Exhibit (g)(ii)
Note: Using this form of agreement, New England Life Insurance Company has
entered into separate agreements with each of the following reinsurers:
Employers Reassurance Co., RGA Reinsurance Co. and Security Life of Denver
Insurance Co.
AUTOMATIC AGREEMENT
BETWEEN
NEW ENGLAND LIFE INSURANCE COMPANY
BOSTON, MASSACHUSETTS
(THE CEDING COMPANY)
AND
ABC REINSURANCE COMPANY
CITY, STATE
(THE REINSURER)
EFFECTIVE MONTH, DAY, YEAR
INDEX OF AGREEMENT
Article Name Article Number Page Number
------------ -------------- -----------
Automatic Coverage I 1
Facultative Coverage II 2
Premiums III 3
Liability IV 4
Claims V 5
Administration and Accounting VI 7
DAC Tax VII 9
Errors and Omissions VIII 11
Conversions and Exchanges IX 12
Terminations, Reductions and Increases X 13
Recapture and Changes in Retention XI 14
Reinstatements, Extended Term and
Reduced Paid-Up Insurance XII 15
Insolvency XIII 16
Arbitration XIV 17
Duration of Agreement XV 19
Execution XVI 20
Exhibit Name Exhibit Number
------------ --------------
Limits I
The Ceding Company Retention Limits II
Policy Plans Reinsured III
Premium Rates IV
Monthly Statements V
2
ARTICLE I
AUTOMATIC COVERAGE
A. Reinsurance hereunder will be ceded automatically by the Ceding Company on
the following basis:
1. For each policy on which life reinsurance is ceded, the Ceding Company
will retain 10%, not to exceed it per life retention as shown in Exhibit
II, taking into account both currently issued and previously issued
policies, including business issued by the former New England Mutual Life
Insurance Company.
B. Reinsurance may be ceded automatically if the following conditions are
met:
1. The Ceding Company has retained its portion of the risk as described
in Section A above.
2. The amount to be ceded to the Reinsurer does not exceed the
Automatic Binding Limit as shown in Exhibit I.
3. The sum of the amount of insurance already in force and applied for
on the life in all companies does not exceed the Jumbo Limit as
shown in Exhibit I.
4. The Ceding Company has not applied for facultative coverage on the
current application.
5. The policy is issued in accordance with the Ceding Company's normal
individual ordinary life underwriting rules and practices.
6. The plan of insurance is listed in Exhibit III.
7. The policy is issued to a resident of the United States or Canada or
a U.S. protectorate, or meets the Ceding Company's guidelines for
foreign nationals or U.S. citizens living abroad.
ARTICLE II
FACULTATIVE COVERAGE
A. The Ceding Company will have the option to submit any case facultatively
which it does not wish to cede automatically or which it may not cede
automatically under the provisions of Article 1.
B. The Ceding Company will send copies of the original applications, all
medical reports, inspection reports, attending physician's statements and
any additional information pertinent to the insurability of the risk.
C. The Ceding Company will also notify the Reinsurer of any outstanding
underwriting requirements at the time of any facultative submission.
D. Acceptance of the Reinsurer's offer to participate in the risk and
delivery of the policy according to the rules of the Ceding Company must
occur within 120 days of the Reinsurer's final offer on a facultative
submission. Unless the Reinsurer explicitly states in writing that the
final offer is extended, the offer will be withdrawn automatically at that
point.
2
ARTICLE III
PREMIUMS
A. Life reinsurance will be on the yearly renewable term basis for the net
amount at risk (death benefit less reserve) on that portion of the policy
which is reinsured by the Reinsurer except for policies with a paid up
additions rider (PUAR) which may be reisured for a level amount. Premiums
for life reinsurance, flat extra premiums, other standard premiums, and
allowances will be based on the rates specified in Exhibit IV.
B. There will be no premium tax reimbursement.
C. Premiums will be paid annually in advance regardless of the mode of the
underlying policy.
D. For technical reasons relating to statutory reserve requirements, the life
reinsurance rates described in Exhibit IV cannot all be guaranteed for
more than one year. The Reinsurer anticipates continuing to accept
premiums on the basis of the rates described in Exhibit IV. For each age
and duration, the guaranteed premium is the higher of the premium based on
the rates shown in Exhibit IV and the premium based on the 1980 CSO Table
with maximum valuation interest rate permitted for the underlying contract
under the National Association of Insurance Commissioners' Standard
Valuation Law.
E. Reinsurance premiums on cases which terminate, change or reinstate will be
based on the number of days of coverage, on a 360 day year basis, during
the policy year in which termination, change, or reinstatement takes
place. The Reinsurer will refund or adjust the portion of the annual
premium paid beyond the termination/ change/ reinstatement date.
3
ARTICLE IV
LIABILITY
A. The liability for all automatic cessions accepted by the Reinsurer under
this Agreement shall commence simultaneously with that of the Ceding
Company.
B. The Reinsurer will not be liable for proceeds paid under the Ceding
Company's temporary term insurance agreement ("TIA") unless conditions for
automatic cessions under Article I of this Agreement are met.
C. Liability for all cessions submitted facultatively to the Reinsurer will
commence when all of the following conditions are met:
1. The Reinsurer has received notice in writing that its offer had been
accepted.
2. The policy has been paid for in accordance with Ceding Company's
procedures.
3. No more than 120 days have elapsed from the date of the Reinsurer's
final offer unless the Reinsurer explicitly states in writing that
the final offer is extended for some further period of time.
D. This Agreement is an indemnity reinsurance agreement solely between the
Ceding Company and the Reinsurer. Each party will render its obligations
under this Agreement solely to the other party. In no instance will anyone
other than the Ceding Company or the Reinsurer have any rights under this
Agreement, and the Ceding Company will be and remain the only party
hereunder that is liable to any insured, policyowner or beneficiary under
any policy reinsured hereunder.
4
ARTICLE V
CLAIMS
A. Prompt notice of a claim will be given to the Reinsurer. In every case of
loss, copies of the proofs obtained by the Ceding Company will be taken by
the Reinsurer as sufficient. Copies thereof, together with proof of the
amount paid on such claim by the Ceding Company will be furnished to the
Reinsurer when requesting its share of the claim. The Ceding Company's
decision to pay a claim without contest, compromise, or litigation will be
unconditionally binding on the Reinsurer.
B. The Ceding Company will notify the Reinsurer of its intention to contest,
compromise, or litigate a claim and the Reinsurer will pay its share of
any settlement up to the maximum that would have been payable under the
specific policy had there been no controversy plus its share of specific
expenses involved, unless it declines to be a party to the contest,
compromise or litigation, in which case it will pay the full amount of its
share of the claim to the Ceding Company. Compensation of salaried
officers and employees of the Ceding Company will not be included in the
Reinsurer's share of the specific expenses and/or final settlement. In no
event will the Reinsurer participate in punitive or compensatory damages
which are awarded against the Ceding Company as a result of an act,
omission or course of conduct committed solely by the Ceding Company in
connection with the insurance reinsured under this Agreement. The
Reinsurer will, however, pay its share of statutory penalties awarded
against the Ceding Company in connection with insurance reinsured under
this Agreement if the Reinsurer elected to join in the contest of the
coverage in question. The parties recognize that circumstances arise under
which equity would require the Reinsurer, to the extent permitted by law,
to share proportionately, in certain assessed damages. Such circumstances
are difficult to define in advance, but generally would be those
situations in which the Reinsurer was an active party and directed,
consented to, or ratified the act, omission, or course of conduct of the
Ceding Company which ultimately resulted in the assessment of punitive
and/or compensatory damages. In such situations where all reinsurers
involved in the reinsurance of a particular policy are participating in a
given claims contest, the Ceding Company and the Reinsurer would share
such damages so assessed in a proportion equal to their percentage share
of the pool. In other situations, the Ceding Company and the Reinsurer
would share such damages so assessed in equitable proportions. For
purposes of this provision, the following definitions will apply:
"Punitive Damages" are those damages awarded as a penalty, the amount of
which is not governed nor fixed by statute;
"Statutory Penalties" are those amounts which are awarded as a penalty and
are fixed in amount by statute;
"Compensatory Damages" are those amounts awarded to compensate for the
actual damages sustained. They are not awarded as a penalty and are not
fixed in amount by statute.
5
C. In the event that the amount of insurance provided by a policy or policies
reinsured hereunder is increased or reduced because of a misstatement of
age established after the death of the insured, the Reinsurer will share
in the increase or reduction in the proportion that the net liability of
the Reinsurer bore to the total net liability under the policy immediately
prior to such increase or reduction. The reinsured policy or policies will
be rewritten from commencement on the basis of the adjusted amounts using
premiums and reserves at the correct ages. The adjustment for the
difference in premiums will be made without interest.
D. In the settlement of any claim, the Reinsurer will pay interest on its
share, calculated at the same rate and for the same period used by the
Ceding Company.
6
ARTICLE VI
ADMINISTRATION AND ACCOUNTING
A. The Ceding Company will administer the record of the reinsurance ceded to
the Reinsurer under this Agreement on the Bordereau basis. The Ceding
Company will furnish statements shown in Exhibit V to the Reinsurer every
month, reflecting information for the month just past.
B. The monthly statements will be furnished to the Reinsurer within thirty
days following the close of each month and will be accompanied by payment
of the net amount, if any, due the Reinsurer as shown on the monthly
statement. All premiums not paid within thirty days following the close of
each month will be in default. If the monthly statement shows an amount
due the Ceding Company, that amount is due thirty days after the Reinsurer
receives the monthly statement from the Ceding Company.
C. Subject to the provisions of Article VIII, the Reinsurer will have the
right to terminate the reinsurance on risks for which reinsurance premiums
are in default by giving thirty days written notice of termination to the
Ceding Company. As of the close of the last day of this thirty day period,
the Reinsurer's liablity for the following reinsurance will terminate:
1. Reinsurance on risks which are the subject of the termination
notice.
2. Reinsurance on risks for which the reinsurance premiums went
into default during the thirty day notice period.
Not withstanding termination of reinsurance as provided in this Section,
the Ceding Company will continue to be liable to the Reinsurer for all
unpaid reinsurance premiums earned by the Reinsurer under this Agreement.
D. Reinsurance terminated under Section C of this Article may be reinstated
by the Ceding Company
The Ceding Company may reinstate such terminated reinsurance if, within
sixty days after the effective date of its termination, the Ceding Company
pays in full all of the unpaid reinsurance premiums for the reinsurance
which was in force prior to its termination. The effective date of
reinstatement will be the day the Reinsurer received all of the required
premiums. The Reinsurer will have no liability in connection with any
claims incurred between the date of termination for a given reinsured
policy and the date reinsurance for that policy is reinstated.
E. The first day of the thirty day notice of termination under Section C of
this Article will be the day the notice is received by the Ceding Company.
If all premiums in default are received by the Reinsurer within the thirty
day notice period, the reinsurance will remain in effect.
F. In the event of the insolvency of either the Ceding Company or the
Reinsurer, any amounts owed by the Reinsurer to the Ceding Company and by
the Ceding
7
Company to the Reinsurer with respect to this Agreement, will be offset,
as permitted by law, against each other with the balance to be paid by the
appropriate party.
G. The Ceding Company will bear the expense of all medical examinations,
inspection fees and other charges incurred in connection with the original
policy.
H. The Reinsurer may at all reasonable times inspect the Ceding Company's
original papers, record, books, files, etc. referring to the business
under this Agreement. Such inspections will be conducted in the Ceding
Company's offices.
8
ARTICLE VII
DAC TAX
A. The terms used in this Article are defined by reference to Treasury
Regulation Section 1.848-2 in effect as of December 29, 1992. The term
"net consideration" shall refer to either net consideration as defined in
Treasury Regulation Section 1.848-2 (f) or "gross premium and other
consideration" as defined in Treasury Regulation Section 1.848-3 (b) as
appropriate.
B. The party with the net positive consideration for this Agreement for each
taxable year shall capitalize specified policy acquisition expenses with
respect to this Agreement without regard to the general deductions
limitation of Section 848(c)(1) of the Internal Revenue Code of 1986, as
amended. This election to capitalize specified policy acquisition expenses
without regard to the general deductions limitation is effective for all
taxable years during which this agreement remains in effect.
C. The Ceding Company and the Reinsurer shall exchange information pertaining
to the amount of net consideration under this Agreement each year to
insure consistency. The Ceding Company and the Reinsurer shall also
exchange information as otherwise required by the Internal Revenue
Service.
D. The Ceding Company shall submit a schedule to the Reinsurer by April 1 of
each year of its calculation of the net consideration for the preceding
taxable year. This schedule of calculations shall 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 taxable year.
E. The Reinsurer may contest such calculation by providing an alternative
calculation to the Ceding Company in writing within thirty (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 shall
report the net consideration as determined by the Ceding Company in the
Reinsurer's tax return for the preceding taxable year.
F. If the Reinsurer contests the Ceding Company's calculation of the net
consideration, the parties shall 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 an amount of net consideration, each party
shall report such consistent amounts in their respective tax returns for
the preceding taxable year.
G. The Reinsurer 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.
9
ARTICLE VIII
ERRORS AND OMISSIONS
It is understood and agreed that, if failure to comply with any of the terms of
this Agreement is shown to be unintentional and the result of misunderstanding
or oversight of the part of either the Ceding Company or the Reinsurer, both the
Ceding Company and the Reinsurer will be restored to the positions they would
have occupied had no such misunderstanding or oversight occurred.
10
ARTICLE IX
CONVERSIONS AND EXCHANGES
A. If any policy covered automatically under this Agreement is exchanged for,
or converted to, another policy, the Ceding Company will recapture
reinsurance under this Agreement up to its retention limit as shown in
Exhibit II. The Reinsurer will reinsure its proportionate share of the
excess above the Ceding Company's retention, up to its automatic binding
limit shown in Exhibit I. Reinsurance premiums will be those shown in
Exhibit IV, based upon policy date, age and underwriting classification of
the original policy.
B. If any policy covered facultatively under this Agreement is exchanged for,
or converted to, another policy, reinsurance will continue based upon the
policy date, age and underwriting classification of the original policy.
D. If existing business not covered by this Agreement is exchanged for a
policy covered by this Agreement, as shown in Exhibit III, it will not be
reinsured under this Agreement.
11
ARTICLE X
TERMINATIONS, REDUCTIONS AND INCREASES
A. If a policy reinsured on the quota share basis described in Article I,
Section A, Subsection 1 is reduced, the reinsurance ceded to the Reinsurer
will be reduced by the Reinsurer's share of the reduction shown in Exhibit
I.
B. If a policy reinsured on the excess retention basis under this Agreement,
or another Ceding Company policy on the same life, is reduced or
terminated, reinsurance on the life will be reduced, to restore, as far as
possible, the Ceding Company's retention on the risk such that the amount
retained will not be greater than the retention limit at the time of issue
of the policy or the retention limit as adjusted in accordance with
recapture in Article X. If there is more than one insurance policy on the
life, the reduction will apply first to any reinsurance on the policy
being reduced, and then, to any reinsurance on other policies on the life
on a chronological basis with the last policies reinsured being reduced
first. If the reinsurance on any policy has been ceded to more than one
reinsurer, the reduction in reinsurance with the Reinsurer on such policy
will be the same fraction of the total reinsurance on that policy
immediately before the reduction.
C. If a policy reinsured on the quota share basis described in Article I,
Section A, Subsection 1 is increased, subject to the normal rules and
practices of the Ceding Company, the Ceding Company will cede
automatically the Reinsurer's share as shown in Exhibit 1 of the increase
to the Reinsurer if the policy continues to meet the conditions of Article
I, Section B.
D. If a policy reinsured under Article II of this Agreement is increased,
such increase is subject to the provisions of Article II.
F. For plans of insurance with a variable death benefit that are reinsured
under this Agreement, the Reinsurer will share proportionately in the
increase or decrease in the amount at risk.
12
ARTICLE XI
RECAPTURE AND CHANGES IN RETENTION
A. The provisions of this Article with the exception of Section G apply only
to business ceded on an excess retention basis.
B. The Ceding Company shall promptly notify the Reinsurer of changes in its
retention limits.
C. The Ceding Company may recapture business to reflect changes in its
retention limits, provided that ten years have elapsed since the issue
date of the original policy.
D. Recapture will become effective on the policy anniversary date following
notification of the Ceding Company's intent to recapture.
E. If any reinsurance is recaptured under the provisions of Section C, all
reinsurance eligible for recapture under the provisions of this Article
must be recaptured.
F. If the reinsurance on the policy has been ceded to more than one
reinsurer, the reduction in reinsurance with the Reinsurer on such policy
will be the same fraction of the total recapture on that policy as the
Reinsurer held of the total reinsurance on that policy immediately before
the recapture.
G. If the Reinsurer increases premiums on inforce business as described in
Article III, Section D, the Ceding Company will have the right to
recapture all inforce or amounts up to its retention limit.
13
ARTICLE XII
REINSTATEMENT, EXTENDED TERM AND PAID-UP INSURANCE
A. Any policy reinsured in accordance with the terms and conditions of this
Agreement by the Ceding Company may be automatically reinstated with the
Reinsurer so long as the policy is reinstated in accordance with terms and
rules of the Ceding Company. The Ceding Company will pay the Reinsurer
reinsurance premiums for the period for which the Ceding Company received
premiums in arrears from the policyholders.
B. Changes as a result of extended term or reduced paid-up insurance
(nonforfeiture options) will continue to be reinsured and will be handled
in accordance with Article III, Section E.
14
ARTICLE XIII
INSOLVENCY
A. In the event of the insolvency of the Ceding Company, all reinsurance will
be payable directly to the liquidator, receiver, or statutory successor of
the Ceding Company without diminution because of the insolvency of the
Ceding Company.
B. In the event of the insolvency of the Ceding Company, the liquidator,
receiver, or statutory successor will give the Reinsurer written notice of
the pendency of a claim on a reinsured policy within a reasonable time
after such claim is filed in the insolvency proceeding. During the
pendency of any such claim, the Reinsurer may investigate such claim and
interpose in the name of the Ceding Company (or its liquidator, receiver,
or statutory successor), but at its own expense, in the proceeding where
such claim is to be adjudicated, any defense or defenses which the
Reinsurer may deem available to the Ceding Company or its liquidator,
receiver, or statutory successor.
C. The expense thus incurred by the Reinsurer will be chargeable, subject to
court approval, against the Ceding Company as part of the expense of
liquidation to the extent of a proportionate share of the benefit which
may accrue to the Ceding Company solely as a result of the defense
undertaken by the Reinsurer. Where two or more reinsurers are
participating in the same claim and a majority in interest elect to
interpose a defense or defenses to any such claim, the expense will be
apportioned in accordance with the terms of the reinsurance agreements as
though such expense had been incurred by the Ceding Company.
D. In the event of the insolvency of either party, the insolvent party must
notify the other party of its insolvency within thirty days.
E. In the event of the insolvency of the Reinsurer, the Reinsurer shall
deliver to the Ceding Company, within thirty (30) days, documentation
relating to the insolvency proceedings.
F. In the event of the insolvency of the Reinsurer, the Ceding Company may
recapture all of the business reinsured by the Reinsurer under this
agreement. Such recapture will be effective with the date of the
insolvency.
G. In the event of the insolvency of the Reinsurer, the Ceding Company must
notify the Reinsurer (or its liquidator, receiver, or statutory successor)
whether or not it is going to recapture the business within sixty (60)
days after being notified of the Reinsurer's insolvency.
15
ARTICLE XIV
ARBITRATION
A. It is the intention of the Reinsurer and the Ceding Company that the
customs and practices of the insurance and reinsurance industries will be
given full effect in the operation and interpretation of this Agreeement.
The parties agree to act in all things with the highest good faith. If the
Reinsurer or the Ceding Company cannot mutually resolve a dispute which
arises out of, or relates to, this Agreement, the dispute will be decided
through arbitration. The arbitrators will base their decision on the terms
and conditions of this Agreement plus, as necessary, on the customs and
practices of the insurance and reinsurance industries rather than solely
on a strict interpretation of applicable law. There will be no appeal from
their decision, and either party may petition a court having jurisdiction
over the parties and the subject matter to reduce the arbitrators'
decision to judgment.
B. To initiate arbitration, either the Ceding Company or the Reinsurer will
notify the other party in writing of its desire to arbitrate, stating the
nature of the dispute and remedy sought. The party to which the notice is
sent will acknowledge the notification in writing within ten days of its
receipt.
C. There will be three arbitrators who will be officers or former officers of
life insurance or reinsurance companies other than the two parties and
their affiliates. Each of the parties will appoint one of the arbitrators
and these two arbitrators will select the third. If either party refuses
or neglects to appoint an arbitrator within sixty days of the appointment
of the first arbitrator, the second arbitrator will be appointed by the
party who appointed the first arbitrator. If the two arbitrators do not
agree on a third arbitrator within sixty days of the appointment of the
second arbitrator, the appointment will be made by the President of the
American Arbitration Association or its successor. If the President of the
American Arbitration Association refuses to make such appointment, each
arbitrator will nominate three candidates, two of whom the other will
decline, and the decision will be made by drawing lots for the final
solution.
D. The arbitrators will determine the time and place of the arbitration
hearing. In no event will this date be later than six months after the
appointment of the third arbitrator. As soon as possible, the arbitrators
will establish pre-arbitration procedures as warranted by the facts and
issues of the particular case. At least ten days prior to the arbitration
hearing, each party will provide the other party and the arbitrators with
a detailed statement of the facts and arguments it will present at the
arbitration hearing. The arbitrators may consider any relevant evidence;
they will give the evidence such weight as they deem it entitled to after
consideration of any objections raised concerning it. The party initiating
the arbitration will have the burden of proving its case by a
preponderance of the evidence. Each party may examine any witnesses who
testify at the arbitration hearing. The arbitrators will hand down their
decision in writing within forty-five days following the close of the
arbitration proceedings.
E. The cost of arbitration will be shared equally by the parties unless the
arbitrators decide otherwise.
16
ARTICLE XV
DURATION OF AGREEMENT
A. This Agreement may be terminated with respect to new business at any time
by either party. The party that wishes to terminate the Agreement must
give the other party ninety days written notice. The day the notice is
mailed to the other party's home office, or, if the mail is not used, the
day it is delivered to the other party's home office or to an officer of
the other party with be the first day of the ninety day period.
B. During the ninety day period, this Agreement will continue to operate in
accordance with its terms.
C. The provisions of this Agreement will continue to apply, after the date of
termination, to the reinsurance which became effective prior to the
termination of this Agreement.
D. This Agreement is subject to the approval of the Massachusetts
Commissioner of Insurance pursuant to Chapter 175, Section 20 of the
Massachusetts General Laws. In the event the Massachusetts Commissioner of
Insurance does not approve reinsurance affected by this Agreement, the
reinsurance will be void as of the effective date of this Agreement and
the parties will be restored to the positions they would have been in had
this Agreement never become effective.
17
ARTICLE XVI
EXECUTION OF AGREEMENT
In witness of the above,
New England Life Insurance Company
of
Boston, Massachusetts
and
ABC Reinsurance Company
of
City, State
have by their respective officers executed and delivered this Agreement,
effective Month, Day, Year in duplicate on the date indicated below.
New England Life Insurance Company
By: _____________________________ By: _____________________________
Name: ___________________________ Name: ___________________________
Title: __________________________ Title: __________________________
ABC Reinsurance Company
By: _____________________________ By: _____________________________
Name: ___________________________ Name: ___________________________
Title: __________________________ Title: __________________________
18
EXHIBIT I
LIMITS
REINSURER'S SHARE: X%
AUTOMATIC BINDING LIMIT
The Ceding Company agrees not to bind the Reinsurer automatically, with respect
to life coverage, when the face amount of the policy exceeds the following:
JUMBO LIMIT
The Ceding Company agrees not to bind the Reinsurer automatically when the
amount of insurance already in force and applied for on the life in all
companies exceeds $
19
EXHIBIT II
THE CEDING COMPANY RETENTION LIMITS
CEDING COMPANY SHARE: X%, not to exceed the following limits per life
LIFE
20
EXHIBIT III
POLICY PLANS REINSURED
The following plans are covered automatically under this Agreement:
21
EXHIBIT IV
PREMIUM RATES
Life premiums will be % of the mortality rates for preferred nonsmokers, %
for standard nonsmokers, % for aggregate nonsmakers, % for smokers, and %
for juveniles. For a description of mortality rate basis and tables see
attachment.
There shall be no policy fees.
For substandard table ratings, premiums will be increased % per table.
The premiums will be increased by any flat extra premium charged the insured
less allowances. For extra premiums which are payable for six years or more, the
first year allowance will be % of the flat extra premium while the renewal
allowance will be % of the flat extra premium. For flat extra premiums which
are payable for five years or less, the allowance will be % in all years.
22
EXHIBIT V
MONTHLY STATEMENTS
The Ceding Company will provide the Reinsurer with the following reports for
each month.
23
AMENDMENT I
TO
REINSURANCE AGREEMENT
CEDING COMPANY: New England Life Insurance Company
REINSURER:
EFFECTIVE DATE OF REINSURANCE AGREEMENT:
EFFECTIVE DATE OF AMENDMENT:
Commensing on the effective date indicated above, Exhibit III will be replaced
by the attached Exhibit III.
This amendment is a part of the Reinsurance Agreement. All provisions in the
Reinsurance Agreement shall apply, except those specifically modified by the
Amendment.
Reinsurer
By:
Title:
Date:
New England Life Insurance Company
By:
Title:
Date:
24
EXHIBIT III
POLICY PLANS REINSURED
The following plans are covered automatically under this Agreement:
25
AMENDMENT II
TO
REINSURANCE AGREEMENT
CEDING COMPANY: New England Life Insurance Company
REINSURER:
EFFECTIVE DATE OF REINSURANCE AGREEMENT:
EFFECTIVE DATE OF AMENDMENT:
This Agreement shall be amended as described below for all eligible policies
with policy dates on or after the effective date of this Amendment.
1. The following paragraph shall be added to Article III (Reinsurance Premiums):
G. In no event shall the Reinsurer increase the reinsurance rates on
inforce business ceded under this Agreement unless it also
concurrently increases the reinsurance rates for all of its YRT
reinsurance assumed individual life insurance business.
2. Exhibits I, III, and IV in this Agreement shall be replaced by the attached
Exhibits I, III and IV.
This Amendment is a part of the Reinsurance Agreement. All provisions in the
Reinsurance Agreement shall apply, except those specifically modified by the
Amendment.
Reinsurer
By:
Title:
Date:
New England Life Insurance Company
By:
Title:
Date:
26
EXHIBIT I
LIMITS
REINSURER'S SHARE: X%
AUTOMATIC BINDING LIMIT
The Ceding Company may not cede Policy amounts pursuant to Article I when the
face amount of the Policy exceeds the following:
JUMBO LIMIT
The Ceding Company may cede Policy amounts pursuant to Article I only if,
according to the information available to the Ceding Company, the total amount
of life insurance in force and applied for on the life with all insurance
companies, including any amount to be replaced, does not exceed $
27
EXHIBIT III
POLICY AND RIDERS
The Policies and Riders described below may be ceded hereunder:
28
EXHIBIT IV
REINSURANCE RATES
There shall be no policy fees.
Premium rates shall be the same for automatic and facultative reinsurance.
Life premiums shall be the following percentages for the attached single life
mortality tables: % for preferred nonsmoker, % for residual (standard)
nonsmokers, % for aggregate nonsmoker, % for preferred smoker, and % for
residual (standard) smoker, % for aggregate smoker, and % for aggregate.
Premiums for Temporary Term will be % of the attached single life mortality
tables, for all underwriting classes.
Substandard table ratings shall increase the single life mortality rates by 25%
per table.
The premiums shall be increased by any flat extra premium charged the insured
less allowances. For flat extra premiums which are payable for six years or
more, the first allowance shall be % of the flat extra premium while the
renewal allowance shall be % of the flat extra premium. For flat extra
premiums which are payable for five years or less, the allowance shall be % in
all years. Permanent flat extra premiums drop off at the later of duration 20
and attained age 75.
Substitute Insured Rider: The excess of the Ceding Company's retention on any
single life policy issued as the result of an exercise of the Substitute Insured
Rider would be reinsured at the above rates on a point-in-scale basis.
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