EXPENSE SHARING AGREEMENT
This Expense Sharing Agreement (this "Agreement") is entered into as of December
31st, 2013 by and between CMFG Life Insurance Company, an Iowa life insurance
company ("CMFG Life"), and MEMBERS Life Insurance Company, an Iowa life
insurance company ("MLIC").
WHEREAS, CMFG Life and MLIC share common personnel and certain common facilities
and services with each other;
WHEREAS, CMFG Life and MLIC wish to have an expense sharing arrangement as
described in this Agreement; and
WHEREAS, this Agreement is intended, after receipt of any required regulatory
approvals, to supersede and replace any prior expense sharing and/or
reimbursement agreement between the parties.
NOW, THEREFORE, for good and valuable considerations, the parties agree as
follows:
1. CMFG Life shall provide MLIC with certain administrative, logistic,
accounting, legal, marketing, information and other services, and will directly
or by procurement from third parties, provide all goods and services MLIC
requires to operate in the ordinary course of administering its business.
2. CMFG Life shall provide MLIC with office space and use of office equipment in
such amounts as MLIC shall require in the ordinary course of administering its
business.
3. MLIC shall reimburse CMFG Life monthly the actual expenses related to the
foregoing. Expenses that require an allocation shall be allocated as agreed by
both parties as described on Exhibit A to this Agreement (which is attached
hereto and incorporated herein by reference), consistent with SSAP 70 guidance.
Reimbursements shall be due within 30 days of presentment in good order.
Presentment shall occur on or about the 4th business day of the month following
the period in which expenses are incurred (For example, November expenses due
would be presented on or about the 4th business day of December).
4. CMFG Life and MLIC shall review the expense allocation under this Agreement
at least annually, with sufficient care so as to provide reasonable assurance to
the parties and other interested persons that each party is bearing its fair
share of all applicable costs and expenses related to this Agreement.
5. The parties understand and agree that all expenses reimbursed will be
reflected on MLIC 's books and records as expenses of MLIC.
6. MLIC will maintain copies of this Agreement and related supporting documents
as required by applicable law and regulation, except to the extent such
supporting documents are maintained by CMFG Life. To the extent CMFG Life
maintains supporting documents related to this Agreement, it shall do so in the
manner and for the period for which MLIC would be required to maintain them
under applicable law and regulation. CMFG Life shall provide MLIC and its
auditors and regulators access to and/or copies of such supporting documentation
upon request.
7. This Agreement shall be effective on the date first above written, and shall
remain in effect until terminated. This Agreement may be terminated by either
party as of the first day of any calendar month with at least 30 days prior
written notice to the other party. Notice of termination shall also be provided
to the Iowa Commissioner of Insurance in accordance with the CUNA Mutual Group's
normal practices.
IN WITNESS WHEREOF, the undersigned, as duly authorized officers, have caused
this Agreement to be executed on behalf of their respective companies.
CMFG LIFE INSURANCE COMPANY
By: /s/Xxxxx X. Power
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Name: Xxxxx X. Power
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Title: EVP, Chief Products Officer
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MEMBERS LIFE INSURANCE COMPANY
By: /s/Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: President
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EXHIBIT A - EXPENSE SETTLEMENT METHODOLOGY
The purpose of this document is to describe the method used to determine the
actual expenses to be reimbursed by MEMBERS Life Insurance Company (MLIC) to
CMFG Life Insurance Company (CMFG Life) in accordance with the Expense Sharing
Agreement effective December 31, 2013 (the "Agreement").
Examples of expenses that are within the scope of this Agreement: (1) Sales and
Policy Administration Expenses and (2) Administrative, Corporate Infrastructure,
and Other Allocated Supporting Expenses. Detailed descriptions of the
methodology used for determination of the expense categorizations are outlined
herein.
All reimbursable expenses relating to expense categories (1) and (2) generally
follow a consistent product hierarchy. For purposes of expense sharing between
CMFG Life and MLIC, the following product groups and individual products will be
included:
Product/Rollup
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o Registered Indexed Annuity product written through MLIC
o Life and AD&D products written through MLIC
Occasionally names of department categories will change in the reporting system
(BPC), but as long as the functions of the departments contained in each
category remain consistent, this exhibit will not be updated until the normal
annual review. The expense settlement process takes place on a monthly basis.
1) SALES AND POLICY ADMINISTRATION EXPENSES: These expenses are incurred in the
provision of policyholder and benefit payment services, including policy
issuance and processing, hedging activity, processing of payments to
policyholders and related reserving efforts.
2) ADMINISTRATIVE, CORPORATE INFRASTRUCTURE, AND OTHER ALLOCATED SUPPORTING
EXPENSES: These expenses include administrative, executive and operations
support. They also include expenses allocated to the products noted above,
consistent with company corporate infrastructure allocation (CIA) policy.
Legal, finance support, and external audit expenses are included in CIA
expenses.
MLIC shall also reimburse CMFG Life for the amortization and maintenance expense
related to certain capitalized assets of CMFG Life utilized by MLIC under the
Agreement.
