Exhibit 1.2
AUTOMATIC YEARLY RENEWABLE TERM
REINSURANCE AGREEMENT
between
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
HARTFORD LIFE INSURANCE COMPANY
and
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Effective: October 1, 1996
ARTICLES
I. Parties to the Agreement ............................. 1
II. Reinsurance Coverage ................................. 1
III. Liability ............................................ 3
IV. Reinsurance Premiums ................................. 4
V. Oversights ........................................... 5
VI. Changes, Reductions and Terminations ................. 6
VII. Increase in Retention ................................ 7
VIII. Reinstatement ........................................ 8
IX. Expenses ............................................ 9
X. Claims ............................................... 9
XI. Extra-Contractual Damages ............................. 11
XII. Inspection of Records ................................. 12
XIII. DAC Tax - Section 1.848-2 (g)(8) Election ............. 12
XIV. Insolvency ............................................ 13
XV. Offset ............................................... 14
XVI. Arbitration .......................................... 14
XVII. Termination .......................................... 15
XVIII. Entire Agreement and Amendments ...................... 15
XIX. Effective Date ...................................... 16
XX. Execution ............................................ 17
SCHEDULES
A Specifications
B Basis of Reinsurance
EXHIBITS
I Reinsurance Premiums
II Retention, Binding, and Issue Limits
All Schedules and Exhibits attached will be considered part of this
Reinsurance Agreement.
ARTICLE I
PARTIES TO THE AGREEMENT
This Agreement is between three Hartford Life Companies, Hartford Life
Insurance Company, Hartford Life and Accident Insurance Company, and ITT
Hartford Life and Annuity Insurance Company (collectively referred to as the
Ceding Company) and The Lincoln National Life Insurance Company (referred to
as the Reinsurer). The Reinsurer agrees that the terms and conditions of
this Agreement shall apply to each of the Hartford Life Companies
individually, unless otherwise set forth herein.
ARTICLE II
REINSURANCE COVERAGE
Reinsurance under this Agreement will apply to insurance issued by Ceding
Company on the Plans of Insurance shown in Schedule A. Such Plans of
Insurance shall be reinsured with the Reinsurer on an automatic basis,
subject to the requirements set forth in Section A below or on a facultative
basis, subject to the requirements set forth in Section B below. The
specifications for all reinsurance under this Agreement are provided in
Schedule A.
A. Requirements for Automatic Reinsurance
For risks which meet the requirements for automatic reinsurance as set
forth below, Reinsurer will participate in a reinsurance pool whereby
Reinsurer will automatically reinsure a portion of the insurance risks
as indicated in Schedule A. The requirements for automatic reinsurance
are as follows:
1. Each life must be a resident of the United States or Canada at
the time of application.
2. Each life must be underwritten according to the Ceding Company's
standard underwriting practices and guidelines. Any life falling into
the category of special underwriting programs will be excluded from
this Agreement unless previously agreed to by the Reinsurer via a
written amendment.
3. Any risk offered on a facultative basis by the Ceding Company to the
Reinsurer or any other company will not qualify for automatic
reinsurance under this Agreement for the same risk and same life.
4. The maximum issue age on any risk will be age 85.
1
5. The mortality rating on each risk must not exceed Table 16, Table P, or
500%, or its equivalent, as shown in the Ceding Company's retention
schedule, on a flat extra premium basis. However, one life may be
uninsurable if the other life meets the preceding requirements.
6. The total face amount of insurance for the Plans of Insurance
in Schedule A to be reinsured on an automatic basis must not exceed
the Automatic Issue Limits in Exhibit II.
7. The total amount of insurance issued and applied for in all
companies on each life must not exceed the jumbo limits as stated
in Exhibit II.
8. The Ceding Company shall retain its maximum limit of retention
for the age and risk classification of each life, as shown in
Exhibit II, either on previous insurance or insurance currently
applied for.
B. Requirements for Facultative Reinsurance
1. If the requirements for automatic reinsurance are met, but the
Ceding Company prefers to apply for facultative reinsurance with
the Reinsurer, or if the requirements for automatic reinsurance are
not met and the Ceding Company applies for facultative reinsurance
with the Reinsurer, then the Ceding Company must submit to the
Reinsurer all the papers relating to the insurability of each life
for facultative reinsurance.
2. For applications for facultative reinsurance, Ceding Company
will send copies of all of the papers relating to the insurability
of each life to the Reinsurer. After the Reinsurer has examined
the request, the Reinsurer will promptly notify the Ceding Company
of the underwriting offer subject to additional requirements or the
final underwriting offer. The final underwriting offer on the risk
will automatically terminate upon the earlier of the withdrawal of
the application or 120 days from the date of the final offer,
unless accepted earlier.
3. Notwithstanding the above, if the requirements for
automatic reinsurance are met except that the face amount of
insurance applied for is greater than the Automatic Issue Limit,
but does not exceed the Auto Process Limit, then the Ceding Company
will submit to the Lead Reinsurer, (as designated in Schedule A),
all papers relating to the insurability of each life. The Lead
Reinsurer shall review the papers to determine if the risk should
be reinsured by the Pool, and, if so, on what basis. The Lead
Reinsurer shall provide Ceding Company with a response within 24
hours
2
of receipt of the papers. Approval of the Lead Reinsurer
shall be binding on all other Pool members. This process shall be
known as Automatic Processing and subject to the limitations in
Exhibit II.
C. Basis of Reinsurance
Reinsurance under this Agreement will be on the basis as
stated in Schedule B.
D. Policy Forms.
When requested, the Ceding Company will furnish the Reinsurer with
a copy of each policy, rider, rate book, and applicable sales or
marketing material which applies to the life insurance reinsured
hereunder.
ARTICLE III
LIABILITY
A. The Reinsurer's liability for automatic reinsurance will begin
simultaneously with the Ceding Company's liability except for those
risks which qualify for automatic reinsurance but are submitted on a
facultative basis.
B. The Reinsurer's liability for facultative reinsurance will begin
simultaneously with the Ceding Company's liability once the Reinsurer
has accepted the application for facultative reinsurance and the Ceding
Company has accepted the offer.
C. In no event shall the reinsurance be in force and binding if the
issuance and delivery of such insurance constituted the doing of
business in a jurisdiction in which the ceding company was not properly
licensed.
D. The Reinsurer's liability for reinsurance on each risk will
terminate when the Ceding Company's liability terminates.
E. The liability of each pool member shall be separate and not joint
with the other pool members.
F. Payment of reinsurance premiums is a condition precedent to the
Reinsurer's liability.
G. The Reinsurer shall establish reserves on Reinsurer's portion of
the policy on the reserve basis specified in Schedule B.
3
ARTICLE IV
REINSURANCE PREMIUMS
A. Computation.
Premiums for reinsurance under this Agreement will be computed as
described in Exhibit I.
B. Premium Accounting.
1. Payment of Reinsurance Premiums.
For automatic and facultative reinsurance, following the close of
each calendar month, the Ceding Company will send the Reinsurer a
statement and a listing of new business, changes and terminations.
If a net reinsurance premium balance is payable to the Reinsurer,
the Ceding Company will forward this balance within (60) sixty days
after the close of each month.
If a net reinsurance premium balance is payable to the Ceding
Company, the balance due will be subtracted from the reinsurance
premium payable by Ceding Company for the current month and any
remaining balance due the Ceding Company shall be paid by the
Reinsurer within (60) sixty days after the Ceding Company submits
the statement.
2. Non-Payment of Premium
If reinsurance premiums are delinquent, the Reinsurer has the right
to terminate the reinsurance risks on those policies listed on the
delinquent monthly statement by giving the Ceding Company ninety
days' advance written notice. If the delinquent premiums have not
been paid as of the close of the ninety-day period, the Reinsurer's
liability will terminate for the risks described in the delinquency
notice.
Regardless of the termination, the Ceding Company will continue to
be liable to the Reinsurer for all unpaid reinsurance premiums
earned.
3. Reinstatement
The Ceding Company may reinstate the risks terminated due to non
payment of reinsurance premium within sixty days after the
effective date
4
of termination by paying the unpaid reinsurance premiums for the
risks in force prior to the termination. However, the Reinsurer
will not be liable for any claim incurred between the date of
termination and reinstatement. The effective date of reinstatement
will be the date the required back premiums are received.
4. Currency
The reinsurance premiums and benefits payable under this Agreement
will be payable in the lawful money of the United States.
5. Detailed Listing
The Ceding Company will send the Reinsurer a detailed listing of
all reinsurance in force as of the close of the immediately
preceding calendar year.
6. Guaranteed Rates
For technical reasons relating to the uncertain status of
deficiency reserve requirements by the various state insurance
departments, the life reinsurance rates cannot be guaranteed for
more than one year. On all reinsurance ceded at these rates,
however, the Reinsurer anticipates continuing to accept premiums on
the basis of the rates shown in Exhibit I.
ARTICLE V
OVERSIGHTS
If there is an unintentional oversight or misunderstanding in the
administration of this Agreement by Ceding Company or Reinsurer, it can be
corrected provided the correction takes place within a reasonable time after
the oversight or misunderstanding is first discovered. Both Ceding Company
and the Reinsurer will be restored to the position they would have occupied
had the oversight or misunderstanding not occurred.
5
ARTICLE VI
CHANGES, REDUCTIONS AND TERMINATIONS
A. Replacement or Change
If there is a contractual change or non-contractual replacement of the
insurance reinsured under this Agreement where full underwriting
evidence according to the Ceding Company's regular underwriting rules
is not required, the insurance may continue to be reinsured with the
Reinsurer provided it meets the minimum reinsurance cession amount
stated in Schedule A. If a non-contractual change is requested on a
facultatively reinsured policy, the Reinsurer must consent to the
change.
B. Increases or Decreases
1. If the policy face amount of a risk reinsured automatically under this
Agreement increases and:
a. The increase is subject to new underwriting evidence, then the
provisions of Article Ii, Section A, shall apply to the increase
in reinsurance.
b. The increase is not subject to new underwriting evidence, then
Reinsurer will accept automatically the increase in reinsurance
but not to exceed the automatic binding limit.
2. If the policy face amount increases, the Ceding Company's retention
will be filled first, then any remaining risk of the increase will be
ceded to the Reinsurer as of the effective date of the increase. If
the policy face amount is reduced, the reinsurance will be reduced
first, thereby maintaining the Ceding Company's retention. Reinsurer
will refund to Ceding Company all unearned reinsurance premiums not
including policy fees, less applicable allowances, arising from
reductions, terminations and changes as described in this Article.
3. In the event of a reduction in the face amount of a policy which was
ceded facultatively, the Reinsurer's percentage of the reduced face
amount should be the same percentage of the initial reinsurance ceded.
4. Increases in face amount of policies reinsured on a facultative basis,
will be submitted to the Reinsurer for acceptance.
6
C. Reduction in Retained Coverage
If any portion of the aggregate insurance retained by Ceding Company on
an individual life reduces or terminates, any reinsurance under this
Agreement based on the same life may also be reduced or terminated.
Ceding Company will reduce the reinsurance by applying the retention
limits which were in effect at the time each policy was issued. Ceding
Company will not be required to retain an amount in excess of its
regular retention limit for the age, mortality rating and risk
classification at the time of issue for any policy on which reinsurance
is being reduced.
The reinsurance to be terminated or reduced will be determined by
chronological order in which the reinsurance was first reinsured,
thereby reducing or terminating the oldest risks first.
D. Multiple Reinsurers
If a risk is shared by more than one reinsurer, Reinsurer's percentage
of any increased or reduced reinsurance will be the same as its initial
percentage of the reinsurance for that risk.
E. Termination
If the policy for a risk reinsured under this Agreement is terminated,
the reinsurance for the risk involved will be terminated on the
effective date of termination.
F. Facultative
On facultative reinsurance, if Ceding Company wishes to reduce the
mortality rating, this reduction will be subject to and reinsured under
the facultative provisions of this Agreement.
ARTICLE VII
INCREASE IN RETENTION
A. If the Ceding Company should increase the retention limits as listed in
Exhibit II, prompt written notice of the increase must be given to the
Reinsurer.
B. In the event of an increase in retention, the Ceding Company will have the
option of recapturing the reinsurance under this Agreement when the
retention limit
7
increases. The Ceding Company may exercise its option to recapture by
giving written notice to the Reinsurer within ninety days after the
effective date of the increase.
C. If the Ceding Company exercises its option to recapture, then
1. The Ceding Company must reduce the reinsurance on each risk on which
the Ceding Company retained the maximum retention limit that was in
effect at the time the reinsurance was ceded to the Reinsurer.
2. No recapture will be made to reinsurance on a risk if (a)
the Ceding Company retained a special retention limit less than the
maximum retention limit in effect at the time the reinsurance was
ceded to the Reinsurer, or if (b) the Ceding Company did not retain
insurance on the risk.
3. The Ceding Company must increase its total amount of
insurance on the risk up to the new retention limit by reducing the
reinsurance. If a risk is shared by more than one reinsurer, the
Reinsurer's percentage of the reduced reinsurance will be the same
as the initial percentage on the individual risk.
4. Upon increasing the retention limit, the reduction in
reinsurance will become effective on the next annual premium
anniversary of those policies that have been inforce for at least
ten (10) years.
ARTICLE VIII
REINSTATEMENT
If an insurance policy lapses for nonpayment of premium and is reinstated under
the Ceding Company's terms and rules, the reinsurance will be reinstated by the
Reinsurer as follows:
A. Automatic Cases:
The Ceding Company must pay the Reinsurer all back reinsurance premiums
in the same manner as the Ceding Company received insurance premiums
under the policy. When the policy is reinstated by the Ceding Company,
the reinsurance will be automatically reinstated.
8
B. Facultative Cases:
If the Ceding Company requires reinstatement evidence of insurability,
the Ceding Company will submit it to the Reinsurer for approval. In
such cases, the Reinsurer's approval is required for the reinsurance to
be reinstated. Upon the Reinsurer's approval, the Ceding Company must
pay the Reinsurer all back reinsurance premiums in the same manner as
the Ceding Company received insurance premium under the policy.
ARTICLE IX
EXPENSES
The Ceding Company must pay the expense of all medical examinations, inspection
fees and other charges in connection with the issuance of the insurance.
ARTICLE X
CLAIMS
A. Liability
The Reinsurer's liability for the insurance benefits reinsured under
this Agreement will be the same as the Ceding Company's liability for
such benefits. All reinsurance claim settlements will be subject to the
terms and conditions of the particular contract under which the Ceding
Company is liable.
B. Notification
When the Ceding Company is advised of a claim, the Reinsurer must be
notified promptly.
C. Claim Payment
1. Automatic Reinsurance on a Risk
If a claim is made on a risk reinsured automatically under this
Agreement and is not contested by the Ceding Company, Reinsurer
will abide by the issue as it is settled by the Ceding Company.
Copies of proofs or other written matters relating to any claim
reimbursements under this Agreement shall be furnished to the
Reinsurer upon written request. The Ceding Company will receive
payment of the reinsurance proceeds from
9
the Reinsurer when the Ceding Company makes the settlement of
the policy proceeds and delivers a copy of the proof of death,
check copy or proof of payment and the claimant's statement to
the Reinsurer.
2. Facultative Reinsurance on a Risk
If a claim is made on a risk reinsured facultatively under this
Agreement, the Ceding Company shall submit to Reinsurer all
relevant and/or requested documents and papers related to the claim
along with Ceding Company's recommendation. Ceding Company shall
then wait five days from the date of mailing during which time
Reinsurer shall have the opportunity to advise Ceding Company of
its consent or disagreement with the recommendation. In the event
Reinsurer does not contact Ceding Company within the five day
period, Reinsurer shall be deemed to have approved the
recommendation and Ceding Company shall be authorized to act
accordingly. The Ceding Company will receive payment of the
reinsurance proceeds from Reinsurer when Ceding Company makes the
settlement of the policy proceeds and delivers proof of payment to
the Reinsurer.
3. Payment of Reinsurance Proceeds
Payment of life reinsurance proceeds will be made in a single sum
regardless of the Ceding Company's mode of settlement with the
payee.
D. Contested Claims
The Ceding Company must promptly notify the Reinsurer of any intent to
contest a claim reinsured under this Agreement or to assert defenses.
If the Ceding Company's contest of such claim results in the increase
or reduction of liability, the Reinsurer will share in this increase or
reduction. The Reinsurer's share of the increase or decrease shall be
proportional to their share of the met amount at risk on the date of
death of the insured.
If the Reinsurer should decline to participate in the contest or
assertion of defenses, the Reinsurer will then release all of the
liability by paying the Ceding Company the full amount of reinsurance
and not sharing in any subsequent increase or reduction in liability.
E. Misstatement of Age or Sex
If the amount of insurance provided by the policy or policies reinsured
under this Agreement is increased or reduced because of misstatement of
age or sex established after the death of the insured, the Reinsurer
will share with the Ceding Company in this increase or reduction.
10
F. Routine Expenses
The Ceding Company will pay the routine expenses incurred in connection
with settling claims. These expenses may include compensation of agent
and employees and the cost of routine investigations such as inspection
reports.
G. Non-Routine Expenses
The Reinsurer will share with the Ceding Company all expenses that are
not routine. Expenses that are not routine are those directly incurred
in connection with the contest or the possibility of a contest of a
claim or the assertion of defenses, including legal expenses. The
expenses will be shared in proportion to the net amount at risk for the
Ceding Company and Reinsurer. However, if the Reinsurer has released
the liability under Section D of this Article, the Reinsurer will not
share in any expenses incurred after the date of the Reinsurer's
release.
X. Xxxxxxxxxxx Period
If, during the contestable period, Ceding Company is notified of the
death of the first joint insured, the Ceding Company will investigate
the case.
ARTICLE XI
EXTRA-CONTRACTUAL DAMAGES
In no event will the Reinsurer have any liability for any extra-contractual
damages which are awarded against the Ceding Company as a result of acts,
omissions or course of conduct committed by the Ceding Company in connection
with the insurance reinsured under this Agreement.
The Reinsurer does recognize that circumstances may arise under which the
Reinsurer, in equity, should share, to the extent permitted by law, in paying
certain assessed damages. Such circumstances are difficult to define in
advance, but involve those situations in which the Reinsurer was an active
party in the act, omission or course of conduct which ultimately results in
the assessment of such damages. The extent of such sharing is dependent on
good faith assessment of culpability in each case, but all factors being
equal, the division of any such assessment would be in the proportion of
total risk accepted by each party for the plan of insurance involved.
11
ARTICLE XII
INSPECTION OF RECORDS
Each party will have the right, at any reasonable time and upon reasonable
notice, to inspect the other party's books and documents which relate to
reinsurance under this Agreement.
ARTICLE XIII
DAC TAX
SECTION 1.848-2(g)(8) ELECTION
A. The Reinsurer and the Ceding Company hereby agree to the following
pursuant to section 1.848-2(g)(8) of the Income Tax Regulations issued
December 1992 under Section 848 of the Internal Revenue Code of 1986,
as amended. This election shall be effective for 1993 and for all
subsequent taxable years for which this Agreement remains in effect.
B. The terms used in this Article are defined by reference to Regulation
Section 1.848-2 in effect December 1992.
C. The party with net positive consideration for this Agreement for each
taxable year will capitalize specified policy acquisition expenses with
respect to this Agreement without regard to the general deduction
limitation of section 848(c)(1).
D. Both parties agree to exchange information pertaining to the amount of net
consideration under this Agreement each year to ensure consistency or
as otherwise required by the Internal Revenue Service.
E. The Ceding Company will submit to the Reinsurer by May 1 of each year a
schedule of the calculation of the net consideration for the preceding
calendar year. This schedule of calculations will be accompanied by a
statement signed by an officer of the Ceding Company stating that such
net consideration will be reported in the tax return for the preceding
calendar year.
F. The Reinsurer may contest such calculation by providing an alternative
calculation to the Ceding Company in writing within 30 days of receipt
of Ceding Company's calculation. If the Reinsurer does not notify the
Ceding Company, Reinsurer will report the net consideration as
determined by the Ceding Company in the tax return for the preceding
calendar year.
12
G. If the Reinsurer contests the Ceding Company's calculation of the net
consideration, both parties will act in good faith to reach an
agreement as to the correct amount within thirty (30) days of the date
the Reinsurer submits their alternative calculation. If both parties
reach agreement on an amount of net consideration, both parties shall
report such amount in their respective tax returns for the previous
calendar year.
ARTICLE XIV
INSOLVENCY
A. Insolvency of Reinsurer
If the Reinsurer becomes insolvent as determined by the Department of
Insurance responsible for such determination, amounts due the Reinsurer
will be paid net of the terms of this Agreement and directly to the
liquidator, receiver, or statutory successor without decrease. All
reinsurance ceded under this Agreement may be recaptured by the Ceding
Company without charge or penalty as of the date Reinsurer fails to
meet its obligations under this Agreement.
B. Insolvency of Ceding Company
If Hartford Life Insurance Company, Hartford Life and Accident
Insurance Company or ITT Hartford Life and Annuity Insurance Company
should become insolvent, all reinsurance under this Agreement covering
risks ceded by that particular company will be payable by Reinsurer
directly to that Company's liquidator, receiver or statutory successor,
on the basis of the liability of that Company under the policy or
policies reinsured and without diminution because of the insolvency of
the Company. However, in the event of such insolvency, the liquidator,
receiver or statutory successor will give written notice of a pending
claim against Ceding Company on the reinsured policy. It will do so
within a reasonable time after the claim is filed in the insolvency
proceedings. During the pendency of such a claim, Reinsurer may
investigate the claim and may, at its own expense, interpose any
defense or defenses which it may deem available to the insolvent
Company, its liquidator, receiver or statutory successor, in the
proceedings where the claim is to be adjudicated.
The expense thus incurred by Reinsurer will be chargeable against the
insolvent Company, subject to court approval, as part of the expense of
liquidation to the extent of a proportionate share of the benefit which
may accrue to the insolvent Company solely as a result of the defense
undertaken by Reinsurer.
13
Where two or more reinsurers are involved in the same claim and a
majority in interest elect to interpose defense to the claim, the
expense will be apportioned in accord with the terms of the reinsurance
agreement as though the expense had been incurred by the insolvent
Company.
It is agreed that the insolvency of any one of the Hartford Life
Companies shall not affect this Agreement as it applies to the
remaining solvent companies.
ARTICLE XV
OFFSET
Any debts or credits, matured or unmatured, liquidated or unliquidated,
regardless of when they arose or were incurred, in favor of or against either
the Ceding Company or the Reinsurer with respect to this Agreement or with
respect to any other claim of one party against the other are deemed mutual
debts or credits, as the case may be, and shall be set off, and only the
balance shall be allowed or paid. In the event the Ceding Company becomes
insolvent, offsets shall be allowed in accordance with applicable law.
ARTICLE XVI
ARBITRATION
Any disagreement, controversy, or claim arising out of or relating to this
Agreement between the Reinsurer and any one of the Hartford Life Companies
will be settled by arbitration. There will be three arbitrators chosen among
current or retired officers of life insurance companies other than parties
or their affiliates. Each party to the dispute will appoint one of the
arbitrators and these two arbitrators will select the third arbitrator. In
the event that either party should fail to choose an arbitrator within 30
days following a written request by the other party to do so, the requesting
party may choose two arbitrators who shall in turn choose a third arbitrator
before entering upon arbitration. If the two arbitrators fail to agree upon
the selection of a third arbitrator within 30 days following their
appointment, each arbitrator shall nominate three candidates within 10 days
thereafter, two of whom the other shall decline, and the decision shall be
made by drawing lots.
Arbitration will be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association which will be in effect on the
date of delivery of demand for 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 industry rather
than solely on a strict interpretation of the
14
applicable law. The site of any arbitration will be determined by a majority
vote of the arbitrators. All expenses and fees of the arbitrations will be
borne equally by the parties unless otherwise decreed by the arbitrators.
The award agreed to by a majority of the arbitrators will be final and
binding and there will be no appeal from their decision. Judgment may be
entered upon it in any court having jurisdiction.
ARTICLE XVII
TERMINATION
A. Each Hartford Life Insurance Company and the Reinsurer may
terminate this Agreement as it applies to the business of each by
giving (90) ninety days' written notice of termination. The day the
notice is deposited in the mail addressed to the Home Office, or to an
Officer of each party, will be the first day of the (90) ninety-day
period.
B. During the (90) ninety-day period, this Agreement will continue to
be in force between the terminating parties.
C. After termination, the terminating parties shall remain liable
under the terms of this Agreement for all automatic reinsurance which
becomes effective prior to termination of this Agreement. After
termination the terminating parties shall be liable for all automatic
and facultative reinsurance which has an application date on or before
the effective date of the termination.
D. Termination by one or two of the Hartford Life Companies shall not
affect this Agreement as it relates to the non-terminating Hartford
Life Company(ies).
ARTICLE XVIII
ENTIRE AGREEMENT AND AMENDMENT
A. Entire Contract
This Agreement with any attached Schedules and Exhibits, shall
constitute the entire agreement between the parties with respect to the
business being reinsured hereunder and there are no understandings
between the parties other than as expressed herein.
15
B. Modifications
Any modification or change to the provisions of this Agreement shall be
null and void unless set forth in a written amendment to the Agreement
which is signed by all parties to the amendment.
ARTICLE XIX
EFFECTIVE DATE
The provisions of this Agreement shall be effective with respect to policies
issued on or after October 1, 1996.
16
ARTICLE XX
EXECUTION
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
By /s/ Xxxxx X. Xxxxxx Attest /s/ X. X. Xxxxxxxx
----------------------------- --------------------------
Title Vice President Title Assistant Secretary
----------------------------- --------------------------
Chief Actuary
----------------------------- --------------------------
Date November 6, 1998 Date 10/23/98
----------------------------- --------------------------
HARTFORD LIFE INSURANCE COMPANY
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
By /s/ Xxxxxxx X. Xxxxx Attest /s/ Xxx X. XxXxxxxx
------------------------------ --------------------------
Xxxxxxx X. Xxxxx, FSA, CLU Xxx X. XxXxxxxx, FSA, MAAA
Vice President Assistant Vice President
Individual Life Product & Marketing Individual Life Product
Development
Date 7/10/98 Date 7/10/98
------------------------------ --------------------------
17
SCHEDULE A
SPECIFICATIONS
TYPE OF BUSINESS Fully underwritten Last Survivor Plans
REINSURANCE POOL SHARE Reinsurer shall automatically reinsure of
the amount at risk on a policy reinsured by the Pool.
PLANS OF INSURANCE
DESCRIPTION GENERAL FORM NO'S.
----------- -----------------
Last Survivor Interest Sensitive Whole Life HL-12710, HL-A12966, XXX-1078
Last Survivor Universal Life HL-14393, HL-A14407, XXX-1011
Last Survivor Variable Life HL-14263, XXX-1020
Last Survivor SPVL (fully underwritten) HL-LSPVL94, XXX-LSPVL97, HL-LSPVL97, XXX-LSPVL97
RIDERS
-------
Additional Insurance Benefit Xxxxx XX-13514, HL-A13504, XXX-1079
Four Year Term Xxxxx XX-12933, HL-A12989, XXX-1080
Increasing Xxxx Xxxxx XX-00000, XX-X00000, XXX-0000
Xxxxxx Protection Xxxxx XX-14627, XXX-1023
Six Month Exchange Xxxxx XX-12936, XXX-1083
Twenty-four Month Exchange Xxxxx XX-12963, XXX-1013
Alternative Requisite Premium Option Xxxxx XX-14201
Maturity Extension Xxxxx XX-14637, XXX-1024
Single Life YRT Life Insurance Xxxxx XX-14626, XXX-1021
First Death Term Life Xxxxx XX-12932
MINIMUM REINSURANCE $50,000 Upon reaching the retention limit
CESSION set forth in Exhibit II, Ceding
Company will automatically cede
the excess insurance only if the
total amount to be ceded to the
Pool is $50,000 or more.
LEAD REINSURER Lincoln National Plans of Insurance and Riders
Life produced through ELAR.
Security Life Plans of Insurance and Riders
of Denver produced through All Other
Producers.
SCHEDULE B
BASIS OF REINSURANCE
LIFE PRODUCTS Life reinsurance will be on the yearly
renewable term (YRT) basis for the amount at
risk on the portion of the policy reinsured
by Reinsurer. The amount at risk on a policy
shall be the death benefit of the policy less
the amount retained by the Ceding Company,
less the cash value under the policy. The
basis for determining Reinsurer's liability
shall be the amount at risk used for
computation of the reinsurance premium.
Exchanges Exchanges from one last survivor plan
reinsured under this agreement to a different
last survivor plan, for the purpose of
allowing the policyowner premium flexibility
(UL) or potentially higher investment return
(VL), will be reinsured hereunder as NEW
BUSINESS at first year reinsurance rates if
the new plan has been fully underwritten and
has new contestable and suicide exclusion
periods. Otherwise, the reinsurance rates
will be point-in-scale.
Reserve Basis Reserves are calculated according to the
applicable CRVM methodology, interest rate
and mortality table. The mortality tables
used are male/female, smoker distinct, age
last birthday and ultimate. The mortality
rates are frasierized. There is a 1/2 qx
unearned premium reserve minimum.
