then the parties will take the steps specified below. The parties will provide prompt notice of the occurrence of any Reserve Credit Event. Upon notification of the occurrence of any Reserve. Reserve Credit Event, the Reinsurer shall establish on behalf of the Ceding Company such trust accounts, letters of credit, premiums withheld by the Ceding Company, or a combination thereof as may be required by applicable law in order to permit the Ceding Company to obtain credit for such reinsurance. The Reinsurer will have the option right to cure the Reserve Credit Event in a manner that eliminates the need for or enables the Company to continue to receive statutory reserve credit in its state of determining the method of funding to be utilized so long as the Ceding Company is satisfied that such method will provide such statutory financial statement credit. The Reinsurer also agrees to take any additional action as may be required so as to comply with the requirements imposed by the insurance laws and regulations of the State of Minnesota and of any other State or jurisdiction having jurisdiction over the Ceding Company in order to give the Ceding Company at all times full statutory financial statement credit domicile for the reinsurance being ceded under this Agreement. The Company will not unreasonably deny any cure proposal presented by the Reinsurer. Without limiting potential cure options, the Reinsurer’s cure may be implemented by: a) Modifying the settlement terms of this Agreement during the Reserve Credit Event to provide for monthly settlements in arrears during the pendency of the Reserve Credit Event; or b) Modifying the settlement terms of this Agreement during the Reserve Credit Event to provide for settlements on a funds withheld basis during the pendency of the Reserve Credit Event; or c) Transferring the reinsurance provided under this Agreement, including Agreement to another reinsurer by amending assignment of this Agreement or otherwise, provided that the alternative reinsurer has an A.M. Best rating of (A) or better at the time of the transfer and that the alternative reinsurer accepts transfer by assignment of this Agreement (and all amendments) without any material modification to add the substantive terms of the Agreement; or d) A combination of the foregoing or comparable approaches. If the Company loses statutory reserve credit in part or in total due to a change in law or regulation (or a change in the interpretation or application of existing law or regulation by a regulator) and the Reserve Credit Event is not cured as set forth above within 120 days of notice of a Reserve Credit Event, then the Reinsurer will establish and maintain collateral. However, the cost of establishing and maintaining that collateral will be shared equally by the Company and the Reinsurer. If the Company loses statutory reserve credit in part or in total due to a failure by the Reinsurer to maintain in effect a required license or accreditation in the Company’s state of domicile and the Reserve Credit Event is not cured as set forth above within 45 days of notice of a Reserve Credit Event, then the Reinsurer will establish and maintain collateral permitting the Company to receive statutory reserve credit in its state of domicile for reinsurance provisionsprovided under this Agreement during the pendency of the Reserve Credit Event. However, the cost of establishing and maintaining that collateral will be borne solely by the Reinsurer. If a Reserve Credit Event is not cured and the Reinsurer fails to establish or maintain collateral as set forth above, then the Ceding Company may recapture the business ceded under this Agreement as set forth in Article 11Agreement. In that event, the Ceding Company and the Reinsurer will negotiate in good faith the terms of a mutually agreed recapture of the reinsurance provided hereunder, including payment of the appropriate amount of benefit reserves to be held in respect of the reinsured amounts being recaptured, determined as of the effective date of the recapture, based on U.S. generally accepted accounting principles (“GAAP”) consistent with FASB Statement 60 Accounting Standard Codification Topic 944, Financial Services - Insurance computed using the Reinsurer’s original pricing assumptions without provision for adverse deviation, less any amount of unamortized deferred acquisition cost assets related thereto and excluding any provisions for adverse deviations or similar deficiency or special reserves.

RESERVE CREDIT. The parties intend that the Ceding Company will receive statutory reserve credit in its state of domicile for reinsurance provided under this Agreement. The parties agree to use reasonable efforts to ensure that such reserve credit will remain available to the Ceding Company. If the Ceding Company loses statutory reserve credit in part or in total due to a change in law or regulation (or a change in the interpretation or application of existing law or regulation by a regulator) or due to a failure by the Reinsurer to maintain in effect a required license or accreditation in the Ceding Company’s state of domicile (hereinafter a “Reserve Credit Event”), then the parties will take the steps specified below. The parties will provide prompt notice of the occurrence of any Reserve Credit Event. Upon the occurrence of any Reserve. Reserve Credit Event, the Reinsurer shall establish on behalf of the Ceding Company such trust accounts, letters of credit, premiums withheld by the Ceding Company, or a combination thereof as may be required by applicable law in order to permit the Ceding Company to obtain credit for such reinsurance. The Reinsurer will have the option of determining the method of funding to be utilized so long as the Ceding Company is satisfied that such method will provide such statutory financial statement credit. The Reinsurer also agrees to take any additional action as may be required so as to comply with the requirements imposed by the insurance laws and regulations of the State of Minnesota and of any other State or jurisdiction having jurisdiction over the Ceding Company in order to give the Ceding Company at all times full statutory financial statement credit for the reinsurance being provided under this Agreement, including by amending this Agreement to add required credit for reinsurance provisions. If a Reserve Credit Event is not cured within 90 days and the Reinsurer fails to establish or maintain collateral as set forth above, then the Ceding Company may recapture the business ceded under this Agreement as set forth in Article 11Agreement. In that event, the Ceding Company and the Reinsurer will negotiate in good faith the terms of a mutually agreed recapture of the reinsurance provided hereunder, including payment of the appropriate amount of benefit reserves to be held in respect of the reinsured amounts being recaptured, determined as of the effective date of the recapture, based on U.S. generally accepted accounting principles (“GAAP”) consistent with FASB Statement 60 computed using the Reinsurer’s original pricing assumptions without provision for adverse deviation, less any amount of unamortized deferred acquisition cost assets related thereto and excluding any provisions for adverse deviations or similar deficiency or special reserves.