Exhibit 7
INDEMNITY REINSURANCE AGREEMENT
between
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
and
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
Dated as of June 1, 2006
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.................................................. 1
ARTICLE II COVERAGE..................................................... 2
ARTICLE III ADMINISTRATION; GENERAL...................................... 3
ARTICLE IV GENERAL ACCOUNT ASSET TRANSFER; ADDITIONAL CONSIDERATION..... 5
ARTICLE V DURATION AND TERMINATION..................................... 6
ARTICLE VI INSOLVENCY................................................... 6
ARTICLE VII CREDIT FOR REINSURANCE....................................... 7
ARTICLE VIII DAC TAXES.................................................... 9
ARTICLE IX GENERAL PROVISIONS........................................... 10
SCHEDULES
---------
SCHEDULE A - SEPARATE ACCOUNTS
SCHEDULE B - REINSURED SEPARATE ACCOUNTS
INDEMNITY REINSURANCE AGREEMENT
This Indemnity Reinsurance Agreement, dated as of June 1, 2006 (this
"Agreement"), is made and entered into by and between Allstate Life Insurance
Company of New York, a New York domiciled stock life insurance company (the
"Company"), and The Prudential Insurance Company of America, a New Jersey life
insurance company, the "Reinsurer").
The Company, Allstate Life Insurance Company, an Illinois domiciled
stock life insurance company, The Allstate Corporation, a Delaware corporation,
the Reinsurer and Prudential Financial, Inc., a New Jersey corporation have
entered into a Master Transaction Agreement dated as of March 8, 2006 (the
"Master Agreement"), which provides for, among other things, the Company and
the Reinsurer to enter into this Agreement.
The Company and the Reinsurer mutually agree to reinsure the risks
described in this Agreement under the terms and conditions stated herein. This
Agreement is an indemnity coinsurance and modified coinsurance agreement solely
between the Company and the Reinsurer, and the performance of the obligations
of each party under this Agreement shall be rendered solely to the other party.
In no instance shall anyone other than the Company or the Reinsurer have any
rights under this Agreement. The Company shall be and shall remain the only
party hereunder that is liable to any insured, cedent, Contractholder, claimant
or beneficiary under any annuity contract or agreement of assumed reinsurance
reinsured hereunder. Capitalized terms used herein and not defined herein,
unless otherwise indicated, have the respective meanings assigned to them in
the Master Agreement.
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Agreement" shall have the meaning specified in the Preamble.
"ALNY Administrative Services Agreement" means the Administrative
Services Agreement entered into between the Company and the Reinsurer as of the
date hereof.
"ALNY Contracts" means the VA Contracts issued by the Company.
"ALNY Separate Accounts" means the separate accounts of the Company
described on Schedule A.
"Company" shall have the meaning specified in the Preamble.
"Contractholder" means the holder of any ALNY Contract.
"Inception Date" shall have the meaning specified in Section 2.1.
"Initial Reinsurance Premium" shall have the meaning specified in
Section 4.1.
"Master Agreement" shall have the meaning specified in the Preamble.
"Non-Guaranteed Elements" shall have the meaning specified in
Section 3.2.
"Reinsured Contracts" means, collectively, the LLANY/CG Life VA
Contracts, with the corresponding separate accounts set forth on Schedule B.
"Reinsured Risks" shall have the meaning specified in Section 2.1.
"Reinsurer" shall have the meaning specified in the Preamble.
"SAP" means statutory accounting practices prescribed or permitted by
the Superintendent.
"Separate Account Charges" shall have the meaning specified in
Section 4.2.
"Superintendent" means the Superintendent of Insurance of the State of
New York.
"Transition Services Agreement" means the Transition Services Agreement
entered into between the Company and the Reinsurer as of the date hereof.
ARTICLE II
COVERAGE
Section 2.1. Coverage. Upon the terms and subject to the conditions and
other provisions of this Agreement, as of 12:01 a.m. Eastern Time on June 1,
2006 (the "Inception Date"), the Company hereby cedes to the Reinsurer, and the
Reinsurer hereby agrees to indemnify the Company (i) on a coinsurance basis,
for one hundred percent (100%) of the General Account Liabilities of the
Company, the LLANY General Account Reinsured Liabilities and the Purchaser
Extra Contractual Obligations with respect to the Company and (ii) on a
modified coinsurance basis, for one hundred percent (100%) of the Separate
Account Liabilities of the Company, in each case, payable by the Company on or
after the Inception Date (the "Reinsured Risks").
Section 2.2. Conditions. (a) The Company, on its own initiative, shall
not change the terms and conditions of any ALNY Contract or consent to or cause
any change to the terms and conditions of any Reinsured Contract. If the
Company's liability under any of the ALNY Contracts is changed because of
changes made on or after the Inception Date in the terms and conditions of the
ALNY Contracts (including to any contract riders or endorsements thereto) that
are required due to changes in Applicable Law or, if the Company's liability
with respect to any of the Reinsured Contracts (including to any contract
riders or endorsements thereto) is
2
changed because of any changes made to the Reinsured Contracts that are
initiated by the policy issuing company and that do not require the consent of
the Company, the Reinsurer will share in the change proportionately to the
coinsurance share hereunder and the Company and the Reinsurer will make all
appropriate adjustments to amounts due each other under this Agreement. With
respect to any change required by reason of the requirement of any Governmental
Entity or otherwise required by Applicable Law, the Company shall, to the
extent practicable, prior to the effectiveness of any such change, promptly
notify the Reinsurer of such proposed change and afford the Reinsurer the
opportunity, to the extent practicable, to object to such change under
applicable administrative procedures (both formal and informal), in either case
in the name of the Company.
(b) Except as otherwise set forth or contemplated herein, including in
paragraph (a) above, no changes, amendments or modifications made on or after
the Inception Date of the terms and conditions of the ALNY Contracts or the
Reinsured Contracts (including to any contract riders or endorsements thereto)
which adversely affect the liability of the Reinsurer hereunder shall be
covered hereunder unless made by the Reinsurer pursuant to the ALNY
Administrative Services Agreement or made or consented to by the Company with
the prior written approval of the Reinsurer. In the event that any such
changes, amendments or modifications are made or consented to in any ALNY
Contract or Reinsured Contract by the Company without the prior written
approval of the Reinsurer, this Agreement will cover Reinsured Risks incurred
by the Company under such ALNY Contract or Reinsured Contract as if the
non-approved changes, amendments or modifications had not been made.
Section 2.3. Territory. The territorial limits of this Agreement shall
be identical with those of the ALNY Contracts and the Reinsured Contracts.
ARTICLE III
ADMINISTRATION; GENERAL
Section 3.1. Contract Administration. Subject to the terms of the
Transition Services Agreement, the Reinsurer shall administer the ALNY
Contracts and the ALNY Separate Accounts directly on behalf of ALNY and shall
administer the Reinsured Contracts and the CG Life Separate Accounts, as a
sub-contractor of ALNY, in each instance pursuant to the ALNY Administrative
Services Agreement.
Section 3.2. Non-Guaranteed Elements. The Company shall set all charges
and interest rates to be credited on the ALNY Contracts and other
non-guaranteed elements of the ALNY Contracts ("Non-Guaranteed Elements") from
and after the Inception Date taking into account the recommendations of the
Reinsurer. To the extent that the Company should decide to not adopt the
recommendations of the Reinsurer, the Company shall nevertheless set
Non-Guaranteed Elements consistent with the Company's past methodologies and
practices, as adjusted by the Company from time to time in order to reflect
changes in industry practice with respect to comparable books of variable
annuity business and comparable variable annuity contract terms, taking into
account the recommendations of the Reinsurer as to both the desirability of
such adjustments and the then current practices in the industry.
3
Section 3.3. Policy Exchanges, Replacements or Surrenders. Unless
otherwise agreed by the parties to this Agreement, the Company will not
institute, promote, or encourage any exchange, replacement or surrender program
with respect to the ALNY Contracts or with respect to the Reinsured Contracts.
Section 3.4. Errors and Omissions. If any delay, omission, error or
failure to pay amounts due or to perform any other act required by this
Agreement is unintentional and caused by misunderstanding or oversight, the
Company and the Reinsurer will adjust the situation to what it would have been
had the misunderstanding or oversight not occurred. The party first discovering
such misunderstanding or oversight, or an act resulting from such
misunderstanding or oversight, will notify the other party in writing promptly
upon discovery thereof, and the parties shall act to correct such
misunderstanding or oversight within twenty (20) Business Days of such other
party's receipt of such notice. However, this Section 3.4 shall not be
construed as a waiver by either party of its right to enforce strictly the
terms of this Agreement.
Section 3.5. Age, Sex and Other Adjustments. If the Company's liability
under any of the ALNY Contracts or the Reinsured Contracts is changed because
of a misstatement of age or sex or any other material fact, the Reinsurer will
share in the change proportionately to the reinsurance share hereunder and the
Company and the Reinsurer will make all appropriate adjustments to amounts due
each other under this Agreement. The foregoing shall not affect the rights or
obligations of the parties or their respective Affiliates under the Master
Agreement or any other Ancillary Agreement.
Section 3.6. Set-off. Any debts or credits, matured or unmatured, in
favor of or against either the Company or the Reinsurer with respect to this
Agreement are deemed mutual debts or credits, as the case may be, and shall be
set off from any amounts due to the Company or the Reinsurer hereunder, as the
case may be, and only the net balance shall be allowed or paid. For the
avoidance of doubt, no such set-off shall affect the rights or obligations of
the parties or their respective Affiliates under the terms of the Master
Agreement or any other Ancillary Agreement.
Section 3.7. Defenses. The Reinsurer accepts, reinsures and assumes the
Reinsured Risks subject to any and all defenses, setoffs and counterclaims to
which the Company would be entitled with respect to the Reinsured Risks, it
being expressly understood and agreed to by the parties hereto that no such
defenses, setoffs, or counterclaims are or shall be waived by the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby and that the Reinsurer is and shall be fully subrogated in and to all
such defenses, setoffs and counterclaims.
Section 3.8. Guaranty Fund Assessments and Premium Taxes. The Company
and the Reinsurer shall settle amounts due with regards guaranty fund
assessments, premium taxes and premium tax credits included in the General
Account Liabilities in accordance with the terms of the ALNY Administrative
Services Agreement.
4
ARTICLE IV
GENERAL ACCOUNT ASSET TRANSFER; ADDITIONAL CONSIDERATION
Section 4.1. Initial Reinsurance Premium. As consideration for the
reinsurance by the Reinsurer of the General Account Liabilities of the Company
and the General Account Reinsured Liabilities under this Agreement, on the
Closing Date, the Reinsurer shall be entitled to an amount equal to one hundred
percent (100%) of the General Account Reserves of the Company as of the
Inception Date, less an amount equal to the Contract Loans as of the Inception
Date (the "Initial Reinsurance Premium"), as determined and adjusted in
accordance with Section 2.03 of the Master Agreement.
Section 4.2. Ceding Commission. On the Closing Date, as provided for in
the Master Agreement, the Reinsurer shall pay to the Company a ceding
commission equal to its share of the Adjusted Ceding Commission, determined and
adjusted in accordance with Section 2.01 of the Master Agreement.
Section 4.3. Additional Consideration. As additional consideration for
the Reinsurer entering into this Agreement, the Reinsurer shall be entitled to
one hundred percent (100%) of all deposits, premiums, Contract Loan repayments
and other considerations or payments with respect to the General Account
Liabilities of the Company and the LLANY General Account Reinsured Liabilities,
to the extent such amounts are either received or receivable on or after the
Inception Date by the Company or the Reinsurer or released from the Company's
suspense account on or after the Inception Date, including all amounts with
respect thereto actually paid or payable to the Company (or to the Reinsurer as
administrator) under the LLANY Retrocession Agreement and all amounts recovered
or recoverable under the Ceded Reinsurance Agreements. In addition, the
Reinsurer shall be entitled to one hundred percent (100%) of (i) all mortality
and expense risk charges, administrative expense charges, rider charges,
contract maintenance charges, back-end sales loads and other considerations
billed separately for the ALNY Contracts collected or collectible by the
Company on or after the Inception Date, and any other charges, fees and similar
amounts received or receivable by the Company from the ALNY Separate Account on
or after the Inception Date (collectively, the "Separate Account Charges") and
(ii) all amounts paid or payable to the Company (or to the Reinsurer as
administrator) under the LLANY Retrocession Agreement or the LLANY
Administrative Services Agreement with respect to the CG Life Separate
Accounts. For the avoidance of doubt, the Separate Account Charges shall
include any revenue sharing fees, service fees and distribution fees received
or receivable from Funds pursuant to a plan adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended. For the avoidance of
doubt, the Company does not guarantee the collectibility of any such amounts
receivable or payable hereunder and the Reinsurer assumes all risk of
non-collectibility.
5
ARTICLE V
DURATION AND TERMINATION
Section 5.1. Duration. Except as otherwise provided herein, this
Agreement shall be unlimited in duration.
Section 5.2. Reinsurer's Liability. The Reinsurer's liability with
respect to the Reinsured Risks will terminate on the earliest of: (i) the date
the Company's liability with respect to the Reinsured Risks is terminated and
all amounts due the Company from the Reinsurer with respect thereto have been
paid to the Company by or on behalf of the Reinsurer; and (ii) the date this
Agreement is terminated upon the written agreement of the parties.
Section 5.3. Termination or Recapture. In the event of a termination or
recapture of liabilities pursuant to the terms of the LLANY Retrocession
Agreement, upon notice from the Company, the Reinsurer shall comply with all
provisions of such agreement on behalf of the Company, including making all
payments required to be made by the Company thereunder, and shall be entitled
to all amounts payable to the Company thereunder.
ARTICLE VI
INSOLVENCY
Section 6.1. Payments. 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 the Reinsurer directly to the Company or to its
liquidator, receiver, or statutory successor on the basis of the liability of
the Company under the contracts reinsured, without diminution because of the
insolvency of the Company. It is agreed and understood, however, that (i) in
the event of the insolvency of the Company, the Reinsurer shall be given
written notice of the pendency of a claim against the insolvent Company on an
ALNY Contract or the LLANY Retrocession Agreement within a reasonable time
after such claim is filed in the insolvency proceeding and (ii) during the
pendency of such claim the Reinsurer may investigate such claim and interpose,
at its own expense, in the proceeding where such claim is to be adjudicated any
defenses which it may deem available to the Company or its liquidator, receiver
or statutory successor.
Section 6.2. Expenses. It is further understood that any expense thus
incurred by the Reinsurer pursuant to Section 6.1 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 solely as a result of the defense undertaken by the
Reinsurer. Where two or more assuming reinsurers are involved in the same claim
and a majority in interest elect to interpose defenses to such claim, the
expense shall be apportioned in accordance with the terms of this Agreement as
though such expense had been incurred by the Company.
6
ARTICLE VII
CREDIT FOR REINSURANCE
Section 7.1. Trigger Events. (a) If, at any time, the Reinsurer (i) is
not authorized or accredited in the State of New York, (ii) fails to maintain
Total Adjusted Capital of at least 200% of the Company Action Level RBC as such
terms are defined in the Insurance Law of the State of New Jersey or (iii) the
claims paying rating of the Reinsurer assigned by A.M. Best's (including any
successor thereto) is lowered to A- or below or withdrawn, the Reinsurer shall
provide a letter of credit, with the Company as the sole beneficiary, in
accordance with the following provisions of this Article VII or other security
arrangement qualifying under New York Insurance Regulation 20, at the direction
of the Reinsurer.
(b) The Reinsurer hereby agrees to provide to the Company (i) within sixty
(60) days after the end of each calendar quarter that this Agreement is in
effect, a certificate, signed by the Reinsurer's treasurer, stating whether the
Reinsurer's Total Adjusted Capital as of the end of such calendar quarter is at
least 200% of the Company Action Level RBC and (ii) within sixty (60) days
after the end of each calendar year, at the request of the Company, the
Reinsurer shall provide to the Company such supporting work papers as the
Reinsurer may have available to support such calculation.
Section 7.2. Letter of Credit Provisions. In the event pursuant to
Section 7.1, the Reinsurer is required to provide a letter of credit, the
Reinsurer shall maintain in force a letter of credit equal to the General
Account Reserves. The letter of credit must be irrevocable, clean and
unconditional, contain an evergreen clause, as provided herein, and be issued
by a qualified United States bank, approved by the Company.
A qualified United States bank means bank or trust company which is:
(a) organized or licensed under the laws of the United States or any state
thereof;
(b) regulated, supervised and examined by United States federal or state
authorities having regulatory authority over banks and trust companies;
(c) designated by the Securities Valuation Office of the National
Association of Insurance Commissioners as meeting such standards of
financial condition and standing as are considered necessary and
appropriate to regulate the quality of financial institutions whose
letters of credit will be acceptable to the insurance regulatory
authorities;
(d) not a foreign branch office of a bank or trust company organized in
the United States; and
(e) not affiliated with the Reinsurer.
In addition, the letter of credit must:
7
(f) contain a statement that identifies the Company as beneficiary and
includes the definition of beneficiary set forth in Section 79.1(b) of
New York Insurance Regulation 133;
(g) contain a statement that it is not subject to any condition or
qualifications outside of the letter of credit;
(h) contain a statement to the effect that the obligation of the issuing
bank under the letter of credit is an individual obligations of such
bank and is in no way contingent upon reimbursement with respect
thereto;
(i) contain an issue date and a date of expiration;
(j) have a term of at least one (1) year and contain an evergreen clause
which automatically extends the term for at least one additional year
at each expiration date unless written notice of non-renewal is given
to the Company not less than thirty (30) days prior to said expiration
date;
(k) state that it is subject to and governed by the laws of the state of
New York and the 1993 Revision of the Uniform Customs and Practice for
Documentary Credits of the International Chamber of Commerce
(Publication 500) and that, in the event of any conflict, the Laws of
the state of New York will control.
(l) conform with any other requirements of Section 79.2 of the New York
Insurance Regulation 133.
The letter of credit will be increased or decreased, from time to time, as
needed to cover any changes in the General Account Reserves.
Section 7.3. Purpose of Letter of Credit. The Company agrees that the
letter of credit may be drawn upon by the Company at any time, notwithstanding
any other provisions in this Agreement, and must be utilized and applied by the
Company or any successor by operation of law of the Company, including any
liquidator, rehabilitator, receiver or conservator of the Company, without
diminution because of insolvency on the part of the Company or the Reinsurer,
for the following purposes only:
(a) to reimburse the Company for the Reinsurer's share of premiums
returned to the owners of policies reinsured under this Agreement on
account of cancellations of such policies;
(b) to reimburse the Company for the Reinsurer's share of surrenders and
benefits or losses paid by the Company under the terms and provisions
of the policies reinsured under this Agreement;
(c) to fund an account with the Company in an amount at least equal to the
deduction, for reinsurance ceded, from the Company's liabilities for
policies ceded under this Agreement. Such amount shall include, but
not be limited to, amounts for policy
8
reserves for claims and losses incurred (including losses incurred but
not reported), loss adjustment expenses, and unearned premiums; and
(d) to pay any other amounts the Company claims are due under this
Agreement.
Section 7.4. Conformity with State Law. In the event that New York
amends the insurance law governing letter of credit requirements for credit for
reinsurance, this Agreement shall be construed to include such amendments.
ARTICLE VIII
DAC TAXES
Section 8.1. (a) Each of the Company and Reinsurer acknowledge that it
is subject to taxation under Subchapter L of the Code and hereby makes the
election contemplated in section 1.848-2(g)(8) of the Treasury regulations
under the Code with respect to this Agreement. Each of the Company and
Reinsurer (i) agrees that such election shall be effective for the taxable year
of each party that includes the Inception Date and for all subsequent years
during which this Agreement remains in effect and (ii) warrants that it will
take no action to revoke the election.
(b) Pursuant to section 1.848-2(g)(8) of the Treasury regulations, each
party hereby agrees (i) to attach a schedule to its federal income tax return
for its first taxable year ending on or after the Inception Date that
identifies this Agreement as a reinsurance agreement for which the joint
election under section 1.848-2(g)(8) has been made, (ii) that the party with
net positive consideration (as defined in the Treasury regulations) for this
Agreement for each taxable year will capitalize specified policy acquisition
expenses with respect to the Agreement without regard to the general deductions
limitation of section 848(c)(1) of the Code, and (iii) to exchange information
pertaining to the amount of net consideration (as defined in the Treasury
regulations) under this Agreement to ensure consistency.
(c) By April 1 of each year, the Reinsurer shall submit a schedule to
the Company of its calculation of the net consideration for the preceding
calendar year. If the Company agrees with the calculation, the Company shall
use this information in determining its net consideration for such prior year.
If the Company disagrees with the calculation, the parties shall act in good
faith to resolve any differences so that consistency is maintained for tax
return reporting purposes.
(d) By May 1 of each calendar year, the Reinsurer shall reimburse (or be
reimbursed by, as the facts may provide) the Company for DAC taxes incurred for
the previous tax year with respect to the policies after the Inception Date.
The DAC tax reimbursement shall be computed by multiplying the DAC tax factor
by the sum of (i) 100% of premiums received during the previous tax year on the
Reinsured Contracts after the Inception Date subject to section 848 of the Code
and (ii) the Company's net consideration (as defined in the Treasury
regulations) for the previous tax year under this Agreement for periods
beginning on or after the Inception Date. The "DAC tax factor" shall be 0.215%.
The Company and the Reinsurer
9
mutually agree to prospectively adjust the DAC tax factor to reflect any
changes in the federal income tax rate applicable to the Company or the
Reinsurer, as the case may be, or changes to section 848 of the Code or the
related Treasury regulations.
ARTICLE IX
ARBITRATION
Section. 9.1 Resolution of Damages. As a condition precedent to any right
arising under this Agreement, any dispute between the Company and the Reinsurer
arising out of the provisions of this Agreement, or concerning its
interpretation or validity, whether arising before or after termination of this
Agreement, shall be submitted to arbitration pursuant to the commercial
arbitration rules of XXXX Reinsurance and Insurance Arbitration Society
("XXXXX").
Section 9.2 Composition of Panel. Unless the parties agree upon a single
arbitrator within fifteen (15) days after the receipt of notice of intention to
arbitrate, all disputes shall be submitted to an arbitration panel composed of
two arbitrators and an umpire, chosen in accordance with Sections 9.3 and 9.4.
Section 9.3 Appointment of Arbitrators. The party requesting arbitration
(hereinafter referred to as the "claimant") shall appoint an arbitrator and
give written notice thereof, by registered mail or a recognized overnight
courier to the other party (hereinafter referred to as the "respondent")
together with its notice of intention to arbitrate. Unless a single arbitrator
is agreed upon within fifteen (15) days after the receipt of the notice of
intention to arbitrate, the respondent shall, within thirty (30) days after
receiving such notice, also appoint an arbitrator and notify the claimant
thereof in a like manner. Before instituting a hearing, the two arbitrators so
appointed shall choose an impartial umpire. If, within thirty (30) days after
they are both appointed, the arbitrators fail to agree upon the appointment of
an umpire, the umpire shall be selected pursuant to the rules of XXXXX. The
arbitrators shall be present or former executives or officers of life insurance
or reinsurance companies. The arbitrators and umpire shall be disinterested
individuals and not be under the control of either party, and shall have no
financial interest in the outcome of the arbitration.
Section 9.4 Failure of a Party to Appoint Arbitrator. If the respondent
fails to appoint an arbitrator within thirty (30) days after receiving a notice
of intention to arbitrate, such arbitrator shall be selected pursuant to the
rules of XXXXX, and shall then, together with the arbitrator appointed by the
claimant, choose an umpire as provided in Section 9.3.
Section 9.5 Choice of Forum. Any arbitration instituted pursuant to this
Article XI shall be held in New York, New York or such other place as the
parties may mutually agree.
Section 9.6 Procedure Governing Arbitration. Each party participating in the
arbitration shall have the obligation to produce those documents and as
witnesses to the arbitration those of its employees as any other participating
party reasonably requests providing always that the same witnesses and
documents be obtainable and relevant to the issues before the
10
arbitration and not be unduly burdensome or excessive. The parties may mutually
agree as to pre-hearing discovery prior to the arbitration hearing and in the
absence of agreement, upon the request of any party, pre-hearing discovery may
be conducted as the panel shall determine in its sole discretion to be in the
interest of fairness, full disclosure, and a prompt hearing, decision and award
by the panel. The panel shall be the final judge of the procedures of the
panel, the conduct of the arbitration of the rules of evidence, the rules of
privilege and production and of excessiveness and relevancy of any witnesses
and documents upon the petition of any participating party. To the extent
permitted by Applicable Law, the panel shall have the authority to issue
subpoenas and other orders to enforce its decisions.
Section 9.7 Arbitration Award. The arbitration panel shall render its
decision within sixty (60) days after termination of the proceeding unless the
parties consent to an extension, which decision shall be in writing, stating
the reason therefor. The decision of the majority of the panel shall be final
and binding on the parties to the proceeding except to the extent otherwise
provided in the Federal Arbitration Act. Judgment upon the award may be entered
in any court having jurisdiction pursuant to the Federal Arbitration Act.
Section 9.8 Cost of Arbitration. Unless otherwise allocated by the panel,
each party shall bear the expense of its own arbitrator and its own witnesses
and shall equally bear with the other parties the expense of the umpire and the
arbitration.
Section 9.9 Limit of Authority. It is agreed that the arbitrators shall have
no authority to impose any punitive, exemplary or consequential damage awards
on either of the parties hereto.
Section 9.10 Survival. This Article IX shall survive the termination of this
Agreement.
ARTICLE X
GENERAL PROVISIONS
Section 10.1. Headings. The headings in this Agreement are for reference
only and shall not affect the interpretation of this Agreement.
Section 10.2. Schedules. The Schedule to this Agreement that is
specifically referred to herein is a part of this Agreement as if fully set
forth herein. All references herein to Articles, Sections, subsections,
paragraphs, subparagraphs, clauses and Schedules shall be deemed references to
such parts of this Agreement, unless the context shall otherwise require.
Section 10.3. Notices. All notices, requests, demands and other
communications under this Agreement must be in writing and will be deemed to
have been duly given or made as follows: (a) if sent by registered or certified
mail in the United States return receipt requested, upon receipt; (b) if sent
by reputable overnight air courier, one business day after mailing; (c) if sent
by facsimile transmission, when transmitted; or (d) if otherwise actually
personally delivered, when delivered, and shall be delivered as follows:
11
If to the Company:
Allstate Life Insurance Company of New York
0000 Xxxxxxx Xxxx, Xxxxx X0X
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Treasurer
with concurrent copies to:
Allstate Insurance Company
0000 Xxxxxxx Xxxx, Xxxxx X0
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxx
and to:
LeBoeuf, Lamb, Xxxxxx & XxxXxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx, Xx.
If to the Reinsurer:
Prudential Financial, Inc.
000 Xxxxx Xx., 0xx Xxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
with concurrent copies to:
Prudential Financial, Inc.
000 Xxxxx Xx., 0xx Xxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
and to:
12
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
Any party may, by notice given in accordance with this Section 10.3 to
the other parties, designate another address or person for receipt of notices
hereunder provided that notice of such a change shall be effective upon receipt.
Section 10.4. Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors, permitted assigns and legal representatives. Neither this
Agreement, nor any of the rights, interests or obligations hereunder, may be
assigned, in whole or in part, by operation of law or otherwise, by any party
without the prior written consent of the other party hereto and any such
assignment that is not consented to shall be null and void.
Section 10.5. Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument.
Section 10.6. Currency. Whenever the word "Dollars" or the "$" sign
appear in this Agreement, they shall be construed to mean United States
Dollars, and all transactions under this Agreement shall be in United States
Dollars.
Section 10.7. Waivers and Amendments; Non-Contractual Remedies;
Preservation of Remedies. This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written
instrument signed by each of the parties or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any right, power or privilege, nor
any single or partial exercise of any such right, power or privilege, preclude
any further exercise thereof or the exercise of any other such right, power or
privilege.
Section 10.8. Governing Law. This Agreement shall be construed,
performed and enforced in accordance with the laws of the State of New York
without giving effect to its principles or rules of conflict of laws thereof to
the extent such principles or rules would require or permit the application of
the laws of another jurisdiction.
Section 10.9. Entire Agreement; Severability. (a) This Agreement, the
Master Agreement and the applicable Ancillary Agreements contain the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, written or oral, with
respect thereto.
(b) If any provision of this Agreement is held to be void or
unenforceable, in whole or in part, (i) such holding shall not affect the
validity and enforceability of the remainder of this Agreement, including any
other provision, paragraph or subparagraph, and (ii) the parties
13
agree to attempt in good faith to reform such void or unenforceable provision
to the extent necessary to render such provision enforceable and to carry out
its original intent.
Section 10.10. Cooperation. Each party hereto shall cooperate fully with
the other in all reasonable respects in order to accomplish the objectives of
this Agreement including making available to each their respective officers and
employees for interviews and meetings with Governmental Entities and furnishing
any additional assistance, information and documents as may be reasonably
requested by a party from time to time.
Section 10.11. No Third Party Beneficiaries. Nothing in this Agreement
is intended or shall be construed to give any Person, other than the parties
hereto, their successors and permitted assigns, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision
contained herein.
Section 10.12. Interpretation. For purposes of this Agreement, the words
"hereof", "herein", "hereby" and other words of similar import refer to this
Agreement as a whole unless otherwise indicated. Whenever the words "include",
"includes", or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation". Whenever the singular is used
herein, the same shall include the plural, and whenever the plural is used
herein, the same shall include the singular, where appropriate.
Section 10.13. Survival. Articles VIII, IX and X shall survive the
termination of this Agreement.
14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
By:
---------------------------------
Name:
Title:
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By:
---------------------------------
Name:
Title:
15
SCHEDULE A
SEPARATE ACCOUNTS
Allstate Life of New York Separate Account A
S-A
SCHEDULE B
REINSURED CONTRACTS SEPARATE ACCOUNTS
CG Variable Annuity Separate Account
S-B
