ACTUALIZER
REINSURANCE AGREEMENT Effective January 1, 1994
between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
(Worcester, Massachusetts)
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
(Hartford, Connecticut)
INDEX
ARTICLE PAGE
ACTUALIZER Reinsurance Account II 3
ACTUALIZER Reinsurance Account Exposure Limitation II 3
Amounts Due and Payable VII 7
Arbitration XIV 13
Automatic Reinsurance Assumed by Connecticut General II 1
Claims for Reinsurance
Assumed by Connecticut General VI 6
Assumed by State Mutual VI 7
Conditions of Reinsurance IV 5
Contractual Changes in Reinsurance
Assumed by Connecticut General IX 10
DAC Tax Regulation VIII 9
Duration of Agreement XV 14
Facultative Reinsurance
Assumed by Connecticut General II 2
General Description I 1
Insolvency XI 12
Limitation of Liability II 3
Migration Program II 3
Migration Program Formula II 3
Net Amount at Risk V 5
Oversights XIII 13
Premium Tax Reimbursements VIII 9
Recaptures of Reinsurance
Assumed by Connecticut General X 11
Reinsurance Assumed by Connecticut General II 1
Reinsurance Ceded III 4
Right to Inspect XII 13
SCHEDULES
A Retention of State Mutual
B ACTUALIZER Reinsurance Account Limit
Automatic Binding Limit
C Reinsurance Application
D Required Data Elements
E Reinsurance Fees
Expected Mortality
Experience Rating Formula
F Plans and Business Reinsured
ACTUALIZER
REINSURANCE AGREEMENT
between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
(Hereinafter called State Mutual)
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
(Hereinafter called
Connecticut General)
It is agreed by the two companies as follows:
ARTICLE I
GENERAL DESCRIPTION
Connecticut General intends to enter into this ACTUALIZER
REINSURANCE
AGREEMENT and to substantially identical agreements with other life
insurance companies for the purpose of ceding and assuming life
insurance risks on direct business written by the companies who are
parties to the agreements in the manner described herein. All
reinsurance cede or assumed under this Agreement will be limited to the
net amount at risk.
ARTICLE II
REINSURANCE ASSUMED BY CONNECTICUT GENERAL
A. AUTOMATIC REINSURANCE ASSUMED BY CONNECTICUT GENERAL
Connecticut General agrees to accept as automatic reinsurance
hereunder the new and existing plans and business defined in
Schedule F, attached hereto, provided that all such risks shall comply
with the following criteria:
1. Reinsurance assumed hereunder will be for the excess over State
Mutual's retention of life insurance, as shown in Schedule A,
attached hereto, where such insurance is issued in accordance
with its usual underwriting standards for individually selected
risks;
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2. Such insurance will be issued to residents of the United States
or to Canadian residents who have applied for coverage in the
United States;
3. Risks which are classified as jumbo risks are excluded. A jumbo
risk is defined as such when the application and commonly
accepted underwriting evidence of insurability of State Mutual
indicate that, on the date of application, the proposed insured's
total life insurance in force and applied for in all insurance
companies, regardless of where located, exceeds Twenty Million
Dollars ($20,000,000);
4. The maximum amount of reinsurance on any one life will be the
amount shown in Schedule B, attached hereto;
5. State Mutual will give Connecticut General prior written notice
as to any proposed change in its usual underwriting and issuance
practices relating to the polices reinsured hereunder.
6. Multiple life insurance coverages (e.g. Joint and Last Survivor)
are excluded.
B. FACULTATIVE REINSURANCE ASSUMED BY CONNECTICUT GENERAL.
1. Whenever State Mutual desires reinsurance on a risk not eligible for
automatic reinsurance under the provisions of Article II (A) of this
Agreement, State Mutual may apply to Connecticut General for
facultative reinsurance, provided that such risk is not concurrently
sent to any other reinsurer.
2. State Mutual will forward to Connecticut General an application for
facultative reinsurance in substantial accord with Schedule C,
attached hereto, together with copies of the original application,
medical examiners reports, inspection reports and any and all other
papers and information that Connecticut General deems necessary as
bearing on the insurability of the risk. Connecticut General will
examine the papers immediately and, as soon as possible, notify State
Mutual of its decision.
State Mutual will then notify Connecticut General whether or not it
will cede the risk submitted on a facultative reinsurance basis to
Connecticut General and whether or not suck risk will be reinsured
under the terms and conditions of this Agreement.
3. Connecticut General will charge and State Mutual will pay an
underwriting fee as provided in Schedule E, attached hereto, for all
business submitted hereunder as facultative insurance.
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C. LIMITATION OF LIABILITY
The liability of Connecticut General on any reinsurance under this
Agreement, subject to the prior approval of Connecticut General in the case
of facultative reinsurance, will commence simultaneously with the liability
of State Mutual. Subject to the provisions of Article IX and Article X and
subject to the payment of fees and claim assessments as provided in Article
VII of this Agreement, each reinsurance will be continued in force as long
as State Mutual is liable under the policy and will cease when the
liability of State Mutual ceases.
D. ACTUALIZER REINSURANCE ACCOUNT
Connecticut General will establish an ACTUALIZER REINSURANCE ACCOUNT and
immediately allocate to such account all automatic reinsurance assumed by
it pursuant to Article II (A), above, and all facultative reinsurance
assumed by Connecticut General pursuant to Article II (B), above, subject
to the operation of the Migration Program set forth below.
Connecticut General will have the right to allocate to the ACTUALIZER
Reinsurance Account direct individual life business it has written, subject
to the same types of limitations as apply to reinsurance ceded by State
Mutual and allocated to the ACTUALIZER Reinsurance Account, as determined
above.
E. ACTUALIZER REINSURANCE ACCOUNT EXPOSURE LIMITATION; MIGRATION PROGRAM
In order to limit the amount of the death loss exposure on any one risk
allocated to the ACTUALIZER Reinsurance Account, Connecticut General will
establish a migration program between the ACTUALIZER Reinsurance Account
and its book of life reinsurance assumed on a conventional basis. Annually,
at the beginning of each of the first five years of this Agreement,
Connecticut General will make the following projections relative to the
business which will be written by State Mutual and reinsured hereunder:
1. The expected average Net Amount of Risk on all risks which will be
insured hereunder as of the end of such year; and
2. Total expected mortality on such risks during such year.
MIGRATION PROGRAM FORMULA. The maximum net amount at risk on a single life
which will be allocated to the ACTUALIZER Reinsurance Account (hereinafter
called the Eligible Amount) during each of the first five years under this
Agreement will be the greater of (a) or (b), where
(a) is two times the Expected Average Net Amount at Risk on all risks
which are reinsured hereunder as of the end of the given year and,
(b) is two times the expected mortality on such risks during the given
year.
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Thereafter, the Eligible Amount will be the ACTUALIZER Reinsurance
Account Limit as specified in Schedule B. Connecticut General will
automatically assume amounts of reinsurance pursuant to the Migration
Program which exceed the Eligible Amounts, subject to the Automatic
Binding Limit specified in Schedule B.
Connecticut General will have the right to adjust the facts in the
above formula downward to the extent necessary to avoid a situation in
which business written by State Mutual would otherwise represent a
disproportionate percentage of the ACTUALIZER Reinsurance Account.
F. SUPPLEMENTAL BENEFITS. Any and all supplemental benefit riders other
than term life insurance, (i.e. Waiver of Premium, Additional Death
Benefits, etc.) are not eligible for reinsurance under this Agreement,
whether such reinsurance be deemed automatic or facultative.
G. RETENTION LIMITS. State Mutual will have the right to modify its
retention limits affecting the amount of new reinsurance ceded to
Connecticut General fourteen (14) days' notice in writing. The amount
of reinsurance to be ceded automatically by State Mutual to
Connecticut General on any life after such notice is provided will be
determined by mutual agreement between the two companies.
H. NOTICE OF EACH POLICY. State Mutual will not be required to send
Connecticut General notice of each policy that is automatically ceded.
ARTICLE III
REINSURANCE CEDED
A. REINSURANCE CEDED. Connecticut General will cede to State Mutual, and
State Mutual hereby agrees to assume, a proportionate share of the
insurance risks allocated to the ACTUALIZER Reinsurance Account equal
to the ratio of the expected mortality on insurance risks written by
State Mutual which are allocated to the ACTUALIZER Reinsurance
Account, computed at the Mortality Rates stated in Schedule E, to the
total expected mortality on all risks allocated to the ACTUALIZER
Reinsurance Account.
B. EXPERIENCE RATING. In determining the ratio set forth above, the
expected mortality for State Mutual will be experience rated on a
quarterly basis. The experience rating formula, which will be used, is
contained on Schedule E. If and when State Mutual ceases to cede all
or any portion of the coverage defined in Article II (A), and State
Mutual is deemed to be in a deficit position, the Accelerated Formula
contained in Schedule E will be followed.
A deficit position is defined as occurring whenever claims submitted
by State Mutual on reinsurance assumed under this Agreement, over the
life of this Agreement, exceed assessed claims on reinsurance ceded by
more than 10%.
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Assessed claims are defined as the ceding company's ACTUALIZER pool
share multiplied by the pool's actual claims.
ARTICLE IV
CONDITIONS OF REINSURANCE
Reinsurance under the terms of this Agreement will be subject to all
the applicable provisions contained in the respective policies of
State Mutual.
Connecticut General will not be called upon to participate in policy
loans on policies reinsured hereunder.
State Mutual will furnish Connecticut General with specimen copies of
all application, policy and rider forms, and tables of rates and
values along with any and all other papers, forms, and information
which may be required for the proper administration of the reinsurance
under the terms of this Agreement and will promptly notify Connecticut
General of all subsequent modifications thereof and new forms under
which reinsurance may be effected. Furthermore, State Mutual will
promptly notify Connecticut General of any non-contractual
modifications of its policy forms and any systematic revision of
available benefits.
ARTICLE V
NET AMOUNT AT RISK
The Net Amount at Risk on Universal Life and other interest sensitive
policies is defined as that amount equal to the death benefit, less
the terminal reserve, less the amount State Mutual is retaining on the
life; except that the terminal reserve will be disregarded when the
original policy is issued on a level term plan for twenty years or
less or on a reducing term plan for any period of years. Terminal
reserves will be based on the reserve table of State Mutual.
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ARTICLE VI
CLAIMS FOR REINSURANCE
A. ASSUMED BY CONNECTICUT GENERAL
1. CLAIM PROCEDURES. State Mutual will notify Connecticut General of
each claim promptly after first receipt of such information.
Connecticut General will abide the issue as settled between State
Mutual and its claimant, whether with or without contest, and the
claim proofs accepted by State Mutual will also be accepted by
Connecticut General, provided, however, that on a contested case
where the amount of life insurance carried by State Mutual in
Connecticut General and in force at the time of claim is greater
than the amount of such coverage retained by State Mutual, State
Mutual will obtain Connecticut General's recommendation before
conceding any liability to or making any settlement with its
claimant. Connecticut General's recommendation with respect to a
claim is advisory. State Mutual has the right to accept or reject
the recommendation and therefore the recommendation is not
binding.
State Mutual will furnish Connecticut General with copies of the
claim proofs.
2. CONTESTED CLAIMS. State Mutual will notify Connecticut General of
its intention to contest, compromise or litigate a claim
involving reinsurance, and Connecticut General will pay its share
of the payment and specific expenses, including legal or
arbitration costs, special investigations or similar expenses,
but including salaries of employees, therein involved, unless it
declines to be a party to the contest, compromise or litigation,
in which case it will pay State Mutual the full amount of the
reinsurance. In the event that Connecticut General agrees to be a
party to the contest, it will also pay its pro rata portion of
any penalties, attorneys fees, and interest imposed automatically
by statute against State Mutual and arising solely out of a
judgement being rendered against State Mutual as a result of the
contested claim.
3. REDUCED. In the event of a reduced settlement of a claim, the
amount payable by Connecticut General will be Connecticut
General's share of the reinsurance amount payable for the benefit
less that proportion of the reduction in settlement which the
amount of benefit reinsured at the date of claim bears to the
total amount at risk for the benefit under the policy at the time
of the claim.
4. MISSTATEMENTS. Whenever the amount of insurance on a policy ceded
by State Mutual is increased or reduced because of a misstatement
of age or sex established after the death of the insured, State
Mutual and Connecticut General will share in such increase or
reduction in proportion to the respective net liabilities carried
by State Mutual and Connecticut General on the policy immediately
prior to the adjustment.
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5. CLAIM PAYMENTS. State Mutual will pay the total amount of death
benefit payable under any policy that is reinsured with
Connecticut General. State Mutual will notify Connecticut General
of the total death claim paid, the Net Amount at Risk in that
amount, and State Mutual retention on the risk. The reinsurance
net amount at risk will be a legal liability of Connecticut
General.
6. Connecticut General will have no obligation to reimburse State
Mutual for death claims on insurance written by State Mutual and
reinsured by Connecticut General hereunder so long as State
Mutual is in default in the making of payments due to Connecticut
General hereunder.
7. EXTRA-CONTRACTUAL DAMAGES. These are additional expenses that are
associated with a claim. Connecticut General assumes no liability
under this Agreement or otherwise for any extra-contractual
damages assessed against State Mutual, its agents or
representatives, on account of any policy reinsured hereunder,
including, but not limited to, consequential, compensatory,
exemplary of punitive damages.
Only expenses incurred by Connecticut General pursuant to this article
relative to death claims which are allocated to the ACTUALIZER
Reinsurance Account will be allocated to the ACTUALIZER Reinsurance
Account.
B. ASSUMED BY STATE MUTUAL
MANNER OF DETERMINING LIABILITY. The liability of State Mutual with
respect to the risks assumed by it as defined in Article III will by
determined in the same manner as is set forth in Article VI (A) and IX
hereunder relative to the liability of Connecticut General to State
Mutual on risks ceded by State Mutual to Connecticut General under
this Agreement.
ARTICLE VII
AMOUNTS DUE AND PAYABLE
A. DATA REQUIREMENTS. State Mutual will provide Connecticut General at
least two (2) weeks PRIOR to the beginning of each quarter, a data
file containing the data elements specified in Schedule D, attached
hereto. Such data elements providing the detail pertaining to the
policies reinsured hereunder and referred to as Reinsurance Assumed.
B. ACCOUNTING STATEMENT. On or before the fourteen (14th) day following
the END of each quarter, Connecticut General will provide to State
Mutual an itemized statement, in duplicate, covering the following for
approximately the quarter immediately preceding:
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1. Underwriting fees contained in Schedule E for reinsurance
submitted as facultative reinsurance under the terms of Article
II (B).
2. Administrative Fees contained in Schedule E on all Reinsurance
Assumed that has been allocated to the ACTUALIZER Reinsurance
Account, and expenses, as defined in Article VI (A.2), relative
to Reinsurance ceded by Connecticut General to State Mutual under
this Agreement.
3. Amounts to the credit of State Mutual resulting from death claims
incurred by State Mutual on business ceded by State Mutual and
which have been allocated to the ACTUALIZER Reinsurance Account,
based on available quarterly data.
4. Amounts for which State Mutual is obligated under Article III
hereunder, resulting from death claims incurred on business ceded
by Connecticut General to State Mutual, based on available
quarterly data; provided that the liability of State Mutual under
this sub-paragraph (4) with respect to any calendar year will not
exceed 150% of State Mutual expected mortality for such year
determined in accordance with Article III. This limitation will
be applied annually, and will be reflected in the last quarterly
accounting statement for each year.
Based on the data referred to above and the terms of this Agreement,
the accounting statement will indicate a net amount payable by
Connecticut General to State Mutual, or a net amount payable to State
Mutual to Connecticut General.
C. PAYMENTS BY CONNECTICUT GENERAL. If there is a balance due State
Mutual when the Accounting Statement is provided, Connecticut General
will pay such balance due at the time the Statement is rendered. The
provisions of Section D of this article will also apply to Connecticut
General in the event that amounts due and payable to State Mutual are
not paid within the Sixty (60) day period.
D. PAYMENTS BY STATE MUTUAL. The payment of all amounts due and payable
Connecticut General as indicated on the Accounting Statement will be a
condition precedent to the liability of Connecticut General under all
Reinsurance Assumed. If amounts due and payable are not paid in full
within Sixty (60) days of receiving a quarterly accounting statement,
Connecticut General will begin charging interest and reserve the right
to terminate all Reinsurance Assumed for which settlements are in
default. The interest applicable to amounts due Connecticut General
will be commensurate with the yields obtained by Connecticut General
in other current investments not to exceed fifteen percent (15%) per
year. If Connecticut General elects to exercise its right of
termination, it will give State Mutual thirty (30) days written notice
of termination. If amounts due to Connecticut General from State
Mutual, including, any obligations which may become in default during
the thirty (30) day period, are not paid before the expiration of such
period, Connecticut General will thereupon be relieved of future
liability under all Reinsurance Assumed for which settlements remain
unpaid. The amounts due and payable to Connecticut General will be
deemed to be claims payable and remain an obligation on the part of
State Mutual.
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ARTICLE VIII
DAC TAC ARTICLE - IRC REG. SECTION 1.848-2(G)(8) ELECTION
The Parties hereby make an election pursuant to Internal Revenue Code
Regulation Section 1.848-2(g)(8). This election shall be effective for all
taxable years for which the
Reinsurance Agreement remains in effect
commencing with the year ending December 31, 1991.
The terms used in this Addendum are defined by reference to Regulation
Section 1.848-2 promulgated on December 28, 1992.
The Party with net positive consideration for the
reinsurance agreement for
each taxable year will capitalize specified policy acquisition expenses
with respect to the
reinsurance agreement without regard to the general
deductions limitation of Section 848(c)(1) of the Internal Revenue Code of
1986, as amended.
The Parties agree to exchange information pertaining to the amount of net
consideration under the
reinsurance agreement each year to ensure
consistency. To achieve this, State Mutual shall provide Connecticut
General with a schedule of its calculation of the net consideration for all
reinsurance agreements in force between them for a taxable year by no later
than May 1 of the succeeding year. Connecticut General shall advise State
Mutual if it disagrees with the amounts provided by no later than May 31,
otherwise the amounts will be presumed correct and shall be reported by
both parties in their respective tax returns for such tax year. If
Connecticut General contests State Mutual's calculation of the net
consideration, the Parties agree to act in good faith to resolve any
difference within thirty (30) days of the date Connecticut General submits
alternative calculation and report the amounts agreed upon in their
respective tax returns for such tax year.
The Parties shall attach to their respective 1992 federal income tax
returns a schedule specifying that the joint election herein has been made
for this
reinsurance agreement.
Connecticut General represents and warrants that it is subject to U.S.
taxation under either Subchapter L or Subpart F of Part III of Subchapter N
of the Internal Revenue Code of 1986, as amended.
PREMIUM TAX REIMBURSEMENTS
Connecticut General will not be responsible for the payment of premium
taxes on policies reinsured under this Agreement.
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ARTICLE IX
CONTRACTUAL CHANGES IN REINSURANCE ASSUMED BY CONNECTICUT GENERAL
A. CHANGES. Whenever a change is made in the plan of a policy or portion
of a policy reinsured hereunder, a corresponding change will be made
in the reinsurance. Whenever a change is made in the underwriting
classification of a policy reinsured hereunder, a corresponding change
will be made in the reinsurance subject to the prior approval of
Connecticut General if such reinsurance was effected on a facultative
basis.
B. EXCHANGES. State Mutual will inform Connecticut General of company
exchange programs with respect to currently reinsured in force
policies so that good faith negotiations can be undertaken to continue
coverage.
C. REDUCTIONS, CANCELLATIONS. Whenever a policy upon which reinsurance is
based is reduced or terminated or whenever all or part of the
insurance which was in force at the date reinsurance was effected and
not covered by previous reinsurance is reduced or terminated, the
reinsurance will be reduced by a like amount as of the date of such
reduction or termination. If reinsurance has been effected in more
than one company, the reduction in Connecticut General will be that
proportion of the total amount of the reduction which the reinsurance
in Connecticut General is of the total amount reinsured.
D. REINSTATEMENTS. Whenever a policy reinsured hereunder lapses, or is
continued on the paid-up or extended term insurance basis, and is
later approved for reinstatement by State Mutual in accordance with
its usual underwriting standards, reinsurance of the excess over State
Mutual's original retention resulting from such reinstatement will be
automatically reinstated by Connecticut General for an amount not
exceeding that part of the policy originally reinsured in Connecticut
General. However, if such reinsurance was effected on a facultative
basis State Mutual will obtain Connecticut General's prior approval
before reinstating the policy.
State Mutual will promptly notify Connecticut General of such
reinstatement, and the reinsurance so reinstated will become effective
as of the date of State Mutual's underwriting approval of
reinstatement.
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ARTICLE X
RECAPTURES OF REINSURANCE ASSUMED BY CONNECTICUT GENERAL
Whenever State Mutual increases its maximum limit of retention for new
business, it will have the option of recapturing a corresponding amount of
insurance on each life reinsured under this Agreement, provided that
reinsurance will not be so recaptured before the end of the respective
tenth policy year of any given policy. Reinsurance will be eligible for
recapture on each life on which State Mutual has maintained its maximum
limit of retention, as shown in Schedule A, for the age, plan and mortality
classification of the risk at time of issue. State Mutual will, within
ninety days after the effective date for its increase in retention on new
issues, notify Connecticut General of its intention to exercise its option
to recapture and the effective date such recapture is to commence.
Reinsurance in force will then be reduced, as herein provided, on the
respective anniversary date next following. If recapture as provided above
is elected by State Mutual, then all reinsurance eligible for such
recapture will be similarly recaptured.
Recapture will commence with the effective date established by State Mutual
and will continue uninterrupted by State Mutual until all eligible policies
have been recaptured.
Notwithstanding the above, whenever reinsurance is issued hereunder on the
conversion of a policy originally reinsured under this or any other
Agreement between the two companies, the recapture provisions applicable to
the original reinsurance will continue to apply to the reinsurance of the
new policy.
The retention in the amount of each risk reinsured will be of such an
amount as will increase State Mutual's share in the risk to its new maximum
limit of retention for the age, plan and mortality classification at time
of issue. If reinsurance is in force with other companies on a given risk,
the reduction in the reinsurance in Connecticut General will be that
proportion of the total reduction indicated which the reinsurance in
Connecticut General is of the total amount reinsured.
The above recapture privileges may not be exercised at any time when State
Mutual is in a deficit position as defined in Article III (B) of this
Agreement.
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ARTICLE XI
INSOLVENCY
All amounts due and payable under the Accounting Statement as defined in
Article VII (B) and (C) will be payable by Connecticut General directly to
State Mutual, its liquidator, receiver or statutory successor on the basis
of the liability of State Mutual under the policy or policies reinsured,
without diminution because of the insolvency of State Mutual. It is
understood, however, that in the event of such insolvency, the liquidator
or receiver or statutory successor of State Mutual will give written notice
of the pendency of a claim against State Mutual on the policy reinsured
within a reasonable time after such claim is filed in the insolvency
proceedings, and that during the pendency of such claim Connecticut General
may investigate such claim and interpose, at its own expense, in the
proceedings which such claim is to be adjudicated, any defense or defenses
which it may deem available to State Mutual or its liquidator or receiver
or statutory successor.
It is further understood that the expense thus incurred by Connecticut
General will be chargeable, subject to court approval, against State Mutual
as part of the expense of liquidation to the extent of a proportionate
share of the benefit which may accrue to State Mutual solely as a result of
the defense undertaken by Connecticut General. Where two or more reinsurers
are involved in the same claim and a majority in interest elect to
interpose defense to such claim, the expense will be apportioned in
accordance with the terms of the
reinsurance Agreement as though such
expense has been incurred by State Mutual.
In the event of the insolvency of a pool member, no new cessions will be
accepted from such member. If a member company fails to pay its assessment,
or becomes insolvent, Connecticut General will work toward converting or
forcing recapture of the insolvent member's pool business, although
Connecticut General does not have a contractual right to do so. Connecticut
General holds the insolvency risk, and will work with the liquidator,
statutory successor, or receiver in the case of pool member insolvency. In
any event, pool members will not be responsible for failure of insolvent
companies to pay pool assessments.
Connecticut General will pay ALL amounts due to participants and will be
responsible for collecting from participants that owe settlements. In
addition, Connecticut General will accept responsibility for policies once
they are removed from the pool, and will impose a traditional rate scale.
In the event of the insolvency of Connecticut General, the provisions of
Article XI will apply to Connecticut General in the same manner as any
other pool member.
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ARTICLE XII
RIGHT TO INSPECT
Connecticut General may, at all reasonable times, inspect in the offices of
State Mutual the original papers, records, books, files and other documents
pertinent to reinsurance assumed or ceded under this Agreement.
ARTICLE XIII
OVERSIGHTS
If failure to pay all amounts due and payable within the time specified or
failure to comply with any of the other terms of this Agreement is shown to
be unintentional and the result of oversight or misunderstanding on the
part of either State Mutual or Connecticut General, this Agreement will not
be considered abrogated thereby, but both State Mutual and the Connecticut
General will be restored to the position they would have occupied had no
such oversight or misunderstanding occurred.
ARTICLE XIV
ARBITRATION
Should a disagreement arise between the two companies regarding the rights
or liabilities of either company under any transaction under this
Agreement, the issue will be referred to arbitrators, one to be chosen by
each company from among officers of other life insurance companies, who are
familiar with reinsurance transactions, and a third to be chosen by the
said two arbitrators before entering into arbitration. An arbitrator may
not be a present or former officer, attorney, or consultant of State Mutual
or Connecticut General or either's affiliates. If the arbitrators appointed
by the two parties cannot agree on a third person, then either party may
apply to the court, pursuant to Section 52-411 of the General Statutes of
the State of Connecticut, for appointment of a third arbitrator. The
arbitrators will regard this document as an honorable agreement and not
merely as a legal obligation as they will consider practical business and
equity principles. The arbitrators' decision will be final and binding upon
both companies.
The place of meeting of the arbitrators will be decided by a majority vote
of the members thereof. All expenses and fees of the arbitrators will be
borne equally by State Mutual and Connecticut General unless the
arbitrators decide otherwise.
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ARTICLE XV
DURATION OF AGREEMENT
This Agreement will take effect as of January 1, 1994. It is not limited in
duration, but may be amended at any time by mutual consent of the two
companies and may be terminated as to further new reinsurance at any time
by either company upon three months' notice by registered letter. Such
termination as to new reinsurance will not affect existing reinsurance
which will remain in force until the termination or expiry of each
individual reinsurance in accordance with the terms and conditions of this
Agreement.
In witness whereof, this Agreement is signed in duplicate on the date indicated
at the home office of each company.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
By: /S/ XXXXXX X. XXXXX XX.
---------------------------------------------------
Date: JANUARY 14, , 1994
------------------------------------ ---------
CONNECTICUT GENERAL LIFE ASSURANCE COMPANY
By: /S/
---------------------------------------------------
Date: (ILLEGIBLE)
-------------------------------------------------
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SCHEDULE A
Maximum Limits of Retention of State Mutual
LIFE INSURANCE
STANDARD RISKS,
SPECIAL CLASSES, SPECIAL CLASSES
A THROUGH H AND J, L, & P, AND
ISSUE FLAT EXTRAS OF FLAT EXTRAS OF
AGES $20.00 OR LESS $20.01 AND OVER
----- ----------------- ---------------
-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
(a) Spouse's Insurance Rider not available above Class D.
(b) Term policies and riders not available above Class H.
Notes: (1) The Above maximum limits are also the maximums on any one life
for all plans and riders combined.
(2) State Mutual will retain those additional amounts which will
avoid Reinsurance cessions of 50,000 or less.
(3) Any situation involving Aviation will use a $500,000 retention.
SCHEDULE A
SCHEDULE B
ACTUALIZER REINSURANCE ACCOUNT LIMIT
$2,000,000
(Except for policies issued prior to January 1, 1994.)
AUTOMATIC BINDING LIMIT
ISSUES AGES STANDARD THRU TABLE 8
0 - 75 $2,000,000
SCHEDULE B
REINSURANCE APPLICATION
Omitted 1 Page
SCHEDULE C
SCHEDULE D
REQUIRED DATA ELEMENTS
Policy Number
Last Name
First Name
Social Security Number
Date of Birth
Policy Date
Retention (F/L)
Plan Code
Submission Basis (A/F)
Termination Date
Sex
Net Amount at Risk
Rating
Flat Extra Rating
Smoke Code (S/N)
Original Policy Date
SCHEDULE D
SCHEDULE E
REINSURANCE FEES
Automatic business will be charged at $.20 per $1,000 annually.
Facultative business will have a first year, one time charge of $30 plus $.01
per $1,000 per case underwritten in addition to $.20 per $1,000 annually.
In addition to the ACTUALIZER fees noted above, migration business will be
assessed a premium equal to the expected mortality of such business in
migration.
EXPECTED MORTALITY AND EXPERIENCE RATING
Mortality rates are based on the 75-80 Basic Table,
Multiplied by the Expected Factor Below.
REGULAR EXPERIENCE RATING FORMULA
Let:
_________________________________
z = Root of Number of expected claims / 120
A = Actual mortality results for the most recent 7 years
71% = INITIAL ASSESSED MORTALITY
Then:
Expected Factor - (A) (z) + 71% (1 - z)
ACCELERATED EXPERIENCE RATING FORMULA
Let:
_________________________________
z = Root of Number of expected claims / 20
A = Actual mortality results for all years
Then:
Expected Factor = (A) (z) + 71% (1 - z)
SCHEDULE E
Amendment No. 1
To the ACTUALIZER
Reinsurance Agreement Effective January 1, 1994
between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
It is agreed by the two companies as follows:
1. The following Paragraph B EXPERIENCE RATING will be submitted for the
corresponding paragraph of the Section entitled REINSURANCE CEDED of
Article III of this agreement:
B. EXPERIENCE RATING. In determining the ratio set forth above, the
expected mortality for State Mutual will be experience rated on a
quarterly basis. The experience rating formula which will be used is
contained in Schedule E. If and when the lapse rate, as defined below,
for any of the four quarters of the previous calendar year equals or
exceeds 15%, the Lapse Triggered Formula contained in Schedule E will
be followed. If and when State Mutual ceases to cede all or any
portion of the coverage defined in Article II (A), and State Mutual is
deemed to be in a deficit position, as defined below, the Accelerated
Formula contained in Schedule E will be followed.
A lapse rate will be calculated for policies in durations five (5) and
higher, ignoring internal replacements, as a rolling twelve (12)
months statistic on a quarterly basis. The lapse rate will be based on
policy counts. The administration of the calculations will be done on
an annual basis. State Mutual's expected mortality will be adjusted
prospectively only.
A deficit position is defined as occurring whenever claims submitted
by State Mutual on reinsurance assumed under this Agreement, over the
life of this Agreement, exceed assessed claims on reinsurance ceded by
more than 10%.
Assessed claims are defined as the ceding company's ACTUALIZER pool
share multiplied by the pool's actual claims.
2. The following Paragraph 2 CONTESTED CLAIMS will be substituted for the
corresponding paragraph of Section A entitled ASSUMED BY CONNECTICUT
GENERAL of Article VI entitle CLAIMS FOR REINSURANCE of this Agreement:
2. CONTESTED CLAIMS. State Mutual will notify Connecticut General of its
intention to contest, compromise or litigate a claim involving
reinsurance, and Connecticut General will pay its share of the payment
unless it declines to be a party to the contest, compromise or
litigation, in which case it will pay State Mutual the full amount of
the reinsurance.
3. The following Paragraph 4 MISSTATEMENTS will be substituted for the
corresponding paragraph of Section A entitled ASSUMED BY CONNECTICUT
GENERAL of Article VI entitled CLAIMS FOR REINSURANCE of this Agreement.
4. MISSTATEMENTS. Whenever the amount of insurance on a policy ceded by
State Mutual is increased or reduced because of a misstatement of age,
sex or smoker status established after the death of the insured, State
Mutual and Connecticut General will share in such increase or
reduction in proportion to the respective net liabilities carried by
State Mutual and Connecticut General on the policy immediately prior
to the adjustment.
4. The following Sub-Paragraph 2 will be substituted for the corresponding
sub-paragraph of Section B entitled ACCOUNTING STATEMENT of Article VII
entitled AMOUNTS DUE AND PAYABLE of this agreement.
2. Administrative Fees and Premiums contained in Schedule E on all
Reinsurance Assumed that has been allocated to the ACTUALIZER
Reinsurance Account and/or the Migration Program relative to
Reinsurance ceded by Connecticut General to State Mutual under this
Agreement.
5. The attached Schedule E will be substituted for the corresponding schedule
attached to this agreement.
This amendment will be effective January 1, 1994.
In witness whereof, this amendment is signed in duplicate on the dates indicated
at the home office of each company.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
By: /S/ XXXXXX X. XXXXX XX.
-------------------------------------------------
Date: MARCH 3, 1994
-----------------------------------------------
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: /S/
-------------------------------------------------
Date: JUNE 3, 1994
-----------------------------------------------
SCHEDULE E
REINSURANCE FEES
Automatic business will be charged at $.20 per $1,000 annual.
Facultative business will have a first year, one time charge of $30 plus $.01
per $1,000 per case underwritten in addition to $.20 per $1,000 annually.
In addition to the ACTUALIZER fees noted above, migration business will be
assessed a premium equal to the expected mortality of such business in
migration.
EXPECTED MORTALITY AND EXPERIENCE RATING
Mortality rates are based on the 75-80 Basic Table,
Multiplied by the Expected Factor Below.
REGULAR EXPERIENCE RATING FORMULA
Let:
________________________________________
z = The lesser of Root of Number of expected claims / 120 and 100%
A = The lesser of actual mortality results for the most recent 7 years
and 150% of expected mortality over the most recent rolling 7 year
period.
71% = INITIAL ASSESSED MORTALITY
Then:
Expected Factor = (A) (z) + 71% (1 - z)
SCHEDULE E, Page 1
LAPSE TRIGGERED EXPERIENCE RATING FORMULA
Let:
______________________________________
z = The lesser of Root of Number of expected claims / B and 100%
where B =
DURATION B
-------- --
1 20
2 20
3 20
4 40
5 60
6 90
7 120
A = The lesser of actual mortality results for the most recent 7
years and 150% of expected mortality over the most recent rolling
7 year period.
71% = INITIAL ASSESSED MORTALITY
Then:
Expected Factor = (A) (z) + 71% (l - z)
ACCELERATED EXPERIENCE RATING FORMULA
Let:
________________________________________
z = The Lesser of Root of Number of expected claims / 20 and 100%
A = The greater of the actual mortality results for all years and the
actual mortality results for the most recent 7 years.
71% = INITIAL ASSESSED MORTALITY
Then:
Expected Factor = (A) (z) + 71% (l - z)
SCHEDULE E, Page 2
SCHEDULE F
PLANS AND BUSINESS REINSURED
New Issue
POLICY PERCENTAGE
PLAN NAME FORM NUMBER OF EACH RISK
--------- ----------- ------------
Execterm II 30%
Flexterm 30%
Universal Life Products 30%
Ten Year Renewable Term 1024-93 25%
Exec 95 Paid Up 25%
Whole Life 25%
All Other Products 33-1/3%
In Force Business
All Execerm, Flexterm, Universal Life and other traditional products with policy
dates of January 1, 1991 or later which were reinsured in Connecticut General
and in force on the effective date of this agreement will be transferred without
interruption to this (ACTUALIZER) agreement.
SCHEDULE F
AMENDMENT No. 2
to the ACTUALIZER
Reinsurance Agreement Effective January 1, 1994
between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
It is agreed by the two companies as follows:
1. Joint Life (First-to Die) policies will be treated as single life cessions
for the purpose of determining retention, automatic limits and premiums
under this agreements.
2. The Survivor Benefit, in the case of Joint Life (First-to Die) plans will
be reinsured under this agreement for the ninety (90) day extension period.
The attached Schedule B will be substituted for the corresponding schedule
attached to this agreement.
This amendment will be effective simultaneously with the inception of this
agreement.
In witness whereof, this amendment is signed in duplicate on the dates indicated
at the home of each company.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
By: /S/ XXXXXX X. XXXXX, XX.
----------------------------------------
Date: 10/4/1994
--------------------------------------
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: /S/
----------------------------------------
Date: 9/27/1994
--------------------------------------
SCHEDULE B
ACTUALIZER REINSURANCE ACCOUNT LIMIT
$2,000,000 for Policies issued with policy dates of January 1, 1994 or later.
$3,000,000 for Business In Force at Inception of this Agreement
AUTOMATIC BINDING LIMIT
ISSUE AGES STANDARD THRU TABLE 8
---------- ---------------------
0 - 75 $2,000,000
SCHEDULE B
AMENDMENT No. 3
to the ACTUALIZER
Reinsurance Agreement Effective January 1, 1994
between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
It is agreed by the two companies as follows:
1. The following Sub-Paragraph 2 will be substituted for the corresponding
sub-paragraph of Section B entitled ACCOUNTING STATEMENT of Article VII
entitled AMOUNTS DUE AND PAYABLE of this agreement:
2. Administrative Fees and Premiums contained in Schedule E on all
Reinsurance Assumed by Connecticut General that has been allocated to
the ACTUALIZER Reinsurance Account and/or the Migration Program under
this Agreement.
2. The following Sub-Paragraph 4 will be substituted for the corresponding
sub-paragraph of Section B entitled ACCOUNTING STATEMENT of Article VII
entitled AMOUNTS DUE AND PAYABLE of this Agreement:
4. Amounts for which State Mutual is obligated under Article III
hereunder, resulting from death claims incurred on business ceded by
Connecticut General to State Mutual, based on available quarterly
data; provided that the liability of State Mutual under this
sub-paragraph (4) with respect to any calendar year will not exceed
one hundred thirty-five percent (135%) of State Mutual's expected
mortality for such year determined in accordance with Article III.
This limitation will be reflected in the last quarterly accounting
statement for each year.
3. The following section entitled DAC TAX REGULATION will be added to and made
a part of Article VIII of this agreement:
DAC TAX REGULATION - IRC REG. SECTION 1.848-2(G)(8) ELECTION
The parties hereby make an election pursuant to Internal Revenue Code
Regulation Section 1.848-2(g)(8). This election shall be effective for all
taxable years for which the Reinsurance Agreement remains in effect.
The terms used in this article are defined by reference to Regulation
Section 1.848-2 promulgated on December 28, 1992.
The Party with net positive consideration for the reinsurance agreement for
each taxable year will capitalize specified policy acquisition expenses
with respect to the reinsurance agreement without regard to the general
deductions limitation of Section 848(c)(1) of the Internal Revenue Code of
1986, as amended.
The Parties agree to exchange information pertaining to the amount of net
consideration under the reinsurance agreement each year to ensure
consistency. To achieve this, State Mutual shall provide Connecticut
General with a schedule of its calculation of the net consideration for all
reinsurance agreements in force between them for a taxable year by no later
than May 1 of the succeeding year. Connecticut General shall advise State
Mutual if it disagrees with the amounts provided by no later than May 31,
otherwise the amounts will be presumed correct and shall be reported by
both parties in their respective tax returns for such tax year. If
Connecticut General contests State Mutual's calculation of the net
consideration, the Parties agree to act in good faith to resolve any
difference within thirty (30) days of the date Connecticut General submits
its alternative calculation and report the amounts agreed upon in their
respective tax returns for such tax year.
The Parties shall attach to their respective federal income tax returns a
schedule specifying that the joint election herein has been made for this
reinsurance agreement.
Connecticut General represents and warrants that it is subject to U.S.
taxation under either Subchapter L or Subpart F of Part III of Subchapter N
of the Internal Revenue Code of 1986, as amended.
4. The following section entitled ENTIRE AGREEMENT will be added to and made a
part of Article XV of this agreement.
ENTIRE AGREEMENT
This agreement shall constitute the entire agreement between State Mutual
and Connecticut General with respect to the business reinsured hereunder,
and there are no understandings between the parties other than as expressed
in the agreement.
Any future change or modification to the agreement shall be null and void
unless made by amendment to the agreement and signed by both parties.
5. The attached Schedule E will be substituted for the corresponding schedule
attached to this agreement.
This amendment will be effective January 1, 1995.
In witness whereof, this amendment is signed in duplicate on the dates indicated
at the home office of each company.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
By: /S/ XXXXXX X. XXXXX, XX.
---------------------------------------------
Date: MAY 11, 1995
-------------------------------------------
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: /S/
---------------------------------------------
Date: MAY 11, 1995
-------------------------------------------
SCHEDULE E
REINSURANCE FEES
Automatic business will be charged at $.20 per $1,000 annually.
Facultative business will have a first year, one time charge of $30 plus $.01
per $1,000 per case underwritten in addition to $.20 per $1,000 annually.
In addition to the ACTUALIZER fees noted above, migration business will be
assessed a premium equal to the expected mortality of such business in
migration.
EXPECTED MORTALITY AND EXPERIENCE RATING
Mortality rates are based on the 75-80 Basic Table,
Multiplied by the Expected Factor Below.
REGULAR EXPERIENCE RATING FORMULA
Let:
________________________________________
z = The lesser of Root of Number of expected claims / 120 and 100%
A = The lesser of actual mortality results for the most recent
7 years and 135% of expected mortality over the most recent
rolling 7 year period.
71% = INITIAL ASSESSED MORTALITY
Then:
Expected Factor = (A) (z) + 71% (1 - z)
SCHEDULE E, Page 1
LAPSE TRIGGERED EXPERIENCE RATING FORMULA
Let:
________________________________________
z = The lesser of Root of Number of expected claims / B and 100%
where B =
DURATION B
-------- ---
1 20
2 20
3 20
4 40
5 60
6 90
7 120
A = The lesser of actual mortality results for the most recent
7 years and 135% of expected mortality over the most recent
rolling 7 year period.
71% = INITIAL ASSESSED MORTALITY
Then:
Expected Factor = (A) (z) + 71% (l - z)
ACCELERATED EXPERIENCE RATING FORMULA
Let:
_______________________________________
z = The Lesser of Root of Number of expected claims / 20 and 100%
A = The greater of the actual mortality results for all years and
the actual mortality results for the most recent 7 years.
71% = INITIAL ASSESSED MORTALITY
Then:
Expected Factor = (A) (z) + 71% (l - z)
SCHEDULE E, Page 2
AMENDMENT No. 4
to the ACTUALIZER
Reinsurance Agreement Effective January 1, 1994
between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
It is agreed by the two companies that the attached Schedule F will be
substituted for the corresponding schedule attached to this agreement:
This amendment will be effective for policies issued with policy dates of May 1,
1995 or later.
In witness whereof, this amendment is signed in duplicate on the dates indicated
at the home office of each company.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
By: /S/ XXXXXX X. XXXXX, XX.
--------------------------------------------
Date: JULY 6, 1995
------------------------------------------
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: /S/
--------------------------------------------
Date: MAY 23, 1995
------------------------------------------
SCHEDULE F
PLANS AND BUSINESS REINSURED
New Issue
POLICY PERCENTAGE
PLAN NAME FORM NUMBER OF EACH RISK
--------- ----------- ------------
Execterm II 3
0%
Flexterm 30%
Universal Life Products 30%
Select Life 1027-95 30%
Ten Year Renewable Term 1024-93 25%
Exec 95 Paid Up 25%
Whole Life 25%
All Other Products 33-1/3%
In Force Business
All Execerm, Flexterm, Universal Life and other traditional products with policy
dates of January 1, 1991 or later which were reinsured in Connecticut General
and in force on the effective date of this agreement will be transferred without
interruption to this (ACTUALIZER) agreement.
SCHEDULE F
AMENDMENT No. 6
to the ACTUALIZER Reinsurance Agreement Effective January 1, 1994
between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
It is agreed by the two companies as follows:
1. WHEREAS, State Mutual has changed its name to First Allmerica Financial
Life Insurance Company; and
2. WHEREAS, SMA Life Assurance Company has changed its name to Allmerica
Financial Life Insurance and Annuity Company (hereinafter called Allmerica
Financial Life);
3. NOW, THEREFORE, this agreement is deemed to be between First Allmerica
Financial Life Insurance Company (hereinafter call First Allmerica
Financial) and Connecticut General, and all references to SMA Life are
deemed to mean Allmerica Financial Life.
4. All provisions of this agreement, as previously amended, will continue in
full force and effect.
This amendment will be effective October 11, 1995.
In witness whereof, this amendment is signed in duplicate on the dates indicated
at the home of each company.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
By: /S/ XXXXXX X. XXXXX, XX.
-----------------------------------------------
Date: NOVEMBER 22, 1995
---------------------------------------------
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: /S/
-----------------------------------------------
Date: (ILLEGIBLE)
---------------------------------------------
SCHEDULE F
Effective January 1, 1996, Reinsurance under this Agreement will be limited to
residents of the United States, to Canadian residents who have applied for
coverage in the United States, or to residents of the Territories of the United
States identified as Commonwealth of the Northern Marianas and Guam.
PLANS AND BUSINESS REINSURED
NEW ISSUE
Policy Percentage
Plan Name Form Number of Each Risk
Execterm II 30%
Flexterm 30%
Universal Life Products 30%
Select Life 1027-95 30%
Ten Year Renewable Term 1024-93 25%
Exec 95 Paid Up 25%
Whole Life 25%
All Other Products 33-1/3%
In Force Business
All Execterm, Flex term, Universal Life and other traditional products with
policy dates of January 1, 1991 or later which were reinsured in Connecticut
General and in force on the effective date of this agreement will be transferred
without interruption to this (ACTUALIZER) agreement.
SCHEDULE F
AMENDMENT No. 7
to the ACTUALIZER
Reinsurance Agreement Effective January 1, 1994
between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
It is agreed by the two companies to amend the Agreement effective January 1,
1996, as follows:
1. The following Sub-Paragraph 2 will be substituted for the corresponding
sub-paragraph of Section A entitled AUTOMATIC REINSURANCE ASSUMED BY
CONNECTICUT GENERAL of Article II entitled REINSURANCE ASSUMED BY
CONNECTICUT GENERAL of this agreement:
2. Such insurance will be issued to residents of the United States, to
Canadian residents who have applied for coverage in the United States,
or to residents of the Territories of the United States identified in
Schedule F.
2. The following Article XII entitled RIGHT TO INSPECT will be substituted for
the corresponding Article of this agreement.
ARTICLE XII
RIGHT TO INSPECT
Connecticut General, or its duly authorized representative, shall have
reasonable access to all books and records of First Allmerica Financial
Life Company relating to the terms and conditions of this Agreement and the
business that is the subject matter of this Agreement.
To the extent that First Allmerica Financial Life Insurance Company has
assumed reinsurance liability in accordance with this Agreement, First
Allmerica Financial Life Insurance Company, or its duly authorized
representative, shall have reasonable access to all books and records of
Connecticut General relating to the business that First Allmerica Financial
Life Insurance Company has assumed in accordance with this Agreement.
3. The attached Schedule F will be substituted for the corresponding schedule
attached to the Agreement.
In witness whereof, this amendment is signed in duplicate on the dates indicated
at the home office of each company.
FIRST ALLMERICA FINANCIAL LIFE INSURANCE
COMPANY
By: /S/ XXXXXX X. XXXXX, XX.
----------------------------------------------
Date: MAY 19, 1997
--------------------------------------------
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: /S/
----------------------------------------------
Date: MAY 15, 1997
--------------------------------------------
AMENDMENT No. 8
to the ACTUALIZER
Reinsurance Agreement Effective January 1, 1994
between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
It is agreed by the two companies as follows:
1. The following Article V entitled NET AMOUNT AT RISK will be substituted
for the corresponding Article of this agreement and will be effective
February 1, 1997:
ARTICLE V
NET AMOUNT AT RISK
The Net Amount at Risk on Universal Life and other interest sensitive
polices is defined as an amount equal to the death benefit, less the cash
value, less the amount First Allmerica is retaining on the policy.
The Net Amount at Risk on all other insurance, excluding Single Premium
Variable Universal Life Plan, is defined as that amount equal to the death
benefit, less the terminal reserve, less the amount First Allmerica
Financial is retaining on the life; except that the terminal reserve will
be disregarded when the original policy is issued on a level term plan for
twenty years or less or on a reducing term plan for any period of years.
Terminal reserves will be based on the reserve tables of First Allmerica
Financial.
For the Single Premium Variable Universal Life Plan, the amount at risk in
the year of issue is defined as the amount of insurance reinsured less 30%
of the single premium for automatic reinsurance and less the entire single
premium for facultative reinsurance. The first year net amount at risk must
equal or exceed $50,001 for any reinsurance to be ceded.
Increases in the death benefit that are underwritten in accordance with
First Allmerica Financial's usual underwriting standards for individually
selected risks for new issues will be considered as new insurance for the
purpose of determining the reinsurance amount at risk.
In witness thereof, this amendment is signed in duplicate on the dates indicated
at the home office of each company.
FIRST ALLMERICA FINANCIAL LIFE INSURANCE
COMPANY
By: /S/ XXXXXX X. XXXXX, XX.
----------------------------------------
Date: MAY 19, 1997
--------------------------------------
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: /S/
----------------------------------------
Date: MAY 15, 1997
--------------------------------------
First Allmerica Financial Life Insurance Company
ACTUALIZER Agreement Effective 1/1/94
Amendment #7 Effective January 1, 1996
SCHEDULE F
Effective January 1, 1996, Reinsurance under this Agreement will be limited to
residents of the United States, to Canadian residents who have applied for
coverage in the United States, or to residents of the Territories of the United
State identified as Commonwealth of the Northern Marianas and Guam.
PLAN AND BUSINESS REINSURED AS OF FEBRUARY 1, 1997
NEW ISSUE
POLICY PERCENTAGE
PLAN NAME FORM NUMBER OF EACH RISK
--------- ----------- ------------
Execterm II 30%
Flexterm 30%
Universal Life Products 30%
Select Life 1027-95 30%
Single Premium Variable
Universal Life 1030-96 30%
Ten Year Renewable Term 1024-93 25%
Exec 95 Paid Up 25%
Whole Life 25%
All Other Products 33-1/3%
In Force Business
All Execterm, Flex term, Universal Life and other traditional products with
policy dates of January 1, 1991 or later which were reinsured in Connecticut
General and in force on the effective date of this agreement will be transferred
without interruption to this (ACTUALIZER) agreement.
