Exhibit (g)(18)
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ADDENDUM NO. 1 to the Reinsurance Agreement referred to as NO. 7449-1 effective
November 25, 2002 made between IDS LIFE INSURANCE COMPANY (hereinafter referred
to as "the Ceding Company") and [NAME OF REINSURANCE COMPANY] (hereinafter
referred to as "the Reinsurer").
1. It is hereby declared and agreed that Exhibit B and Exhibit D of the
above Agreement will be replaced by the attached Exhibit B and
Exhibit D (both Revised January 1, 2005) in order to revise the
Reinsurer's share, provision B.7 (International Risks) and
allowances, with respect to any New Policy (as defined below). The
original Exhibit B and Exhibit D remain applicable to any Existing
Policy (as defined below).
With respect to any insurance policy identified in Exhibit B of the
Agreement issued by the Ceding Company on or after January 1, 2005,
or any covered rider on such policy (hereinafter referred to as a
"New Policy"), the Reinsurer's share is decreased to [percentage] of
the total automatic pool. For purposes of this Agreement, a New
Policy will be deemed to include any insurance policy identified in
Exhibit B that either (i) has an issue date or is applied for on or
after January 1, 2005, or (ii) goes into effect on or after January
1, 2005 even if backdated to reflect an issue date prior to January
1, 2005, including any covered rider on such policy. Any policy
issued by the Ceding Company and originally covered by the Agreement
prior to January 1, 2005 is considered an Existing Policy, including
any covered rider on such policy whether issued before or after
January 1, 2005. Existing Policy also includes any conditional
receipt or temporary insurance provision if the policy is applied
for prior to January 1, 2005 until such time as the policy is issued
or declined, but only to the extent coverage for such risks is
provided for under the terms of the Agreement.
2. It is further agreed that any change, reinstatement, increase,
replacement or conversion of an Existing Policy following January 1,
2005 will be treated and covered in the manner provided for in the
Agreement without regard to the change in Reinsurer's share or
allowances as noted above.
3. It is further agreed that the schedule outlined in Article 9.4 (Lead
Reinsurer) of the Agreement will be replaced with the following,
effective January 1, 2005:
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CLAIMANT LAST NAME LEAD REINSURER
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A-F [name of reinsurance company]
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G-M [name of reinsurance company]
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N-S [name of reinsurance company]
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T-Z [name of reinsurance company]
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2
Except as expressly amended above, all other terms of the Agreement, together
with all exhibits and attachments thereto, remain in full force and effect. This
Addendum No. 2 takes effect January 1, 2005 and supersedes both the notice of
termination sent by the Reinsurer to the Ceding Company dated September 22, 2004
and Addendum No. 1 previously executed by the Parties.
Made in duplicate and executed by both parties.
Signed for and on behalf of IDS LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
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Title: President Title: Reinsurance Officer
Date: 7/21/05 Date: 7/21/05
Signed for and on behalf of [NAME OF REINSURANCE COMPANY]
By: By: [signature] By: [signature]
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Title: [title] Title: [title]
Date: April 8, 2005 Date: 4-13-05
EXHIBIT B
(Revised January 1, 2005)
PLANS COVERED AND BINDING LIMITS
The business reinsured under this Agreement is defined as follows:
B.1 PLANS, RIDERS AND BENEFITS
Policies issued on plans with effective dates on or after the Commencement
Date shown below qualify for reinsurance under the terms of this
Agreement. It is understood that policies may be backdated by up to six
(6) months from the date shown below.
COMMENCEMENT
PLAN IDENTIFICATION DATE
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VUL-IV (Form 30061 with
endorsement 132024, and Form Nov. 25, 2002
F0061C)
LP Select (Form 30080C) Nov. 25, 2002
Benefit & Riders:
Automatic Increasing Benefit Nov. 25, 2002
Rider (AIBR) (Form 30965)
Base Insured Rider (BIR) (Form Nov. 25, 2002
132023)
Other Insured Rider (OIR) (Form Nov. 25, 2002
30450 and Form 30976C)
B.2 BASIS
Cessions may be automatic, capacity facultative or non-capacity
facultative. Only mortality risk will be reinsured under this Agreement.
Automatic cessions shall be on a first dollar quota share basis with the
Ceding Company retaining its Retained Share as described in Exhibit A. Net
Amount at Risk in excess of the Retained Share will be ceded to
reinsurers, a percentage of which is assumed by the Reinsurer as the
Reinsured Net Amount at Risk, determined as of the last policy anniversary
or subsequent policy change date if applicable.
The Reinsurer's Percentage Share for purposes of calculating the Reinsured
Net Amount at Risk is [percentage].
EXHIBIT B
Page 2
(Revised January 1, 2005)
Facultative cessions will be negotiated on a case-by-case basis. The
Ceding Company, at its discretion, may submit any policy for facultative
consideration rather than automatic cession or in cases where automatic
capacity has been exhausted. For facultative cessions, the Ceding
Company's Retained Share and the Reinsurer's Percentage Share of the
Reinsured Net Amount at Risk shall be determined based on terms offered by
the Reinsurer and accepted by the Ceding Company at the time the policy or
rider is applied for.
B.3 AUTOMATIC BINDING LIMITS
Life
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Issue Age Standard - Table D Table E - H Table I - P
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[ages] [dollar amount] [dollar amount] [dollar amount]
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[ages] [dollar amount] [dollar amount] [dollar amount]
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[ages] [dollar amount] [dollar amount] [dollar amount]
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[ages] [dollar amount] [dollar amount] [dollar amount]
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The Ceding Company may not cede reinsurance automatically if the sum of
all amounts in force and applied for on the same life with the Ceding
Company, excluding amounts being internally replaced, exceeds the above
Automatic Binding Limits. These Automatic Binding Limits include any
amounts within the Ceding Company's retention.
Increased policy amounts elected under the terms of the Automatic
Increasing Benefit Rider will not be taken into account for automatic and
jumbo limits, provided that the total of all increases to the Specified
Amount of a single policy cannot exceed [dollar amount]. If an applicant
has existing joint life coverage inforce with the Ceding Company, the full
face amount of the joint life policy will be included in the total inforce
risk on the life for the purposes of the application of automatic and
jumbo limits.
B.4 JUMBO LIMITS
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Issue Age Jumbo Limit
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[ages] [dollar amount]
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[ages] [dollar amount]
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EXHIBIT B
Page 3
(Revised January 1, 2005)
The Ceding Company will not cede any risk automatically if, according to
information available to the Ceding Company, the total amount in force and
applied for on the life with all insurance companies, including any amount to be
replaced, exceeds the applicable amounts shown above.
B.5 CONDITIONAL RECEIPT OR TEMPORARY INSURANCE AGREEMENT
The Reinsurer's liability will not exceed its proportionate share of
a) [dollar amount], or
b) [dollar amount] if the amount is ordered by a court of competent
jurisdiction or the result of a settlement with the applicant.
B.6 CESSION LIMITS
Minimum Initial Cession: None for automatic cessions. For facultative
cessions, the minimum cession shall be [dollar amount] up to age 70, and
[dollar amount] for ages over 70.
B.7 INTERNATIONAL RISKS
The Ceding Company may cede reinsurance automatically on international
clients who meet the financial and medical criteria listed in the Ceding
Company's "Guidelines for Underwriting International Clients and Foreign
Travel (`International Risk Guidelines')," if their country of origin and
citizenship has been agreed for automatic reinsurance and is shown in the
International Risk Guidelines as an `A' or `13' location.
If an international client does not meet the Ceding Company's financial or
medical criteria, requires a flat extra or individual consideration under
the Ceding Company's International Risk Guidelines, or if the country of
origin or citizenship is not an agreed `A' or `B' location, then
reinsurance will not be ceded automatically.
The Ceding Company will promptly notify the Reinsurer of any proposed
material changes in its international client guidelines. This Agreement
will not extend to policies issued pursuant to such changes unless the
Reinsurer has consented in writing to accept policies subject to such
changes.
EXHIBIT D
(Revised January 1, 2005)
REINSURANCE PREMIUMS
D.1 PREMIUMS AND ALLOWANCES
Plans covered under this Agreement will be reinsured on a YRT basis.
Reinsurance premium rates shall equal the Ceding Company's original annual
Band 4 COI premium rates for the VUL-III plan, as shown in Schedule D-1
attached hereto, less the following allowances:
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UNDERWRITING CLASS YEARS 1-10 YEARS 11 +
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Preferred Non-Smoker [percentage] [percentage]
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Standard Non-Smoker [percentage] [percentage]
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Smoker [percentage] [percentage]
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To determine the amount of reinsurance premium to be paid by the Ceding
Company to the Reinsurer, these reinsurance premium rates will be applied
to the Reinsured Net Amount at Risk for each policy determined as of the
last policy anniversary or subsequent policy change date if applicable.
D.2 AGE BASIS
Age Last Birthday
D.3 POLICY FEES
The Reinsurer will not participate in any policy fees.
D.4 SUBSTANDARD PREMIUMS
Substandard multiple ratings will be applied to increase the underlying
COI rates by [percentage] per table of assessed rating, and the normal
base allowances will be paid on the entire amount.
When flat extras are applied, the following allowances will be paid on the
extra premium portion:
Temporary (five years or less): [percentage] for first year and all
renewal years Permanent (over five years): [percentage] for first year and
[percentage] for all renewal years
EXHIBIT D
Page 2
(Revised January 1, 2005)
D.5 RIDERS AND BENEFITS
AIBR (Automatic Increase Benefit Rider) - Elected increases will be
proportionately reinsured using the premiums for the base coverage, at
point-in-scale.
BIR (Base Insured Rider) and OIR (Other Insured Rider) - These riders will
be proportionately reinsured using the same premium rates scale as used
for the base coverage.
ACCELERATED DEATH BENEFIT RIDER - if IDS Life pays an accelerated death
benefit under the terms of the policy contract, the reinsurance coverage
will continue unaffected until the death of the insured.
The following benefits are not reinsured under this Agreement:
Waiver of Monthly Deduction Rider (WMD)
Children's Insurance Rider (CIR)
Accidental Death Benefit Rider (ADB)
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SCHEDULE D-1
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Basis for Reinsurance Premiums
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ALB ANNUAL COST OF INSURANCE RATES PER $1000 (BEFORE ALLOWANCES)
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Male Male Male Female Female Female
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Attained Preferred Standard Standard Preferred Standard Standard
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Age Nonsmoker Nonsmoker Smoker Nonsmoker Nonsmoker Smoker
--- --------- --------- ------ --------- --------- ------
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0
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Male Male Male Female Female Female
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Attained Preferred Standard Standard Preferred Standard Standard
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Age Nonsmoker Nonsmoker Smoker Nonsmoker Nonsmoker Smoker
--- --------- --------- ------ --------- --------- ------
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Male Male Male Female Female Female
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Attained Preferred Standard Standard Preferred Standard Standard
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Age Nonsmoker Nonsmoker Smoker Nonsmoker Nonsmoker Smoker
--- --------- --------- ------ --------- --------- ------
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