1
VARIABLE ANNUITY GUARANTEED DEATH BENEFIT REINSURANCE
Effective JULY 1, 1995
between
NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY
(BOSTON, MA)
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
CIGNA REINSURANCE
(Hartford, Connecticut)
2
REINSURANCE AGREEMENT, Effective JULY 1, 1995
between
NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY
(BOSTON, MA)
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
CIGNA REINSURANCE
(Hartford, Connecticut)
INDEX
ARTICLE PAGE
------- ----
Access to Records XI 7
Amounts at Risk II 2
Arbitration XVI 10
Automatic Excess Reinsurance III 3
Claims VII 5
Currency XIII 8
DAC Tax Regulation Election XVII 11
Delays, Errors, or Omissions XII 8
Effective Date; Term and Termination XVIII 12
Extra Contractual Obligations VIII 6
Hold Harmless XIV 8
Insolvency XV 9
Liability of Connecticut General IV 3
Litigation IX 7
Notices XIX 15
Offset X 7
Parties to the Agreement I 1
Premium Accounting VI 5
Reinsurance Premiums V 4
SCHEDULES
A Maximum Limits of Reinsurance in Connecticut General
B Policy Forms and Funds Subject to this Reinsurance Agreement
C Limits and Rules of NASL
D Reinsurance Premium Rates
E Reporting Format Description
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REINSURANCE AGREEMENT
(hereinafter called Agreement)
between
NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY
(hereinafter called NASL)
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
(hereinafter called Connecticut General or Reinsurer)
It is agreed by the two companies as follows:
ARTICLE I PARTIES TO THE AGREEMENT
This Agreement shall be binding upon and shall inure solely to the benefit of
NASL and Connecticut General. This Agreement shall not and is not intended to
create any right or interest in any third party and shall not and is not
intended to create any legal relationship between either party and any third
party, including, without limitation, annuitants, insureds, certificate
holders, employees, dependents, beneficiaries, policy owners, applicants or
assignees under any policy or contract issued by NASL.
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ARTICLE II AMOUNTS AT RISK
ALL FORMS BEGINNING WITH VISION
A. The reinsurance death benefit is 50% of the excess of the guaranteed
minimum death benefit over the contract value. The death benefit is
payable upon the death of any owner
If any owner dies prior to their 85th birthday, and the oldest owner had
an attained age under age 81 at the time of issue, the guaranteed minimum
death benefit is a 5% indexing death benefit with a two times cap.
If any owner dies after their 85th birthday, and the oldest owner had an
attained age under age 81 at the time of issue, the guaranteed minimum
death benefit is a premium guarantee. Death benefits payable after age
85 are not covered under this treaty.
If the annuitant had an attained age over 81 at time of issue, the policy
form does not provide a minimum death benefit guarantee and is not covered
by the treaty.
Please refer to Schedule C for a detailed discussion of the guaranteed
minimum death benefit.
B. The contract value represents the owner's invested assets in the funds in
Schedule B as it appears in the records of NASL before application of any
surrender charges, on any given date.
C. In determining the amount at risk, the guaranteed minimum death benefit
and the contract value are calculated as the average of the values at the
end of the current calendar quarter and the end of the prior calendar
quarter. The amount at risk cannot fall below zero.
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ARTICLE III AUTOMATIC EXCESS REINSURANCE
A. On and after the Effective Date of this Agreement, subject to the limit of
Reinsurer's liability set forth in Schedule A and all other terms,
conditions and limitations set forth in this Agreement and the Schedules
attached to and made a part hereof, NASL shall cede and the Reinsurer
shall accept 50% of NASL'S guaranteed death benefit liability under the
Variable Annuity Contracts, as described in Article II A.
B. This Agreement covers only NASL'S liability for claims paid under Variable
Annuity Contracts written on forms and investment in funds which were
reviewed by the Reinsurer prior to their issuance. Forms, as supplemented
by additional materials, and funds available as of the date of this
Agreement are listed on Schedule B, attached hereto and made a part
hereof. If NASL intends to cede to Reinsurer liability with respect to a
new form or fund, or a revised version of an approved form or fund, it
must provide to the Reinsurer written notice of such intention together
with a copy of the proposed form, fund or revision, and a revised Schedule
B.
C. NASL shall provide written notice to Connecticut General of any changes in
its published limits and rules identified on Schedule C, and Connecticut
General shall have no liability pursuant to revised limits and rules
unless and until Connecticut General provides written notice to NASL that
such revised limits and rules are acceptable.
ARTICLE IV LIABILITY OF CONNECTICUT GENERAL
Connecticut General's liability for reinsurance under this Agreement shall
follow that of NASL in every case, and be subject in all respects to the
general stipulations, terms, clauses, conditions, waivers and modifications of
the Variable Annuity Contracts.
In no event shall Connecticut General have any reinsurance liability unless the
Variable Annuity Contract issued by NASL is in force and the underwriting and
issuance of coverage by NASL constitutes the doing of business in a state of
the United States of America in which NASL is properly licensed and authorized
to do business.
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ARTICLE V REINSURANCE PREMIUMS
The calendar quarterly premiums for reinsurance subject to the terms and
conditions of this Agreement shall be determined by application of the rates
set forth in Schedule D to the amount of reinsurance coverage provided for each
annuity insured by NASL, subject to the following:
1. The reinsurance shall be based on the owner's age at the end of the
each calendar quarter. If the contract has more than one owner, the
reinsurance premiums shall be based on the age listed on the records
of NASL. NASL shall determine the owner s age at the time it
prepares the quarterly exposure data submission for the variable
annuity guaranteed death benefit, as set forth in Schedule E,
attached hereto.
2. The reinsurance premiums shall be calculated separately for funds
identified as variable and guaranteed in Schedule B.
3. The Age Adjusted Aggregate Contract Value is the sum of the contract
values in all of NASL's variable annuities subject to this Agreement,
minus contract values attributable to amounts in excess of the
maximum purchase amounts listed in Schedule A.
4. For funds identified as variable in Schedule B, the premium over
each calendar year will be at least equivalent to 50% of the Age
Adjusted Aggregate Contract Values times 6.0 BASIS POINTS (.0006) for
attained ages less than 70 and the Age Adjusted Aggregate Contract
Values times 20.0 BASIS POINTS (.0020) for attained ages 70 and
older.
5. For funds identified as guaranteed in Schedule B, there will be no
minimum premium regardless of attained age.
6. For all funds identified in Schedule B, the premium over each
calendar year will not exceed 50% of the Age Adjusted Aggregate
Contract Values times 16.4 BASIS POINTS (.00164) for attained ages
less than 70 and the Age Adjusted Aggregate Contract Values times
34.0 BASIS POINTS (.0034) for attained ages 70 and older.
7. 50% of the Age Adjusted Aggregate Contract Values times one fourth
(1/4 of the minimum premium rate will be remitted to Connecticut
General in advance for the current calendar quarter, at the time of
settlement for the prior calendar quarter.
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ARTICLE VI PREMIUM ACCOUNTING
NASL shall forward to Connecticut General within thirty (30) days of the end of
the reporting period a quarterly statement as set forth in Schedule X. XXXX
shall also remit any premium due for the prior quarter along with an advance
premium for the current quarter, in accordance with Article V. In the event of
any over payment by NASL of premiums or advance premiums, Connecticut General
shall remit to NASL the excess amount within thirty (30) days following receipt
of the quarterly reinsurance statement.
If the amounts described in Article V cannot be determined by the dates set
forth in the above paragraph, on an exact basis, such payments will be made
with a generally agreed upon formula which will approximate the actual
payments. Adjustments will then be made to reflect actual amounts when they
become available.
ARTICLE VII CLAIMS
A. NASL is solely responsible for payment of its claims under the Underlying
Annuity Contracts, policies, master contracts or certificates identified
on Schedule B. NASL shall provide Connecticut General with proof of
claim, proof of claim payment and any other claim documentation requested
by Connecticut General on a quarterly basis. Payment of reinsurance shall
be made by Connecticut General in one sum regardless of the method of
payment by XXXX and within thirty (30) days following receipt of the
quarterly reinsurance statement, as set forth in Schedules E-1 and E-2.
B. NASL shall notify Connecticut General of NASL'S intention to contest, or
deny a claim which may involve the reinsurance coverage under this
Agreement before any notice of contest or denial is provided to the
claimant. Connecticut General shall then have thirty (30) days within
which to advise NASL whether it agrees that the claim should be contested
or denied. If Connecticut General does not agree that the claim should be
contested or denied, then it shall pay to NASL the full amount of the
reinsurance on the risk reinsured, as set forth in Article II, and
Connecticut General shall have no further obligation in respect to such
claim. If Connecticut General agrees that the claim should be contested
or denied, then Connecticut General shall pay its share of the following
in accordance with its share of liability set forth in Article II:
- Expenses incurred by XXXX in investigating, contesting, or
litigating or otherwise resisting the claim, excluding salaries and
expenses of employees, officers and agents of NASL and ordinary
overhead expenses of NASL, and costs of third party administrators
acting on behalf of XXXX; and
- Interest which is paid by XXXX in respect of the claim.
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ARTICLE VIII EXTRA CONTRACTUAL OBLIGATIONS
A. In no event shall Connecticut General be liable for extra contractual
damages (whether they constitute Compensatory damages, Statutory
penalties, Exemplary or Punitive damages) which are awarded against NASL
as a result of an act, omission or course of conduct by NASL in connection
with policies subject to this Agreement, unless the Reinsurer shall have
received notice of and concurred with the actions taken or not taken by
NASL which led to its liability, in which case the Reinsurer shall pay its
share of such liability. For this purpose, the Reinsurer's share shall be
proportionate with its risk under the business reinsured hereunder.
B. The following definitions shall apply:
(1) Punitive damages and Exemplary damages are those damages awarded as
a penalty, the amount of which is not governed nor fixed by statute.
(2) Statutory penalties are those amounts which are awarded as a penalty
but fixed in amount by statute.
(3) 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.
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ARTICLE IX LITIGATION
A. In the event of any action brought against NASL under any Underlying
Annuity Contract that is subject to the terms and conditions of this
Agreement, NASL shall provide to Connecticut General a copy of such action
within ten (10) business days following NASL'S direct receipt of the
service process. If Connecticut General is a party to action brought
against NASL, NASL shall counsel with Connecticut General on the selection
and appointment of local counsel to represent NASL in such action.
B. If NASL pursues any litigation where Connecticut General is not a party or
where Connecticut General is a party but does not agree to pursue
litigation, NASL and Connecticut General agree that all litigation costs,
excluding the salaries of employees of NASL and Connecticut General, shall
be borne by XXXX. However, if NASL and Connecticut General agree to
jointly defend any litigation, or if Connecticut General agrees that NASL
should pursue litigation, litigation costs will be borne in proportion to
the net liability borne by each party.
ARTICLE X OFFSET
Either party shall have, and may exercise at any time and from time to time,
the right to offset any balance or amounts whether on account of premiums or on
account of losses or otherwise, due from one party to the other under the terms
of this Agreement. However, in the event of insolvency of NASL subject to the
provisions of Article XV, offset shall only be allowed in accordance with the
statutes and/or regulations of the state having jurisdiction over the
insolvency.
ARTICLE XI ACCESS TO RECORDS
NASL and Connecticut General (or its duly authorized representative) each shall
have the right during normal business and at reasonable intervals, to audit at
the office of the other, all records relating to this reinsurance.
Books and records shall be maintained in accordance with prudent standards of
insurance company record keeping and must be retained for a period of at least
seven (7) years from the date of creation. Within one hundred and fifty (150)
days following the end of each calendar year, NASL and Connecticut General will
provide each office with copies of their respective audited financial
statements.
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ARTICLE XII DELAYS, ERRORS OR OMISSIONS
No accidental delay, errors or omissions on the part of NASL shall relieve
Connecticut General of liability provided such delay, errors or omissions are
rectified as soon as possible after discovery. However, Connecticut General
shall not be liable with respect to any reinsurance which may have been
inadvertently included in the premium computation but which ought not to have
been included by reason of the terms and conditions of this Agreement. It is
expressly understood and agreed that if failure to comply with any terms of
this Agreement is hereby shown to be unintentional or the result of
misunderstanding or oversight on the part of either party, both parties shall
be restored to the position they would have occupied had no such error or
oversight occurred, subject always to the correction of the error or oversight.
ARTICLE XIII CURRENCY
All retentions and limits hereunder are expressed in United States dollars and
all premium and loss payments shall be made in United States currency. For the
purposes of this Agreement, amounts paid or received by Connecticut General in
any other currency shall be converted into United States dollars at the rates
of exchange on the date such transactions are entered on the books of
Connecticut General.
ARTICLE XIV HOLD HARMLESS
A. Connecticut General shall indemnify and hold NASL harmless from any and
all liability, loss, damage, fines, punitive damages, penalties and costs,
including expenses and attorney's fees, which results from any negligence
or willful misconduct of Connecticut General in fulfilling its duties and
obligations under this Agreement or which results from any action which
exceeds its authority under this Agreement.
B. NASL shall indemnify and hold Connecticut General harmless from any and
all liability, loss, damage, fines, punitive damages, penalties and costs,
including expenses and attorney's fees, which results from any negligence
or willful misconduct of NASL in fulfilling its duties and obligations
under this Agreement or which results from any action which exceeds its
authority under this Agreement.
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ARTICLE XV INSOLVENCY
In the event of insolvency of NASL, the reinsurance under this Agreement shall
be payable directly by Connecticut General to NASL or to its liquidator,
receiver, conservator or statutory successor on the basis of Connecticut
General's liability to NASL without diminution because of the insolvency of
NASL or because the liquidator, receiver, conservator or statutory successor of
NASL has failed to pay all or a portion of any claim. It is agreed, however,
that the liquidator, receiver, conservator or statutory successor of NASL shall
give prompt written notice to Connecticut General of the pendency of a claim
against NASL within a reasonable time after such claim is filed in the
receivership, conservation, insolvency or liquidation proceeding and that
during the pendency of such claim, Connecticut General may investigate such
claim and interpose, at its own expense, in the proceeding where such claim is
to be adjudicated, any defense or defenses that it may deem available to NASL
or its liquidator, receiver, conservator or statutory successor. The expense
thus incurred by Connecticut General shall be chargeable, subject to the
approval of the Court, against NASL as part of the expense of conservation or
liquidation to the extent of a pro-rata share of the benefit which may accrue
to NASL solely as a result of the defense undertaken by Connecticut General.
Where two or more reinsurers are involved in the same claim and a majority in
interest elect to interpose defense to such claim, the expense shall be
apportioned in accordance with the terms of this Agreement as though such
expense had been incurred by NASL.
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ARTICLE XVI ARBITRATION
A. As a condition precedent to any right of action hereunder, any dispute
between the parties with respect to the interpretation of this Agreement
or any right, obligation or liability of either party, whether such
dispute arises before or after termination of this Agreement, shall be
submitted to arbitration upon the written request of either party. Each
party shall select an arbitrator within thirty (30) days of the written
request for arbitration. If either party refuses or neglects to appoint
an arbitrator within thirty (30) days of the written request for
arbitration, the other party may appoint the second arbitrator. The two
arbitrators shall select an umpire within thirty (30) days of the
appointment of the second arbitrator. If the two arbitrators fail to
agree on the selection of the umpire within thirty (30) days of the
appointment of the second arbitrator, each arbitrator shall submit to the
other a list of three umpire candidates, each arbitrator shall select one
name from the list submitted by the other and the umpire shall be selected
from the two names chosen by a lot drawing procedure to be agreed upon by
the arbitrators.
B. The arbitrators and the umpire all shall be active or retired,
disinterested executive officers of insurance or reinsurance companies.
C. The arbitration panel shall interpret this Agreement as an honorable
engagement rather than merely as a legal obligation and shall make its
decision considering the custom and practice of the applicable insurance
and reinsurance business. The arbitration panel is released from judicial
formalities and shall not be bound by strict rules of procedure and
evidence.
D. The decision of the arbitration panel shall be final and binding on both
parties. The arbitration panel may, at its discretion, award costs and
expenses as it deems appropriate, including, but not limited to,
attorneys' fees and interest. Judgment may be entered upon the final
decision of the arbitration panel in any court of competent jurisdiction.
E. All meetings and hearings before the arbitration panel shall take place in
Worcester, Massachusetts unless some other place is mutually agreed upon
by the parties.
F. Each party shall bear the expense of its own arbitrator and shall jointly
and equally bear with the other party the expenses of the umpire and of
the arbitration.
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ARTICLE XVII DAC TAX REGULATION ELECTION
Connecticut General and XXXX hereby agree to make an election pursuant to
Internal Revenue Code Regulation Section 1.848-2(g)(8). This election shall be
effective for all taxable years for which the Reinsurance Agreement remains in
effect.
The terms used in this article are defined by reference to Regulation Section
1.848-2 promulgated on December 28, 1992.
Connecticut General and XXXX agree that the entity with net positive
consideration for the reinsurance agreement for each taxable year will
capitalize specified policy acquisition expenses with respect to the
reinsurance agreement without regard to the general deductions limitation of
Section 848(c)(1) of the Internal Revenue Code of 1986, as amended.
Connecticut General and XXXX agree to exchange information pertaining to the
amount of net consideration under the reinsurance agreement each year to ensure
consistency. To achieve this, NASL shall provide Connecticut General with a
schedule of its calculation of the net consideration for all reinsurance
agreements in force between them for a taxable year by no later than April 30
of the succeeding year. Connecticut General shall advise NASL if it disagrees
with the amounts provided by no later than May 31, otherwise the amounts will
be presumed correct and shall be reported by both parties in their respective
tax returns for such tax year. If Connecticut General contests NASL's
calculation of the net consideration, the Parties agree to act in good faith to
resolve any differences within thirty (30) days of the date Connecticut General
submits its alternative calculation and report the amounts agreed upon in their
respective tax returns for such tax year.
Connecticut General represents and warrants that it is subject to U.S. taxation
under either Subchapter L or Subpart F of Part III of Subchapter N of the
Internal Revenue Code of 1986, as amended.
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ARTICLE XVIII EFFECTIVE DATE; TERM AND TERMINATION
A. The effective date of this Agreement is JULY 1, 1995. This Agreement
remains effective for all annuity contracts subject to this Agreement
written by NASL through JUNE 30, 1998, unless terminated pursuant to the
paragraphs listed below:
B. Either Connecticut General or NASL shall have the option of terminating
this agreement with one hundred and eighty (180) days written notice to
the other party for new business anytime on or after June 30, 1998.
C. Once each calendar year, NASL shall have the option to recapture existing
contracts beginning with the fifteenth (15) anniversary of their
reinsurance hereunder. If NASL elects to recapture, 1/3 of the contracts
can be recaptured in the first year eligible, 1/2 of the remaining
contracts can be recaptured in the second year, and the balance of the
contracts can be recaptured in the third year. Recapture must be made on
an issue year basis beginning with the earliest issue year. Recapture
cannot occur on contracts with later issue years until all contracts with
earlier issue dates have been recaptured.
D. Upon delivery of sixty (60) days written notice to NASL, Connecticut
General shall have the option of terminating this Agreement for new
business within sixty (60) days of the happening of any of the following
events:
(1) NASL'S A. M. Best rating is reduced to a "C" or lower.
(2) NASL'S parent company is placed upon a "watch list" by its
domiciliary state's insurance regulators;
(3) An order appointing a receiver, conservator or trustee for
management of NASL is entered or a proceeding is commenced for
rehabilitation, liquidation, supervision or conservation of NASL;
(4) NASL is merged, purchased or there is any other material change
(in whole or in part) in the ownership of NASL other than is
currently contemplated by the following agreement: An agreement
and plan of reorganization dated September 5, 1995 among North
American Life Assurance Company, NASL, Xxxx Xxxxx Associates, Inc.,
X. Xxxxxxx Xxxx, X. Xxxxx Xxxxx and NAWL Holding Co., Inc., and an
Amalgamation Agreement dated September 15, 1995 between The
Manufacturers Life Insurance Company and North American Life
Assurance Company;
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(5) The Securities and Exchange Commission revokes the licenses of NASL
to conduct business.
(6) Failure by NASL to pay premium in accordance with Article V and
Article VI. If, during the sixty (60) days notice period, the
Reinsurer receives all premiums in arrears and all premiums which may
become due within the sixty (60) days notice period, the notice of
termination shall be deemed withdrawn. In the event of termination
under this paragraph, this Agreement may be reinstated upon the
written consent of the Reinsurer if, at any time within sixty (60)
days of termination, NASL pays and the Reinsurer receives all
premiums due with interest thereon and payable up to the date of
reinstatement. (Please refer to paragraph J below for the interest
calculation description)
E. Upon delivery of sixty (60) days written notice to Connecticut General,
NASL shall have the option of terminating this Agreement for new business
within sixty (60) days of the happening of any of the following events:
(1) Connecticut General's A. M. Best rating is reduced to a "C" or
lower;
(2) Connecticut General is placed upon a "watch list" by its
domiciliary state's insurance regulators;
(3) An order appointing a receiver, conservator or trustee for
management of Connecticut General is entered or a proceeding is
commenced for rehabilitation, liquidation, supervision or
conservation of Connecticut General;
(4) Connecticut General is merged, purchased or there is any other
material change (in whole or in part) in the ownership of
Connecticut General;
(5) Failure by Connecticut General to pay reinsurance death benefits
in accordance with Article II. If, during the sixty (60) days
notice period, XXXX receives all reinsurance death benefits in
arrears, the notice of termination shall be deemed withdrawn. In
the event of termination under this paragraph, this Agreement may
be reinstated upon the written consent of NASL if, at any time
within sixty (60) days of termination, the Reinsurer pays and NASL
receives all reinsurance death benefits due with interest thereon
and payable up to the date of reinstatement. (Please refer to
paragraph J below for the interest calculation description)
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F. If this Agreement is terminated for new and existing business, Connecticut
General shall be relieved of all liability to NASL for claims incurred
following the termination date of this Agreement under such Underlying
Annuity Contracts issued by NASL, and
G. If this Agreement is terminated for new business only, Connecticut General
will remain liable, after termination, in accordance with the terms and
conditions of this Agreement, with respect to all reinsurance effective
prior to termination of the Agreement.
H. Both parties shall continue to be entitled to all offset credits provided
by Article X up to the effective date of termination.
I. NASL shall not have the right to assign or transfer any portion of the
rights, duties and obligations of NASL under the terms and conditions of
this Agreement without the written approval of Connecticut General.
X. In the event of reinstatement as described in paragraph D and E above,
there will be an interest charge at the three (3) month LIBOR Rate (as
published in the Wall Street Journal), plus .01, determined on the first
business day following the end of the 60 day notice period. The
settlement is considered overdue at the end of the 60 day notice period
and interest shall commence from the overdue date.
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ARTICLE XIX NOTICES
All notices required to be given hereunder shall be in writing and shall be
deemed delivered if personally delivered, sent via facsimile, or dispatched by
certified or registered mail, return receipt requested, postage prepaid,
addressed to the parties as follows:
XXXXXXX X. XXXXXX
VICE PRESIDENT, TREASURER AND CHIEF FINANCIAL OFFICER
NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY
P.O. BOX 9230
BOSTON, MA 02205-9230
PHONE NO. (000) 000-0000 (X253) FAX NO. (000) 000-0000
XXXXXXX X. XXXXX, FSA
ASSISTANT VICE PRESIDENT AND ACTUARY
XXXXX XXXXXXXXXXX, R26
000 XXXXXXX XXXXX XXXX
XXXXXXXX, XX 00000-4026
PHONE NO. (000) 000-0000 FAX NO. (000) 000-0000
Notice shall be deemed given on the date it is deposited in the mail or sent
via facsimile in accordance with the foregoing. Any party may change the
address to which to send notices by notifying the other party of such change of
address in writing in accordance with the foregoing.
This Agreement constitutes the entire contract between the parties and shall be
deemed to have been made under and governed by the laws of the State of
Connecticut. Any amendment or modification hereto shall be in writing,
endorsed upon or attached hereto and signed by both NASL and Connecticut
General.
In witness whereof, the parties hereto have caused this Agreement to be signed
in duplicate on the dates indicated to be effective as of the date specified
above.
NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY
Date: ________________, 19___ By: __________________________
Date: ________________, 19___ By: __________________________
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
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Date: ________________, 19___ By: __________________________
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SCHEDULE A
Maximum Limits of Reinsurance in Connecticut General
The maximum purchase amount issued on the life of each insured:
$3,500,000
The maximum purchase amount is the sum of all premium contributions less
withdrawals in the contract. For purchase amounts in excess of the maximum,
Connecticut General's death benefit liability will be reduced by the ratio of
purchase amounts in excess of the maximum to the total purchase amounts.
SCHEDULE A
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SCHEDULE B
Contracts and Funds Subject to this Reinsurance Agreement
Form
Number* Policy Description Date
------ ------------------ ----
VISION.001 Flexible Purchase Payment August 15, 1994
Individual Deferred Combination
Fixed and Variable Annuity
Contract Non Participating
* Includes all state variations
Fund
Date Fund Description
---- ----------------
VARIABLE FUNDS:
January 9, 1995 International Growth & Income Trust
February 19, 1993 Value Equity Trust
May 1, 1989 U.S. Government Securities Trust
February 19, 1993 Strategic Bond Trust
April 23, 1991 Growth & Income Trust
June 18, 1985 Investment Quality Bond Trust
June 18, 1985 Money Market Trust
June 18, 1985 Equity Trust
August 3, 1989 Conservative Asset Allocation Trust
August 3, 1989 Moderate Asset Allocation Trust
August 3, 1989 Aggressive Asset Allocation Trust
December 11, 1992 Pasadena Growth Trust
March 18, 1988 Global Equity Trust
March 18, 1988 Global Government Bond Trust
March 1, 1996 International Small Cap Trust
March 1, 1996 Small\Mid Cap Trust
FIXED FUNDS:
May 1, 1995 One Year
SCHEDULE B
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SCHEDULE C
Limits and Rules of NASL
1) NASL will determine the Guaranteed Minimum Death Benefit for each deceased
within seven (7) working days of due proof of death.
2) The maximum purchase payment allowed without company approval is $1,000,000.
3) The minimum purchase payment is $25,000. Lower purchase payments may be
made subject to company approval.
MINIMUM DEATH BENEFIT
VISION.001
DEATH BENEFIT BEFORE MATURITY DATE
A Death Benefit will be determined as of the date on which written notice
and proof of death and all required claim forms are received at the Company's
Annuity Service Office as follows:
1. If any Owner dies on or prior to their 85th birthday and the oldest Owner
had an attained age of less than 81 years on the Contract Date, the Death
Benefit will be the greater of:
(a) the Contract Value, or
(b) the excess of (i) over (ii) where:
(i) equals the sum of each Payment accumulated daily, at the
equivalent of 5% per year, starting on the date each Payment is allocated to
the Contract, with a maximum accumulation of 2 times each Payment.
(ii) equals the sum of any amounts deducted in connection with
partial withdrawals, accumulated daily at the equivalent of 5% per year,
starting on the date each such deduction occurs, with a maximum accumulation
of 2 times each amount deducted.
2. If any Owner dies after their 85th birthday and the oldest Owner had an
attained age of less than 81 years on the Contract Date, the Death Benefit
will be determined as the greater of:
SCHEDULE C-1
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(a) the Contract Value, or
(b) the excess of (i) over (ii) where:
SCHEDULE C
(continued)
(i) equals the sum of all Payments,
(ii) equals the sum of any amounts deducted in connection with partial
withdrawals.
3. If any Owner dies and the oldest Owner had an attained age of 81 or greater
on the Contract Date, the Death Benefit will be the Contract Value less any
applicable Withdrawal Charges at the time of payment of benefits.
SCHEDULE C-1
23
SCHEDULE D
Quarterly Reinsurance Premium Rates
Exposure Based
Per $1,000 Exposed
Ages Unisex
---- ------
Less than 35 .19
35-39 .25
40-44 .37
45-49 .63
50-54 1.15
55-59 2.02
60-64 3.21
65-69 5.52
70-74 9.54
75-79 15.40
80-84 25.20
SCHEDULE D
24
SCHEDULE E
Quarterly Reporting Format
1. Following the end of each calendar quarter, the Quarterly Detail Page,
Fund/Exposure-Based exhibit (attached) must be prepared for each
Qualified plan and Non-Qualified plan separately.
2. The tabulation should be on an Adjusted Basis, which requires omission
of excess contract values due to an issue amount in excess of $3.5
million.
3. The tabulation is on a seriatim basis, with each contract contributing
toward the totals for both exposure and aggregate contract value.
4. An exhibit demonstrating the aggregate allocation of contract values by
fund shall be provided each calendar quarter.
5. At year end reporting, a tabulation of exposures by age based on a
percentage decrease in account value by fund type as specified by the
NAIC must be submitted for reserve purposes.
SCHEDULE E
