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REINSURANCE
AGREEMENT
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Between
FIRST INVESTORS LIFE INSURANCE COMPANY
and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Inspected By _________
Date _________
TABLE OF CONTENTS
Page
Reinsurance Coverage 1
Reinsurance Limits 3
Placing Reinsurance in Effect 4
Computation of Reinsurance Premiums 6
Payment of Reinsurance Premiums 7
Settlement of Claims 8
Experience Refunds 10
Premium Tax Reimbursement 10
Policy Changes 10
Reinstatements 10
Expenses 11
Reductions 11
Inspection of Records 12
Increase in Limit of Retention 12
Oversights 14
Arbitration 14
Choice of Law and Forum 16
Insolvency 16
Parties to Agreement 17
Execution and Duration of Agreement 17
Insurance Subject to Reinsurance under
this Agreement Appendix I
Retention Limits of the REINSURED Schedule A
Maximum Amounts which the REINSURED
may cede Automatically Schedule B
Administrative Forms Schedule C
Reinsurance Premium Rates Schedule D, Parts I & II
R E I N 5 U R A N C E A G R E E M E N T
Between
FIRST INVESTORS LIFE INSURANCE COMPANY
of
New York, New York,
hereinafter referred to as the "REINSURED," and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
of
Fort Xxxxx, Indiana,
hereinafter referred to as the "LINCOLN."
REINSURANCE COVERAGE
--------------------
1. On the basis hereinafter stated, the REINSURED'S excess of individual
ordinary life, waiver of premium disability, and accidental death insurance
issued by the REINSURED on the policy forms listed in Appendix I shall be
reinsured with the LINCOLN automatically, shall be submitted to the LINCOLN on a
facultative basis, or shall be reinsured with the LINCOLN as continuations; a
continuation is a new policy replacing a policy issued earlier by the REINSURED
("original policy") or a change in an existing policy issued or made either (a)
in compliance with the terms of the original policy or (b) without the same new
underwriting information the REINSURED would obtain in the absence of the
original policy, without a suicide exclusion period or a contestable period as
long as those contained in new issues by the REINSURED.
2. Subject to the prior approval of the LINCOLN in the case of facultative
reinsurance, the liability of the LINCOLN shall begin simultaneously with that
of the REINSURED. In no event shall the reinsurance be in force and binding
unless the insurance issued directly by the REINSURED is in force and unless the
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issuance and delivery of such insurance constituted the doing of business in a
jurisdiction in which the REINSURED was properly licensed.
3. Life and Accidental Death reinsurance under this agreement shall be
term insurance for the amount at risk on the portion of the original insurance
which is reinsured with the LINCOLN. The amount of reinsurance shall be the
death benefit provided by the portion of the original insurance which is
reinsured with the LINCOLN. The amount at risk on such a policy shall be the
death benefit of the policy less the cash value under the policy. This amount at
risk shall be determined at the beginning of each policy year and shall be
amended during that year only if there is a change in the amount of reinsurance
on the life arising from a change in the specified amount under the policy
reinsured hereunder. For the second and subsequent years, the REINSURED shall
notify the LINCOLN of the amount at risk for that policy year at least fifteen
days before the beginning of that policy year. The portion reinsured shall be
the amount at risk on the policy less the REINSURED'S retention on the policy.
The basis for determining the amount at risk may be changed for new reinsurance
by agreement between the REINSURED and the LINCOLN.
4. If the face amount of the policy changes, the amount reinsured
hereunder shall continue to be determined as described in paragraph 3 of this
article. If the face amount increases subject to the approval of the REIN-
SURED, provisions of the "REINSURANCE LIMITS" article hereof shall apply to the
increase in the amount reinsurance hereunder. If the face amount increases and
such increase is not subject to the REINSURED'S approval, the LINCOLN shall
accept automatically increases in the amount reinsured arising from such
increases in the face amount.
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5. Reinsurance of disability insurance shall follow the original forms of
the REINSURED.
6. Life reinsurance in amounts less than the amount at risk upon $1,000 of
insurance shall not be placed in effect under this agreement.
7. If the REINSURED issues a policy as a continuation of a policy
reinsured under this agreement, reinsurance of the continuation shall continue
with the LINCOLN. Such reinsurance shall be in effect under the reinsurance
agreement between the REINSURED and the LINCOLN which provides reinsurance of
the policy form issued as a continuation if there is such an agreement in effect
on the effective date of the continuation; otherwise, reinsurance shall be in
effect under the terms of this agreement.
8. The amount of reinsurance under this agreement shall be maintained in
force without reduction so long as the amount of insurance carried by the
REINSURED on the life remains in force without reduction, except as provided in
the "PAYMENT OF REINSURANCE PREMIUMS" and "INCREASE IN LIMIT OF RETENTION"
articles.
REINSURANCE LIMITS
------------------
1. If the following conditions are met, reinsurance may be ceded
automatically under this agreement in amounts not to exceed those specified in
Schedule B.
(a) The REINSURED shall retain its limit of retention.
(b) The sum of the amount of insurance already in force on that life
in the REINSURED and the amount applied for from the REINSURED
on the current application shall not exceed the sum of the
appropriate automatic limit shown in Schedule B and the
REINSURED'S maximum limit of retention for the mortality class,
plan of insurance, and age at issue on the current application.
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(c) The sum of the amount of insurance already in force on the life
and the amount applied for currently, in all companies, shall
not exceed the following amounts.
Life Insurance
Ages Waiver of Premium Accidental Death
0-20 $ 750,000 $150,000
21-65 2,000,000 150,000
66-70 750,000 None
(d) The REINSURED has not made facultative application for
reinsurance of the current application.
(e) The policy was issued in accordance with the REINSURED'S normal
individual ordinary life underwriting rules and practices.
(f) The policy is not a continuation.
2. Applications which the REINSURED does not care to cede to the LINCOLN
automatically or which may not be so ceded under the terms of this agreement and
which do not arise from continuations shall be submitted for reinsurance on a
facultative basis.
3. The LINCOLN shall have no liability under facultative applications for
reinsurance unless the REINSURED has accepted the LINCOLN'S offer to reinsure.
4. Continuations shall be reinsured under this agreement only if the
original policy was reinsured with the LINCOLN; the amount of reinsurance under
this agreement shall not exceed the amount of the reinsurance of the original
policy with the LINCOLN immediately prior to the conversion.
PLACING REINSURANCE IN EFFECT
-----------------------------
1. When the REINSURED submits a risk to the LINCOLN for reinsurance upon a
facultative basis, a facultative application for such reinsurance shall be made
on a form in substantial accord with Schedule C. Copies of the original
applications, all medical examinations, microscopical reports, inspection
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reports, and all other information which the REINSURED may have pertaining to
the insurability of the risk shall accompany the application. Upon receipt of
such application, the LINCOLN shall immediately examine the papers and shall
notify the REINSURED of its underwriting action as soon as possible.
2. To effect reinsurance, the REINSURED shall, within ten working days
after the original policy has been reported delivered and paid for, mail to the
LINCOLN a reinsurance cession in substantial accord with Schedule C. The LINCOLN
shall send the REINSURED a record of reinsurance ceded in substantial accord
with Schedule C. Upon request, the REINSURED shall furnish the LINCOLN with
copies of any underwriting information in the REINSURED'S files.
3. To effect Accidental Death reinsurance apart from life reinsurance, the
REINSURED shall mail to the LINCOLN consecutively numbered cards in substantial
accord with Schedule C. The REINSURED shall send the cards within ten working
days after the original policy has been reported delivered and paid for.
4. All offers of reinsurance made by the LINCOLN under this agreement
shall, unless otherwise terminated by the LINCOLN, automatically terminate on
the earlier of (a) the date the LINCOLN receives notice from the REINSURED of
its withdrawal of its application and (b) the later of (i) the date 120 days
after the date the offer was made by the LINCOLN and (ii) the date specified in
the LINCOLN'S approval of a written request from the REINSURED to grant an
extension of the offer.
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COMPUTATION OF REINSURANCE PREMIUMS
-----------------------------------
1. The premium to be paid to the LINCOLN for Life reinsurance shall be the
sum of:
(a) the appropriate premium rate from the schedule of premiums in
Schedule D applied to the appropriate amount at risk reinsured;
plus
(b) any flat extra premium charged the insured on the face amount
initially reinsured less total allowances in the amount of 75%
of any first year permanent flat extra premium and 10% of any
renewal flat extra premium.
2. The portions of the reinsurance premiums described in the subparagraphs
of the preceding paragraph shall hereinafter be referred to as the basic
premium.
3. The premium charged the REINSURED for increases in reinsurance
hereunder described in paragraph 4 of the "REINSURANCE COVERAGE" article hereof
shall be computed using the age and date of issue of the policy if the increase
in face amount is not subject to approval of the REINSURED and using the age at
and date of the increase if the increase in face amount is subject to the
REINSURED'S approval.
4. The premium to be paid the LINCOLN for reinsurance of Supplemental
Benefits shall be as shown in Schedule D.
5. For technical reasons relating to the uncertain status of deficiency
reserve requirements by the various state insurance departments, the Life
reinsurance rates cannot be guaranteed for more than one year. On all
reinsurance ceded at these rates, however, the LINCOLN anticipates continuing to
accept premiums on the basis of the rates shown in Schedule D.
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PAYMENT OF REINSURANCE PREMIUMS
-------------------------------
1. The LINCOLN shall send the REINSURED each month a statement in
duplicate showing all outstanding first-year policies for which the LINCOLN'S
records have been completed and a statement in duplicate showing all renewal
reinsurance premiums on reinsurance policies having anniversaries in the
preceding month.
2. One copy of each statement received from the LINCOLN shall be returned
to the LINCOLN not later than fifteen days after the statement was received with
notice of any adjustments made necessary by changes in reinsurance during such
month. The REINSURED shall remit with such statement the premiums due the
LINCOLN as adjusted. Premiums for reinsurance hereunder are payable at the Home
Office of the LINCOLN or any other location specified by the LINCOLN and shall
be paid on an annual basis without regard to the manner of payment stipulated in
the policy issued by the REINSURED.
3. The payment of reinsurance premiums in accordance with the provisions
of the preceding paragraph shall be a condition precedent to the liability of
the LINCOLN under reinsurance covered by this agreement. In the event that
reinsurance premiums are not paid as provided in the preceding paragraph, the
LINCOLN shall have the right to terminate the reinsurance under all policies
having reinsurance premiums in arrears. If the LINCOLN elects to exercise its
right of termination, it shall give the REINSURED thirty days notice of its
intention to terminate such reinsurance. If all reinsurance premiums in arrears,
including any which may become in arrears during the thirty-day period, are not
paid before the expiration of such period, the LINCOLN shall thereupon be
relieved of future liability under all reinsurance for which premiums remain
unpaid. Policies on which reinsurance premiums subsequently fall due will
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automatically terminate if reinsurance premiums are not paid when due as
provided in paragraph 2 of this article. The reinsurance so terminated may be
reinstated at any time within sixty days of the date of termination upon payment
of all reinsurance premiums in arrears; but, in the event of such reinstatement,
the LINCOLN shall have no liability in connection with any claims incurred
between the date of termination and the date of reinstatement of the
reinsurance. The LINCOLN'S right to terminate reinsurance as herein provided
shall be without prejudice to its right to collect premiums for the period
reinsurance was in force prior to the expiration of the thirty-day notice
period.
SETTLEMENT OF CLAIMS
--------------------
1. The REINSURED shall give the LINCOLN prompt notice of any claim
submitted on a policy reinsured hereunder and prompt notice of the instigation
of any legal proceedings in connection therewith. Copies of proofs or other
documents bearing on such claim or proceeding shall be furnished to the LINCOLN
when requested.
2. The LINCOLN shall accept the good faith decision of the REINSURED in
settling any claim or suit and shall pay, at its Home Office, its share of net
reinsurance liability upon receiving proper evidence of the REINSURED'S having
settled with the claimant. Payment of net reinsurance liability on account of
death or dismemberment shall be made in one lump sum. In settlement of
reinsurance liability for Waiver of Premium Disability benefits, the LINCOLN
shall pay to the REINSURED its proportionate share of the gross premium waived.
3. If the REINSURED should contest or compromise any claim or proceeding,
and the amount of net liability thereby be reduced, the LINCOLN'S reinsurance
liability shall be reduced in the proportion that the net liability of the
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LINCOLN bore to the sum of the retained net liability of the REINSURED and the
net liability of other reinsurers existing as of the occurrence of the claim.
4. Any unusual expenses incurred by the REINSURED in defending or
investigating a claim for policy liability or in taking up or rescinding a
policy reinsured hereunder shall be participated in by the LINCOLN in the same
proportion as described in paragraph 3, above.
5. In no event shall the following categories of expenses or liabilities
be considered, for purposes of this agreement, as "unusual expenses" or items of
"net reinsurance liability:"
(a) routine investigative or administrative expenses;
(c) expenses incurred in connection with a dispute or contest
arising out of conflicting claims of entitlement to policy
proceeds or benefits which the REINSURED admits are payable;
(c) expenses, fees, settlements, or judgments arising out of or in
connection with claims against the REINSURED for punitive or
exemplary damages;
(d) expenses, fees, settlements, or judgments arising out of or in
connection with claims made against the REINSURED and based on
alleged or actual bad faith, failure to exercise good faith, or
tortious conduct.
6. For purposes of this agreement, penalties, attorney's fees, and
interest imposed automatically by statute against the REINSURED and arising
solely out of a judgment being rendered against the REINSURED in a suit for
policy benefits reinsured hereunder shall be considered "unusual expenses."
7. In the event that the amount of insurance provided by a policy or
policies reinsured hereunder is increased or reduced because of a misstatement
of age or sex established after the death of the insured, the net reinsurance
liability of the LINCOLN shall increase or reduce in the proportion that the net
reinsurance liability of the LINCOLN bore to the sum of the net retained
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liability of the REINSURED and the net liability of other reinsurers immediately
prior to the discovery of such misstatement of age or sex. Reinsurance policies
in force with the LINCOLN shall be reformed on the basis of the adjusted
amounts, using premiums and reserves applicable to the correct age and sex. Any
adjustment in reinsurance premiums shall be made without interest.
8. The LINCOLN shall refund to the REINSURED any reinsurance premiums,
without interest, unearned as of the date of death of the life reinsured
hereunder.
EXPERIENCE REFUNDS
------------------
Reinsurance hereunder shall not be considered for experience refunds.
PREMIUM TAX REIMBURSEMENT
-------------------------
The LINCOLN shall not reimburse the REINSURED for any taxes the latter may
be required to pay on reinsurance hereunder.
POLICY CHANGES
--------------
If a change is made in the policy issued by the REINSURED to the insured which
affects reinsurance hereunder, the REINSURED shall immediately notify the
LINCOLN of such change.
REINSTATEMENTS
--------------
If a policy reinsured hereunder lapses for nonpayment of premium and is
reinstated in accordance with its terms and the rules of the REINSURED, the
LINCOLN shall automatically reinstate its reinsurance under such policy. The
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REINSURED shall pay the LINCOLN all reinsurance premiums in arrears in
connection with the reinstatement with interest at the same rate and in the same
manner as the REINSURED received under its policy.
EXPENSES
--------
The REINSURED shall bear the expense of all medical examinations, inspection
fees, and other charges incurred in connection with the original policy.
REDUCTIONS
----------
1. Except as otherwise provided in paragraph 3 of the "REINSURANCE
COVERAGE" article hereof, if a portion of the insurance issued by the REINSURED
on a life reinsured hereunder is terminated, reinsurance on that life hereunder
shall be reduced as hereinafter provided to restore, as far as possible, the
retention level of the REINSURED on the risk, provided, however, that the
REINSURED shall not assume on any policy being adjusted as provided in this
article an amount of insurance in excess of the higher of, for the retention
category of that policy, (a) its retention limit at the time of issue of that
policy and (b) the retention limit of that policy as already adjusted by the
provisions of the "INCREASE IN LIMIT OF RETENTION" article. The reduction in
reinsurance shall first be applied to the reinsurance, if any, of the specific
policy under which insurance terminated. The reinsurance of the LINCOLN shall be
reduced by an amount which is the same proportion of the amount of reduction so
applied as the reinsurance of the LINCOLN on the policy bore to the total
reinsurance of the policy. The balance, if any, of the reduction shall be
applied to reinsurance of other policies on the life, the further reduction, if
any, in the reinsurance of the LINCOLN again being determined on a proportional
basis.
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2. The LINCOLN shall return to the REINSURED any basic life reinsurance
premiums and any reinsurance premiums for Supplemental benefits, without
interest thereon, paid to the LINCOLN for any period beyond the date of
reduction of reinsurance hereunder.
INSPECTION OF RECORDS
---------------------
The LINCOLN shall have the right at any reasonable time to inspect, at the
office of the REINSURED, all books and documents relating to the reinsurance
under this agreement.
INCREASE IN LIMIT OF RETENTION
------------------------------
1. The REINSURED may increase its limit of retention and may elect,
subject to the other provisions of this article, to: (a) continue unchanged
reinsurance then in force under this agreement; (b) make reductions in both
standard and substandard reinsurance then in force under this agreement; or (c)
make reductions in standard reinsurance then in force under this agreement. The
increased limit of retention shall be effective with respect to new reinsurance
on the date specified by the REINSURED subsequent to written notice to the
LINCOLN. Such written notice shall specify the new limit of retention, the
effective date thereof, and the election permitted by the first sentence of this
paragraph. If the REINSURED makes election (b) or (c), the amount of reinsurance
shall be reduced, except as hereinafter provided, to the excess, if any, over
the REINSURED'S new limit of retention.
2. No reduction shall be made in the amount of any reinsurance policy
unless the REINSURED retained its maximum limit of retention for the plan, age,
and mortality classification at the time the policy was issued, nor shall
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reductions be made unless held by the REINSURED at its own risk without benefit
of any proportional or nonproportional reinsurance other than catastrophe
accident reinsurance. In the case of Life and Disability reinsurance, no
reduction shall be made in any class of reinsurance fully reinsured; Accidental
Death Benefits fully reinsured because the REINSURED retains Life insurance
first and then Accidental Death Benefits may be reduced as herein provided, but
other fully reinsured Accidental Death Benefits may not. No reduction shall be
made in any Supplemental Benefits reinsured on a Life reinsurance cession unless
the Life reinsurance is also being reduced as described hereunder. The plan,
age, and mortality classification at issue shall be used to determine the
REINSURED'S new retention on any life on which reinsurance policies are reduced
in accordance with the provisions of this article.
3. The reduction in each reinsurance policy shall be effective upon the
reinsurance renewal date of that policy first following the effective date of
the increased limit of retention or upon the tenth reinsurance renewal date of
the reinsurance policy, if later. If there is reinsurance in other reinsurers on
a life on whom a reinsurance policy will be reduced hereunder, the LINCOLN shall
share in the reduction in the proportion that the amount of reinsurance of the
LINCOLN on the life bore to the amount of reinsurance of other reinsurers on the
life.
4. In the event the REINSURED overlooks any reduction in the amount of a
reinsurance policy which should have been made on account of an increase in the
REINSURED'S limit of retention, the acceptance by the LINCOLN of reinsurance
premiums under such circumstances and after the effective date of the reduction
shall not constitute or determine a liability on the part of the LINCOLN for
such reinsurance. The LINCOLN shall be liable only for a refund of premiums so
received, without interest.
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OVERSIGHTS
----------
It is understood and agreed that, if failure to comply with any terms of
this agreement is shown to be unintentional and the result of misunderstanding
or oversight on the part of either the REINSURED or the LINCOLN, both the
REINSURED and the LINCOLN shall be restored to the positions they would have
occupied had no such misunderstanding or oversight occurred.
ARBITRATION
-----------
1. It is the intention of the REINSURED and the LINCOLN that the customs
and practices of the life insurance and life reinsurance industry shall 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 the REINSURED or the
LINCOLN cannot mutually resolve a dispute which arises out of or relates to this
agreement, however, the dispute shall be decided through arbitration. The
arbitrators shall base their decision on the terms and conditions of this
agreement plus, as necessary, on the customs and practices of the life insurance
and life reinsurance industry rather than solely on a strict interpretation of
the applicable law.
2. To initiate arbitration, either the REINSURED or the LINCOLN shall
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
shall respond to the notification in writing within ten (10) days of its
receipt. At that time, the party also shall assert any dispute it may have which
arises out of or relates to this agreement.
3. The arbitration hearing shall be before a panel of three arbitrators,
each of whom must be present or former officers of life insurance or life
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reinsurance companies other than the REINSURED or the LINCOLN or either's
affiliates. The REINSURED and the LINCOLN shall each appoint one arbitrator by
written notification to the other party within twenty-five (25) days of the date
of the mailing of the notification initiating the arbitration. These two
arbitrators shall then select the third arbitrator within fourteen (14)
additional days of the date of the mailing of the notification initiating the
arbitration. Should either the REINSURED or the LINCOLN fail to appoint an
arbitrator, or should the two arbitrators be unable to agree upon the choice of
a third arbitrator, such appointment shall be left to the president of the
American Council of Life Insurance or of its successor organization. Once
chosen, the arbitrators are empowered to decide all substantive and procedural
issues by a majority of votes.
4. The arbitration hearing shall be held on the date and in the location
fixed by the arbitrators. In no event shall this date be later than six months
after the appointment of the third arbitrator. The arbitrators shall establish
prearbitration procedures as warranted by the facts and issues of the particular
case. At least ten (10) days prior to the arbitration hearing, each party shall
provide the other party and the arbitrators with a detailed statement of the
facts and arguments it will present at the arbitration hearing. The arbitrators
may consider any relevant evidence; they shall give the evidence such weight as
they deem it entitled to after consideration of any objections raised concerning
it. The party initiating the arbitration shall have the burden of proving its
case by a preponderance of the evidence. Each party may examine any witnesses
who testify at the arbitration hearing. Within twenty (20) days after the end of
the arbitration hearing, the arbitrators shall issue a written decision, from
which there shall be no appeal and which any court having jurisdiction of the
subject matter and the parties may reduce to judgment. In their decision, the
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arbitrators shall apportion the costs of arbitration, which shall include but
not be limited to their own fees and expenses, as they deem appropriate.
CHOICE OF LAW AND FORUM
-----------------------
Indiana law shall govern the terms and conditions of the agreement.
INSOLVENCY
----------
1. In the event of the insolvency of the REINSURED, all reinsurance shall
be payable directly to the liquidator, receiver, or statutory successor of said
REINSURED, without diminution because of the insolvency of the REINSUREE).
2. In the event of insolvency of the REINSURED, the liquidator, receiver,
or statutory successor shall give the LINCOLN written notice of the pendency of
a claim on a policy reinsured within a reasonable time after such claim is filed
in the insolvency proceeding. During the pendency of any such claim, the LINCOLN
may investigate such claim and interpose, in the name of the REINSURED (its
liquidator, receiver, or statutory successor), but at its own expense, in the
proceeding where such claim is to be adjudicated, any defense or defenses which
the LINCOLN may deem available to the REINSURED or its liquidator, receiver, or
statutory successor.
3. The expense thus incurred by the LINCOLN shall be chargeable, subject
to court approval, against the REINSURED as part of the expense of liquidation
to the extent of a proportionate share of the benefit which may accrue to the
REINSURED solely as a result of the defense undertaken by the LINCOLN. Where two
or more reinsurers are participating in the same claim and a majority in
interest elect to interpose a defense or defenses to any such claim, the expense
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shall be apportioned in accordance k., with the terms of the reinsurance
agreement as though such expense had been incurred by the REINSURED.
PARTIES TO AGREEMENT
--------------------
This is an agreement for indemnity reinsurance solely between the
REINSURED and the LINCOLN. The acceptance of reinsurance hereunder shall not
create any right or legal relation whatever between the LINCOLN and the insured
or the beneficiary under any policy reinsured hereunder.
EXECUTION AND DURATION OF AGREEMENT
-----------------------------------
The provisions of this reinsurance agreement shall be effective with
respect to policies for which the date on which application was first made to
the REINSURED is on or after the first day of May, 1985, but in no event shall
this agreement become effective unless and until it has been duly executed by
two officers of the LINCOLN at its Home Office in Fort Xxxxx, Indiana. This
agreement shall be unlimited as to its duration but may be terminated at any
time, insofar as it pertains to the handling of new reinsurance thereafter, by
either party giving three months' notice of termination in writing. The LINCOLN
shall continue to accept reinsurance during the three months aforesaid and shall
remain liable on all reinsurance granted under this agreement until the
termination or expiry of the insurance reinsured.
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IN WITNESS WHEREOF the said
FIRST INVESTORS LIFE INSURANCE COMPANY
Of
New York, New York,
and the said
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Of
Fort Xxxxx, Indiana,
have by their respective officers executed and delivered these presents in
duplicate on the dates shown below.
FIRST, INVESTORS LIFE INSURANCE COMPANY
By ______________________________ By _____________________________
Date _____________________________ Date _____________________________
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
By ______________________________ By _____________________________
Date _____________________________ Date _____________________________
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APPENDIX I
Insurance Forms Subject to Reinsurance under this Agreement
A. One hundred percent of the REINSURED'S entire excess of its issues of
the following plans bearing register dates in the range shown below
to insureds having surnames beginning with the letters of the
alphabet shown below.
Dates Letters
Plan From Through From Through
---- ---- ------- ---- -------
Universal Life 5-1-85 -- A Z
B. Continuations of the REINSURED'S issues to any of the plans listed
above, provided the original policy was reinsured with the LINCOLN
under this or another reinsurance agreement.
SCHEDULE A
Retention Limits of the REINSURED
Life*
-----
Ages Standard-Table D Over Table D
---- ---------------- ------------
0-50 $100,000 $50,000
Over 50 70,000 35,000
*At ages 50 through 55 the retention on 10-year non-renewable, nonconvertible
term shall b $5,000.
Waiver of Premium Disability
----------------------------
Same as Life
Accidental Death
----------------
$50,000
SCHEDULE B
Maximum Amounts which the REINSURED may cede Automatically
Life
----
Ages Standard-Table D Tables E-P Over Table P
---- ---------------- ---------- -------------
0-50 $400,000 $200,000 None
51-70 280,000 140,000 None
Over 70 None None None
Waiver of Premium Disability
----------------------------
The REINSURED may cede automatically Waiver of Premium Disability reinsurance in
amount applicable to the amount of Life reinsurance ceded automatically not to
exceed the following:
Ages Standard-Table F Over Table F
---- ---------------- ------------
0-44 $2,000,000 None
45-65 1,000,000 None
Over 65 None None
Accidental Death Benefits
-------------------------
Ages Standard-Table F Over Table F
---- ---------------- -------------
0-65 $190,000 None
Over 65 None None
INSTRUCTIONS
------------
1. Submit Part I when making Facultative Application.
2. Submit Part 2 when making Formal Cession of Reinsurance to
Lincoln National (new business or amended cession) or
withdrawing Facultative Application.
3. Retain Part 3 for your records.
3. On RPR cases, please furnish the Disability Premium per
unit on Parts 2 & 3 in the remarks area.
TRANSACTION TYPE CODES AND DEFINITIONS
NEW COVERAGE
CODE LITERAL DEFINITION
N B - New Business New issues, on which the underwriting is within
the ceding company's requirements as per published
guidelines.
SU - New Business with New Issues for which the ceding company has a
Special Underwriting program to use modified underwriting requirements.
(e.g., a Special Replacement Program).
CONTINUATION OF COVERAGE - A "continuation" of a policy is a new policy
replacing a policy issued earlier by the client ("original policy") or a change
in an existing policy issued or made either:
(a) in compliance with the terms of the original policy (such as a
conversion of a term policy or the use of first-year rates for a
re-entry term product)
0R
(b) without the same new underwriting information the client would obtain
in the absence of the original policy, without a suicide exclusion or
contestable period as long as those contained in new issues by the
client, or without the payment of the same first-year commissions
payable in the absence of the original policy.
CODE LITERAL DEFINITION
EX - Exchange A policy which is replacing a policy previously
issued by the ceding company and for which the
company does not obtain Full Evidence of
Insurability requirements as per published
underwriting guidelines it would obtain in the
absence of the replaced policy. (Indicate
effective date in remarks area).
CN - Conversion A newly issued policy based on a contractual
provision contained in the previous policy with
limited or no evidence of insurability. (indicate
effective date and other pertinent data in the
remarks area).
RT - FIE-Entry Term A contractual privilege which allows the insured
to present evidence of insurability to obtain a
new first year premium at his then attained age
(based on same plan of insurance originally
issued).
C) R - Other Reissues All other reissues not considered to be exchanges,
conversions, or re-entries (e.g., reduction in
amount, rating reduction, return to first-year
premium, adding or terminating benefits, etc.).
(indicate effective date and other pertinent data
in the remarks areas).
OT - Other MUST explain in remarks area.
SCHEDULE C
FORMAL CESSION FORMS
SCHEDULE D, PART I
Reinsurance Premium Rates
Issues on an Automatic and Non-Shopped Facultative* Basis
Fully Underwritten Issues
-------------------------
Standard and Substandard Risks
The annual reinsurance premium rates for reinsurance submitted to the LINCOLN on
an automatic or a non-shopped facultative basis for amounts of reinsurance not
in excess of $5,000,000 on any one life shall be the attached rates labeled
lIU3M3, NONSMOKER," "17M3, SMOKER," "Q3M3, AGGREGATE," and "ZAM4,
SUBSTANDARD-EXTRA," nonrefunding and age last birthday of the net amount at risk
per thousand.
Continuations to Issues Reinsured Hereunder
-------------------------------------------
The premium rates for newly-issued policies reinsured under this agreement
issued as continuations and in compliance with the terms of the original policy
shall be determined as though the continuation was issued on the same date and
at the same issue age as the original policy.
Continuations from Issues Reinsured Hereunder
---------------------------------------------
The reinsurance premium shall be as described in the agreement to which covers
the new policy. For purposes of calculating premiums for continua- tions, the
continuation shall be determined as though it was issued on the same date and at
the same issue age as the original policy. If no such agreement is in effect
between the LINCOLN and the REINSURED, reinsurance shall continue hereunder.
*Non-shopped facultative cessions shall be defined as policies submitted to the
LINCOLN on a facultative basis and not submitted to any other reinsurer and the
REINSURED retains its maximum limit of retention for the plan, age, and
mortality classification at the time of issue.
SCHEDULE D, PART I (Continued)
Continuation Policy Fees
------------------------
Notwithstanding the method used to calculate the reinsurance premium rate
described herein; for purposes of determining the appropriate policy fee only, a
continuation shall be considered a renewal issue if the REINSURED has paid the
LINCOLN a first-year policy fee on reinsurance of the original policy and as a
new issue if the REINSURED has not paid the LINCOLN a first-year policy fee on
reinsurance of the original policy.
Waiver of Premium Disability and Payor Benefits
-----------------------------------------------
The premium which the REINSURED charges the insured on the amount reinsured less
total allowances of 75% first year and 10% in renewal years.
Accidental Death Benefits
-------------------------
Based on the classification of the occupational manual of the REINSURED:
Rates Per Thousand
Classification First Year Renewal
-------------- ---------- -------
Standard $ .25 $ .90
I'-L, x Standard .40 1.25
2 x Standard .50 1.60
3 x Standard .75 2.35
5 x Standard 1.25 3.80
AMENDMENT
to the Risk Premium Reinsurance Agreement (the "Agreement") between the
FIRST INVESTORS LIFE INSURANCE COMPANY of New York, New York, hereinafter
referred to as the "REINSURED,"
and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY of Fort Xxxxx, Indiana,
hereinafter referred to as the "LINCOLN"
effective December 1, 1984.
1. It is hereby agreed that Revision No. 6,, effective November 1,
1987, to the Agreement shall be rescinded.
2. The REINSURED'S plans to be reinsured under the Agreement on and
after the first day of November, 1987, shall be those specified in the Appendix
1, attached hereto.
3. For Variable Life Insurance policies ceded under the Agreement,
the term "Reinsurance Amount" shall be defined as the face amount at issue less
the REINSURED'S retention at issue. The term "Processing Date" shall be defined
as the policy anniversary. The term "Policy Net Amount at Risk" shall be defined
as the policy death benefit less the cash value at the Processing Date. The term
"Reinsurance Percentage" shall be defined as the Reinsurance Amount divided by
the face amount. The term "Reinsured Net Amount at Risk" shall be defined as the
Reinsurance Percentage multiplied by the Policy Net Amount at Risk as of the
Processing Date. If the REINSURED'S approval is needed for or results in any
change in the death benefit or the Policy Net Amount at Risk, the Reinsurance
Amount and Reinsurance Percentage shall be recalculated as of the effective date
of any such approved change, subject to the provisions of the "REINSURANCE
LIMITS" article of the Agreement. If either the death benefit or the Policy Net
Revision No. 7
Amount at Risk increases without being subject to the REINSURED'S approval, the
LINCOLN shall accept automatically the Reinsurance Percentage of such increase,
but at no time shall the Reinsured Net Amount at Risk exceed 150% of the
Reinsurance Amount, as defined above. Any policy Net Amount at Risk in excess of
150% of the Reinsurance Amount shall be retained entirely by the REINSURED. Any
subsequent decreases of the increased Policy Net Amount at Risk shall first be
applied to decrease the REINSURED'S retention to 150% of its, initial retention
and any further decreases shall reduce the REINSURED'S retention and the
Reinsured Net Amount at Risk proportionately.
4. On and after the first day of November, 1987, the retention limit
of the REINSURED shall be that shown in the revised Schedule A, Parts A and B
attached hereto. This retention shall apply to reinsurance ceded after the
effective date hereof.
5. The REINSURED may cede and the LINCOLN shall accept automatically
amounts of reinsurance not to exceed those described in the attached Schedule B,
Parts A and B.
6. For Variable Life Insurance policies ceded automatically under the
Agreement on and after the first day of November, 1987, the sum of the amount of
insurance already in force on the life and the amount applied for currently in
all companies, shall not exceed the following amounts.
Ages Life Insurance
---- --------------
0-20 $ 616,667
21-65 1,866,667
66-70 656,667
It is expressly understood and agreed that the provisions of this
amendment shall be subject to all the terms and conditions of the Agreement of
which this amendment is a part which do not conflict with the terms hereof.
Revision No. 7
IN WITNESS WHEREOF the parties hereto have caused this amendment to be
executed in duplicate on the dates shown below.
FIRST INVESTORS LIFE INSURANCE COMPANY
Signed at ______________________
By ______________________________ By _____________________________
Title: __________________________ Title: __________________________
Date _____________________________ Date _____________________________
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Signed at Fort Xxxxx, Indiana
By ______________________________ By _____________________________
Date _____________________________ Date _____________________________
Revision No. 7
APPENDIX I
Insurance Subject to Reinsurance under this Agreement
A. One hundred percent of the REINSURED'S entire excess of its issues of
the following plans bearing register dates in the range shown below
to insureds having surnames beginning with the letters of the
alphabet shown below.
Dates Letters
Plan from through from through
---- ---- ------- ---- -------
Universal Life 12-1-84 -- A Z
Variable Life Insurance
Policy 11-1-87 -- A Z
B. Continuations of the REINSURED'S issues to any of the plans listed
above, provided the original policy was reinsured with the LINCOLN
under this or another reinsurance agreement.
Revision No. 7
SCHEDULE. A, PART A
(Effective November 1, 1987)
Retention Limits of the REINSURED
UNIVERSAL LIFE
Life*
-----
Ages Standard-Table D Over Table D
---- ---------------- ------------
0-50 $100,000 $50,000
Over 50 70,000 35,000
*At ages 50 through 55 the retention on 10-year non-renewable, non- convertible
term shall be $5,000.
Waiver of Premium Disability
----------------------------
Same as Life
Accidental Death
----------------
$50,000
Revision No. 7
SCHEDULE A, PART B
(Effective November 1, 1987)
Retention Limits of the REINSURED*
VARIABLE LIFE
Life
----
INITIAL RETENTION:
Ages Standard-Table D Over Table D
----- ---------------- -------------
0-50 $66,700 $33,350
Over 50 46,700 23,350
*In addition, the REINSURED shall retain its proportionate share of all
increases in Policy Net Amount at Risk up to 150% of its share of the Policy Net
Amount at Risk at Issue, plus all increases in excess of 150% of the Policy Net
Amount at Risk at Issue.
Revision No. 7
SCHEDULE B, PART A
(Effective November 1, 1987)
Maximum Amounts which the REINSURED may cede Automatically
UNIVERSAL LIFE
Life
----
Ages Standard-Table D Tables E-P Over Table P
---- ---------------- ---------- -------------
0-50 $400,000 $200,000 None
51-70 280,000 140,000 None
Over 70 None None None
Waiver of Premium Disability
----------------------------
The REINSURED may cede automatically Waiver of Premium Disability reinsurance in
amount applicable to the amount of Life reinsurance ceded automatically not to
exceed the following:
Ages Standard-Table F Over Table F
---- ---------------- ------------
0-44 $2,000,000 None
45-65 1,000,000 None
Over 65 None None
Accidental Death Benefits
-------------------------
Ages Standard-Table F Over Table F
---- ---------------- ------------
0-65 $190,000 None
Over 65 None None
Revision No. 7
SCHEDULE S, PART B
(Effective November 1, 1987)
Maximum Amounts which the REINSURED may cede Automatically
VARIABLE LIFE
Life
----
Ages Standard-Table D Tables E-P Over Table P
---- ---------------- ---------- ------------
0-50 $266,667 $133,333 None
51-70 186,667 93,333 None
Over 70 None None None
Revision No. 7
AMENDMENT
to the Risk Premium Reinsurance Agreement (the "Agreement") between the
FIRST INVESTORS LIFE I.NSURANCE COMPANY of New York, New York,
hereinafter referred to as the "REINSURED,"
and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY of Fort Xxxxx, Indiana,
hereinafter referred to as the "LINCOLN,"
effective December 1, 1984.
On and after the first day of November, 1988, Life reinsurance of the
REINSURED'S Variable Life Insurance Policy in amounts less than the amount at
risk upon $15,000 of insurance shall not be placed in effect under the
Agreement.
It is expressly understood and agreed that the provisions of this
amendment shall be subject to all the terms and conditions of the Agreement of
which this amendment is a part which do not conflict with the terms hereof. IN
WITNESS WHEREOF the parties hereto have caused this amendment to be executed in
duplicate on the dates shown below. FIRST INVESTORS LIFE INSURANCE COMPANY
Signed at _________________________________
By ______________________________ By _______________________________
Title: __________________________ Title: ___________________________
Date ____________________________ Date _____________________________
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Signed at Fort Xxxxx, Indiana
By ______________________________ By ______________________________
Date ____________________________ Date _____________________________
Revision No. 8
