EXHIBIT 27(g)
AUTOMATIC AND FACULTATIVE REINSURANCE AGREEMENT
(Group Life, Group Universal Life, and Group
Accidental and Death and Dismemberment Benefits)
THIS AGREEMENT, made this twenty-seventh day of September 1989 between THE
MINNESOTA MUTUAL LIFE INSURANCE COMPANY, a corporation organized under the laws
of the State of Minnesota, hereinafter referred to as the "Company," and NORTH
AMERICAN REASSURANCE COMPANY, a corporation organized under the laws of the
State of New York, hereinafter referred to as "North American Re," WITNESSETH AS
FOLLOWS:
TABLE OF CONTENTS
ARTICLE TITLE PAGE(S)
------- ----- -------
I Scope 1
II Automatic Coverage 2 - 3
III Facultative Reinsurance 4
IV Mode of Cession 5 - 6
V Commencement and Termination of Liability 7
VI Oversights 8
VII Plan of Reinsurance 9
VIII Group Reinsurance Premium Rates 10 - 12
IX Tax Credits 13
X Experience Refunds 14
XI Premium Accounting 15 - 16
XII Conversion - Replacement 17
XIII Reinstatements 18
XIV Reductions 19
XV Retention Limits Increases - Recapture 20
XVI Continuance of Reinsurance 21
XVII Claims 22 - 23
XVIII Policy Changes 24
XIX Inspection of Records 25
XX Insolvency of the Company 26 - 27
XXI Insolvency of North American Re 28
XXII Arbitration 29 - 30
XXIII Parties to Agreement 31
XXIV Duration of Agreement 32
Signature Page 33
TABLE OF CONTENTS
SCHEDULE TITLE PAGE(S)
-------- ----- -------
SCHEDULES A.1 Maximum Limits of Issue if Automatic 34 - 36
and A.2 Reinsurance is to Apply
SCHEDULE B Retention Formula 37 - 38
SCHEDULE C Groups Not Eligible for Automatic 39 - 40
Reinsurance
SCHEDULE D Underwriting Guidelines for Supplemental 41 - 42
and Voluntary Group Coverages for
Automatic Reinsurance to Apply
SCHEDULE E Facultative Submission of Group Life, Group 43
Universal Life, and Group AD&D Cases
SCHEDULE F Facultative Group Reinsurance Confirmation 44
SCHEDULE G Reinsurance of Ordinary Insurance 45 - 52
Stemming From Exercise of Conversion
Privilege in the Group Life Policy
EXHIBIT A Combination Application Cession 53
EXHIBIT B Yearly Renewable Term Reinsurance 54 - 58
Premium Rates
o NRN-6042
o NRL-6042
ADDENDUM I Automatic and Facultative Group Excess 1 - 5
With Evidence
Signature Page 6
ARTICLE I
Scope
On and after the twenty-seventh day of September 1989, the Company shall
reinsure with North American Re new Group Life, new Group Universal Life, and
new Group Accidental Death and Dismemberment benefits issued directly by the
Company to employer-employee groups with or without individual (Ordinary-type)
evidence of insurability. In-force business may be submitted facultatively.
Automatic reinsurance shall pertain only to groups with all lives actively at
work on the effective date of reinsurance or shall commence on the date such
life becomes actively at work on a full-time basis. For groups with lives not
actively at work on the effective date of reinsurance, applications shall be
submitted for reinsurance on a facultative basis. Such reinsurance shall also
pertain to any disability benefit (Waiver of Premium or Extended Death) written
supplementary to the Life benefit. Hereinafter, it shall be assumed that any
Life risk reinsurance shall be accompanied by the supplemental disability risk.
1
ARTICLE II
Automatic Coverage
If the Company issues a Group Life, Group Universal Life, or a Group Accidental
Death and Dismemberment benefit within the limits shown in Schedules A.1 and A.2
and retains its maximum risk retention as shown in Schedule B, the Company shall
cede and North American Re shall automatically accept reinsurance of amounts of
such benefits in excess of the Company's maximum limits of retention as shown in
Schedule B. Automatic coverage shall not extend to:
1. Groups which exceed the limits shown in Schedules A.1 and A.2,
regardless of whether the amounts in excess of these limits are fully
retained by the Company;
2. Groups indicated as exclusions in Schedule C;
3. Voluntary or supplemental programs which permit selection of amounts by
individual insureds except as allowed by Schedule D;
4. Groups with a benefit formula that contains no maximum guaranteed issue
limit or when benefits contain no age reductions. This requirement does
not apply to Group Universal Life;
2
5. Groups with reinsurance on any life after retirement. However, for
Group Universal Life plans requiring reinsurance on retirees at issue,
such plans most be submitted facultatively. Facultative submission does
not apply to plans including future retirees after the inception date
of the plan;
6. Groups underwritten using substantial exceptions to the Company's usual
underwriting rules. It is understood that up to and including a 10%
deviation in any numerical underwriting rule (but not greater than the
overall maximum guaranteed issue limit) shall not constitute a
substantial exception;
7. Groups without an actively-at-work provision and groups which cover
in-force disabled lives to be reinsured. For Group Universal Life,
facultative submission is required for cases without an actively at
work at inception of coverage provision or which covers disabled lives
at inception of coverage.
Application for reinsurance of such groups may be submitted on a facultative
basis.
3
ARTICLE III
Facultative Reinsurance
Applications for reinsurance of amounts in excess of those shown in Article II
or which may not be so ceded under the terms hereof, shall be submitted for
reinsurance on a facultative basis. Any risks which the Company does not care to
cede to North American Re automatically shall be submitted for reinsurance on a
facultative basis.
4
ARTICLE IV
Mode of Cession
Notification of Automatic Reinsurance
1. On automatic reinsurance the Company shall, after completing its papers
and approving the risk, forward promptly to North American Re a written
notification of the important details of the risk, including the total
volume and number of certificates in the group, the maximum certificate
and the individual amounts of Group Life, Group Universal Life, and
Group Accidental Death and Dismemberment benefits to be reinsured with
North American Re.
Facultative Submissions
2. When the Company desires to submit a risk to North American Re on a
facultative basis, it may communicate (by telephone acceptable) the
information found on Form number L(GRP)476-1/7-86 (see Schedule E) and,
thereafter, send copies of pertinent papers, including Master
Applications, Master Policies, Certificates, proposals, and all other
information which the Company may have relating to the insurability of
the risk. A facultative acceptance, modification, or decline will be
communicated by telephone and confirmed by Form number L(GRP)200/7-86
(see attached Schedule F).
Cession Form
3. As outlined in Article XI, after the end of the month in which the
first premium has been received by the Company on an automatic case or
on a facultative case accepted by North American Re, the Company shall
send premium statement forms
5
of a form mutually acceptable to the Company and North American Re. The
premium statement on which is entered the initial reinsurance premium
for a case shall be considered to be the cession form for that case.
If copies of papers regarding the insurability of the risk, including
the Master Application, were not sent with the reinsurance
notification, they shall accompany the first premium statement.
6
ARTICLE V
Commencement and Termination of Liability
1. On automatic reinsurance and on facultative reinsurance accepted by
North American Re, the liability of North American Re shall commence
and terminate simultaneously with that of the Company unless terminated
as provided for in Article VIII or Article XV of this Agreement.
2. Neither a merger involving the Company nor the sale of reinsured group
business by the Company shall affect the rights of North American Re as
reinsurer nor shall it constitute termination of liability by the
Company.
7
ARTICLE VI
Oversights
Should the Company omit to cede reinsurance that otherwise would have been ceded
on an automatic basis in accordance with the provisions of this Agreement or
should either the Company or North American Re fail to comply with any of the
other terms and if this is shown to be unintentional and the result of a
misunderstanding or oversight on the part of either the Company or North
American Re, then this Agreement shall not be deemed abrogated thereby, but both
companies shall be restored to the position they would have occupied had no such
oversight or misunderstanding occurred.
8
ARTICLE VII
Plan of Reinsurance
All group reinsurance, except as provided by this Agreement, shall be subject to
the same terms, conditions, limitations, and restrictions as those contained in
the insuring Master Policy of the Company.
9
ARTICLE VIII
Group Reinsurance Premium Rates
Group Life and Group Universal Life
1. The net group life reinsurance premium per one thousand dollars
($1,000) of reinsurance shall be calculated as of each anniversary of
the Master Policy and shall remain in force for the ensuing policy
year. For Group Universal Life, premium shall be based on the
reinsurance net amount at risk. Unless North American Re requests a
modification, as provided herein, of the premium per thousand dollars
($1,000) of reinsurance, North American Re shall coinsure the Company's
rate basis including volume, industry, and geographic adjustment
factors. North American Re shall pay its share of commissions plus the
following expense allowances:
FIRST YEAR RENEWAL YEARS
New Cases 5% 2%
In-Force Cases 2 2
Premium rates for supplemental and voluntary group coverages will be
determined using the guidelines shown in Schedule D.
2. The total reinsurance premium payable to North American Re shall be the
reinsurance premium per thousand dollars ($1,000), as defined in the
previous paragraphs, multiplied by the amount of reinsurance and
divided by one thousand.
10
Group Accidental Death and Dismemberment
1. Premiums for reinsurance of Group Accidental Death and Dismemberment
benefits shall be payable at the net rate of $.034 per thousand dollars
($1,000) of reinsurance per month for all risks written on a
twenty-four (24) hour basis.
2. The total reinsurance premium payable to North American Re shall be the
reinsurance premium per thousand dollars ($1,000), as defined in the
previous paragraph, multiplied by the amount of reinsurance and divided
by one thousand.
Reinsurance Rate Modification - Group Life, Group Universal Life,
and Group Accidental Death and Dismemberment Benefits
1. North American Re will notify the Company in writing, at least ninety
(90) days prior to the policy anniversary of any modification of the
reinsurance premium rates desired by North American Re, and such
modified reinsurance rates shall be effective from such policy
anniversary unless the Company shall notify North American Re, in
writing, within thirty (30) days following receipt of such notice from
North American Re that such reinsurance premium rates are not
acceptable to the Company. If a mutual agreement between North American
Re and the Company as to proper reinsurance premium rates on any Master
Policy reinsured under this Agreement is not reached within thirty (30)
days prior to such policy anniversary, the reinsurance premium rates
then in effect shall continue unchanged, but North American Re may
terminate the reinsurance of such Master Policy upon thirty (30) days'
written notice to the Company.
11
2. North American Re will notify the Company, in writing, within thirty
(30) days after receipt of notice from the Company that the terms of
any Master Policy reinsurance under this Agreement are being changed,
of any modification of the reinsurance premium rates desired by North
American Re, and such modified reinsurance premium rates shall be
effective from the date of such change unless the Company shall notify
North American Re, in writing, within thirty (30) days after receipt of
such notice from North American Re that such modification is not
acceptable to the Company. In such latter event, the modification shall
not become effective, but North American Re may at any time within
thirty (30) days after receipt of such latter notice terminate the
reinsurance of the Master Policy in question as of such changed date by
written notice to the Company.
12
ARTICLE IX
Tax Credits
Except in those instances where North American Re is taxed directly and
independently on premiums collected by it from the Company, North American Re
shall reimburse the Company either at the average rate or the exact tax rate on
reinsurance premiums paid.
13
ARTICLE X
Experience Refunds
1. Group Life, Group Universal Life, and Group Accidental Death and
Dismemberment reinsurance ceded pursuant to this Agreement shall not be
eligible for experience refunds.
2. Group Life and Group Universal Life shall be eligible for a mortality
bonus to be determined by North American Re.
14
ARTICLE XI
Premium Accounting
1. Promptly after the close of each calendar month or as mutually agreed
upon for self-administered groups, the Company shall send to North
American Re statements showing premiums due North American Re and
premium overpayments due the Company. If the net balance is in favor of
North American Re, the Company shall thereupon remit to North American
Re the amount of such balance. If the net balance is in favor of the
Company, North American Re shall within thirty-one (31) days after
receipt of the statement remit to the Company the amount of such
balance.
2. Such statements shall also include the number of lives and volume of
insurance reinsured at the beginning of the Master Policy period for
which each premium is being paid and increases and decreases in such
items since the last statement was rendered.
3. Separate statements shall be submitted for reinsurance risks up to and
including five hundred thousand dollars ($500,000) and for reinsurance
risks over five hundred thousand dollars ($500,000). The statement
shall provide details for each individual whose amounts exceed five
hundred thousand dollars ($500,000) showing name (or other
identification), date of birth (or age), and total reinsured benefit
amount.
15
Accounting Following Termination of Agreement or Master Policy
4. Following termination of this Agreement or of any Master Policy
reinsured under this Agreement, this Company will from time to time,
but not less frequently than quarter-annually, submit statements to
North American Re supported by appropriate records. If such statement
shall show a balance in favor of North American Re, the Company shall
thereupon remit to North American Re the amount of such balance. If
such statement shall show a balance in favor of the Company, North
American Re shall, within thirty-one (31) days after receipt of the
statement, remit to the Company the amount of such balance.
16
ARTICLE XII
Conversion - Replacement
1. If at any time the Group Life or Group Universal Life insurance on an
individual insured under this Agreement is converted to Ordinary Life
insurance, North American Re shall receive the same proportion of
reinsurance on the individual policy that it had on such individual
life under the reinsured Master Policy before conversion.
2. The reinsurance on the Ordinary policy shall be governed by the
provisions set forth in Schedule G.
3. Group Universal Life coverage not converted to an Ordinary Life policy
but continued under the portability provision of the group master
contract either by group certificate or individual policy will be
reinsured under the terms of this Agreement.
17
ARTICLE XIII
Reinstatements
Should a lapsed Master Policy or group insurance on any individual be
reinstated, in accordance with its terms and the rules of the Company, the
reinsurance under such Master Policy or on such individual life shall be
reinstated automatically. Notice of reinstatement shall be mailed to North
American Re within a reasonable time after the insurance has been reinstated by
the Company. Premiums on reinstated reinsurance shall be payable only to the
extent that the Company is entitled to premiums on such insurance.
18
ARTICLE XIV
Reductions
If on a life reinsured hereunder any portion of the Group insurance carried by
the Company shall be terminated for any reason, the amount of reinsurance
carried by the Company on that life shall be reduced by a like amount as of the
date and time of the termination of the original insurance.
19
ARTICLE XV
Retention Limits Increases - Recapture
The reinsurance granted by North American Re hereunder shall be maintained in
force by the Company so long as the insurance issued by the Company upon the
same risk shall remain in force unless terminated, in whole or in part, as
provided for below:
Recapture
1. At such time as the Company increases its retention limit, it shall
have the right to recapture in-force reinsurance up to its new
retention limit after at least thirty (30) days' notice in writing.
Such recapture shall be permitted subject to the Company's increase in
retention as evidenced by a resolution of its Group Division
Underwriting Committee and the intention of the Company to retain the
additional risk for its own account.
2. Recapture shall pertain to active lives only.
20
ARTICLE XVI
Continuance of Reinsurance
The reinsurance granted by North American Re hereunder shall be maintained in
force by the Company so long as the insurance issued by the Company shall remain
in force unless terminated as provided in Article VIII or Article XV.
21
ARTICLE XVII
Claims
1. In the case of a claim under a reinsured Master Policy, whether the
claim payment is made under the strict policy conditions or compromised
for a lesser amount, the contractual settlement made by the Company
shall be unconditionally binding on North American Re. If the whole
risk on any particular claim is carried by North American Re, North
American Re shall be consulted before admission or acknowledgement of
the claim is made by the Company. However, such consultation shall not
impair the Company's freedom to determine the proper action on the
claim, and the settlement made by the Company shall still be
unconditionally binding on North American Re.
2. The Company shall furnish North American Re with copies of the proofs
of claim, together with any information the Company may possess in
connection with the claim. Payment in settlement of the reinsurance
under a claim approved and paid by the Company for a life reinsured
hereunder shall be made by North American Re upon receipt of the claim
papers.
3. In the case of death claims payable under optional modes of settlement,
North American Re's claim payment shall be made in a lump sum. Such
lump sum shall be North American Re's share of the face amount of the
certificate.
22
4. North American Re shall share in the expense of any contest or
compromise of a claim in the same proportion that the net amount at
risk reinsured with North American Re bears to the total net risk of
the Company on the certificate reinsured hereunder and shall share in
the total amount of any savings in the same proportion. Covered claim
expenses shall include cost of investigation, legal fees, court costs,
and interest charges, if any. Compensation of salaried officers and
employees and any possible extra contractual damages shall not be
considered covered expenses.
5. Any savings to the Company due to subrogation or a reimbursement
agreement shall be shared with North American Re proportionate to its
share of the risk.
23
ARTICLE XVIII
Policy Changes
If any change is made in any reinsured policy issued by the Company and if such
change affects the reinsurance thereon, North American Re shall immediately be
notified of such change. The rules of the Company governing changes in policy
contracts which affect reinsured policies shall be accepted as satisfactory by
North American Re.
24
ARTICLE XIX
Inspection of Records
North American Re shall have the right at all reasonable times to inspect at the
offices of the Company all books and documents relating to the insurance covered
by this Agreement.
25
ARTICLE XX
Insolvency of the Company
1. In the event of the insolvency of the Company all reinsurance made,
ceded, renewed, or otherwise becoming effective under this Agreement
shall be payable by North American Re directly to the Company or to its
liquidator, receiver, or statutory successor on the basis of liability
of the Company under the contract or contracts reinsured without
diminution because of the insolvency of the Company. It is understood,
however, that in the event of the insolvency of the Company, the
liquidator or receiver or statutory successor of the insolvent Company
shall given written notice of the pendency of a claim against the
insolvent Company on the policy reinsured within a reasonable time
after such claim is filed in the insolvency proceeding and that during
the pendency of such claim, North American Re may investigate such
claim and interpose, at its own expense, in the proceeding where such
claim is to be adjudicated any defense or defenses which is may deem
available to the Company or to its liquidator or receiver or statutory
successor.
2. In the event the Company shall become insolvent or fail to pay any
liability assumed under this Agreement within the time prescribed
herein, North American Re shall have the right to deduct from any sums
which may be or become due to North American Re any sums that are due
North American Re by the Company under this Agreement.
26
3. It is further understood that the expense thus incurred by North
American Re shall be chargeable, subject to court approval, against the
insolvent Company as part of the expense of liquidation to the extent
of a proportionate share of the benefit which may accrue to the Company
as a result of the defense undertaken by North American Re. Where two
or more assuming insurers 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 the
reinsurance
agreement as though such expense had been incurred by the Company.
27
ARTICLE XXI
Insolvency of North American Re
In the event North American Re shall become insolvent, this Agreement shall
automatically terminate as of the date of insolvency, and the Company may
recapture all risks under North American Re's portion of the insurance.
In the event North American Re shall become insolvent or fail to pay any
liability assumed under this Agreement within the time prescribed herein, the
Company shall have the right to deduct from any sums which may be or become due
to North American Re any sums that are due the Company by North American Re
under this Agreement.
Nothing in this section shall be deemed to release in any way the liability of
North American Re to the Company.
28
ARTICLE XXII
Arbitration
1. In the event of any difference arising hereafter between the
contracting parties with reference to any transaction under the
Agreement, the same shall be referred to three arbitrators who must be
executive officers of life insurance or life reinsurance companies
familiar with the group insurance business, other than the two parties
to this Agreement or their affiliates. Each of the contracting
companies shall appoint one of the arbitrators, and such two
arbitrators shall select the third arbitrator.
2. If the two arbitrators fail to agree on the selection of a third
arbitrator within 30 days of their appointment, each of them shall name
three individuals, of whom the other shall decline two, and the
decision between the remaining two shall be made by drawing lots.
3. The arbitrators shall consider this
Reinsurance Agreement as an
honorable undertaking, the purpose of which should not be defeated by a
strict or narrow interpretation of the Agreement language. They shall
decide by a majority vote of the arbitrators. There shall be no appeal
from their written decision.
29
4. Each party shall bear the expense of its own arbitration, including its
arbitrator and outside attorney fees, and shall jointly and equally
bear with the other party the expense of the third arbitrator. Any
remaining costs of the arbitration proceedings shall be apportioned by
the Board of Arbitrators.
30
ARTICLE XXIII
Parties to Agreement
The reinsurance provided hereunder shall not create any right or legal relation
between North American Re and the policyholder or between North American Re and
the person or persons insured under a Master Policy reinsured under this
Agreement or their beneficiaries.
31
ARTICLE XXIV
Duration of Agreement
This Agreement may be cancelled at any time by either party giving ninety (90)
days' notice of cancellation in writing. North American Re shall continue to
accept reinsurance during the ninety (90) day period aforesaid and shall remain
liable on all reinsurance granted under this Agreement until the date of the
cancellation of the Agreement unless terminated in accordance with the
provisions of Article VIII or Article XV of this Agreement.
32
IN WITNESS WHEREOF, the Company and North American Re have caused their names to
be subscribed and duly attested hereunder by their respective Authorized
Officers.
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY
By:
--------------------------- --------------------------
Authorized Officer Title
Attest:
By:
------------------------- ----------------------
Authorized Officer Title
Date:
-----------------------
NORTH AMERICAN REASSURANCE COMPANY
By:
--------------------------- --------------------------
Authorized Officer Title
Attest:
By:
------------------------- ----------------------
Authorized Officer Title
Date:
-----------------------
33
SCHEDULES A.1 AND A.2
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY'S MAXIMUM LIMITS
OF ISSUE IF AUTOMATIC REINSURANCE IS TO APPLY
34
SCHEDULE A.1
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY'S
MAXIMUM GUARANTEED ISSUE LIMITS
For Automatic Reinsurance to Apply
LIFE INSURANCE
A B C
Total Volume of
Group Life Insurance GI Schedule(1) Average Factor(2)
-------------------- -------------- -----------------
$10,000,000 to $12,500,000 $ 550,000 12
$12,500,000 to $15,000,000 600,000 12
$15,000,000 to $20,000,000 650,000 12
$20,000,000 to $25,000,000 700,000 12
$25,000,000 to $30,000,000 750,000 12
$30,000,000 to $35,000,000 800,000 12
$35,000,000 to $40,000,000 900,000 12
$40,000,000 to $45,000,000 1,000,000 12
$45,000,000 to $50,000,000 1,000,000 12
$50,000,000 to $55,000,000 1,000,000 12
$55,000,000 to $60,000,000 1,000,000 12
$60,000,000 to $65,000,000 1,000,000 12
$65,000,000 to $70,000,000 1,000,000 12
$70,000,000 and over 1,000,000 12
1. This Schedule is applicable to both noncontributory and standard single
choice contributory plans where 60% minimum participation is required.
2. The GI maximum is the lesser of the GI SCHEDULE amount (Column B) or the
product of the AVERAGE FACTOR times the average certificate. In determining
the average certificate, use no more than one-half of the appropriate GI
SCHEDULE amount on any one life.
35
SCHEDULE A.2
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY'S
MAXIMUM GUARANTEED ISSUE LIMITS
For Automatic Reinsurance to Apply
AD&D INSURANCE
A B C
Total Volume of
Group Life Insurance GI Schedule(1) Average Factor(2)
-------------------- -------------- -----------------
$2,500,000 to $3,000,000 $ 225,000 12
$3,000,000 to $3,500,000 250,000 12
$3,500,000 to $4,000,000 275,000 12
$4,000,000 to $4,500,000 300,000 12
$4,500,000 to $5,000,000 325,000 12
$5,000,000 to $6,000,000 350,000 12
$6,000,000 to $7,000,000 375,000 12
$7,000,000 to $8,000,000 400,000 12
$8,000,000 to $9,000,000 425,000 12
$9,000,000 to $10,000,000 465,000 12
$10,000,000 to $12,500,000 550,000 12
$12,500,000 to $15,000,000 600,000 12
$15,000,000 to $20,000,000 650,000 12
$20,000,000 to $25,000,000 700,000 12
$25,000,000 to $30,000,000 750,000 12
$30,000,000 to $35,000,000 800,000 12
$35,000,000 to $40,000,000 900,000 12
$40,000,000 to $45,000,000 1,000,000 12
$45,000,000 to $50,000,000 1,000,000 12
$50,000,000 to $55,000,000 1,000,000 12
$55,000,000 to $60,000,000 1,000,000 12
$60,000,000 to $65,000,000 1,000,000 12
$65,000,000 to $70,000,000 1,000,000 12
$70,000,000 and over 1,000,000 12
1. This Schedule is applicable to both noncontributory and standard single
choice contributory plans where 60% minimum participation is required.
2. The GI maximum is the lesser of the GI SCHEDULE amount (Column B) or
the product of the AVERAGE FACTOR times the average certificate. In
determining the average certificate, use no more than one-half of the
appropriate GI SCHEDULE amount on any one life.
36
SCHEDULE B
RETENTION FORMULA
37
SCHEDULE B
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY'S MAXIMUM RETENTION
LIMITS FOR GROUP LIFE, GROUP UNIVERSAL LIFE, AND GROUP
ACCIDENTAL DEATH AND DISMEMBERMENT
Group Life and Group Universal Life $500,000
Group Accidental Death and $200,000*
Dismemberment
* Each group with at least one (1) life with an insurance amount in excess of
five hundred thousand dollars ($500,000) will reinsure automatically the
excess over two hundred thousand dollars ($200,000) for each certificate in
excess of two hundred thousand dollars.
38
SCHEDULE C
GROUPS NOT ELIGIBLE FOR AUTOMATIC REINSURANCE
UNDER THIS AGREEMENT
39
SCHEDULE C
GROUPS NOT ELIGIBLE FOR AUTOMATIC REINSURANCE
UNDER THIS AGREEMENT
1. Sports Teams
2. Airlines
3. Mining
4. Oil and Gas (Off Shore)
40
SCHEDULE D
UNDERWRITING GUIDELINES FOR SUPPLEMENTAL AND VOLUNTARY
GROUP COVERAGES FOR AUTOMATIC REINSURANCE TO APPLY
41
SCHEDULE D
UNDERWRITING GUIDELINES FOR SUPPLEMENTAL AND VOLUNTARY GROUP COVERAGES
For Automatic Reinsurance to Apply
Combined Supplemental and Basic Maximum Not to Exceed Guaranteed Issue
Schedules A.1 and A.2
REINSURANCE
PARTICIPATION CHOICES UNDERWRITING REINSURANCE PRICING
------------- ------- ------------ ----------- -----------
60% + No All Guaranteed Issue Excess Coinsurance
40 - 59% No All Guaranteed Issue Excess Coinsurance + 15%
20 - 39% No All Guaranteed Issue Modified Coinsurance(2)
Excess
LT 20% No All Guaranteed Issue Facultative Coinsurance(2)
Quota Share
60% + Yes All Guaranteed Issue Excess Coinsurance + 15%
40 - 59% Yes All Guaranteed Issue Modified Coinsurance(2)
Excess(1)
LT 40% Yes All Guaranteed Issue Facultative Coinsurance(2)
Quota Share
60% + Yes 1st Choice Guaranteed Excess Coinsurance
Issue and Then
Simplified Issue
40 - 59% Yes 1st Choice Guaranteed Excess Coinsurance + 15%
Issue and Then
Simplified Issue
20 - 39% Yes 1st Choice Guaranteed Modified Coinsurance(2)
Issue and Then Excess(1)
Simplified Issue
LT 20% Yes 1st Choice Guaranteed Facultative Coinsurance(2)
Issue and Then Quota Share
Simplified Issue
All levels Yes or All Simplified Issue Excess Coinsurance
No
1. Modified Excess - Generally North American Re reinsures 50% of amounts
in excess of $50,000 until the Company's retention has been met and
then 100% of the excess.
2. Coinsurance - Reinsurance pricing based on the Company's gross rate
basis. North American Re pays its share of commissions and premium
taxes plus expense allowance on new business of 5% first year and 2%
for renewal years and on in-force business of 2% all years.
42
SCHEDULE E
FACULTATIVE SUBMISSION OF GROUP LIFE, GROUP UNIVERSAL LIFE,
AND GROUP ACCIDENTAL DEATH AND DISMEMBERMENT CASES
43
SCHEDULE F
FACULTATIVE GROUP REINSURANCE CONFIRMATION
44
SCHEDULE G
REINSURANCE OF ORDINARY INSURANCE STEMMING FROM EXERCISE
OF CONVERSION PRIVILEGE IN THE GROUP LIFE POLICY
45
SCHEDULE G
TABLE OF CONTENTS
PARAGRAPH TITLE PAGE(S)
--------- ----- -------
1. Submission of Cession G-1
2. Policy Forms G-1
3. Commencement and Termination
of Liability G-1
4. Oversight - Clerical Errors G-2
5. Plan of Reinsurance G-2
6. Reinsurance Premiums G-2
7. Mode of Payment - Reinsurance
Premiums G-3
8. Tax Credits G-3
9. Experience Refunds G-3
10. Reductions G-4
11. Extended and Paid-Up Insurance G-4
12. Reinstatements G-4
13. Policy Changes G-5
14. Settlement of Claims G-5-6
15. Age Adjustment G-6
EXHIBIT A Combination Application Cession
EXHIBIT B Yearly Renewable Term Reinsurance
Premium Rates
o NRN-6042
o NRL-6042
46
Submission of Cession
1. After the first premium for the permanent policy is received, the
Company shall send to North American Re the Combination Application
Cession (Exhibit A). Sheet 2 of the Combination Application Cession
shall be executed and promptly returned by North American Re.
Policy Forms
2. The Company shall forward to North American Re copies of all its
present policy forms, its rate book, and reserve factors of special
plans of insurance which are not readily available in published form.
If new forms are published or if changes are made in the material filed
aforesaid, the Company agrees to file promptly with North American Re
the new or revised copies of such material.
Commencement and Termination of Liability
3. The liability of North American Re shall commence and terminate
simultaneously with that of the Company on reinsurances arising from
conversion of Group Life coverages previously reinsured.
47
Oversight - Clerical Errors
4. Should the Company omit to cede reinsurance that otherwise would have
been ceded in accordance with the provisions of this Schedule or fail
to comply with any of the other terms of this Agreement and if this is
shown to be unintentional and the result of a misunderstanding or
oversight on the part of either the Company or North American Re, then
this Agreement shall not be deemed abrogated thereby, but both
companies shall be restored to the position they would have occupied
had no such oversight or misunderstanding occurred.
Plan of Reinsurance
5. Reinsurance of life risks, arising from conversion of Group Life
coverages and ceded in accordance with this Schedule, shall be upon the
yearly renewable term plan for the amount at risk under the policy
reinsured. For the purpose of this Agreement, the amount at risk is
defined as the difference, taken to the nearest dollar, between the
face amount of the sum reinsured and the terminal reserve corresponding
to that face amount on the basis of the original policy.
Reinsurance Premiums
6. Until further notice, first-year and renewal premiums shall be at the
rates given in the attached Exhibit B. North American Re guarantees
that premium rates for a given attained age and rating will not exceed
the higher of the rates shown on the attached Exhibit B. for that age
and rating or the one-year term rate on the appropriate multiple of the
1958 CSO table at 2 1/2%.
48
Mode of Payment- Reinsurance Premiums
7. Reinsurance premiums shall be paid annually, but if a reinsured policy
is terminated or reduced in accordance with this Agreement, North
American Re shall refund to the Company the unearned reinsurance
premium.
Promptly at the close of each calendar month, North American Re shall
send to the Company a list showing premiums for all outstanding
reinsurance upon which cessions have been received by North American Re
and renewal premiums for all renewal reinsurance falling due with each
month. The Company shall verify and return within a reasonable time
such list to North American Re with a remittance covering first-year
premiums for all new reinsurance upon which premiums shall have been
paid to the Company and renewal premiums on all renewal reinsurance
falling due with the month, together with any adjustments made
necessary by change in reinsurances.
Tax Credits
8. Unless North American Re is taxed directly and independently on
reinsurance premiums collected in accordance with the terms of the
Schedule by it from the Company, North American Re shall reimburse the
Company at the exact tax rate on reinsurance premiums as that on which
the Company's premium tax on its policy was based.
Experience Refunds
9. Reinsurance ceded in accordance with the terms of this Schedule shall
not be subject to an experience refund.
49
Reductions
10. If any portion of the Ordinary policy, a portion of which is reinsured
as provided by this Schedule, is terminated, the amount of reinsurance
to be terminated shall be in the same proportion as the original amount
reinsured bore to the total amount issued upon conversion.
Extended and Paid-Up Insurance
11. Should a policy reinsured in North American Re in accordance with the
terms of this Schedule lapse and extended or paid-up insurance be
granted in accordance with the provisions of the policy, the cession of
reinsurance shall be exchanged for a new cession showing the adjusted
amounts of reinsurance. For any resulting reduction in amount of
insurance, a corresponding reduction of reinsurance shall be made in
accordance with the "Reduction" provisions of this Schedule.
Reinstatements
12. Should a policy reinsured in North American Re in accordance with the
terms of this Schedule be lapsed or surrendered and subsequently be
reinstated in accordance with its terms and the rules of the Company,
the reinsurance under such policy shall be reinstated automatically.
Notice of reinstatement shall be mailed to North American Re within a
reasonable time after the insurance has been reinstated by the Company.
Copies of the reinstatement papers shall be furnished to North American
Re. Premiums and interest on reinsurance shall be payable only to the
extent that the Company is entitled to premium and interest on such
insurance.
50
Policy Change
13. If any change which affects the reinsurance hereunder shall be made in
the policy issued by the Company to the insured, the Company shall,
within a reasonable time, notify North American Re of such change. The
rules of the Company governing changes in policy contracts which affect
reinsurance shall be accepted as satisfactory by North American Re.
Settlement of Claims
14. In the case of a claim on a reinsured policy, whether claim payment is
made under the strict policy conditions or compromised for lesser
amount, the settlement made by the Company shall be unconditionally
binding upon North American Re. If the whole risk on a particular claim
is carried by North American Re, North American Re shall be consulted
before admission or acknowledgement of the claim is made by the
Company. However, such consultation shall not impair the Company's
freedom to determine the proper action on the claim, and the settlement
made by the Company shall still be unconditionally binding on North
American Re.
The Company shall furnish North American Re with copies of the proofs
of claim, together with any information the Company may possess in
connection with the claim. Payment in settlement of the reinsurance
under a claim approved and paid by the Company for a life reinsured
hereunder shall be made by North American Re upon receipt of the claim
papers.
51
In the case of death claims payable under optional modes of settlement,
North American Re's claim payment shall be made in a lump sum. Such
lump sum shall be North American Re's share of the face amount of the
certificate.
North American Re shall share in the expense of any contest or
compromise of a claim in the same proportion that the net amount at
risk reinsured with North American Re bears to the total net risk of
the Company on the policy reinsured hereunder and shall share in the
total amount of any savings in the same proportion. Covered claim
expenses shall include cost of investigation, legal fees, court costs,
and interest charges, if any. Compensation of salaried officers and
employees and any possible extra contractual damages shall not be
deemed covered expenses.
Age Adjustment
15. In the event of an increase or reduction in the amount of the Company's
insurance on any policy reinsured hereunder because of an overstatement
or understatement of age being established after the death of the
insured, the Company and North American Re shall share in such increase
or reduction in proportion to their respective liabilities under such
policy.
52
EXHIBIT A
COMBINATION APPLICATION CESSION
53
EXHIBIT B
YEARLY RENEWABLE TERM REINSURANCE PREMIUMS
54
EXHIBIT B
Premiums for $1,000 of Risk Premium Reinsurance
Standard Male Nonrefund
Age Nearest Birthday
Policy Fee: $10 All Years
Attained Attained Attained
Age YRT Rate Age YRT Rate Age YRT Rate
-------- -------- -------- -------- -------- --------
0 $4.00 45 $ 4.60 73 $ 43.80
1-18 1.30 46 5.00 74 47.20
19 1.30 47 5.40 75 50.90
20 1.40 48 5.90 76 54.80
21 1.40 49 6.50 77 58.70
22 1.50 50 7.00 78 63.00
23 1.50 51 7.50 79 67.00
24 1.50 52 8.00 80 71.00
25 1.50 53 8.70 81 76.00
26 1.60 54 9.30 82 82.00
27 1.60 55 10.00 83 90.00
28 1.70 56 10.90 84 102.00
29 1.70 57 11.80 85 115.00
30 1.80 58 12.90 86 129.00
31 1.80 59 13.95 87 144.00
32 1.90 60 15.10 88 159.00
33 1.90 61 16.40 89 174.00
34 1.90 62 17.80 90 190.00
35 2.00 63 19.30 91 210.00
36 2.10 64 21.00 92 230.00
37 2.20 65 22.80 93 250.00
38 2.40 66 24.80 94 275.00
39 2.50 67 26.90 95 300.00
40 2.80 68 29.30 96 325.00
41 3.00 69 31.80 97 350.00
42 3.40 70 34.50 98 375.00
43 3.70 71 37.40 99 400.00
44 4.20 72 40.50
NRN-6042
55
FEMALE RATES
Rates for females equal the rates for males two years younger, except that rates
for females 0-18 equal the rates for males of the same ages, and rates for
females 19-20 equal those for males age 18.
56
EXHIBIT B
Premiums for $1,000 of Risk Premium Reinsurance
Standard Male Nonrefund
Age Last Birthday
Policy Fee: $10 All Years
Attained Attained Attained
Age YRT Rate Age YRT Rate Age YRT Rate
-------- -------- -------- -------- -------- --------
0 $4.00 45 $ 4.80 73 $ 45.50
1-18 1.30 46 5.20 74 49.05
19 1.35 47 5.65 75 52.85
20 1.40 48 6.20 76 56.75
21 1.45 49 6.75 77 60.85
22 1.50 50 7.25 78 65.00
23 1.50 51 7.75 79 69.00
24 1.50 52 8.35 80 73.50
25 1.55 53 9.00 81 79.00
26 1.60 54 9.65 82 86.00
27 1.65 55 10.15 83 96.00
28 1.70 56 11.05 84 108.50
29 1.75 57 12.35 85 122.00
30 1.80 58 13.43 86 136.50
31 1.85 59 14.53 87 151.50
32 1.90 60 15.75 88 166.50
33 1.90 61 17.10 89 182.00
34 1.95 62 18.55 90 200.00
35 2.05 63 20.15 91 220.00
36 2.15 64 21.90 92 240.00
37 2.30 65 23.80 93 262.50
38 2.45 66 25.85 94 287.50
39 2.65 67 28.10 95 312.50
40 2.90 68 30.55 96 337.50
41 3.20 69 33.15 97 362.50
42 3.55 70 35.95 98 387.50
43 3.95 71 38.95 99 412.50
44 4.40 72 42.15
NRL-6042
57
FEMALE RATES
Rates for females equal the rates for males two years younger, except that rates
for females 0-18 equal the rates for males of the same ages, and rates for
females 19-20 equal those for males age 18.
58
ADDENDUM NO. I
TO THE AUTOMATIC AND FACULTATIVE
REINSURANCE AGREEMENT
AUTOMATIC AND FACULTATIVE GROUP EXCESS WITH EVIDENCE
(Group Life, Group Universal Life, and Group Accidental
Death and Dismemberment Benefits)
between
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY
and
NORTH AMERICAN REASSURANCE COMPANY
Except as herein specified, all the terms and conditions of the Automatic and
Facultative
Reinsurance Agreement effective the twenty-seventh day of September
1989 shall apply, and this Addendum is to be attached to and made part of the
aforesaid Agreement.
TABLE OF CONTENTS
SECTION TITLE PAGE(S)
------- ----- -------
1. Automatic Coverage 1 - 2
2. Evidence of Insurability 3
3. Confirmation of Reinsurance 3
4. Commencement and Termination of Liability 3 - 4
5. Oversights 4
6. Reinsurance Premium Rates 4
7. Claims 4 - 5
Signature Page 6
Automatic Coverage
1. If the Company issues a Group Life, Group Universal Life, or Group
Accidental Death and Dismemberment benefit in excess of those provided
in Schedules A.1 or A.2 of the Automatic and Facultative Agreement,
subject to submission of satisfactory individual (Ordinary-type)
evidence of insurability, and the Company retains its maximum risk
retention on a life as set forth in Schedule B of the Automatic
Agreement (the Company filling up its retention first with amounts
issued under Schedules A.1 or A.2), the Company shall cede and North
American Re shall automatically accept reinsurance, under this
Agreement, of amounts of such benefits in excess of the Company's
maximum limits of retention as shown in Schedule B. Automatic
reinsurance of such excess amounts subject to satisfactory individual
(Ordinary-type) evidence of insurability shall be limited to the
greater of:
a. Three hundred thousand dollars ($300,000).
or
b. The maximum guaranteed issue amount for the group.
Total coverage for automatic binding, guaranteed issue and excess with
evidence including the Company's retention, cannot exceed one million
dollars ($1,000,000). Amounts in excess of one million dollars
($1,000,000), combined guaranteed issue
1
and excess with evidence including the Company's retention, shall be reinsured
facultatively.
If such excess amounts issued subject to submission of satisfactory individual
(Ordinary-type) evidence of insurability exceed the automatic binding limit, the
entire amount shall be reinsured facultatively.
If the Company issues a Group Life or Group Universal Life benefit subject to
submission of satisfactory individual (Ordinary-type) evidence of insurability,
the Company xxxx xxxxx the Group Master Policy and the Group Certificate to
provide for:
a. An Ordinary-type suicide clause to apply only to the amount issued
subject to submission of satisfactory individual (Ordinary-type)
evidence of insurability.
b. The carryover of any substandard rating upon conversion of the amount
issue subject to individual (Ordinary-type) evidence of insurability.
c. The exclusion of any extended insurance or premium waiver benefits with
respect to amounts issued subject to individual (Ordinary-type)
evidence of insurability for substandard lives.
2
Evidence of Insurability
2. Normally for amounts of Group Life and Group Accidental Death and
Dismemberment coverage that will be reinsured with North American Re,
underwriting evidence is required for those facultative amounts subject
to submission of satisfactory evidence of insurability approximating
the Company's published evidence requirements applicable to Ordinary
business.
When the Company submits a risk to North American Re, copies of the
original application, all medical examinations, microscopical reports,
inspection reports, and all other information the Company may have
pertaining to the insurability of the risk shall be sent to North
American Re. North American Re shall promptly notify the Company of its
decision on the risk.
Confirmation of Reinsurance
3. After the first premium has been received by the Company on a case
accepted by North American Re, the Company shall cede the risk by
reporting to North American Re as stated in Article IV Mode of Cession
of this Agreement.
Commencement and Termination of Liability
4. On automatic reinsurance and on facultative reinsurance accepted by
North American Re, provided that in the case of facultative Group
Excess with Evidence, the Company has accepted, during the lifetime of
the insured involved, a facultative offer made by North American Re,
the liability of North American Re shall
3
commence and terminate simultaneously with that of the Company unless
terminated as provided for in Article VIII or Article XV of this
Agreement.
Oversights
5. Should the Company omit to cede reinsurance that otherwise would have
been ceded in the administration of facultative Group Excess with
Evidence cases accepted by North American Re or should either the
Company or North American Re fail to comply with any of the other terms
and if this is shown to be unintentional and the result of a
misunderstanding or oversight on the part of either the Company or
North American Re, then this Agreement shall not be deemed abrogated
thereby, but both companies shall be restored to the position they
would have occupied had no such oversight or misunderstanding occurred.
Reinsurance Premium Rates
6. Substandard ratings and extra premiums may apply to automatic or
facultative amounts subject to evidence of insurability. Such ratings
shall increase the premiums proportionately and when combined with
extra premiums are to be used in the calculation of the unit
reinsurance rate.
Claims
7. If the claim is for an amount issued facultatively, subject to evidence
of insurability and is contestable, North American Re shall be
consulted before admission or
4
acknowledgement of the claim is made by the Company. However, such
consultation shall not impair the Company's freedom to determine the
proper action on the claim, and the settlement made by the Company
shall still be unconditionally binding on North American Re.
5
IN WITNESS WHEREOF, the Company and North American Re have caused their names to
be subscribed and duly attested hereunder by their respective Authorized
Officers.
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY
By:
-------------------------- ----------------------
Authorized Officer Title
Attest:
By:
-------------------------- ----------------------
Authorized Officer Title
Date:
------------------------
NORTH AMERICAN REASSURANCE COMPANY
By:
-------------------------- ----------------------
Authorized Officer Title
Attest:
By:
-------------------------- ----------------------
Authorized Officer Title
Date:
------------------------
6
AMENDMENT NO. I
Attached to and Made Part of the
AUTOMATIC AND FACULTATIVE
REINSURANCE AGREEMENT
dated the 27th day of September 1989
between
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY
St. Xxxx, Minnesota
and
NORTH AMERICAN REASSURANCE COMPANY
New York, New York
Effective July 17, 1990, Schedule B, The Minnesota Mutual Life Insurance
Company's Maximum Retention Limits for Group Life, Group Universal Life, and
Group Accidental Death and Dismemberment is declared null and void and the
following substituted therefor:
2
SCHEDULE B
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY'S MAXIMUM
RETENTION LIMITS FOR GROUP LIFE, GROUP UNIVERSAL LIFE, AND
GROUP ACCIDENTAL DEATH AND DISMEMBERMENT
Group Life and Group Universal Life $500,000
Group Accidental Death and Dismemberment $500,000
3
IN WITNESS WHEREOF, the Company and North American Re have caused their names to
be subscribed and duly attested hereunder by their respective Authorized
Officers.
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY
By:
------------------------- ----------------------
Authorized Officer Title
Attest:
By:
-------------------------- ----------------------
Authorized Officer Title
Date:
------------------------
NORTH AMERICAN REASSURANCE COMPANY
By:
------------------------- ----------------------
Authorized Officer Title
Attest:
By:
-------------------------- ----------------------
Authorized Officer Title
Date:
------------------------
4
SPECIAL DAC TAX AMENDMENT
To the Following Agreements:
AUTOMATIC AND FACULTATIVE
REINSURANCE AGREEMENT
EFFECTIVE SEPTEMBER 27, 1989
GROUP LIFE
REINSURANCE AGREEMENT (Price Waterhouse)
EFFECTIVE JULY 1, 1991
between
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY
(HEREINAFTER REFERRED TO AS THE "Company")
and
NORTH AMERICAN REASSURANCE COMPANY
(HEREINAFTER REFERRED TO AS "North American Re")
It is mutually agreed that effective the first day of January 1992, this
Amendment between the Company and North American Re, hereby amends and is to be
attached to and made a part of the aforesaid Agreement.
DAC TAX ARTICLE
ELECTION STATEMENT
1. The Company and North American Re hereby agree to the following
pursuant to Section 1.848-2(g)(8) of the Income tax Regulation issued
December 1992 under Section 848 of the Internal Revenue Code of 1986 as
amended. This election shall be effective for 1992 and for all
subsequent taxable years for which this Agreement remains in effect.
a. The term party will refer to either the Company or North
American Re as appropriate.
b. The terms used in this Article are defined by reference to
Regulation 1.848-2 in effect December 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 deductions limitation of Section
848(c)(1).
d. Both parties agree to exchange information pertaining to the
amount of net consideration under this Agreement each year to
ensure consistency or is otherwise required by the Internal
Revenue Service.
2
e. The Company will submit a schedule to North American Re by May
1 of each year of its calculation of the net consideration for
the preceding calendar year. This schedule of calculations
will be accompanied by a statement stating that the Company
will report such net consideration it its tax return for the
preceding calendar year.
f. North American Re may contest such calculation by providing an
alternative calculation to the Company by June 1. If North
American Re does not so notify the Company, the Company will
report the net consideration as determined by the Company in
the Company's tax return for the previous calendar year.
g. If North American Re contests the Company's calculation of the
net considerations, the parties will act in good faith to
reach an agreement as to the correct amount by July 1. if the
Company and North American Re reach agreement on an amount of
the net consideration, each party shall report such amount in
their respective tax returns for the previous calendar year.
2. North American Re and the Company represent and warrant that they are
subject to U.S. taxation under Subchapter L of Chapter 1 of the
Internal Revenue Code.
3
IN WITNESS WHEREOF, the Company and North American Re have caused their names to
be subscribed and duly attested hereunder by their respective Authorized
Officers.
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY
By:
------------------------- ----------------------
Authorized Officer Title
Attest:
By:
-------------------------- ----------------------
Authorized Officer Title
Date:
------------------------
NORTH AMERICAN REASSURANCE COMPANY
By:
------------------------- ----------------------
Authorized Officer Title
Attest:
By:
-------------------------- ----------------------
Authorized Officer Title
Date:
------------------------
4
SWISS RE AMERICA
AMENDMENT NO. II
To the Automatic and Facultative
Reinsurance Agreement
(Group Life, Group Universal Life, and Group Accidental Death and Dismemberment
Benefits)
between
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY
(Hereinafter referred to as the "Company")
and
SWISS RE LIFE COMPANY AMERICA
(Formerly known as North American Reassurance Company prior to June 5, 1995)
(Hereinafter referred to as "Swiss Re America")
Except as hereinafter specified, all terms and conditions of the Automatic
Reinsurance Agreement effective the twenty-seventh day of September 1989,
amendments and addenda attached thereto, shall apply, and this Amendment is to
be attached to and made a part of the aforesaid Agreement.
It is mutually agreed that effective the first day of October 1995, Exhibit C,
Single Case Agreement Number 1, is attached hereto as follows:
1
SWISS RE AMERICA
EXHIBIT C
Single Case Agreement Number 1
1. Group Reinsured
Farm Credit Program
2. Basis of Reinsurance
The Farm Credit Program shall be reinsured on an automatic basis subject
to the underwriting, retention, and rates detailed below.
3. Schedule of Benefits
Group Credit Short- and Long-Term Life Maximum
Reinsurance Amount on Any One Person: $1,000,000
All individual loan amounts in excess of $500,000 will be subject to full
medical underwriting.
4. Retention
The Company shall retain a combined short- and long-term maximum of
$500,000 per person.
5. Reinsurance Rates
Rates will be based on the attached SRA-64 table.
2
SWISS RE AMERICA
SWISS RE AMERICA
GROUP CREDIT LIFE MONTHLY
REINSURANCE PREMIUM RATES
Age Rate Age Rate Age Rate Age Rate
--- ---- --- ---- --- ----- --- ------
18 $.06 38 $.11 58 $ .75 78 $ 5.41
19 .07 39 .12 59 .83 79 5.88
20 .08 40 .13 60 .92 80 6.36
21 .08 41 .15 61 1.02 81 6.87
22 .08 42 .16 62 1.14 82 7.41
23 .08 43 .19 63 1.27 83 7.97
24 .08 44 .20 64 1.41 84 8.50
25 .07 45 .23 65 1.56 85 8.95
26 .07 46 .26 66 1.74 86 9.28
27 .06 47 .28 67 1.93 87 9.42
28 .06 48 .31 68 2.14 88 9.43
29 .06 49 .34 69 2.37 89 9.64
30 .06 50 .36 70 2.62 90 10.52
31 .07 51 .40 71 2.89 91 12.51
32 .07 52 .44 72 3.18 92 16.07
33 .08 53 .47 73 3.50 93 21.44
34 .08 54 .51 74 3.83 94 28.00
35 .08 55 .56 75 4.19 95 34.93
36 .08 56 .61 76 4.58 96 41.44
37 .10 57 .68 77 4.99 97 46.68
SRA-64
Use of Rate Scale for In-Force Business
1. Active Male Lives: Use 100% of the above rates.
2. Active Female Lives: Use 50% of the above rates.
3
SWISS RE AMERICA
IN WITNESS WHEREOF, the Company and Swiss Re America have caused their names to
be subscribed and duly attested hereunder by their respective Authorized
Officers.
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY
By:
----------------------------------- -----------------------------
Authorized Officer Title
Attest:
By:
------------------------------- -------------------------
Authorized Officer Title
Date:
-----------------------------
SWISS RE LIFE COMPANY AMERICA
By:
------------------------------- -------------------------
Authorized Officer Title
Attest:
By:
------------------------------- -------------------------
Authorized Officer Title
Date:
-----------------------------
4
AMENDMENT NO. III
To Automatic and Facultative Reinsurance Agreement SANA23489
(Group Life, Group Universal Life, Variable Group Universal Life, and Accidental
Death and Dismemberment Benefits)
between
MINNESOTA LIFE INSURANCE COMPANY (Hereinafter Referred to as the "Company")
and
SWISS RE LIFE & HEALTH AMERICA INC.
(Hereinafter Referred to as "Swiss Re Life & Health")
Except as herein specified, all the terms and conditions of the Reinsurance
Agreement effective the twenty-seventh day of September 1989 shall apply hereto,
and this Amendment shall be attached to and made part of the aforesaid Agreement
and shall have full force and effect so long as the aforesaid Agreement has full
force and effect.
It is mutually agreed that effective the twenty-seventh day of September 1989,
the Cover Page; Article I, Scope; and Article II, Automatic Coverage are hereby
voided and replaced with the attached Cover Page; Article I, Scope; and Article
II, Automatic Coverage - amended.
IN WITNESS WHEREOF, the Company and Swiss Re Life & Health have caused their
names to be subscribed and duly attested hereunder by their respective
Authorized Officers.
MINNESOTA LIFE INSURANCE COMPANY
By:
------------------------------- -------------------------
Authorized Officer Title
Attest:
By:
------------------------------- -------------------------
Authorized Officer Title
Date:
-----------------------------
SWISS RE LIFE & HEALTH AMERICA INC.
By:
------------------------------- -------------------------
Authorized Officer Title
Attest:
By:
------------------------------- -------------------------
Authorized Officer Title
Date:
-----------------------------
AUTOMATIC AND FACULTATIVE REINSURANCE AGREEMENT
(Group Life, Group Universal Life, Variable Group Universal Life, and Group
Accidental Death and Dismemberment Benefits)
This Agreement made this twenty-seventh day of September 1989 between THE
MINNESOTA MUTUAL LIFE INSURANCE COMPANY, a corporation organized under the laws
of the State of Minnesota, hereinafter referred to as the "Company" and SWISS RE
LIFE & HEALTH AMERICA INC., a corporation organized under the laws of the State
of New York, hereinafter referred to as Swiss Re Life & Health, witnesseth as
follows:
Effective: September 27, 1989
ARTICLE I
Scope
1. On and after the twenty-seventh day of September 1989, the Company
shall reinsure with Swiss Re Life & Health, New and In-Force, Group
Life, Group Universal Life, Variable Group Universal Life, and Group
Accidental Death and Dismemberment benefits issued directly by the
Company to employer-employee groups with or without individual
(Ordinary-type) evidence of insurability. Automatic reinsurance shall
pertain only to groups with all lives actively at work on the effective
date of reinsurance or shall commence on the date such life becomes
actively at work on a full-time basis. For groups with lives not
actively at work on the effective date of reinsurance, applications
shall be submitted for reinsurance on a facultative basis. Such
reinsurance shall also pertain to any disability benefit (Waiver of
Premium or Extended Death) written supplementary to the Life benefit.
Hereinafter, it shall be assumed that any Life risk reinsurance shall
be accompanied by the supplemental disability risk.
2. Swiss Re Life & Health shall reinsure any Accelerated Benefit amounts
in excess of the Company's retention.
Effective: September 27, 1989
1
ARTICLE II
Automatic Coverage
If the Company issues a Group Life, Group Universal Life, Variable Group
Universal Life, or a Group Accidental Death and Dismemberment benefit within the
limits shown in Schedules A.1 and A.2 and retains its maximum risk retention as
shown in Schedule B, the Company shall cede and Swiss Re Life & Health shall
automatically accept reinsurance of amounts of such benefits in excess of the
Company's maximum limits of retention as shown in Schedule B. Automatic coverage
shall not extend to:
1. Groups which exceed the limits shown in Schedules A.1 and A.2,
regardless of whether the amounts in excess of these limits are fully
retained by the Company;
2. Groups indicated as exclusions in Schedule C;
3. Voluntary or supplemental programs which permit selection of amounts by
individual insureds except as allowed by Schedule D;
4. Groups with a benefit formula that contains no maximum guaranteed issue
limit or when benefits contain no age reductions. This requirement does
not apply to Group Universal Life.
Effective: September 27, 1989
2
AMENDMENT NO. IV
To Automatic and Facultative Reinsurance Agreement SANA23489
(Group Life, Group Universal Life, Variable Group Universal Life, and Accidental
Death and Dismemberment Benefits)
between
MINNESOTA LIFE INSURANCE COMPANY (Hereinafter Referred to as the "Company")
and
SWISS RE LIFE & HEALTH AMERICA INC.
(Hereinafter Referred to as "Swiss Re Life & Health")
Except as herein specified, all the terms and conditions of the Reinsurance
Agreement effective the twenty-seventh day of September 1989 shall apply hereto,
and this Amendment shall be attached to and made part of the aforesaid Agreement
and shall have full force and effect so long as the aforesaid Agreement has full
force and effect.
It is mutually agreed that effective the first day of June 1998, Schedule B is
hereby voided and replaced with the attached Schedule B - amended.
IN WITNESS WHEREOF, the Company and Swiss Re Life & Health have caused their
names to be subscribed and duly attested hereunder by their respective
Authorized Officers.
MINNESOTA LIFE INSURANCE COMPANY
By:
------------------------------- -------------------------
Authorized Officer Title
Attest:
By:
------------------------------- -------------------------
Authorized Officer Title
Date:
-----------------------------
SWISS RE LIFE & HEALTH AMERICA INC.
By:
------------------------------- -------------------------
Authorized Officer Title
Attest:
By:
------------------------------- -------------------------
Authorized Officer Title
Date:
-----------------------------
SCHEDULE B
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY'S MAXIMUM RETENTION
LIMITS FOR GROUP LIFE, GROUP UNIVERSAL LIFE, VARIABLE GROUP
UNIVERSAL LIFE, AND GROUP ACCIDENTAL DEATH AND DISMEMBERMENT
Group Life, Variable Group Universal Life, and $500,000
Group Universal Life
Group Accidental Death and Dismemberment $200,000
Effective: June 1, 1998
AMENDMENT NO. V
To Automatic and Facultative Reinsurance Agreement SANA23489
(Group Life, Group Universal Life, Variable Group Universal Life, and Accidental
Death and Dismemberment Benefits)
between
MINNESOTA LIFE INSURANCE COMPANY (Hereinafter Referred to as the "Company")
and
SWISS RE LIFE & HEALTH AMERICA INC.
(Hereinafter Referred to as "Swiss Re Life & Health")
Except as herein specified, all the terms and conditions of the Reinsurance
Agreement effective the twenty-seventh day of September 1989 shall apply hereto,
and this Amendment shall be attached to and made part of the aforesaid Agreement
and shall have full force and effect so long as the aforesaid Agreement has full
force and effect.
It is mutually agreed that effective the first day of January 2000, Article
VIII, Group Accidental Death and Dismemberment, paragraph 1 is hereby voided and
replaced with the attached Article VIII, Group Accidental Death and
Dismemberment, paragraph 1 - amended.
IN WITNESS WHEREOF, the Company and Swiss Re Life & Health have caused their
names to be subscribed and duly attested hereunder by their respective
Authorized Officers.
MINNESOTA LIFE INSURANCE COMPANY
By:
------------------------------- -------------------------
Authorized Officer Title
Attest:
By:
------------------------------- -------------------------
Authorized Officer Title
Date:
-----------------------------
SWISS RE LIFE & HEALTH AMERICA INC.
By:
------------------------------- -------------------------
Authorized Officer Title
Attest:
By:
------------------------------- -------------------------
Authorized Officer Title
Date:
-----------------------------
AMENDMENT NO. VI
To Automatic and Facultative Reinsurance Agreement SANA23489
(Group Life, Group Universal Life, Variable Group Universal Life, and Accidental
Death and Dismemberment Benefits)
between
MINNESOTA LIFE INSURANCE COMPANY (Hereinafter Referred to as the "Company")
and
SWISS RE LIFE & HEALTH AMERICA INC.
(Hereinafter Referred to as "Swiss Re Life & Health")
Except as herein specified, all the terms and conditions of the Reinsurance
Agreement effective the twenty-seventh day of September 1989 shall apply hereto,
and this Amendment shall be attached to and made part of the aforesaid Agreement
and shall have full force and effect so long as the aforesaid Agreement has full
force and effect.
It is mutually agreed that effective the first day of January 2001, Article VIII
(Group Reinsurance Premium Rates), Page 10 is hereby voided and replaced with
the attached Article VIII (Group Reinsurance Premium Rates), Pages 10 and 10-A -
amended.
IN WITNESS WHEREOF, the Company and Swiss Re Life & Health have caused their
names to be subscribed and duly attested hereunder by their respective
Authorized Officers.
MINNESOTA LIFE INSURANCE COMPANY
By:
------------------------------- -------------------------
Authorized Officer Title
Attest:
By:
------------------------------- -------------------------
Authorized Officer Title
Date:
-----------------------------
SWISS RE LIFE & HEALTH AMERICA INC.
By:
------------------------------- -------------------------
Authorized Officer Title
Attest:
By:
------------------------------- -------------------------
Authorized Officer Title
Date:
-----------------------------
ARTICLE VIII
Group Reinsurance Premium Rates
Group Life, Variable Group Universal Life, and Group Universal Life
1. The net group life reinsurance premium per one thousand dollars
($1,000) of reinsurance shall be calculated as of each anniversary of
the Master Policy and shall remain in force for the ensuing policy
year. For Group Universal Life, premium shall be based on the
reinsurance net amount at risk. Unless Swiss Re Life & Health requests
a modification, as provided herein, of the premium per thousand dollars
($1,000) of reinsurance, Swiss Re Life & Health shall coinsure the
Company's rate basis including volume, industry, and geographic
adjustment factors. Swiss Re Life & Health shall pay its share of
commissions and taxes plus the following retention allowances:
GROUP TERM LIFE
First Year Renewal Years
---------- -------------
New Cases 5% 2%
In-Force Cases 2 2
GROUP UNIVERSAL LIFE
First Year Renewal Years
---------- -------------
Monthly Administration Charge = $0 22% 14%
Monthly Administration Charge = $1.00 19 11
Monthly Administration Charge = $2.00 or more 16 8
10
VARIABLE GROUP UNIVERSAL LIFE
First Year Renewal Years
---------- -------------
Monthly Administration Charge = $0 26% 16%
Monthly Administration Charge = $1.00 23 13
Monthly Administration Charge = $2.00 or more 20 10
Premium rates for supplemental and voluntary group coverages will be
determined using the guidelines shown in Schedule D.
2. The total reinsurance premium payable to Swiss Re Life & Health shall be
the reinsurance premium per thousand dollars ($1,000) as defined in the
previous paragraphs, multiplied by the amount of reinsurance and divided
by one thousand.
10-A
Group Accidental Death and Dismemberment
1. Swiss Re Life & Health shall coinsure the Company's rate basis less
applicable expenses limited to a minimum net reinsurance rate of $.02
per $1,000 of reinsurance per month for all risks written on a
twenty-four (24) hour basis.
2. The total reinsurance premium payable to Swiss Re Life & Health shall
be the reinsurance premium per thousand dollars ($1,000) as defined in
the previous paragraph, multiplied by the amount of reinsurance and
divided by one thousand.
Reinsurance Rate Modification - Group Life, Variable Group
Universal Life, Group Universal Life, and
Group Accidental Death and Dismemberment Benefits
1. Swiss Re Life & Health will notify the Company, in writing, at least
ninety (90) days prior to the policy anniversary of any modification of
the reinsurance premium rates desired by Swiss Re Life & Health, and
such modified reinsurance rates shall be effective from such policy
anniversary unless the Company shall notify Swiss Re Life & Health, in
writing, within thirty (30) days following receipt of such notice from
Swiss Re Life & Health that reinsurance premium rates are not
acceptable to the Company. If a mutual agreement between Swiss Re Life
& Health and the Company as to proper reinsurance premium rates on any
Master Policy reinsurance under this Agreement is not reached within
thirty (30) days prior to such policy anniversary, the reinsurance
premium rates then in effect shall continue unchanged, but Swiss Re
Life & Health may terminate the reinsurance of such Master Policy upon
thirty (30) days' written notice to the Company.
11
