DAC-TAX
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AMENDMENT
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This Amendment, effective January 1, 1991, between CENTURY LIFE OF AMERICA
(referred to as Ceding Company; Reinsured; you, your), and GENERAL AMERICAN LIFE
INSURANCE COMPANY (referred to as General American; Reinsurer; we, us our)
hereby amends and becomes a part of the following Reinsurance Agreement(s).
DOC. NO. EFFECTIVE DATE DESCRIPTION
843 01-SEP-91 FACULTATIVE AGREEMENT (BUSINESS TERM)
844 01-SEP-91 FACULTATIVE AGREEMENT (PERMANENT)
1. The attached DAC Tax Article, entitled Section 1.848-2(g)(8) Election, is
hereby added to the Agreement.
2. This Amendment does not alter, amend or modify the Reinsurance Agreement
other than as stated in this Amendment. It is subject to all of the terms
and conditions of the Reinsurance Agreement together with all Amendments and
Addendums.
Executed in duplicate by GENERAL AMERICAN LIFE INSURANCE COMPANY at St. Louis,
Missouri, on March 22, 1993.
By: /s/ A. Xxxxx Xxxxxxx
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Title: Executive Vice President
Executed in duplicate by CENTURY LIFE OF AMERICA
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Title: V.P. - Valuation Actuary Title: Secretary
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Date: 6/29/93
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DAC TAX ARTICLE
Treasury Reg. Section 1.848-2(g)(8) Election
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The Ceding Company and the Reinsurer hereby agree to the following pursuant to
Section 1.848-2(g)(8) of the Income Tax Regulations issued December 29th, 1992,
under Section 848 of the Internal Revenue Code of 1986, as amended. This
election shall be effective for the 1991 taxable year for all amounts of
consideration arising after November 14, 1991 and for all subsequent taxable
years for which this Agreement remains in effect.
1. The term "party" will refer to either the Ceding Company or the Reinsurer
as appropriate.
2. The terms used in this Article are defined by reference to Treasury
Regulation Section 1.848-2 in effect as of December 29th, 1992. The term
"net consideration" will refer to either net consideration as defined in
Treasury Reg. Section 1.848-2(f) or "gross premium and other consideration"
as defined in Treasury Reg. Section 1.848-3(b) as appropriate.
3. The party with the net positive consideration for this Agreement for each
taxable year will capitalize specified policy acquisition expenses with
respect to this Agreement without regard to the general deductions
limitation of IRC Section 848(c)(1).
4. The Ceding Company and Reinsurer agree to exchange information pertaining
to the amount of net consideration under this Agreement each year to ensure
consistency. The Ceding Company and the Reinsurer also agree to exchange
information which may be otherwise required by the IRS.
5. The Ceding Company will submit a schedule to the Reinsurer by June 1 of
each year of its calculation of the net consideration for the preceding
calendar year. This schedule of calculations will be accompanied by a
statement signed by an officer of the Ceding Company stating that the
Ceding Company will report such net consideration in its tax return for the
preceding calendar year.
6. The Reinsurer may contest such calculation by providing an alternative
calculation to the Ceding Company in writing within 30 days of the
Reinsurer's receipt of the Ceding Company's calculation. If the Reinsurer
does not so notify the Ceding Company, the Reinsurer will report the net
consideration as determined by the Ceding Company in the Reinsurer's tax
return for the previous calendar year.
7. If the Reinsurer contests the Ceding Company's calculation of the net
consideration, the parties will act in good faith to reach an agreement as
to the correct amount within thirty (30) days of the date the Reinsurer
submits its alternative calculation. If the Ceding Company and the
Reinsurer reach agreement on am amount of net consideration, each party
shall report such amount in their respective tax returns for the previous
calendar year.
