AUTOMATIC REINSURANCE AGREEMENT
between
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
Boston, Massachusetts
(hereinafter referred to as the CEDING COMPANY)
and
AXA RE LIFE INSURANCE COMPANY
New York, New York
(hereinafter referred to as the REINSURER)
EFFECTIVE MAY 1, 2000
THIS AGREEMENT WILL HEREINAFTER BE REFERRED TO AS AGREEMENT NO. 2000-14
CONTENTS
ARTICLES PAGE
I. Scope of Agreement 3
II. Commencement and Termination of Liability 4
III. Oversights and Clerical Errors 5
IV. Net Amount at Risk 6
V. Reinsurance Premiums 7-8
VI. Reinsurance Administration 9-10
VII. Settlement of Claims 11-12
VIII. Reinsurance Credit 13
IX. Recapture Privileges 14
X. Inspection of Records 15
XI. Insolvency 16
XII. Negotiation 17
XIII. Arbitration 18
XIV. Right to Offset Balances Due 19
XV. Contract and Program Changes 20
XVI. Confidentiality 21
XVII. Miscellaneous 22
XVIII. Severability 23
XIX. DAC Tax 24
XX. Duration of Agreement 25
XXI. Execution of Agreement 26
SCHEDULES
A. Plans of Reinsurance 27
B. Investment Funds 28
C. Data Layout 29-31
EXHIBITS
I. 1994 Variable Annuity MGDB Mortality Table 32
II. Reinsurance Premiums 33-34
III. Benefit Limitation Rule 35
IV. Confidentiality and Non-Disclosure Agreement
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 2
ARTICLE I
SCOPE OF AGREEMENT
A. On and after the 1st day of May 2000, the CEDING COMPANY shall automatically
reinsure with the REINSURER and the REINSURER shall automatically accept, a
quota-share percentage (defined in Schedule A) of the MNAR as defined in
Article IV, generated prior to termination of the REINSURER's liability
(defined in Article II), by the Guaranteed Minimum Death Benefit provisions
within the variable annuity contracts issued by the CEDING COMPANY as set
forth in Schedule A.
B. The REINSURER's maximum aggregate VNAR (defined in Article IV) claim payment
in any one calendar year shall not exceed two-hundred (200) basis points of
the REINSURER's quota-share percentage of the average aggregate account value
over each respective calendar year of coverage. This average shall be
calculated by way of a trapezoidal rule as shown in Exhibit III.
C. The REINSURER's annual aggregate VSCNAR and FSCNAR (defined in Article IV)
claim payment has no independently calculated annual aggregate claim limit.
D. For contracts where cumulative deposits are less than four-million dollars
($4,000,000), the REINSURER's maximum MNAR (defined in Article IV) liability
on any individual life shall be limited to one-million ($1,00,000) multiplied
by the quota-share percentage reinsured by the REINSURER.
E. For contracts where cumulative deposits are greater than or equal to
four-million dollars ($4,000,000), the REINSURER's maximum MNAR (defined in
Article IV) claim payment on any individual life reinsured hereunder shall be
limited to three-million dollars ($3,000,000) multiplied by the quota-share
percentage reinsured by the REINSURER.
F. This Agreement covers only the CEDING COMPANY's liability for claims paid
under variable annuity contract forms specified in Schedule A and supported
by investment funds specified in Schedule B and its Amendments, that were
submitted to the REINSURER prior to their issuance.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 3
ARTICLE II
COMMENCEMENT AND TERMINATION OF LIABILITY
A. On reinsurance ceded under the terms of this Agreement, the liability of the
REINSURER shall commence simultaneously with that of the CEDING COMPANY. The
liability under this Agreement will terminate either in accordance with the
Duration of Agreement provisions of this Agreement as stated in Article XX,
or, for an individual contract, upon the earliest of the following
occurrences defined in the contract(s) reinsured hereunder:
1. the date the owner elects to annuitize
2. surrender or termination of the contract
3. the death of the owner or annuitant where such death triggers the
payment of a contractual death benefit
4. attainment of the maximum annuitization age or attained age 95, if
earlier
5. due to the anti-selective nature of the dollar-for-dollar withdrawals,
reinsurance coverage will cease on the first day of the month
following where a withdrawal causes the Account Value of the contract
to fall below one-thousand-five-hundred dollars ($1,500). Once
reinsurance coverage ends for a specific contract, it cannot be
reinstated under this Agreement.
B. The REINSURER shall be liable to reimburse claims only on those deaths where
the date of death is on or after May 1, 2000, in accordance with Article VII.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 4
ARTICLE III
OVERSIGHTS AND CLERICAL ERRORS
A. Should either the CEDING COMPANY or the REINSURER fail to comply with any of
the terms of this Agreement, and if this is shown to be unintentional and the
result of a misunderstanding, oversight or clerical error on the part of
either the CEDING COMPANY or the REINSURER, then this Agreement shall not be
deemed abrogated thereby, but both companies shall be restored to the
positions they would have occupied had no such oversight, misunderstanding or
clerical error occurred. Such conditions are to be reported and corrected
promptly after discovery.
B. If the CEDING COMPANY or the REINSURER discovers that the CEDING COMPANY did
not cede reinsurance on a contract it should have reinsured under this
Agreement, the CEDING COMPANY will take reasonable and necessary steps to
ensure that similar oversights do not recur. Then this Agreement shall not be
deemed abrogated thereby, but both companies shall be restored to the
positions they would have occupied had the CEDING COMPANY ceded such
reinsurance at the original date. If the REINSURER receives no evidence that
the CEDING COMPANY has taken action to remedy such a situation, the REINSURER
reserves the right to limit its liability to reported contracts only.
C. Any negligent or deliberate acts or omissions by the CEDING COMPANY regarding
the insurance or reinsurance provided are the responsibility of the CEDING
COMPANY and its liability insurer, if any, but not that of the REINSURER. The
previous sentence does not negate the REINSURER's liability under Article
VII, Settlement of Claims, of this Agreement.
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Effective May 1, 2000 Page 5
ARTICLE IV
NET AMOUNT AT RISK
A. The mortality net amount at risk for each variable annuity contract reinsured
hereunder shall be calculated as of the first day of each calendar month and
shall be equal to the following:
MNAR (Mortality Net Amount at Risk) = VNAR + VSCNAR + FSCNAR where:
- VNAR (Variable Net Amount at Risk) = Maximum (a, b) multiplied by the
quota-share percentage (defined in Schedule A) where:
a = (Contractual Death Benefit - Account Value)
b = 0
- VSCNAR (Variable Surrender Charge Net Amount at Risk) = (Surrender
Charges allocated to Variable Account) multiplied by the quota-share
percentage
- FSCNAR (Fixed Surrender Charge Net Amount at Risk) = (Surrender
Charges allocated to Fixed Account) multiplied by the quota-share
percentage
B. The death benefit and the surrender charges will be as described in the
variable annuity contract forms specified in Schedule A.
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Effective May 1, 2000 Page 6
ARTICLE V
REINSURANCE PREMIUMS
A. The total reinsurance premium is equal to the sum of the variable account
reinsurance premium and the fixed account reinsurance premium.
B. The fixed account reinsurance premium is a monthly YRT rate which is applied
to the average FSCNAR over the reporting period on a life-by-life basis, and
is equal to one-twelfth (1/12th) of one-hundred percent (100%) of the 1994
Variable Annuity MGDB Mortality Table (Exhibit I) which is the 1994 GAM Basic
Table increased by ten percent (10%) for margins and contingencies, without
projection.
C. The variable account reinsurance premium is a monthly YRT rate which is
applied to the average (VNAR + VSCNAR) over the reporting period on a
life-by-life basis, and is equal to one-twelfth (1/12th) of one-hundred
percent (100%) of the 1994 Variable Annuity MGDB Mortality Table (Exhibit I)
which is the 1994 GAM Basic Table increased by ten percent (10%) for margins
and contingencies, without projection. The reinsurance premium is subject to
minimum and maximum asset-based premium rate levels which vary by issue age
and cumulative deposits.
D. If the CEDING COMPANY is unable, at this time, to apply the monthly YRT rates
on a life-by-life basis, quinquennial age groupings may be used by applying
the YRT rate applicable to the third age in each quinquennial group (eg., for
ages 60-64, use YRT rate corresponding to age 62). The age used in each
quinquennial group will be monitored by the REINSURER in the interim and
adjusted accordingly. At such time that the CEDING COMPANY becomes able to
apply the YRT rates on a life-by-life basis, it will inform the REINSURER and
will use this method beginning on the month of notification and going
forward. Any necessary "true-up" will be paid or credited for premiums paid
on the above basis.
E. The minimum asset-based premium rates shall be applied to the greater of the
average aggregate GMDB value minus the average aggregate fixed account value,
and the average variable aggregate account value in force over the reporting
period multiplied by the quota-share percentage reinsured by the REINSURER.
The reporting period is assumed to be monthly.
F. The maximum asset-based premium rates shall be applied to the greater of the
average aggregate total account value and average aggregate GMDB value in
force over the reporting period multiplied by the quota-share percentage
reinsured by the REINSURER. The reporting period is assumed to be monthly.
G. The annualized reinsurance premium rates are shown in Exhibit II and are
expressed in terms of basis points. In practice, they shall be applied on a
monthly basis by utilizing one-twelfth (1/12th) of the annualized rates.
H. Once cumulative deposits reach four-million dollars ($4,000,000), a contract
enters the larger size reinsurance premium structure shown in Exhibit II and
remains there for the duration of coverage.
I. The YRT rate and the minimum/maximum asset-based premium rates shall be
based on the oldest person of a multiple life status.
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Effective May 1, 2000 Page 7
ARTICLE V - REINSURANCE PREMIUMS
(continued)
J. The total reinsurance premium due and payable in the first month shall at
least equal one-thousand-five-hundred dollars ($1,500). Thereafter, the
minimum reinsurance premium that is due and payable shall increase by
one-thousand-two-hundred dollars ($1,200) for each month after the first
month until it reaches seven-thousand-five-hundred ($7,500) six months after
the Effective Date of this Agreement. The total reinsurance premium that is
due and payable in any month thereafter shall be at least
seven-thousand-five-hundred $7,500.
K. The reinsurance premium structure described above shall remain in effect as
long as the death benefit design, contract fees, mortality and expense
charges, administration fees and surrender charges in effect at the inception
of this Agreement remain unchanged.
L. Premium Recalculation:
- If the CEDING COMPANY is unable to offer the Enhanced Benefit before
August 1, 2000, for Venture Vantage, or before June 1, 2000 for
Venture Strategy, but does offer it before January 1, 2001, the
REINSURER will provide coverage under this Agreement but reserves the
right to recalculate the reinsurance premiums applicable to this
benefit. The recalculated premiums may not increase above 20% of the
values shown in Exhibit II.
- The CEDING COMPANY must notify the REINSURER at least two weeks prior
to the scheduled rollout date of the Enhanced Benefit in order for the
REINSURER to determine final prices for the Enhanced Benefit.
- The CEDING COMPANY may allow contracts issued on or after May 1, 2000,
to elect the Enhanced Benefit once it becomes available. These
elections must be made within thirty (30) days of the rollout date,
but not after December 31, 2000, in order to be covered under this
Agreement. The benefit will be retroactive to the issue date of the
contract.
- For the months elapsed since the inception of the Agreement until the
month of the inforce election, any necessary "true-up" will be paid or
credited. If the volume of inforce elections exceeds
one-hundred-million dollars ($100,000,000) of net considerations, the
REINSURER reserves the right to recalculate the reinsurance premiums
at this time to be applied to any additional inforce elections. The
recalculated premiums have no guaranteed limits above which they will
not increase.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 8
ARTICLE VI
REINSURANCE ADMINISTRATION
A. Within thirty (30) days of the end of each calendar month, the CEDING COMPANY
will furnish the REINSURER with a seriatim electronic report as detailed in
Schedule C, for each contract specified in Schedule A, valued as of the last
day of that month. The CEDING COMPANY will also provide separate reports for
the smaller contractholders (i.e., <$4 million) and the larger
contractholders (i.e., $4 million or more)
B. Additionally, within thirty (30) days of the end of each calendar month,
the CEDING COMPANY will furnish the REINSURER with a separate paper report
summarizing the following:
1. reinsurance premiums due to the REINSURER separate for each premium
class as shown in Exhibit II
2. benefit claim reimbursements due to the CEDING COMPANY in total and
broken down by VNAR, SCNAR and FSCNAR
C. If the net balance is due to the REINSURER, the amount due shall be remitted
with the report statement. If the net balance is due to the CEDING COMPANY,
the REINSURER shall remit the amount to the CEDING COMPANY within ten (10)
days of receipt of the report.
D. Furthermore, the REINSURER will use the summary data in Schedule C to
calculate and monitor its maximum annual aggregate VNAR liability throughout
the calendar year. Upon the receipt of the final report for the calendar
year, the REINSURER will "true-up" benefit claim reimbursements, if
necessary, from the prior calendar year.
E. Other
1. The REINSURER reserves the right to charge interest [if (a) or (b)
below occur] based on the ninety (90) day Federal Government Treasury
Xxxx as first published by the Wall Street Journal in the month
following the end of the billing period plus fifty (50) basis points.
The method of calculation shall be simple interest (360-day year) and
applied as follows:
(a) if premiums are not paid within sixty (60) days of the due date shown
on the statement
(b) if premiums for first year business are not paid within
one-hundred-eighty (180) days of the effective date of the policy
2. If claims are not paid within sixty (60) days of the REINSURER's receipt
of satisfactory proof of claim liability, the CEDING COMPANY reserves the
right to charge interest, based on the ninety (90) day Federal Government
Treasury Xxxx as first published by the Wall Street Journal in the month
following the end of the billing period plus fifty (50) basis points. The
method of calculation shall be simple interest (360-day year).
3. The REINSURER will have the right to terminate this Agreement when
premium payments are more than ninety (90) days past due by giving
ninety (90) days' written notice of termination to the CEDING
COMPANY. As of the close of the last day of this ninety (90) day
notice period, the REINSURER's liability for all risks reinsured
associated with the defaulted premiums under this Agreement will
terminate. The first day of the ninety (90) day notice of termination
will be
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 9
ARTICLE VI - REINSURANCE ADMINISTRATION
(continued)
the day the notice is received in the mail by the CEDING COMPANY or if the
mail is not used, the day it is delivered to the CEDING COMPANY. If all
premiums in default are received within the ninety (90) day time period,
the Agreement will remain in effect.
4. Payments between the CEDING COMPANY and the REINSURER may be paid net
of any amount due and unpaid under this Agreement.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 10
ARTICLE VII
SETTLEMENT OF CLAIMS
A. The claims, as set forth in Article IV, that are eligible for reimbursement
are only those that the CEDING COMPANY is contractually required to pay on
deaths that occur on or after the Effective Date of this Agreement and
subject to benefit limitations as described in Article I.
B. In the event the CEDING COMPANY provides satisfactory proof of claim
liability to the REINSURER, claim settlements made by the CEDING COMPANY
shall be unconditionally binding on the REINSURER. In every case of claim,
copies of the proofs obtained by the CEDING COMPANY will be taken by the
REINSURER as sufficient.
C. Within thirty (30) days of the end of each calendar month, the CEDING COMPANY
shall notify the REINSURER of the reinsured contractual death benefits paid
in that month, based on the net amount at risk definition set forth in
Article IV, and the REINSURER shall reimburse the CEDING COMPANY, as provided
in Article VI, for the reinsured benefits.
D. Settlements by the REINSURER shall be in a lump sum regardless of the mode
of payment made by the CEDING COMPANY.
E. 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
shall, 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 may arise in which equity would
require the REINSURER, to the extent permitted by law, to share
proportionately in certain assessed 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 the extra-contractual damages, other than statutory damages. In
such situations, the REINSURER and the CEDING COMPANY shall share such
damages so assessed, in equitable proportions. For the purposes of this
provision, the following definitions will apply:
- "Punitive Damages" are those damages awarded as a penalty, the amount
of which is neither governed nor fixed by statute
- "Statutory Penalties" are those amounts awarded as a penalty, but
fixed in amount by statute
- "Compensatory Damages" are those amounts awarded to compensate for the
actual damages sustained and are not awarded as a penalty, nor fixed
in amount by statute
If the REINSURER declines to be party to the contest, compromise, or
litigation of a claim, it will pay its full share of the amount reinsured, as
if there had been no contest, compromise, or litigation, and its
proportionate share of covered expenses incurred to the date it notifies the
CEDING COMPANY it declines to be a party.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 11
ARTICLE VII - SETTLEMENT OF CLAIMS
(continued)
F. In no event will the REINSURER be liable for expenses incurred in connection
with a dispute or contest arising out of conflicting or any other claims of
entitlement to policy proceeds or benefits, provided the REINSURER makes
payment of the amount of reinsurance to the CEDING COMPANY, as described in
the above paragraph.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 12
ARTICLE VIII
REINSURANCE CREDIT
It is the intention of both the REINSURER and the CEDING COMPANY that the CEDING
COMPANY qualify for reinsurance credit in all States for reinsurance ceded
hereunder. The REINSURER, at its sole cost and expense, shall do all that is
necessary to comply with the insurance laws and regulations of all States in
order to enable the CEDING COMPANY to take credit for the reinsurance ceded
hereunder, including delivery of any reports required thereunder.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 13
ARTICLE IX
RECAPTURE PRIVILEGES
The CEDING COMPANY may recapture existing reinsurance in force in accordance
with the following rules:
A. The CEDING COMPANY will notify the REINSURER of its intent to recapture at
least ninety (90) days prior to any recaptures.
B. No recapture will be made unless reinsurance has been in force for fifteen
(15) years from the Effective Date of this Agreement.
C. Recapture will be available only if the total carry-forward is in a positive
position. The total carry-forward is defined as the sum of the carry-forwards
of this Agreement and the complementary GMIB Agreement, if any, that
reinsures the same related contracts. The REINSURER has the option to waive
this requirement and allow recapture to occur.
D. The carry-forward for each Agreement is defined as the current period's
reinsurance premium, minus all reinsurance claims paid under this Agreement,
minus a two-and-one-half (2.5) basis point annual expense allowance applied
against the average aggregate Account Value, minus the change in treaty
reserves, plus last period's loss carry-forward. The carry-forward amount is
accumulated at the ninety (90) day Federal Government Treasury Xxxx rate as
published in the Wall Street Journal on the first business day of the current
period plus two percent (2%).
E. Upon election, recapture shall occur ratably over a thirty-six (36) month
period (i.e., every month the initial quota-share percentage reduces 2.78%
times the initial quota-share percentage). It is irrevocable once elected.
F. It is the responsibility of the REINSURER to determine the carry-forward,
based on the method described above.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 14
ARTICLE X
INSPECTION OF RECORDS
A. The REINSURER, or its duly appointed representatives, shall have the right at
all reasonable times and for any reasonable purpose to inspect at the office
of the CEDING COMPANY all records referring to reinsurance ceded to the
REINSURER.
B. Relating to the business reinsured hereunder, the CEDING COMPANY or its duly
appointed representatives shall have the right at all reasonable times and
for any reasonable purpose, to inspect at the office of the REINSURER all
records referring to reinsurance ceded from the CEDING COMPANY.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 15
ARTICLE XI
INSOLVENCY
A. In the event of the insolvency of the CEDING COMPANY, all reinsurance will be
payable on the basis of the liability of the CEDING COMPANY on the policies
reinsured directly to the CEDING COMPANY or its liquidator, receiver or
statutory successor without diminution because of the insolvency of the
CEDING COMPANY.
B. In the event of insolvency of the CEDING COMPANY, the liquidator, receiver or
statutory successor will, within a reasonable time after the claim is filed
in the insolvency proceeding, give written notice to the REINSURER of all
pending claims against the CEDING COMPANY or any policies reinsured. While a
claim is pending, the REINSURER may investigate and interpose, at its own
expense, in the proceedings where the claim is adjudicated, any defense or
defenses which it may deem available to the CEDING COMPANY or its liquidator,
receiver or statutory successor. The expenses 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 expenses will be apportioned in
accordance with the terms of the Reinsurance Agreement as though such expense
had been incurred by the CEDING COMPANY.
C. Any debts or credits, matured or unmatured, liquidated or unliquidated, in
favor of or against either the REINSURER or CEDING COMPANY with respect to
this Agreement are deemed mutual debts or credits, as the case may be, and
will be offset, and only the balance will be allowed or paid. However, in the
event of liquidation, the REINSURER may offset against undisputed amounts
which are due and payable to the CEDING COMPANY, only those undisputed
amounts due the REINSURER which are not more than one-hundred-eighty (180)
days past due at the date of the court order of liquidation.
D. In the event of insolvency of the REINSURER, the CEDING COMPANY may recapture
immediately all ceded benefits upon written notice to the REINSURER, its
liquidator, receiver or statutory successor. The CEDING COMPANY shall also
have a claim on the REINSURER for any reinsurance credit amounts including
reserves, unearned premiums and other amounts due the CEDING COMPANY on such
reinsurance, at the date of recapture.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 16
ARTICLE XII
NEGOTIATION
A. Within ten (10) days after one of the parties has given the other the first
written notification of a specific dispute, each party will appoint a
designated officer to attempt to resolve the dispute. The officers will meet
at a mutually agreeable location as early as possible and as often as
necessary, in order to gather and furnish the other with all appropriate and
relevant information concerning the dispute. The officers will discuss the
problem and will negotiate in good faith without the necessity of any formal
arbitration proceedings. During the negotiation process, all reasonable
requests made by one officer to the other for information will be honored.
The specific format for such discussions will be decided by the designated
officers.
B. If the officers cannot resolve the dispute within thirty (30) days of their
first meeting, the parties will agree to submit the dispute to formal
arbitration. However, the parties may agree in writing to extend the
negotiation period for an additional thirty (30) days.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 17
ARTICLE XIII
ARBITRATION
A. It is the intention of the CEDING COMPANY and the REINSURER that the customs
and practices of the insurance and reinsurance industry will be given full
effect in the operation and interpretation of this Agreement. The parties
agree to act in all things with the highest good faith. If after the
negotiation required by Article XII, the REINSURER or the CEDING COMPANY
cannot mutually resolve a dispute that 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
industry rather than solely on a strict interpretation of the applicable law.
There will be no appeal of their decision, and any court having jurisdiction
of the subject matter and the parties, may reduce that decision to judgement.
B. To initiate arbitration, either the REINSURER or the CEDING COMPANY will
notify the other party in writing of its desire to arbitrate, stating the
nature of its dispute and the remedy sought. The party to which the notice is
sent will respond to the notification in writing within ten (10) days of its
receipt.
C. There will be three arbitrators who will be current or former officers of
life insurance companies other than the contracting companies or affiliates
thereof. Each of the contracting companies 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 thirty (30) days, the
other party may appoint the second arbitrator. If the two arbitrators do not
agree on a third arbitrator within thirty (30) days of their appointment,
then the appointment of said arbitrator shall be left to the President of the
American Arbitration Association. Once chosen, the arbitrators are empowered
to decide all substantive and procedural issues by majority of votes.
D. It is agreed that each of the three arbitrators should be impartial regarding
the dispute and should resolve the dispute on the basis described in Section
A of this Article.
E. The arbitration hearing will be held on the date fixed by the arbitrators in
New York City. In no event will this date be later than three (3) 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 (10) 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 they 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. Each party may
examine any witnesses who testify at the arbitration hearing.
F. The cost of arbitration will be divided between the parties, unless the
arbitrators decide otherwise.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 18
ARTICLE XIV
RIGHT TO OFFSET BALANCES DUE
The CEDING COMPANY and the REINSURER shall have, and may exercise at any time,
the right to offset any balance or balances due one party to the other, its
successors or assignees, against balances due to the other party under this
Agreement or under any other Agreements or Contracts previously or subsequently
entered into between the CEDING COMPANY and the REINSURER. This right of offset
shall not be affected or diminished because of the insolvency of either party to
this Agreement.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 19
ARTICLE XV
CONTRACT AND PROGRAM CHANGES
A. The CEDING COMPANY may amend, substitute, add or delete variable investment
funds to the investment options supporting the annuity contract as described
in the contract general provisions. No such change shall be made by the
CEDING COMPANY without prior notification to the REINSURER and without
changes being declared effective by the Securities and Exchange Commission-
(SEC), if necessary. The REINSURER will approve or disapprove of the fund
change within fifteen (15) working days of the date on which they receive
notification. The CEDING COMPANY agrees to maintain at all times a
satisfactory selection of core investment options with characteristics
similar to those listed in Schedule B.
B. The CEDING COMPANY shall also give the REINSURER advance notice of any other
changes to its annuity product design and/or death benefit design, its fees
and charges, its distribution systems and/or methods, or the addition of any
riders to any contract forms reinsured hereunder.
C. Should any such change as stated above result in a material change in the
underlying risk, the REINSURER shall have the right to modify, for that
product line only, any of the terms of this Agreement in order to restore the
REINSURER to its original position.
D. The CEDING COMPANY agrees to provide the REINSURER with all contractholder
communications as though the REINSURER was a contractholder in the State of
Delaware.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 20
ARTICLE XVI
CONFIDENTIALITY
A. This Agreement incorporates the confidentiality agreement previously agreed
to between the parties on December 1, 1998 (Exhibit IV). All matters with
respect to this Agreement require the utmost good faith of both parties. Both
the CEDING COMPANY and the REINSURER shall hold confidential and not disclose
or make competitive use of any shared proprietary information unless
otherwise agreed to in writing, or unless the information otherwise becomes
publicly available, or the disclosure of which is required for retrocession
purposes, or has been mandated by law, or is duly required by external
auditors.
B. Furthermore, the REINSURER agrees to not disclose any of the personal
contractholder information provided to it by the CEDING COMPANY in Schedule
C. All information provided in Schedule C shall be used by the REINSURER
solely for the purpose contemplated by the terms of this Agreement and shall
not be provided to any other entity or individual, except as required to be
disclosed pursuant to a valid court order or pursuant to a subpoena from a
regulatory agency or lawful jurisdiction.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 21
ARTICLE XVII
MISCELLANEOUS
A. This Agreement shall constitute the entire Agreement between the parties with
respect to business reinsured hereunder. There is no understanding between
the parties other than as expressed in this Agreement and any change or
modification of this Agreement shall be null and void unless made by
Amendment to the Agreement and signed by both parties.
B. Any notice or communication given pursuant to this Reinsurance Agreement must
be in writing and 1) delivered personally, 2) sent by facsimile or other
similar transmission to a number specified in writing by the recipient, 3)
delivered by overnight express, or 4) sent by Registered or Certified Mail,
Postage Prepaid, Return Receipt Requested, as follows:
If to CEDING COMPANY: The Manufacturers Life Insurance Company
of North America
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxx Xxxxx
If to the REINSURER: AXA Re Life Insurance Company
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxxxx
All notices and other communications required or permitted under this
Reinsurance Agreement that are addressed as provided in this Section will 1)
if delivered personally or by overnight express, be deemed given upon
delivery; 2) if delivered by facsimile transmission or other similar
transmission, be deemed given when electronically confirmed, and 3) if sent
by Registered or Certified mail, be deemed given when marked Postage Prepaid
by the sender's terminal. Any party from time-to-time may change its address,
but no such notice of change will be deemed to have been given until it is
actually received by the party sought to be charged with the contents
thereof.
C. This Agreement shall be binding to the parties and their respective
successors and permitted assignees. This Agreement may not be assigned by
either party without the written consent of the other. This Agreement may be
modified or amended only by an Amendment duly executed and delivered on
behalf of each party by its respective duly authorized officers.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 22
ARTICLE XVIII
SEVERABILITY
If any provision of this Agreement is determined to be invalid or unenforceable,
such determination will not affect or impair the validity or the enforceability
of the remaining provisions of this Agreement.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 23
ARTICLE XIX
DAC TAX
TREASURY REGULATION SECTION 1.848-2(g)(8) ELECTION
The CEDING COMPANY and the REINSURER hereby agree to the following pursuant to
the Section 1.848-2(g)(8) of the Income Tax Regulations issued December 29,
1992, under Section 848 of the Internal Revenue Code 1986, as amended. This
election shall be effective for 1993 and all subsequent taxable years for which
this Agreement remains in effect.
A. The term "party" will refer to either the CEDING COMPANY or the REINSURER as
appropriate.
B. The terms used in this Article are defined by reference to Treasury
Regulations Section 1.848-2 in effect as of December 29, 1992.
C. The party with the net positive consideration for this Agreement for each
taxable year will capitalize specified policy acquisition expenses with
respect to this Agreement without regard to the general deduction limitation
of IRC 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. The
parties also agree to exchange information, which may be otherwise required
by the IRS.
E. The CEDING COMPANY will submit to the REINSURER by April 1st of each year, a
schedule of its calculation of the net consideration for the preceding
calendar year. This schedule will be accompanied by a statement signed by an
officer of the CEDING COMPANY stating that the CEDING COMPANY will report
such net consideration in its tax return for the preceding calendar year.
F. The REINSURER may contest such calculation by providing an alternate
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 notify the CEDING COMPANY, the REINSURER will report the net
consideration as determined by the CEDING COMPANY in the REINSURER's tax
return for the previous calendar year.
G. If the REINSURER contests the CEDING COMPANY's calculation of the net
consideration, the parties will act in good faith to reach an agreement as to
the correct amount within thirty (30) days of the date the REINSURER submits
its alternate calculation. If the REINSURER and CEDING COMPANY reach
agreement on an amount of net consideration, each party shall report such
amount in their respective tax returns for the previous calendar year.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 24
ARTICLE XX
DURATION OF AGREEMENT
A. This Agreement shall be unlimited as to its duration but may be reduced or
terminated as provided in this Article, below.
B. This Agreement shall be open for new business for a minimum of two (2) years
as measured from the Effective Date of this Agreement subject to a limit of
six-billion dollars ($6,000,000,000) of total new considerations to the
CEDING COMPANY divided by the quota-share percentage as described in Schedule
A. Anytime on or after the second anniversary of this Agreement, and upon
one-hundred-eighty (180) days' written notice, or anytime on or after
attainment of six-billion dollars ($6,000,000,000) of total new deposits,
either the CEDING COMPANY or the REINSURER may cancel this Agreement for new
business unilaterally or amend the terms of reinsurance for new business by
mutual agreement. The facility may be renewed thereafter, subject to mutually
accepted terms.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 25
ARTICLE XXI
EXECUTION OF AGREEMENT
This Agreement may be executed by the parties in separate counterparts, each of
which when so executed and delivered shall be an original, but all such
counterparts together shall constitute one and the same instrument. Each
counterpart may consist of a number of copies hereof signed by less than both,
but together signed by both of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate by their duly authorized representatives as of May 1, 2000.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
By: __________________________________________________ Date:_______________
Name/Title
Attest: __________________________________________________
Name/Title
AXA RE LIFE INSURANCE COMPANY
By: __________________________________________________ Date:_______________
Xxxxxxx X. Xxxx, President
By: __________________________________________________
Xxxx Xxxxxxxxx, Assistant Actuary
Attest: __________________________________________________
Xxxxxxxxx Xxxxxxxx, Vice President
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 26
SCHEDULE A
PLANS OF REINSURANCE
A. Quota-Share Percentage: 100%
B. GMDB Reinsured:
- Venture Vantage Basic Benefit for issue ages 0-80: One-time 9-year
ratchet, frozen thereafter and reduced for withdrawals on a
dollar-for-dollar basis
- Venture Vantage Enhanced Benefit for issue ages 0-80: Annual ratchet
to attained age 80; frozen thereafter and reduced for withdrawals on
a dollar-for-dollar basis
- Venture Strategy Basic Benefit for issue ages 0-85: Return of Net
Considerations reduced proportionately for withdrawals
- Venture Strategy Enhanced Benefit for issue ages 0-80: Annual
ratchet to attained age 80; frozen thereafter and reduced
proportionately for withdrawals
C. Related Contracts:
- Venture Vantage VA (policy forms: Venture.015, Venture.015.98,
Venture.016, Venture.017)
- Venture Strategy VA (policy forms: Venture.025, Venture.026,
Venture.025.00, Venture.027))
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 27
SCHEDULE B
INVESTMENT FUNDS
VARIABLE FUNDS
AIM Manufacturers Adviser Corporation X. Xxxx Price
All Cap Growth Trust Pacific Rim Emerging Markets Trust Equity Income Trust
Aggressive Growth Trust Money Market Trust Blue Chip Growth Trust
Quantitative Equity Trust Science & Technology Trust
CGTC Real Estate Securities Trust
Diversified Bond Trust Lifestyle Conservative 280 Trust PIMCO
Income & Value Trust Lifestyle Moderate 460 Trust Global Bond Trust
US Large Cap Value Trust Lifestyle Balanced 640 Trust Total Return Trust
Small Company Blend Trust Lifestyle Growth 820 Trust
Lifestyle Aggressive 1000 Trust Xxxx Xxxxx - Xxxxxxx
Fidelity International Index Trust International Stock Trust
Mid Cap Blend Trust Total Stock Market Index Trust
Large Cap Growth Trust 500 Index Trust Xxxxxxxxx
Overseas Trust Mid Cap Index Trust International Value Trust
Small Cap Index Trust
Founders Xxxxxxxxx Inst.
Balanced Trust Xxxxxxxx Xxxxxxxx Small Company Value Trust
International Small Cap Tactical Allocation Trust
Trust
Salomon
Xxxxxxxx Xxxxxx US Government Securities Trust
Emerging Small Company Trust Internet Technologies Trust Strategic Bond Trust
Xxxxx Xxxxxxx Xxxxx SsgA
Dynamic Growth Trust ML Basic Value Focus Trust* Growth Trust
ML Special Value Focus Trust*
ML Developing Capital Markets Trust* Wellington
Growth & Income Trust
Xxxxxx Xxxxx. Xxxx. Investment Quality Bond Trust
Value Trust Mid Cap Stock Trust
High Yield Trust
Xxxxxx Xxxxxxx
Global Equity Trust
*Excludes Strategy Plan
FIXED FUNDS
One Year
DCA Twelve Month
DCA Six Month
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 28
SCHEDULE C
SUGGESTED DATA LAYOUT
FIELD DESCRIPTION COMMENTS
Annuitant's ID: Last Name
First Name
Middle Name
Sex M or F
Date of Birth YYYYMMDD
Social Security No. / Social Insurance No.
Joint Annuitant's ID: Last Name If Applicable
First Name
Middle Name
Sex M or F
Date of Birth YYYYMMDD
Social Security No. / Social Insurance No.
Owner's ID: Last Name
First Name
Middle Name
Sex M or F
Date of Birth YYYYMMDD
Social Security No. / Social Insurance No.
Joint Owner's ID: Last Name If Applicable
First Name
Middle Name
Sex M or F
Date of Birth YYYYMMDD
Social Security No. / Social Insurance No.
Policy Number
Policy Issue Date YYYYMMDD
Policy Issue Status NI = True New Issue, SC = Spousal Continuance, EX = 1035 Exchange
Tax Status Qualified (Q), or Non-qualified (N)
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 29
EXHIBIT C
SUGGESTED DATA LAYOUT
(continued)
FIELD DESCRIPTION COMMENTS
GMDB SECTION
Mortality Risk Definition Indicator AV = VNAR; CV = VNAR + SCNAR
Death Claim Trigger A = Annuitant, O = Owner, 1 = 1st to die, 2 = 2nd to die
(e.g., A2 = payable upon death of second of joint annuitants)
Current Ratchet Value If Applicable
Current Reset Value If Applicable
Current Rollup Value If Applicable
Current Return of Premium Value If Applicable
Minimum Guaranteed Death Benefit
Contract Death Benefit Greater of Account Value and Minimum Guaranteed Death Benefit
Mortality Risk VNAR Max [Contractual Death Benefit - Account Value), 0]
VSCNAR Surrender Charge allocated to Variable Account
FSCNAR Surrender Charge allocated to Fixed Account
GMIB SECTION
GMIB Indicator Y = benefit elected, N = benefit not elected, NA = not applicable
Income Benefit Elected 01 = option 1, 02 = option 2, etc.
Expiration of Waiting Period YYYYMMDD
GMIB Annuitization Date YYYYMMDD - actual date
Most Recent GMIB Step-up / Reset Date YYYYMMDD, if applicable
Cancellation Date YYYYMMDD, if applicable
Pricing Cohort Indicator
IBB Amount
GMIB IBNAR Amount Calculated using an individual life annuity form with 10 years certain
Treasury Rate Used in IBNAR calculation
GMAB SECTION
GMAB Indicator Y = benefit elected, N = benefit not elected, NA = not applicable
Accumulation Benefit Elected 01 = option 1, 02 = option 2, etc.
Maturity Date YYYYMMDD
Most Recent GMAB Step-up / Rollover Date YYYYMMDD, if applicable
Cancellation Date YYYYMMDD, if applicable
Pricing Cohort Indicator
GMAB Guaranteed Value Current Value
GMAB NAR Max [ (GMAB Guaranteed Value - Account Value) , 0
Account Value Current total value
Surrender Charge If reinsured
Cumulative Deposits Total premiums
Cumulative Withdrawals Total withdrawals
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 30
EXHIBIT C
SUGGESTED DATA LAYOUT
(continued)
FIELD DESCRIPTION COMMENTS
Funding Vehicle Values:
"MorningStar" designations (US)
Aggressive Growth
Balanced
Corporate Bond
Government Bond
Growth
Growth and Income
High Yield Bond
International Bond
International Stock
Money Market
Specialty Fund
Dollar Cost Averaging
Fixed Account
Note: total of funding vehicles should equal
account value.
Termination Information:
Termination Date YYYYMMDD, If applicable
Reason for Termination Death (D), Annuitization (A), 1035 Exchange (X), GMIB Election (I), Other (O).
Cause of Death If applicable. Use your Cause of Death code, and provide translation
Summary Information: For reconciliation purposes (may be paper summary)
Total number of records Monthly aggregate information by GMIB Design, GMAB Design, and
Pricing Cohort (if applicable)
Total of each dollar field Monthly aggregate information by GMIB Design, GMAB Design, and
Pricing Cohort (if applicable)
Note: All values to nearest dollar
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 31
EXHIBIT I
1994 VARIABLE ANNUITY MGDB MORTALITY TABLE
(applied age last birthday)
Age Male Qx Female Qx Age Male Qx Female Qx
--- ------- --------- --- ------- ---------
1 0.000587 0.000519 60 0.010029 0.005636
2 0.000433 0.000358 61 0.011312 0.006460
3 0.000350 0.000268 62 0.012781 0.007396
4 0.000293 0.000218 63 0.014431 0.008453
5 0.000274 0.000201 64 0.016241 0.009611
6 0.000263 0.000188 65 0.018191 0.010837
7 0.000248 0.000172 66 0.020259 0.012094
8 0.000234 0.000158 67 0.022398 0.013318
9 0.000231 0.000154 68 0.024581 0.014469
10 0.000239 0.000159 69 0.026869 0.015631
11 0.000256 0.000169 70 0.029363 0.016957
12 0.000284 0.000185 71 0.032169 0.018597
13 0.000327 0.000209 72 0.035268 0.020599
14 0.000380 0.000239 73 0.038558 0.022888
15 0.000435 0.000271 74 0.042106 0.025453
16 0.000486 0.000298 75 0.046121 0.028372
17 0.000526 0.000315 76 0.050813 0.031725
18 0.000558 0.000326 77 0.056327 0.035505
19 0.000586 0.000333 78 0.062629 0.039635
20 0.000613 0.000337 79 0.069595 0.044161
21 0.000642 0.000340 80 0.077114 0.049227
22 0.000677 0.000343 81 0.085075 0.054980
23 0.000717 0.000344 82 0.093273 0.061410
24 0.000760 0.000344 83 0.101578 0.068384
25 0.000803 0.000346 84 0.110252 0.075973
26 0.000842 0.000352 85 0.119764 0.084432
27 0.000876 0.000364 86 0.130583 0.094012
28 0.000907 0.000382 87 0.143012 0.104874
29 0.000935 0.000403 88 0.156969 0.116968
30 0.000959 0.000428 89 0.172199 0.130161
31 0.000981 0.000455 90 0.188517 0.144357
32 0.000997 0.000484 91 0.205742 0.159461
33 0.001003 0.000514 92 0.223978 0.175424
34 0.001005 0.000547 93 0.243533 0.192270
35 0.001013 0.000585 94 0.264171 0.210032
36 0.001037 0.000628 95 0.285199 0.228712
37 0.001082 0.000679 96 0.305931 0.248306
38 0.001146 0.000739 97 0.325849 0.268892
39 0.001225 0.000805 98 0.344977 0.290564
40 0.001317 0.000874 99 0.363757 0.313211
41 0.001424 0.000943 100 0.382606 0.336569
42 0.001540 0.001007 101 0.401942 0.360379
43 0.001662 0.001064 102 0.422569 0.385051
44 0.001796 0.001121 103 0.445282 0.411515
45 0.001952 0.001186 104 0.469115 0.439065
46 0.002141 0.001269 105 0.491923 0.465584
47 0.002366 0.001371 106 0.511560 0.488958
48 0.002618 0.001488 107 0.526441 0.507867
49 0.002900 0.001619 108 0.536732 0.522924
50 0.003223 0.001772 109 0.543602 0.534964
51 0.003598 0.001952 110 0.547664 0.543622
52 0.004019 0.002153 111 0.549540 0.548526
53 0.004472 0.002360 112 0.550000 0.550000
54 0.004969 0.002589 113 0.550000 0.550000
55 0.005543 0.002871 114 0.550000 0.550000
56 0.006226 0.003241 115 1.000000 1.000000
57 0.007025 0.003713
58 0.007916 0.004270
59 0.008907 0.004909
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 32
EXHIBIT II
REINSURANCE PREMIUMS
FOR CONTRACTS WITH CUMULATIVE DEPOSITS < $4 MILLION:
VENTURE VANTAGE Issue Reinsurance Premiums Guaranteed
Ages Minimum Maximum* Maximum
---- ------- -------- -------
One-time 9-Year Ratchet 0-49 3.50 6.25 13.50
50-59 7.75 13.50 29.00
60-69 15.50 27.00 56.00
70-80 32.00 56.00 114.00
Annual Ratchet 0-49 7.50 13.00 28.00
50-59 14.75 25.50 53.00
60-69 25.25 43.75 89.50
70-80 44.50 77.50 157.00
VENTURE STRATEGY Issue Reinsurance Premiums Guaranteed
Ages Minimum Maximum* Maximum
---- ------- -------- -------
Return of Net Considerations 0-49 1.75 3.00 7.00
50-59 3.25 5.50 13.00
60-69 6.75 11.75 25.50
70-80 16.00 28.00 58.00
80-85 26.00 45.50 93.00
Annual Ratchet 0-49 6.75 12.00 26.00
50-59 11.50 20.00 42.00
60-69 17.00 29.75 61.50
70-80 25.50 45.50 93.00
FOR CONTRACTS WITH CUMULATIVE DEPOSITS > $4 MILLION:
VENTURE VANTAGE Issue Reinsurance Premiums Guaranteed
Ages Minimum Maximum* Maximum
---- ------- -------- -------
One-time 9-Year Ratchet 0-49 3.50 8.00 18.00
50-59 7.75 17.50 37.00
60-69 15.50 35.00 72.00
70-80 32.00 72.00 146.00
Annual Ratchet 0-49 7.50 17.00 36.00
50-59 14.75 33.00 68.00
60-69 25.25 57.00 116.00
70-80 44.50 100.00 202.00
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 33
EXHIBIT II - REINSURANCE PREMIUMS
(continued)
VENTURE STRATEGY Issue Reinsurance Premiums Guaranteed
Ages Minimum Maximum* Maximum
---- ------- -------- -------
Return of Net Considerations 0-49 1.75 4.00 10.00
50-59 3.25 7.25 16.50
60-69 6.75 15.25 32.50
70-80 16.00 36.00 74.00
80-85 26.00 58.50 119.00
Annual Ratchet 0-49 6.75 15.25 32.50
50-59 11.50 26.00 54.00
60-69 17.00 38.25 78.50
70-80 25.50 57.50 117.00
* The current maximum premium rate shall be in effect for a minimum of
twenty (20) years from the Effective Date of this Reinsurance Agreement.
Thereafter, it may be increased based on expected experience but not
beyond the stated guaranteed maximum rates shown.
Manu LIC NA Agreement No. 2000- 14 DB
Effective May 1, 2000 Page 34
EXHIBIT III
BENEFIT LIMITATION RULE
TRAPEZOIDAL RULE
Average Aggregate Account Value inforce in calendar year Z equals:
AV(Jan(B))
--------- +
24
AV(Feb(B)) + AV(Mar(B)) + AV(Apr(B)) + AV (May(B))
------------------------------------------------- +
00
XX (Xxx(X)) + AV (Jul(B)) + AV (Aug(B)) + AV (Sep(B))
---------------------------------------------------- +
12
AV (Oct(B)) + AV (Nov(B)) + AV (Dec(B))
-------------------------------------- +
12
AV (Dec(E))
----------
24
where AV(Month(B)) is equal to the beginning of month aggregate account value of
the Related Contracts listed in Schedule A and AV(Month(E)) is equal to the end
of month aggregate account value of the Related Contracts listed in Schedule A.
For partial calendar years AV(Month(B)) for months prior to the Effective Date
of this Reinsurance Agreement should be set equal to zero.
Manu LIC NA Agreement No. 2000-14 DB
Effective May 1, 2000 Page 35
