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 Should the Reinsurer fail to hold and maintain all licenses and authorizations required under Applicable Law to enable the Ceding Company will to 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 EventCredit, the Reinsurer shall establish on behalf shall, at its own expense, take all steps (including the posting of the Ceding Company such trust accounts, letters of credit, premiums withheld by the Ceding Company, credit or a combination thereof other acceptable security) necessary so as may be required by applicable law in order to permit the Ceding Company to obtain credit for Reserve Credit. In such reinsuranceevent and at the request of the Reinsurer, the Ceding Company shall cooperate in good faith to promptly amend this Agreement and the Trust Agreement, or execute such other documents and papers, to include such additional or alternate provisions to the extent necessary to enable the Ceding Company to receive Reserve Credit. The Reinsurer will have the option of determining the method of funding to be utilized so long as shall promptly notify the Ceding Company is satisfied of any event or change or condition that results in a loss of Reserve Credit. 28 <Page> SECTION 4.9 ACTIONS FOLLOWING REINVESTMENT EVENT, TRIGGERING EVENT OR RESERVE CREDIT EVENT. (a) Upon the occurrence of a Reinvestment Event, the Reinsurer shall deposit Eligible Assets in the Trust Account in accordance with the terms of the Trust Agreement within five (5) Business Days of the occurrence of such Reinvestment Event, which such Eligible Assets shall be valued at their applicable Fair Market Value or Statutory Book Value in accordance with the provisions of Section 4.4 and shall be sufficient to ensure that such method will provide such statutory financial statement creditFair Market Value or Statutory Book Value of the assets held in the Trust Account equals the Required Balance. The (b) Upon the occurrence of a Triggering Event, including for the avoidance of doubt, a Triggering Event that occurs following a Trust Withdrawal Event, the Reinsurer also agrees to take any additional action shall deposit Eligible Assets, as may be required so as to comply necessary, in the Trust Account in accordance with the requirements imposed by the insurance laws and regulations terms of the State Trust Agreement within five (5) Business Days of Minnesota and the applicable RBC Reporting Deadline related to such Triggering Event, sufficient to ensure that the Fair Market Value of any other State or jurisdiction having jurisdiction over the Ceding Company assets held in order to give the Ceding Company at all times full statutory financial statement credit Trust Account equals the Required Balance. (c) Upon the occurrence of a Reserve Credit Event, including for the reinsurance being provided under this Agreementavoidance of doubt, including by amending this Agreement to add required credit for reinsurance provisions. If a Reserve Credit Event is not cured and that occurs following a Trust Withdrawal Event, the Reinsurer fails to establish or maintain collateral shall deposit Eligible Assets, as set forth abovenecessary, then in the Ceding Company may recapture the business ceded under this Agreement as set forth Trust Account in Article 11. In that event, the Ceding Company and the Reinsurer will negotiate in good faith accordance with the terms of a mutually agreed recapture the Trust Agreement within five (5) Business Days of the reinsurance provided hereunderReserve Credit Event, including payment sufficient to ensure that the Fair Market Value of the appropriate amount of benefit reserves to be assets held in respect of the reinsured amounts being recaptured, determined as of Trust Account equals 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.Required Balance. 29 <Page> SECTION 4.10

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.