REINSURANCE AGREEMENT #6714-1
(Automatic YRT Universal Life Bulk)
(referred to as the "Agreement")
between
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
(Worcester, Massachusetts)
(hereinafter referred to as the "Company")
and
LIFE REASSURANCE CORPORATION OF AMERICA
(A MEMBER OF THE SWISS RE GROUP)
(Stamford, Connecticut)
(hereinafter referred to as "Life Re")
Effective: January 1, 2000
Life Reassurance Corporation of America
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
TABLE OF CONTENTS
PREAMBLE 1
ARTICLE I - METHOD OF REINSURANCE AND INSURANCE 1
1. Effective Date 1
2. Method 1
3. Amounts 1
4. Minimum Amounts 2
ARTICLE II - AUTOMATIC REINSURANCE 2
1. Insurance 2
2. Coverages 3
3. Jumbo Risk 3
4. Waiver Acceptance and Participation Limits 3
5. Regular Limits of Retention 4
ARTICLE III - FACULTATIVE REINSURANCE 4
ARTICLE IV - PROCEDURES FOR REPORTING 4
1. General Information 4
2. Self-Administered Reporting 5
ARTICLE V - PREMIUMS 7
1. Life Insurance and Waiver 7
2. Premium Taxes 7
3. Payments 7
4. Nonpayment of Reinsurance Premiums 7
5. Interest on Delinquent Payments 8
6. Misstatements 8
ARTICLE VI - CLAIMS 8
1. Notice 8
2. Contested Claims 9
3. Expenses 9
4. Misstatements 9
5. Payment 10
6. Assistance and Advice 10
ARTICLE VII - REDUCTIONS, REINSTATEMENTS & CHANGES 10
1. Reductions and Terminations 10
2. Reinstatements 11
3. Nonforfeiture Benefits 11
4. Contractual Conversions and Exchanges 12
5. Non Contractual Exchanges 12
6. Program of Internal Replacement 12
ARTICLE VIII - DAC TAX 12
ARTICLE IX - RECAPTURE 13
1. Standards for Recapture 13
2. Method of Recapture 13
ARTICLE X - INSOLVENCY 14
ARTICLE XI - ARBITRATION 14
ARTICLE XII - GENERAL PROVISIONS 15
1. Reinsurer's Right of Notice of Unusual Practices 15
2. Policy Forms and Rates 16
3. Reinsurance Conditions 16
4. Errors and Omissions 16
5. Offset 16
6. Inspection 16
7. Entire Agreement 17
8. Amendment 17
9. Counterparts 17
10. No Assignment 17
11. Binding Effect 17
12. Notices 17
ARTICLE XIII - DURATION OF AGREEMENT 19
ARTICLE XIV - EXECUTION 20
Schedule A - Retention Limits, Automatic Binding Limits, Plans Covered
Schedule B - Reporting Forms
Schedule C - Premium Rates
Schedule D - Allowances
Life Re Agreement #6714-1
ii
PREAMBLE
This Reinsurance Agreement ("Agreement") is entered into by and between
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY, a Massachusetts
insurance corporation (the "Company") and LIFE REASSURANCE CORPORATION
OF AMERICA, a Connecticut insurance corporation ("Life Re"). The
Company and Life Re mutually agree to reinsure on the terms and
conditions set forth in this Agreement. This Agreement is solely
between the Company and Life Re, and performance of the obligations of
each party under this Agreement will be rendered solely to the other
party. In no instance will anyone other than the Company or Life Re
have any rights under this Agreement.
ARTICLE I - METHOD OF REINSURANCE AND INSURANCE
1. EFFECTIVE DATE.
The reinsurance under this Agreement is effective as of JANUARY 1,
2000.
2. METHOD.
Insurance of life insurance risks ("Life Insurance") under this
Agreement and waiver of premium benefits ("Waiver") is on the yearly
renewable term ("YRT") plan for the amount at risk under the policy
reinsured. The Company will cede and Life Re will accept reinsurance
under the policies or plans set forth in Schedule A, written by the
Company on citizens of the United States, Canada, Guam or the Virgin
Islands and domiciled in the United States, Canada, Guam or the Virgin
Islands at the time of application. The policies set forth in Schedule
A that are reinsured under this Agreement are hereinafter referred to
collectively as "Reinsured Policies" and individually as a "Reinsured
Policy." Said policies will have been underwritten in accordance with
the Company's individual ordinary life underwriting rules and
practices.
3. AMOUNTS.
Life Re will reinsure a quota share percentage of each Reinsured
Policy. The percentage associated with the Reinsured is hereinafter
referred to as "Life Re's Share," and is set forth in Schedule A.
For the purpose of this Agreement, the reinsured amount at risk (R) is
calculated as follows:
(1) For Option A and C:
R = D - A - X, where
D = Death benefit times Life Re's Share
A = The Accumulation Fund Value or Cash Value, whichever
is applicable under base plan
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X = The Company's special retention as described in Schedule A
(2) For Option B:
R = D - X, where
D = Death benefit times Life Re's Share
X = The Company's special retention as described in
Schedule A
4. MINIMUM AMOUNTS.
Amounts of initial reinsurance less than $3,500 will not be ceded under
this Agreement.
ARTICLE II - AUTOMATIC REINSURANCE
1. INSURANCE.
The Company will cede and Life Re will accept automatically reinsurance
in amounts not exceeding the binding limits per life in Schedule A of
this Agreement. If the Company has more than one agreement with Life
Re, the total amount per life automatically ceded to Life Re under all
agreements combined will not exceed the automatic binding limit
available to the Company under the agreement with the highest binding
authority. Life Re will accept automatic reinsurance when (a) the
Company already has for its own account its maximum limit of retention
on the risk and for this reason alone is not retaining any portion of
the insurance applied for on a current application, and (b) in the
Company's opinion there has been no adverse change in the insurability
of the risk since the Company's last acceptance for its own retention.
A risk as defined in the following categories is not eligible for
reinsurance under this paragraph:
(a) A jumbo risk as defined in paragraph 3 below.
(b) A risk which has been sent to Life Re or any other reinsurer
for facultative underwriting consideration.
(c) Life Insurance resulting from a group conversion, where full
evidence of insurability has not been secured.
(d) Any risk which is not fully underwritten or any risk where
the Company has not followed its usual underwriting practice.
The liability of Life Re on any automatic reinsurance under this
Agreement begins and ends at the same time as that of the Company,
provided that such an automatic application shall not have been
submitted to Life Re or to any other reinsurer for facultative
underwriting consideration.
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2. COVERAGES.
Life Insurance, Waiver for an amount not greater than the corresponding
life insurance, is exclusively the coverages or risks reinsured
automatically under this Agreement. Life Re will not participate in a
unilateral enhancement of policy provisions unless agreed to in writing
prior to the granting of the enhancement. Life Insurance includes both
basic policies and term riders providing life insurance protection.
3. JUMBO RISK.
A jumbo risk is one where the papers of the Company, including all
papers that are part of the current application, indicate that the
person to be insured has or will have total insurance in force with all
companies greater than:
LIFE
All Ages $35,000,000
4. WAIVER ACCEPTANCE AND PARTICIPATION LIMITS.
Life Re's maximum acceptance limit for Waiver is $2,000,000 per life,
and the maximum participation limit for such benefits is $3,000,000 per
life.
5. REGULAR LIMITS OF RETENTION.
The Company may modify its regular limits of retention, detailed in
Schedule A, by giving thirty days' written notice to Life Re. The
amount of reinsurance to be ceded and accepted automatically after the
new limits take effect will be determined by mutual written agreement
by Life Re and the Company.
ARTICLE III - FACULTATIVE REINSURANCE
The Company may choose to submit for consideration by Life Re, a
request for any amount of reinsurance of the coverages in Article II
that the Company may require. Reinsurance may be requested for any
amount without regard for the limits of retention detailed in Schedule
A, but the Company will notify Life Re promptly of any changes in its
limits of retention.
When the Company requests facultative reinsurance, the application will
be made by submitting to Life Re a mutually agreeable form. The Company
will send to Life Re any and all information the Company has about the
risk, including without limitation, copies of the application, medical
examiners' reports, attending physicians' statement, inspection
reports, and other reports and other papers bearing on the insurability
of the risk. Promptly upon receipt of the application, Life Re will
analyze the risk and notify the Company of Life Re's decision and Life
Re's classification of the risk. If the Company elects to accept Life
Re's unconditional offer of acceptance for reinsurance of the risk, the
Company will notify Life Re within 120 days of Life Re's offer.
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The liability of Life Re on any facultative reinsurance under this
Agreement begins and ends at the same time as that of the Company,
provided that:
(a) Life Re has given the Company an unconditional offer of
acceptance after the application for reinsurance, AND
(b) the Company has notified Life Re of its acceptance of such
offer within 120 days of said offer.
ARTICLE IV - PROCEDURES FOR REPORTING
1. GENERAL INFORMATION.
Life Re will accept, on a self administered basis, reinsurance in
amounts per life up to the amounts set forth in Schedule A.
2. SELF-ADMINISTERED REPORTING.
The Company will remit a check for the balance indicated in the monthly
statements to Life Re along with the reporting form set forth in
Schedule B or a mutually agreed upon form submitted by the Company. If
a balance is due the Company, it will be remitted by Life Re promptly.
Within ten (10) days following the close of each calendar month, the
Company will forward to Life Re on computer tape or other acceptable
form, reports in substantial conformity with the following:
A. MONTHLY NEW BUSINESS REPORT
(1) policy number (10) amount reinsured
(2) full name of insured (11) automatic/facultative indicator
(3) date of birth (12) state of residence
(4) sex (13) table rating
(5) issue age (14) flat extra (amount + number of years)
(6) policy date (15) death benefit option (UL products)
(7) underwriting (16) amount at risk classification
(8) plan of insurance (17) transaction code
(9) amount issued (18) currency if other than U.S.
(19) qualified pension (yes/no)
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B. MONTHLY CONVERSION REPORT
The Company will furnish Life Re with a separate listing of
reinsurance policies that are conversions or replacements to
the plan(s) as stated in Schedule A. The listing should
provide the following information:
(1) 1 through 19 in 2.A above (4) attained age
(2) original policy date (5) duration
(3) original policy number (6) effective date if other
than policy date
C. MONTHLY PREMIUM REPORT
The Company will furnish Life Re a listing of all reinsurance
policies issued or renewing during the past month accompanied
by the reinsurance premiums for such policies. The listing
should be segregated into first year issues and renewals and
should provide the following information:
(1) 1 through 19 in 2.A above
(2) current amount at risk
(3) The net reinsurance premium due for each reinsured
policy with the premium for life and each supplemental
benefit separated.
D. MONTHLY CHANGE REPORT
The Company will report the details of all policy terminations
and changes on the reinsured policies. In addition to the data
indicated in 2.A, above, the report should provide information
about the nature, the effective date, and the financial result
of the change with respect to reinsurance.
E. MONTHLY POLICY EXHIBIT REPORT
The Company will provide a summary of new issues,
terminations, recaptures, changes, death claims and
reinstatements during the month and the in force reinsurance
at the end of the month.
F. QUARTERLY INFORCE AND RESERVE LISTING
Within ten (10) days after the close of each calendar quarter,
the Company will furnish Life Re with a listing of reinsurance
in force by policy, by year of issue and include statutory
reserves for the same. The listing must show sufficient detail
such that reserve calculations can be independently verified
by Life Re's auditors and examiners. The listing should be
segregated into first year issues and renewals and should
provide the following information:
(1) 1 through 19 in 2.A above
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For the fourth quarter, Federal Income Tax reserves must also
be furnished. They may be included in the fourth quarter
statutory report or they may be submitted separately, but in
the same format as the statutory report.
G. ELECTRONIC DATA TRANSMISSION
If the Company reports its reinsurance transactions via
electronic media, the Company will consult with Life Re to
determine the appropriate reporting format. Should the Company
subsequently desire to make changes in the data format or the
code structure, the Company will communicate such changes to
Life Re prior to the use of such changes in reports to Life
Re.
ARTICLE V - PREMIUMS
1. LIFE INSURANCE AND WAIVER.
Premiums per $1,000 for Life Insurance are shown in Schedule C. The
premiums per $1,000 are multiplied by the percentages shown in Schedule
D and are applied to the amount of life reinsurance as outlined in
Article I.
For Survivorship Policies: The Frasierization method shown in Schedule
C-1 shall be employed to determine the rates for Survivorship policies.
Life Re anticipates that these premiums will be continued indefinitely
for all business ceded under this Agreement. For the purpose of
satisfying requirements for deficiency reserves imposed by various
state insurance departments, Life re will guarantee for renewal the
greater of the premiums provided in this Agreement or premiums based on
the 1980 CSO Table at 2.5% interest.
When the Company charges a flat extra premium, whether alone or in
addition to a premium based on a multiple table, the Company will pay
this premium less the allowances detailed in Schedule D, on the
reinsurance amount in addition to the standard or multiple table
premium for the rating and plan of reinsurance.
Premium for Waiver will be paid at the same rate as the Company charges
for the benefit on which reinsurance with Life Re is based. Allowances
for waiver are detailed in Schedule D.
2. PREMIUM TAXES.
Life Re will not reimburse the Company for state premium taxes on
reinsurance premiums received from the Company.
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3. PAYMENTS.
Premiums are payable annually in advance. If reinsurance is reduced,
terminated, increased, or reinstated, during the year, pro-rata
adjustment will be made by Life Re and the Company on all premium items
except policy fees.
4. NONPAYMENT OF REINSURANCE PREMIUMS.
The payment of reinsurance premiums is a condition precedent to the
liability of Life Re under this Agreement. If the Company does not pay
premiums to Life Re as provided in this Agreement and such amounts are
more than 120 days in arrears, Life Re will have the right to terminate
the reinsurance under this Agreement.
5. INTEREST ON DELINQUENT PAYMENTS.
If the Company is more than 90 days in arrears in remitting premiums to
Life Re, such premiums will be considered delinquent and interest will
be added to the amount to be remitted. Interest will be calculated from
(i) the time the premiums are due Life Re to (ii) the date the Company
pays the premium to Life Re. The rate of interest charged on delinquent
payments will be equal to the rate listed in the Federal Reserve
Statistical Release, as promulgated by the Board of Governors of the
Federal Reserve System, for the monthly average of Corporate bonds,
Xxxxx'x seasoned Aaa (the "Interest Rate").
6. MISSTATEMENTS.
If the insured's age or sex was misstated and the amount of insurance
on the Company's policies is adjusted, the Company and Life Re will
share the adjustment in proportion to the amount of liability of each
at the time of issue of the policies. Premiums will be recalculated for
the correct age or sex and amounts according to the proportion as above
and adjusted without interest. If the insured is still alive, the
method above will be used for past years and the amount of reinsurance
and premium will be adjusted for the future to the amount that would
have been correct at issue.
ARTICLE VI - CLAIMS
1. NOTICE.
The Company will notify Life Re promptly after receipt of any
information on a claim where reinsurance is involved. The Company will
furnish to Life Re as soon as possible the completed reinsurance claim
form and copies of all claim papers and proofs. However, if the amount
reinsured with Life Re is more than the amount retained by the Company
and the claim is contestable, all papers in connection with such claim,
including all underwriting and investigation papers must be submitted
to Life Re for its recommendation before admission of any liability on
the part of the Company.
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2. CONTESTED CLAIMS.
Whenever the Company has formed a preliminary opinion that a claim
might be denied or contested, and prior to any final action by the
Company indicating to the claimant that the claim is being denied or
contested, the Company will give Life Re the opportunity to review the
complete claim file. Life Re will review this file promptly and, at its
option, (a) pay Life Re's full share as if the claim was not contested,
in full discharge of Life Re's obligation to the Company for that
claim, or (b) after consultation with the Company join in the contest,
or ratify the denial, in which case Life Re will communicate to the
Company in writing Life Re's decision to participate in the contest, or
ratify the denial, with respect to that claim.
3. EXPENSES.
Life Re will share in the claim expense of any contest or compromise of
a claim in the same proportion that the amount at risk reinsured under
this Agreement bears to the total risk of the Company on all policies
being contested by the Company, and Life Re will share in the total
amount of any reduction in liability in the same proportion. Claim
expense will include without limitation the cost of investigation,
legal fees, court costs, and interest charges. Compensation of salaried
officers and employees and any possible extra-contractual damages will
not be considered covered expenses. Life Re will not be liable for
expenses incurred in connection with a dispute or contest arising out
of conflicting claims of entitlement to policy proceeds or benefits.
4. MISSTATEMENTS.
In the event of an increase or reduction in the amount of the Company's
insurance on any policy reinsured hereunder because of an overstatement
or understatement of age or misstatement of sex, established after the
death of the insured, the Company and Life re will share in such
increase or reduction in proportion to their respective amounts at risk
under that policy.
5. PAYMENT.
For Life Insurance, Life Re will pay its share in a lump sum to the
Company, without regard to the form of claim settlement of the Company.
For a Waiver claim, the Company will continue to pay premiums for
reinsurance except the premium for disability reinsurance. Life Re will
pay its proportionate share of the gross premium waived by the Company
on the original policy, including its share of the premiums for
benefits that remain in effect during disability.
8
6. ASSISTANCE AND ADVICE.
At the request of the Company, Life Re will advise the Company on any
claim concerning business reinsured under this Agreement and, when such
a claim appears to be of doubtful validity, Life Re will assist the
Company in its determination of liability and in the best procedure to
follow with respect to the claim.
ARTICLE VII - REDUCTIONS, REINSTATEMENTS & CHANGES
1. REDUCTIONS AND TERMINATIONS.
Unless specified otherwise in this Agreement, if the amount of
insurance on a reinsured life under this Agreement is reduced,
reinsurance on that life shall be reduced proportionately according to
Life Re's Share of the Reinsured Policy. If the reduction is greater
than the amount of reinsurance, the reinsurance shall be terminated.
The effective date and time of the reduction in reinsurance shall be
the same as those of the reduction in the amount of insurance.
The reduction will first apply to any reinsurance on the policy being
reduced and then in a chronological order according to policy date
("first in, first out") to any reinsurance on the other policies in
force on the life.
However, the Company will not be required to assume a risk for an
amount in excess of its regular retention for the age at issue and the
mortality rating of the policy under which reinsurance is being
terminated.
If the reinsurance for a policy has been placed with more than one
reinsurer, the reduction will be applied to all reinsurers pro rata to
the amounts originally reinsured with each reinsurer.
It is agreed, however, that in no case shall the Company be required to
assume a risk for an amount in excess of the retention limit specified
in the attached Schedule A. If the cancellation of reinsurance in
accordance with the above rules would have this result, the amount of
reinsurance to be cancelled will be adjusted so the specified retention
limit is not exceeded.
2. REINSTATEMENT.
(a) AUTOMATIC REINSURANCE
A policy of the Company, ceded to Life Re on an automatic
basis, that was reduced, terminated, or lapsed, if reinstated
by the Company under its regular rules, will be reinstated
automatically to the amount that would be in force had the
policy not been reduced, terminated, or lapsed.
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(b) FACULTATIVE REINSURANCE
A Reinsured Policy ceded to Life Re that was reduced,
terminated, or lapsed, on a facultative basis, (i) will
require approval by Life Re prior to reinstatement if the
Company has retained less than 50% of the risk, or (ii) will
be reinstated automatically by Life re if the Company has
retained more than 50% of the risk and reinstates the
Reinsured Policy under its regular rules. Upon reinstatement,
reinsurance for the policy will be for the amount that would
be in force had the policy not been reduced, terminated, or
lapsed.
In consideration with all reinstatements the Company will pay Life Re
all reinsurance premiums and interest in like manner as the Company has
received under its policy.
3. NONFORFEITURE BENEFITS.
Life Re will not participate in nonforfeiture benefits.
4. CONTRACTUAL CONVERSIONS AND EXCHANGES.
In the event of a contractual conversion or exchange (i.e., conversion
or exchange that requires no evidence of insurability) Life Re will
reinsure the risk resulting from such conversion or exchange at the
rates shown in Schedule C on point-in-scale basis (using the original
issue age and duration from the original issue) and the percentages of
Schedule D on a point-in-scale basis. The reinsured amount at risk on
the policy or policies being converted may not exceed the current
reinsured amount at risk on the policy or policies being converted or
exchanged. If the conversion or exchange results in an increase of
risk, the amount of increase will be subject to evidence of
insurability.
5. NON CONTRACTUAL EXCHANGES.
Non contractual exchanges are subject to evidence of insurability.
Premiums for the risk resulting from the exchange will be reflected in
Schedule C.
6. PROGRAM OF INTERNAL REPLACEMENT.
Should the Company, its affiliates, successors, or assigns, initiate a
program of internal replacement, as defined below, that would include
any of the risks reinsured hereunder, the Company will immediately
notify the reinsurer. For each risk reinsured hereunder that has been
replaced under a program of internal replacement, the reinsurer shall
have the option, at its sole discretion, of either treating the risks
reinsured as recaptured, or continuing reinsurance on the new policy
under this Agreement. The term "program of internal replacement" shall
mean any program offered to a class of policy owners in which a policy
or any portion of a policy is exchanged for another policy, not
reinsured under this Agreement, which is written by the Company, its
affiliates, successors, or assigns.
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ARTICLE VIII - DAC TAX
Life Re and the Company hereby agree to the following pursuant to Section
1.848-2(g)(8) of the Income Tax Regulation under Section 848 of the Internal
Revenue Code of 1986, as amended.
(a) The term "party" will refer to either Life Re or the Company
as appropriate.
(b) The terms used in this Article are defined by reference to
Regulation 1.848-2. The term "net consideration" will refer to
either net consideration as defined in Regulation Section
1.848-2(f) or gross amount of premiums and other consideration
as defined in Regulation Section 1.848-3(b) as appropriate.
(c) Each party shall attach a schedule to its federal income tax
return which identifies the relevant reinsurance agreements
for which the joint election under the Regulation has been
made.
(d) The party will net positive consideration, as defined in the
Regulation promulgated under Code Section 848, for such
agreement for each taxable year, shall capitalize specified
policy acquisition expenses with respect to such agreement
without regard to the general deductions limitation of Section
848(c)(1).
(e) Each party agrees to exchange information pertaining to the
amount of net consideration under such agreement each year to
ensure consistency.
ARTICLE IX - RECAPTURE
1. STANDARDS FOR RECAPTURE.
If the Company increases its maximum retention from the maximum limit
of retention set forth in Schedule A, the Company may elect to
recapture that portion of each Reinsured Policy equal to the difference
between the Company's new limit of retention and the Company's old
limit of retention, subject to the provisions of this Article IX. If
the Company elects this type of recapture, the Company may only
recapture Reinsured Policies that meet both of the following
requirements: (a) Reinsured Policies that have been in force for
fifteen (15) years and (b) Reinsured Policies for which the Company
maintained its maximum limit of retention at the time the Reinsured
Policy was issued.
However, if Life Re has given the Company ninety day written notice of
a premium rate increase, the Company may elect to recapture all
Reinsurance Policies affected by such increase before such increase
takes effect regardless of the above requirements.
2. METHOD OF RECAPTURE.
If the Company elects to recapture, the Company will notify Life Re in
writing within ninety days from the effective date of the increase in
its limit of retention. If the
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Company elects to recapture one Reinsured Policy under this provision,
the Company must recapture every Reinsured Policy that meets the
requirements set forth in Article IX, Section 1, above.
Recapture for each Reinsured Policy will occur on the later to occur of
(a) the next anniversary of the Reinsured Policy or (b) the fifteenth
(15) anniversary of the Reinsured Policy. The amount of reinsurance on
the Reinsured Policy will be reduced so that the total amount of risk
retained by the Company will be equal to the Company's maximum limit of
retention.
If two or more reinsurers have reinsurance on the same Reinsured
Policy, Life Re's portion of the reduction will be in proportion to
Life Re's share of the total reinsurance on the Reinsured Policy.
ARTICLE X - INSOLVENCY
All reinsurance under this Agreement will be paid on demand by Life Re directly
to the Company, its liquidator, receiver, or statutory successor, on the basis
of the liability of the Company under the policy or policies reinsured without
diminution because of the insolvency of the Company. In the event of the
insolvency of the Company, the liquidator, receiver, or statutory successor of
the Company will give written notice to Life Re of a pending claim against Life
Re or the Company on any policy reinsured within a reasonable time after the
claim is filed in the conservation, liquidation, or insolvency proceedings.
While the claim is pending, Life Re may investigate and interpose, at its own
expense, in the proceedings where the claim is to be adjudicated, any defenses
which it may deem available to the Company or its liquidator, receiver, or
statutory successor. The expense incurred by Life Re will be charged, subject to
court approval, against the Company as an expense of the conservation,
liquidation, or insolvency to the extent of a proportionate share of the benefit
that accrues to the Company as a result of the defenses by Life Re. Where two or
more reinsurers are involved and a majority in interest elect to defend a claim,
the expense will be apportioned in accordance with the terms of this Agreement
as if the expense had been incurred by the Company.
ARTICLE XI - ARBITRATION
Life Re and the Company intend that any dispute between them under or with
respect to this Agreement be resolved without resort to any litigation.
Accordingly, Life Re and the Company agree that they will negotiate diligently
and in good faith to agree on a mutually satisfactory resolution of any such
dispute; PROVIDED, HOWEVER, that if any such dispute cannot be so resolved by
them within sixty calendar days (or such longer period as the parties may agree)
after commencing such negotiations, Life Re and the Company agree that they will
submit such dispute to arbitration in the manner specified in, and such
arbitration proceeding will be conducted in accordance with, the rules of the
American Arbitration Association.
The arbitration hearing will be before a panel of three arbitrators, each of
whom must be a present or former officer of a life insurance or life reinsurance
company. Life Re and the Company will each appoint one arbitrator by written
notification to the other party within thirty
12
calendar days after the date of the mailing of the notification initializing the
arbitration. These two arbitrators will then select the third arbitrator within
sixty calendar days after the date of the mailing of the notification initiating
arbitration.
If either Life Re or the Company fails to appoint an arbitrator, or should the
two arbitrators be unable to agree upon the choice of a third arbitrator, the
president of the American Arbitration Association or of its successor
organization or (if necessary) the president of any similar organization
designated by lot of Life Re and the Company within thirty calendar days after
the request will appoint the necessary arbitrators.
The vote or approval of a majority of the arbitrators will decide any question
considered by the arbitrators; PROVIDED, HOWEVER, that if no two arbitrators
reach the same decision, then the average of the two closest mathematical
determinations will constitute the decision of all three arbitrators. The place
of arbitration will be Stamford, Connecticut. Each decision (including without
limitation each award) of the arbitrators will be final and binding on all
parties and will be non-appealable, and (at the request of either Life Re or the
Company) any award of the arbitrators may be confirmed by a judgment entered by
any court of competent jurisdiction. No such award or judgment will bear
interest. Each party will be responsible for paying (a) all fees and expenses
charged by its respective counsel, accountants, actuaries, and other
representatives in conjunction with such arbitration and (b) one-half of the
fees and expenses charged by each arbitrator.
ARTICLE XII - GENERAL PROVISIONS
1. REINSURER'S RIGHT OF NOTICE OF UNUSUAL PRACTICES.
In providing reinsurance facilities to the Company under this
Agreement, Life Re has granted the Company considerable authority with
respect to automatic binding power, reinstatements, claim settlements,
and the general administration of the reinsurance account. To
facilitate transactions, Life Re has required the minimum amount of
information and documentation possible, reflecting its utmost faith and
confidence in the Company. Life Re assumes that, except as otherwise
notified by the Company, the underwriting, claims and other insurance
practices employed by the Company with respect to reinsurance ceded
under this Agreement are generally consistent with the customary and
usual practices of the insurance industry as a whole. If the Company
changes or modifies its practices or engages in exceptional or
uncustomary practices, the Company agrees to make those practices known
to Life Re before assigning any liability to Life Re with respect to
any reinsurance issued under such practices.
2. POLICY FORMS AND RATES.
Upon request, the Company will furnish Life Re with a copy of its
application forms, policy and rider forms, premium and non-forfeiture
value manuals, reserve tables, actuarial memoranda, and any other forms
or tables needed for proper handling of reinsurance under this
Agreement. Life Re must agree in writing before incurring
13
additional liability resulting from any changes to policies, policy
riders or amendments reinsured under this Agreement.
3. REINSURANCE CONDITIONS.
The reinsurance is subject to the same limitations and conditions as
the insurance under the policy or policies written by the Company on
which the reinsurance is based.
4. ERRORS AND OMISSIONS.
If either the Company or Life Re unintentionally fails to perform an
obligation that affects this Agreement and such failure results in an
error on the part of the Company or Life Re, the error will be
corrected by restoring both the Company and Life Re to the positions
they would have occupied had no such error occurred. For business
reported but not covered under the provisions of this Agreement, Life
Re shall be obligated only for the return of premium paid, plus
interest as provided below.
Any amounts due under this Section 4 will bear interest at a rate
agreed upon the Company and Life Re or at a rate equal to the Interest
Rate as described in Article V.5.
5. OFFSET.
Any amount which either the Company or Life Re is contractually
obligated to pay to the other party may be paid out of any amount which
is due and unpaid under this Agreement. The application of this offset
provision will not be deemed to constitute diminution in the event of
insolvency.
6. INSPECTION.
Upon reasonable notice, Life Re may inspect any and all books, records,
documents or similar information relating to or affecting reinsurance
under this Agreement at the home office of the Company during normal
business hours.
7. ENTIRE AGREEMENT.
This Agreement and the Schedules attached hereto supersede all prior
discussions and written and oral agreements between the parties with
respect to the subject matter of this Agreement. This Agreement and the
Schedules attached hereto contain the sole and entire agreement between
the parties hereto with respect to the subject matter hereof.
8. AMENDMENT.
This Agreement may be modified or amended only with a written
instrument properly signed on behalf of the Company and Life Re.
14
9. COUNTERPARTS.
This Agreement may be executed simultaneously in any number of
counterparts, each of which will be deemed an original, but all which
will constitute one and the same instrument.
10. NO ASSIGNMENT.
Except as otherwise provided herein, neither party hereto may assign
this Agreement or any right hereunder or part of hereof without the
prior written consent of the other party hereto.
11. BINDING EFFECT.
This Agreement is binding upon and will inure to the benefit of the
parties and their respective successors and permitted assignees.
12. NOTICES.
Any notice, request, instruction, or other document to be given
hereunder by any party hereto to the other party hereto will be in
writing and (a) delivered personally, (b) sent by facsimile, (c)
delivered by overnight express, or (d) sent by registered or certified
mail, postage prepaid, as follows:
If to the Company to:
First Allmerica Financial Life Insurance Company
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Reinsurance Manager
Facsimile (000) 000-0000
If to Life Re, to:
Life Reassurance Corporation of America
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Vice President, Administration
Facsimile: (000) 000-0000
or at such other address for a party as will be specified by like
notice. Each notice or other communication required or permitted under
this Agreement that is addressed as provided in this Article XII will,
if delivered personally or by overnight express, be deemed given upon
delivery; will, if delivered by facsimile or similar facsimile
transmission, be deemed delivered when electronically confirmed; and
will, if delivered
15
by mail in the manner described above, be deemed given on the third
business day after the day it is deposited in a regular depository of
the United States Mail.
Please send all cash remittances to:
Life Reassurance Corporation of America
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxxxxx 00000
ARTICLE XIII - DURATION OF AGREEMENT
This Agreement will be effective on and after the effective date stated
in Article I. It is unlimited in duration but may be amended by mutual
consent of the Company and Life Re. This Agreement may be terminated as
to new reinsurance by either party giving 90 days' written notice to
the other. Termination as to new reinsurance does not affect existing
reinsurance. Existing reinsurance will remain in force until
termination of the Company's policy or policies on which the
reinsurance is based in accordance with the terms of this Agreement.
Notwithstanding the foregoing, Life Re may terminate this Agreement as
to new and existing reinsurance in the event the Company does not pay
premiums to Life Re, as provided in Article V.
ARTICLE XIV - EXECUTION
IN WITNESS WHEREOF, Life Re and the Company have executed this
Agreement on the dates set forth below.
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
Date: 11/26/02 By: /s/
---------------------------- ----------------------------
Place: Worcester, MA Title: Vice President
--------------------------- -------------------------
Witness: Xxxx Xxxx
-------------------------
LIFE REASSURANCE CORPORATION OF AMERICA
NOW KNOWN AS SWISS RE LIFE & HEALTH AMERICA INC.
Date: 12/02/02 By: /s/
---------------------------- ----------------------------
Place: Stamford, CT Title: Vice President
---------------------------- -------------------------
Witness: /s/
----------------------------
16
SCHEDULE A
RETENTION LIMITS
AUTOMATIC BINDING LIMITS
PLANS COVERED
Agreement Number 6714-1
RETENTION LIMITS
A. LIFE
The Company will retain 20% of the mortality risk on each policy up to
the maximum retention limits specified below:
STANDARD - TABLE H TABLE J - TABLE P
AGE & FLAT EXTRAS OF $20 OR LESS & FLAT EXTRAS OVER $20
--- ---------------------------- ----------------------
0 $ 500,000 $ 250,000
1-60 $2,000,000 $ 250,000
61-70 $1,000,000 $ 500,000
71-80 $ 500,000 $ 250,000
81-85 $ 500,000 (up to Table F) 0
AVIATION (Includes policies with an Aviation Exclusion Clause.
Exception is pilots of regularly scheduled passenger,
charter and cargo airlines) Maximum retention is
$500,000.
SPECIAL In cases which are borderline for ratings, the Company
may choose not to hold a full retention.
B. WAIVER OF PREMIUM
Same as Life
SCHEDULE A, PAGE 2
AUTOMATIC BINDING LIMITS
A. LIFE
Life Re's share is 35% of the binding limits specified below:
STANDARD - TABLE H TABLE J - TABLE P
AGE & FLAT EXTRAS OF $20 OR LESS & FLAT EXTRAS OVER $20
--- ---------------------------- ----------------------
0 $ 3,750,000 $1,875,000
1-60 $15,000,000 $1,875,000
61-70 $ 7,500,000 $3,750,000
71-80 $ 3,750,000 $1,875,000
81-85 $ 3,750,000 (up to Table F) 0
AVIATION (Includes policies with an aviation Exclusion Clause.
Exception is pilots of regularly scheduled passenger,
charter and cargo airlines). Maximum binding is
$3,750,000.
B. WAIVER OF PREMIUM
Same as Life
PLANS COVERED
VARIABLE UNIVERSAL LIFE FORM NO. 1033-99
SURVIVORSHIP VARIABLE UNIVERSAL LIFE FORM NO. 1034-99
SCHEDULE B
REPORTING FORM
SCHEDULE C
PREMIUM RATES
75-80 BASIC SELECT AND ULTIMATE MORTALITY TABLE, AGE NEAREST BIRTHDAY
(6 PAGES OMITTED)
SCHEDULE C-1
JOINT EQUAL AGE CALCULATION
Definition of Terms:
(a) Qx,n = single life rate per thousand in duration n for an insured whose
policy was issued at issue age x
(b) Qx,y,n = joint last survivor rate per thousand in duration n for two
insureds whose policies were issued at issue ages x and y
STEP 1
Calculate qx,n for each insured for durations 1 to n.
qx,n = Qx,n divided by 1000
STEP 2
Calculate px, n for each insured for durations (n-1) and n.
px,n = (1-qx,1) x (1-qx,2) x...x (1-qx,n).
STEP 3
Calculate px,y,n for durations (n-1) and n.
px,y,n = px, n + py,n - ((px,n) x (py,n))
STEP 4
Calculate qx,y,n for duration n. Let px,y,0 = 1.
Qx,y,n = 1 - px,y,n
--------
px,y,n-1
STEP 5
Qx,y,n = 1000 x qx,y,n.
.15 per thousand minimum rate in any year after the first year.
SCHEDULE D
PERCENTAGES & ALLOWANCES
AGREEMENT NUMBER 6714-1
I. The following percentages are used to calculate the reinsurance
premiums (as a percentage of 75-80 Basic Table ANB):
Preferred NonSmoker 33%
Standard NonSmoker 46%
Preferred Smoker 90%
Standard Smoker 100%
II. The following allowances are granted on Flat Extras and
Waiver Benefits:
LIFE INSURANCE - FLAT EXTRA PREMIUMS FIRST YEAR RENEWAL
Aviation Hazards 10% 10%
Temporary Extras (< = 5 years) 10% 10%
Permanent Extras (> = 5 years) 75% 10%
On cessions in excess of $15,000,000 Life Re reserves the right to
adjust the discounts/rates and expenses.
AMENDMENT NO. 1 to Reinsurance Agreement 6714-1, effective January 1, 2000,
between FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY of Worcester,
Massachusetts (the "Company") and LIFE REASSURANCE CORPORATION OF AMERICA of
Stamford, Connecticut ("Life Re").
AMENDMENT NO. 1
Effective January 1, 2000:
Schedule A, Page 2 is hereby amended to add Variable Universal Life Form Numbers
1018-93, 1027-95, and 1026-94. Life Re's share shall be 30% as set forth in
Automatic Binding Limits, Section II.
All other provisions of the Reinsurance Agreement will continue unchanged.
This Amendment is signed in duplicate at the dates and places indicated with an
effective date of January 1, 2000.
FIRST ALLMERICA FINANCIAL LIFE
Date: 11-26-02 INSURANCE COMPANY
---------------------------
Place: Worcester, MA By: /s/
-------------------------- -------------------------------
Witness: Xxxx Xxxx Title: Vice President
------------------------ -----------------------------
LIFE REASSURANCE CORPORATION
DATE: 12/02/02 OF AMERICA (NOW KNOWN AS SWISS RE
--------------------------- LIFE & HEALTH AMERICA INC.
Place: Stamford, CT By: /s/
-------------------------- -------------------------------
Witness: /s/ Title: Vice President
------------------------ ---------------------------
SCHEDULE A
RETENTION LIMITS
AUTOMATIC BINDING LIMITS
PLANS COVERED
AGREEMENT NUMBER 6714-1
RETENTION LIMITS
A. LIFE
The Company will retain 20% of the mortality risk on each
policy up to the maximum retention limits specified below:
STANDARD - TABLE H TABLE J - TABLE P
AGE & FLAT EXTRAS OF $20 OR LESS & FLAT EXTRAS OVER $20
--- ---------------------------- ----------------------
0 $ 500,000 $250,000
1-60 $2,000,000 $250,000
61-70 $1,000,000 $500,000
71-80 $ 500,000 $250,000
81-85 $ 500,000 (up to Table F) $ 0
AVIATION (Includes policies with an Aviation Exclusion Clause.
Exception is pilots of regularly scheduled passenger,
charter and cargo airlines) Maximum retention is
$500,000.
SPECIAL In cases which are borderline for ratings, the Company
may choose not to hold a full retention.
B. WAIVER OF PREMIUM
Same as Life
SCHEDULE A, PAGE 2
AUTOMATIC BINDING LIMITS
A. LIFE
STANDARD - TABLE H TABLE J - TABLE P
AGE & FLAT EXTRAS OF $20 OR LESS & FLAT EXTRAS OVER $20
--- ---------------------------- ----------------------
0 $ 3,750,000 $1,875,000
1-60 $15,000,000 $1,875,000
61-70 $ 7,500,000 $3,750,000
71-80 $ 3,750,000 $1,875,000
81-85 $ 3,750,000 (up to Table F) $ 0
I. Life Re' share is 35% of the binding limits specified above
for Variable Universal Life Form No. 1033-99 and Survivorship
Variable Universal Life Form No. 1034-99.
II. Life Re's share is 30% of the binding limits specified above
for Variable Universal Life Form Nos. 1018-93, 1027-95 and
1026-94.
AVIATION (Includes policies with an aviation Exclusion Clause.
Exception is pilots of regularly scheduled passenger,
charter and cargo airlines). Maximum binding is $3,750,000.
B. WAIVER OF PREMIUM
Same as Life
PLANS COVERED
VARIABLE UNIVERSAL LIFE FORM NO. 1033-99
VARIABLE UNIVERSAL LIFE FORM NO. 1018-93
VARIABLE UNIVERSAL LIFE FORM NO. 1027-95
VARIABLE UNIVERSAL LIFE FORM NO. 1026-94
SURVIVORSHIP VARIABLE UNIVERSAL LIFE FORM XX. 0000-00
XXXXXXXXX XX. 0 to Reinsurance Agreement 6714-1, effective January 1, 2000,
between FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY of Worcester,
Massachusetts (the "Company") and LIFE REASSURANCE CORPORATION OF AMERICA of
Stamford, Connecticut ("Life Re").
AMENDMENT NO. 2
Effective January 1, 2001, it is hereby understood and agreed that the Company
may submit business facultatively to Life Re on plans formerly reinsured with
CIGNA Reinsurance. Life Re agrees to provide facultative reinsurance coverage
under the terms set forth in this Agreement.
All other provisions of the Reinsurance Agreement will continue unchanged.
This Amendment is signed in duplicate at the dates and places indicated with an
effective date of January 1, 2001.
FIRST ALLMERICA FINANCIAL LIFE
Date: 11-26-02 INSURANCE COMPANY
-------------------------------
Place: Worcester, MA By: /s/
------------------------------ -------------------------------
Witness: Xxxx Xxxx Title: Vice President
---------------------------- ----------------------------
LIFE REASSURANCE CORPORATION
DATE: 12/02/02 OF AMERICA (NOW KNOWN AS SWISS RE
------------------------------- LIFE & HEALTH AMERICA INC.
Place: Stamford, CT By: /s/
------------------------------ --------------------------------
Witness: /s/ Title: Vice President
---------------------------- -----------------------------
AMENDMENT NO. 3 to Reinsurance Agreement 6714-1, effective January 1, 2000,
between FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY of Worcester,
Massachusetts (the "Company") and LIFE REASSURANCE CORPORATION OF AMERICA of
Stamford, Connecticut ("Life Re").
AMENDMENT NO. 3
Effective January 1, 2001, it is hereby understood and agreed that Schedule A-1
is added to the Agreement to provide terms for the Substandard Table Shaving
Program.
All other provisions of the Reinsurance Agreement will continue unchanged.
This Amendment is signed in duplicate at the dates and places indicated with an
effective date of January 1, 2001.
FIRST ALLMERICA FINANCIAL LIFE
Date: 11-26-02 INSURANCE COMPANY
-------------------------------
Place: Worcester, MA By: /s/
------------------------------ --------------------------------
Witness: Xxxx Xxxx Title: Vice President
---------------------------- -----------------------------
LIFE REASSURANCE CORPORATION
DATE: 12/02/02 OF AMERICA (NOW KNOWN AS SWISS RE
------------------------------- LIFE & HEALTH AMERICA INC.
Place: Stamford, CT By: /s/
------------------------------ ---------------------------------
Witness: /s/ Title: Vice President
---------------------------- ------------------------------
SCHEDULE A-1
SUBSTANDARD TABLE
SHAVING PROGRAM
AGREEMENT NUMBER 6714-1
Life Re will automatically assume an 80% share of the amount reinsured on
policies issued by the Company under the Substandard Table Shaving Program,
provided the following criteria are met:
BASIS OF REINSURANCE
- First dollar quota share
- Allmerica Financial must retain 20% of the risk up to their maximum retention
- Minimum face amount eligible is $250,000
- Maximum face amount eligible is $2,500,000
- Issues age 0-70 only
- Must be permanent residents of the US or Canada
- Risks must be underwritten in accordance with Allmerica's published
underwriting standards and guidelines
- Original rating cannot exceed 200% Table 4) Credits and or business decisions
may not be used to reduce a higher rated policy to then qualify under this
program.
- No waiving of requirements for any reason
- Acceptable manuals used to determine risk Swiss Re, Lincoln, ERC, Transamerica
(Cologne many not be used to reduce tables)
- Any ratable risks from Aviation, Hazardous Avocations, Driving, Alcohol or
Drugs are excluded from the program.
- Limited to new business applications only and does not include a conversion,
group conversion, internal rollover or be the result of an exchange program
- Increases to existing policies, on covered plans, are acceptable provided the
additional risk amount is fully underwritten.
Through age 60 - Allow up to a 4 table reduction, unless the risk is derived
from heart or cancer. The maximum reduction is this instance is 3 tables.
Age 61-65 - Allow up to a 3 table reduction, unless the risk is derived from
heart or cancer. The maximum reduction in this instance is 2 tables.
Age 66-70 - Allow up to a 2 table reduction, unless the risk is derived from
heart or cancer. There is no reduction in this case. The rate remains Table 2.
SCHEDULE A-1
JOINT LIFE POLICIES AND POLICIES WITH SPOUSAL RIDERS MAY BE REINSURED UNDER THIS
PROGRAM SUBJECT TO THE FOLLOWING PARAMETERS:
- Both lives must be Table 4 (200%) or better using normal underwriting
guidelines.
- Table reductions are described above in the individual charts may only be
applied to ONE life.
- Both lives must be between the ages of 18 and 65.
- The minimum policy face amount is $250,000.
PERMANENT FLAT EXTRAS MAY BE CONVERTED INTO TABLE REDUCTIONS AT $2.50 PER
THOUSAND.
PRICING
- 150% of Standard reinsurance premium
PLANS COVERED
- All plans reinsured automatically with Swiss Re Life & Health or Life
Reassurance.
AMENDMENT NO. 4 to Reinsurance Agreement 6714-1, effective January 1, 2000,
between FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY of Worcester,
Massachusetts (the "Company") and LIFE REASSURANCE CORPORATION OF AMERICA, now
known as Swiss Re Life & Health America Inc., of Stamford, Connecticut ("Life
Re").
AMENDMENT NO. 4
Effective June 20, 2001, Schedule A, Page 2 is hereby amended to add the Private
Placement Variable Universal Life plan (Form Numbers 1037-99, 1039-99 and
1029P-94). All Private Placement Variable Universal Life policies will be ceded
on a facultative basis only.
All other provisions of the Reinsurance Agreement will continue unchanged.
This Amendment is signed in duplicate at the dates and places indicated with an
effective date of June 20, 2001.
FIRST ALLMERICA FINANCIAL LIFE
Date: 11-26-02 INSURANCE COMPANY
--------------------------
Place: Worcester, MA By: /s/
------------------------- ----------------------------------
Witness: Xxxx Xxxx Title: Vice President
----------------------- -------------------------------
LIFE REASSURANCE CORPORATION
DATE: 12/02/02 OF AMERICA
-------------------------- NOW KNOWN AS SWISS RE LIFE & HEALTH
AMERICA INC.
Place: Stamford, CT By: /s/
------------------------- --------------------------------
Witness: /s/ Title: Vice President
----------------------- -----------------------------
SCHEDULE A
RETENTION LIMITS
AUTOMATIC BINDING LIMITS
PLANS COVERED
AGREEMENT NUMBER 6714-1
RETENTION LIMITS
A. LIFE
The Company will retain 20% of the mortality risk on each
policy up to the maximum retention limits specified below:
STANDARD - TABLE H TABLE J - TABLE P
AGE & FLAT EXTRAS OF $20 OR LESS & FLAT EXTRAS OVER $20
--- ---------------------------- ----------------------
0 $ 500,000 $ 250,000
1-60 $2,000,000 $1,000,000
61-70 $1,000,000 $ 500,000
71-80 $ 500,000 $ 250,000
81-85 $ 500,000 (up to Table F) $ 0
AVIATION (Includes policies with an Aviation Exclusion Clause.
Exception is pilots of regularly scheduled passenger,
charter and cargo airlines) Maximum retention is
$500,000.
SPECIAL In cases which are borderline for ratings, the Company
may choose not to hold a full retention.
B. WAIVER OF PREMIUM
Same as Life
SCHEDULE A, PAGE 2
AUTOMATIC BINDING LIMITS
A. LIFE
STANDARD - TABLE H TABLE J - TABLE P
AGE & FLAT EXTRAS OF $20 OR LESS & FLAT EXTRAS OVER $20
--- ---------------------------- ----------------------
0 $ 3,750,000 $1,875,000
1-60 $15,000,000 $7,500,000
61-70 $ 7,500,000 $3,750,000
71-80 $ 3,750,000 $1,875,000
81-85 $ 3,750,000 (up to Table F) $ 0
I. The Reinsurer's share is 35% of the binding limits specified
above for Variable Universal Life Form 1033-99 and
Survivorship Variable Universal Life Form No. 1034-99.
II. The Reinsurer's share is 30% of the binding limits specified
above for Variable Universal Life Form Nos. 1018-93, 1027-95
and 1026-94.
AVIATION (Includes policies with an aviation Exclusion Clause.
Exception is pilots of regularly scheduled passenger,
charter and cargo airlines). Maximum binding is
$3,750,000.
B. WAIVER OF PREMIUM
Same as Life
PLANS COVERED
VARIABLE UNIVERSAL LIFE FORM NO. 1033-99, 1018-93, 1027-95, 1026-94
SURVIVORSHIP VARIABLE UNIVERSAL LIFE FORM NO. 1034-99
PRIVATE PLACEMENT VARIABLE UNIVERSAL LIFE FORM NOS. 1037-99, 1039-99, 1029P-94.
AMENDMENT 5
EFFECTIVE SEPTEMBER 1, 2002
TO THE
AUTOMATIC AND FACULTATIVE
YEARLY RENEWABLE TERM REINSURANCE AGREEMENT
Effective January 1, 2000
Reinsurer Agreement No. 6714-1
(The "Agreement")
BETWEEN
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
("Ceding Company")
AND
LIFE REASSURANCE CORPORATION OF AMERICA,
NOW KNOWN AS SWISSRE LIFE & HEALTH AMERICA INC.
("Reinsurer")
RECITALS
WHEREAS, the Reinsurer currently reinsures Ceding Company's plans under the
Agreement; and
WHEREAS, Ceding Company wishes to:
1. Submit additional policy plans, entitled High Net Worth and to be
identified by policy form below, for automatic reinsurance to the
Reinsurer under the Agreement; and
WHEREAS, the Reinsurer wishes to accept these policy plans;
AGREEMENT
The parties agree to the following
2. Schedule A is hereby amended as follows:
RETENTION LIMITS:
For High Net Worth Policy Forms (as defined under PLANS COVERED):
STANDARD - TABLE H TABLE I TO P
ISSUE AGES & FLAT EXTRAS OF $20 OR LESS & FLAT EXTRAS OVER $20
---------- ---------------------------- ----------------------
0 50,000 25,000
1-70 250,000 125,000
71-80 125,000 62,500
81-90 50,000 0
Retention: 2.5% up to the maximum retention limit form the above table.
AUTOMATIC BINDING LIMITS:
The Automatic Portion Reinsured will remain unchanged except for the plans
identified as High Net Worth Policy Forms (as defined under PLANS COVERED). The
Reinsurer will automatically reinsure 10% of each High Net Worth risk on a first
dollar quota share basis, up to the Ceding Company's retention limit as amended
below.
For High Net Worth Policy Forms:
ISSUE AGES TO THE POOL TO THE REINSURER
---------- ----------- ----------------
0 2,000,000 200,000
1-70 10,000,000 1,000,000
71-80 5,000,000 500,000
81-90 2,000,000 200,000
PLANS COVERED:
High Net Worth Policy Forms:
New York Group Certificate No.: 1029-94NY-R
Group Certificate No.: 1037-99GRC
Individual Contract No.: 1039-99
(including state specific abbreviation)
3. All remaining terms and conditions set forth in Schedule A of the
Agreement shall apply to the new policy plans; and
4. Except as herein amended, all other terms and conditions of this
Agreement shall remain unchanged.
In witness of the above, Ceding Company and Reinsurer have by their respective
officers executed and delivered this Amendment in duplicate on the dates
indicated below, with an effective date of September 1, 2002.
FIRST ALLEMRICA FINANCIAL LIFE REASSURANCE CORPORATION
LIFE INSURANCE COMPANY OF AMERICA now known as Swiss Re Life &
Health America Inc.
By: /s/ By: /s/
--------------------------------- -------------------------------
Title: Vice President Title: Vice President
------------------------------ ----------------------------
Date: 11-26-02 Date: 12/02/02
------------------------------- ----------------------------
By: /s/ By: /s/
--------------------------------- ------------------------------
Title: President Title: Second VP
------------------------------ ---------------------------
Date: 11-26-02 Date: 12/02/02
------------------------------- ----------------------------
