COINSURANCE AGREEMENT
Between: Texas
Imperial Life Insurance Company
Houston,
Texas
hereinafter referred to as CEDENT
and: Reserve
National
Insurance Company
Oklahoma City, Oklahoma
hereinafter referred to as REINSURER
Effective:
December
31, 2006
TABLE
OF CONTENTS
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A.
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Coinsurance
Coverage
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4
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B.
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Representations
and Warranties of the CEDENT
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4
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C.
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Representations
and Warranties of the REINSURER
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6
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D.
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Offset
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6
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E.
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Payments
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6
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F.
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Terms
of Coinsurance
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8
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G.
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Assessments
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8
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H.
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Indemnity
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8
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I.
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Policy
Changes
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8
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J.
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Errors
and Omissions
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9
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K.
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Audit
of Records and Procedures
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9
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L.
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Arbitration
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9
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M.
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Insolvency
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10
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N.
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Parties
to Agreement
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11
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O.
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Effective
Date
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11
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P.
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Terms
Effective Upon Election to Convert to Assumption Reinsurance
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11
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Q.
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Confidentiality
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13
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R
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Entire
Agreement
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13
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S.
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Duration
of Agreement
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14
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T.
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Severability
of Provisions
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14
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U.
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Other
Conditions
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14
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V.
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Execution
of Agreement
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15
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SCHEDULE
I
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Policies
Subject to Reinsurance
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16
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SCHEDULE
II
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Coinsurance
Percentages
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17
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Exhibit
“A”
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Administrative
Services Agreement
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Exhibit
“B”
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Medicare
Supplement Business Activity Indicators Report
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A. Coinsurance
Coverage
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1.
|
The
policies issued or accepted as insurance by CEDENT as described in
Schedule I (the "Policies") shall be reinsured with REINSURER on
a
coinsurance basis pursuant to this Agreement. The reinsurance shall
cover
that portion of the risk as specified in Schedule
II.
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2.
|
The
liability of REINSURER shall begin on the effective date of this
Agreement. Notwithstanding the foregoing, the reinsurance provided
pursuant to this Agreement shall cover only policies validly issued
or
assumed by the CEDENT and in force as of the Effective Date or validly
reinstated following the Effective
Date.
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3.
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The
reinsurance hereunder shall follow the fortunes of the CEDENT, and
the
REINSURER shall be liable in the same amount and to the same extent
as
CEDENT except as to extra-contractual liabilities as provided in
Subsection H.
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4.
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The
reinsurance under this Agreement with respect to any Policy shall
be
maintained in force without reduction so long as and to the extent
that
the liability of CEDENT under such policy reinsured hereunder remains
in
force without reduction, unless reinsurance is terminated or reduced
as
provided herein.
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5.
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The
CEDENT shall notify the REINSURER in writing, as soon as CEDENT is
notified, of the pendancy of any and all examinations of the CEDENT
or its
principal officers or shareholders conducted by any federal, state
or
local governmental or regulatory
agency.
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6.
|
The
CEDENT and REINSURER agree that REINSURER has the option to convert
this
Agreement to an assumption reinsurance agreement on a state by state
basis
as regulatory approvals are obtained at the expense of the REINSURER.
REINSURER shall be responsible for complying with state requirements
for
filing for approval or the assumption reinsurance agreement. Once
such
approvals have been obtained, REINSURER will comply with all notice
requirements, including mailing or delivery of an assumption certificate
to each applicable policyholder of a Policy within 45 days from the
date
approval is obtained; and including any notification of right of
the
policyholder’s right to reject, if applicable.
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7.
|
The
CEDENT and REINSURER agree that from and after the Effective Date,
REINSURER will serve as Administrator for CEDENT, pursuant to the
Administrative Service Agreement attached hereto as Exhibit “A”, to
process claims made on the Policies, including claims with dates
of
service prior to the Effective Date which have not been processed
by
CEDENT. REINSURER agrees to make all filings or registrations necessary
to
serve in this capacity. CEDENT agrees to transfer to REINSURER all
information necessary for REINSURER to serve in the capacity of
Administrator.
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B. Representations
and Warranties of the CEDENT
|
1.
|
The
CEDENT has provided the REINSURER copies of all forms, applications,
rates
and values with respect to the Policies and shall keep the REINSURER
promptly informed with respect to any changes or modifications to
such
forms, applications or rates. CEDENT has provided all files, claims
processing manual(s), electronic records or databases and other documents
necessary for REINSURER to serve as
Administrator.
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2.
|
The
CEDENT has provided the REINSURER with the latest Examination Report
of
CEDENT by the Texas Department of Insurance, and all examinations
performed by any regulatory authority within the last 5
years.
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3.
|
The
CEDENT is licensed and in good standing in all jurisdictions in which
policies were issued or assumed and all Policies are in full compliance
with applicable laws, regulations and rules. The CEDENT has not been
placed in, nor does it have any reason to believe that it is about
to be
placed in supervision, rehabilitation, receivership, suspension or
liquidation by any insurance
department.
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4.
|
The
CEDENT is duly organized, validly existing and in good standing under
the
laws of the state of Texas, and has all necessary corporate power
and
authority to entitle it to use its name, to own, lease or otherwise
hold
its properties and assets, to carry on its business as currently
conducted, and to perform its
obligations.
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5.
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The
execution, delivery and performance of this Agreement by the CEDENT
will
not (i) violate or conflict with any provision of its Certificate
of
Incorporation or by-laws; (ii) violate or result in any breach of
or
constitute a default under, or give rise to a right of modification,
termination or cancellation of, or accelerate the performance required
by
the terms of, as the case may be, any contract, lease, license, mortgage,
note, or any agreement to which the CEDENT is bound; or (iii) violate
or
conflict with any law, regulation, code, judgment, order, writ, injunction
or decree of any court, governmental body, or administrative agency
by
which the CEDENT may be bound.
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6.
|
The
CEDENT has full corporate power and authority to execute, deliver
and
perform its obligations under this Agreement, and has taken all necessary
corporate and other action to authorize the ceding of the Policies
under
the terms of this Agreement.
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7.
|
This
Agreement has been duly executed and delivered by the CEDENT and
constitutes the valid and legally binding obligation of the CEDENT,
enforceable in accordance with its terms. The Policies are in compliance
with all applicable requirements of law and are on forms approved
in all
material respects by the appropriate governmental authorities except
to
the extent that failure to be in compliance therewith does not have
a
material adverse effect.
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8.
|
The
assets reflected by CEDENT on its annual statement to the Insurance
Department of the State of Texas for the year ended December 31,
2005 are
a) substantially unchanged since that time, b) accurately reflected
as to
value, c) unencumbered, except as reflected on the statement, and
d) fully
available to the CEDENT to support its obligations to its
policyholders.
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9.
|
The
disclosures CEDENT has made regarding the premium, claims and reserves,
including but not limited to, the loss ratios for the year 2005 and
the
first nine months of 2006 contained in the Medicare Supplement Business
Activity Indicators Report attached hereto as Exhibit “B” and incorporated
herein by this reference, fairly and accurately present the information
contained therein and contain no material
omissions.
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C. Representations
and Warranties of the REINSURER
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1.
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The
REINSURER is duly organized, validly existing and in good standing
as a
licensed insurance company under the laws of the state of Oklahoma,
and
has all necessary corporate power and authority to entitle it to
use its
name, to own, lease or otherwise hold its properties and assets,
to carry
on its business as currently conducted, and to perform its
obligations.
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2.
|
The
execution, delivery and performance of this Agreement by the REINSURER
will not (i) violate or conflict with any provision of its Certificate
of
Incorporation or by-laws; (ii) violate or result in any breach of
or
constitute a default under, or give rise to a right of modification,
termination or cancellation of, or accelerate the performance required
by
the terms of, as the case may be, any contract, lease, license, mortgage,
note, or any agreement to which the REINSURER is bound; or (iii)
violate
or conflict with any law, regulation, code, judgment, order, writ,
injunction or decree of any court, governmental body, or administrative
agency by which the REINSURER may be
bound.
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3.
|
The
REINSURER has full corporate power and authority to execute, deliver
and
perform its obligations under this Agreement, and has taken all necessary
corporate and other action to authorize the ceding of the Policies
under
the terms of this Agreement.
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4.
|
This
Agreement has been duly executed and delivered by the REINSURER and
constitutes the valid and legally binding obligation of the REINSURER,
enforceable in accordance with its
terms.
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D. Offset
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1.
|
Any
debits or credits under this Agreement, matured or unmatured, liquidated
or unliquidated, regardless of when they arose or were incurred,
between
CEDENT and REINSURER are deemed mutual debts or credits, as the case
may
be, and shall be set off dollar for dollar, and only the balance
shall be
allowed or paid, regardless of the solvency of either
party.
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E. Payments
|
1.
|
As
of the Valuation Date, REINSURER shall be assigned and entitled to
all
premiums for the Policies coinsured by it under this Agreement and
CEDENT
agrees to promptly remit to REINSURER any such premium payments as
are
received by it. REINSURER shall be authorized to endorse all checks,
drafts, and money orders payable to CEDENT with respect to premium
paid on
the Policies. CEDENT assigns, to the extent permitted by law, to
REINSURER
all its rights and privileges to draft or debit the accounts of any
policyholders for premiums due under the Policies pursuant to existing
pre-authorized bank draft, credit card or electronic fund transfer
arrangements between CEDENT and such policyholders. CEDENT agrees
to fully
cooperate and perform all acts necessary to ensure premiums are remitted
to the REINSURER, including, but not limited to, the execution of
any
document necessary for any financial institution to accept the endorsement
of the REINSURER or its right to draft or debit the account of an
insured,
and if permissible, requiring its insureds to remit payment directly
to
the REINSURER in the REINSURER’s name as Administrator of the
Policies.
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Upon
receipt of premium payment for the Policies via any bank draft, credit
card or electronic fund transfer arrangements after the Effective
Date,
CEDENT shall remit such payments to REINSURER within thirty days
after the
receipt together with appropriate detailed policyholder and premium
information. REINSURER has the right to audit and inspect the records
related to such payments.
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2.
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REINSURER
agrees to pay CEDENT and CEDENT agrees to accept a single one time
commission payment of 45% of the annualized premium of the Policies
in
force with paid to dates on or after the December 15, 2006 (the “Valuation
Date”) (the “Coinsurance Premium”). The Coinsurance Premium paid shall be
the net amount after the following
deductions:
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a. Claim
Reserve. Actuaries for REINSURER and CEDENT shall determine an agreed upon
reserve, as of the Valuation Date, for incurred and reported and incurred but
not reported claims (jointly “Claims”)(“Claim Reserve”). REINSURER will withhold
the Claim Reserve from the Coinsurance Premium and place it in a trust account
in a bank chosen by REINSURER for the sole purpose of paying such claims.
b. Unearned
Premium Reserve. Actuaries for REINSURER and CEDENT shall determine as of the
Valuation Date, on the daily pro-rata basis, the unearned premium reserve
(“Unearned Premium Reserve”). The Unearned Premium Reserve shall be deducted
from the Coinsurance Premium.
c. Active
Life Reserve. Actuaries for REINSURER and CEDENT shall determine the appropriate
amount of active life reserve, as of the Valuation Date, for the Policies
(“Active Life Reserve”). The Active Life Reserve will be deducted from the
Coinsurance Premium.
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3.
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In
the event the agreed Claim Reserve exceeds the amount necessary to
pay
Claims, the difference between these two amounts shall be returned
to
CEDENT as
soon as practicable after the first anniversary of the Effective
Date.
Prior to such return, the CEDENT shall have the right to audit the
Claims
processed by REINSURER. Such election shall be made within 30 days
after
notice by REINSURER that it will be returning excess Claim Reserve
funds.
If CEDENT elects to audit, the audit will be completed within 90
days of
its election. REINSURER shall return excess Claim Reserve funds,
as soon
as practicable after the conclusion of any audit elected by CEDENT,
or in
the event no audit is elected, as soon as practicable after the 30
day
period to elect to audit has expired. However, in the event of threatened
or pending litigation, the parties may agree to determine a reserve
for
any threatened or pending litigation and continue the Claim Reserve
in
that amount.
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4.
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In
the event the Claim Reserve is less than the amount necessary to
pay
Claims, CEDENT shall transfer the amount necessary to satisfy all
Claims
to the Claim Reserve trust account within 30 days from receipt of
documentation from REINSURER of payment of claims in excess of the
original Claim Reserve.
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5.
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REINSURER
shall be liable for all state or territory premium and maintenance
taxes
arising out of business reinsured
hereunder.
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F. Terms
of Coinsurance
1. Expenses
1.1. REINSURER
shall be responsible for the administration of agent’s or broker’s commissions
in accordance with the written agent and broker agreements furnished to
REINSURER related to the Policies, except as provided in Section (P)(4).
2. Collateral
in Trust.
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2.1
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In
the event that the coinsured premium as of December 31, 2007 exceeds
10%
of the Coinsurance Premium (as defined in Subsection (E)(2)), REINSURER
shall establish a trust for the benefit of CEDENT and deposit in
said
trust collateral in an amount equal to the reserve liabilities of
the
CEDENT; said trust shall be adjusted quarterly to maintain collateral
sufficient to equal all reserve liabilities. Collateral assets shall
be
cash, cash equivalents or securities of a quality equivalent to NAIC
1 or
2 rated securities.
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G. Assessments
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1.
|
REINSURER
shall reimburse CEDENT for payment of all guarantee fund or other
assessments incurred by CEDENT related to the Policies for calendar
years
subsequent to 2006.
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H. Indemnity
|
1.
|
REINSURER
shall not be liable for extra-contractual damages or penalties, including
but not limited to punitive, compensatory, statutory, bad faith,
or other
damages, attorneys fees, fines, or liability in excess of policy
limits
which may arise from the acts or omissions of CEDENT or its agents
and
representatives, in its conduct with its own insured, policyholder,
beneficiary or assignee of the policy or with other persons. CEDENT
agrees
to indemnify and hold harmless REINSURER, its shareholders, directors,
officers, agents and assigns from and against all costs and expenses
(including interest, penalties, reasonable attorneys’, accountants’ and
actuaries’ fees, and any other costs and expenses incident to any suit,
action or proceeding), damages, charges, losses, deficiencies,
liabilities, obligations, claims and judgments sustained or incurred
by,
or asserted against, REINSURER by any third-party arising from these
extra-contractual damages and
penalties.
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2.
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CEDENT
shall not be liable for extra-contractual damages or penalties, including
but not limited to punitive, compensatory, statutory, bad faith,
or other
damages, attorneys fees, fines, or liability in excess of policy
limits
which may arise from the acts or omissions of REINSURER or its agents
and
representatives, in its conduct with its own insured, policyholder,
beneficiary or assignee of the policy or with other persons. REINSURER
agrees to indemnify and hold harmless CEDENT, its shareholders, directors,
officers, agents and assigns from and against all costs and expenses
(including interest, penalties, reasonable attorneys’, accountants’ and
actuaries’ fees, and any other costs and expenses incident to any suit,
action or proceeding), damages, charges, losses, deficiencies,
liabilities, obligations, claims and judgments sustained or incurred
by,
or asserted against, CEDENT by any third-party arising from these
extra-contractual damages and
penalties.
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I. Policy
Changes
|
1.
|
The
REINSURER shall have the exclusive right to make changes to the terms
and
conditions of Policies issued or assumed by the CEDENT and reinsured
hereunder including, but not limited to, changes in the current premium
rates on the Policies. CEDENT will cooperate with REINSURER in any
such
regulatory filings in connection with the Policies, including without
limitation, loss ratio information, request for rate adjustments
and the
like. If necessary, these filings will be made in the name of CEDENT.
CEDENT will furnish all information reasonably requested by REINSURER
in
connection with all such filings.
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J. Errors
and Omissions
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1.
|
If
either CEDENT or REINSURER shall unintentionally perform an obligation
incorrectly under this Agreement or unintentionally fail to perform
an
obligation required by this Agreement, such error or omission shall
be
corrected by restoring both CEDENT and REINSURER to the positions
they
would have occupied had no such error or omission
occurred.
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2.
|
This
provision shall apply only to misunderstandings, oversights or clerical
errors relating to the administration of reinsurance covered by this
Agreement.
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3.
|
Any
negligent or deliberate acts of commission or omission by CEDENT
are the
responsibility of CEDENT but not that of
REINSURER.
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K. Audit
of Records and Procedures
| 1. |
REINSURER
shall have the right to audit all records and procedures relating
to
business covered under this Agreement. Further, CEDENT agrees to
complete,
at the reasonable request of REINSURER and in a manner acceptable
to
REINSURER a process confirming the existence of policies reinsured
under
this Agreement.
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| 2. |
REINSURER
and CEDENT shall have the right to review the Statutory Financial
Statements and available State Examination reports of the other party
in
order to monitor its statutory solvency and general financial
condition.
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L. Arbitration
|
1.
|
Any
dispute or difference between the parties arising out of or relating
to
this Agreement, including the formation or validity thereof, shall
be
decided by arbitration. The arbiters are empowered to decide all
questions
or issues and shall be free to consider this Agreement as an honorable
engagement rather than merely as a legal obligation and they are
relieved
of all judicial formalities and may abstain from following the strict
rules of law.
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2.
|
Arbiters
shall be selected from the XXXX Reinsurance and Insurance Arbitration
Society, XXXXX US.
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3.
|
To
initiate arbitration, a party shall send by facsimile or overnight
delivery, to the other party's home office, a notice demanding
arbitration. If the demand is sent by facsimile, a report of successful
transmission shall be deemed proof of delivery and shall trigger
the time
period in which to name an arbiter; if the demand is sent by overnight
delivery, a delivery receipt provided by the overnight carrier shall
be
deemed proof of delivery and shall trigger the time period in which
to
name an arbiter.
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4.
|
There
shall be three neutral and disinterested arbiters who shall be active
or
retired officers of health insurance or health reinsurance companies.
An
arbiter may not be a present or former employee, officer, director
or
attorney of CEDENT or REINSURER or either's affiliates. The CEDENT
and
REINSURER shall each appoint one of the arbiters and these two arbiters
shall select the third. In the event that either company fails to
appoint
an arbiter within thirty days after it receives a written request
from the
other to do so, the other company may choose two arbiters, who shall
in
turn choose a third arbiter before entering arbitration. If the two
arbiters are unable to agree upon the selection of a third arbiter
within
thirty days of the appointment of the second arbiter, each party
shall
nominate five qualified candidates, four of whom the other shall
decline
and the final selection shall be made by any random method agreed
to by
the arbiters.
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5.
|
Each
party shall present is case to the arbiters within 30 days following
the
appointment of the third arbiter. The arbiters shall decide by a
majority
vote and such decision shall be final and binding on both parties.
Judgment upon the final decision may be entered in any court of competent
jurisdiction. There shall be no motion to vacate or amend the arbitration
panel’s award, except to the extent permitted by the Federal Arbitration
Act. The cost of arbitration, including the fees of the arbiters,
but not
including attorneys fees, shall be borne by the losing party unless
the
arbiters decide otherwise.
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M. Insolvency
|
1.
|
In
the event of the insolvency of the CEDENT, this reinsurance, with
respect
to Policies not converted to assumption reinsurance only, shall be
payable
directly to the CEDENT or to its liquidator, receiver, conservator
or
statutory successor on the basis of the liability of the CEDENT,
without
diminution because of the insolvency of CEDENT or because the liquidator,
receiver, conservator or statutory successor of the CEDENT has failed
to
pay all or a portion of any claim.
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2.
|
The
liquidator, receiver, conservator or statutory successor of the CEDENT
shall give written notice to the REINSURER of the pendency of a claim
against the CEDENT indicating the policy reinsured which claim would
involve a possible liability on the part of the REINSURER within
a
reasonable time after such claim is filed in the conservation or
liquidation proceeding or in the receivership, and that 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 defense or defenses that it may deem available to
CEDENT
or its liquidator, receiver, conservator or statutory
successor.
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3.
|
The
expense thus incurred by the REINSURER shall be chargeable, subject
to the
approval of the Court, against the CEDENT as part of the expense
of
conservation or liquidation to the extent of a pro rata share of
the
benefit which may accrue to CEDENT solely as a result of the defense
undertaken by REINSURER.
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4.
|
In
the event of the insolvency of the REINSURER, CEDENT shall have the
right
to immediately take possession of and exercise control over any and
all
trust funds established under this agreement, and to apply said funds
to
pay policy obligations, commissions, fees and any other legal obligations
relating to the policies subject to this
agreement.
|
N. Parties
to Agreement
|
1.
|
This
is an Agreement for indemnity reinsurance solely between CEDENT and
REINSURER. The acceptance of reinsurance hereunder shall not create
any
right or legal relation whatever between REINSURER and any original
issuing or insuring company (if other than CEDENT), the insured or
the
beneficiary under any policy reinsured hereunder, and the CEDENT
shall be
and remain solely liable to such insured or beneficiary under any
such
policy.
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2.
|
This
Agreement may not be assigned by either party without the written
permission of the other party.
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O. Effective
Date
|
1.
|
The
effective date of this Agreement is December 31,
2006.
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P. Terms
Effective Upon Election to Convert to Assumption
Reinsurance
|
1.
|
On
and after the effective date of any conversion, REINSURER will be
responsible for the investigation, payment, denial, settlement or
litigation under the Policies of claims with dates of service after
the
effective date of any conversion (“Post-Conversion Claims”).
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|
2.
|
REINSURER
agrees that as of the effective date of any conversion, it is responsible
for the contractual obligations under the Policies and all liability
under
the Policies resulting from any actions taken by it on or after the
conversion date(s), including liability which may result from the
processing of Claims and Post-Conversion Claims. However, REINSURER
does
not assume any tort liability under the Policies which may have resulted
from the action or inaction of CEDENT prior to or after the effective
date
of any conversion, or the liability for any extra-contractual damages
or
penalties arising from such tort liability or otherwise, as set forth
in
paragraph H(1). CEDENT’S agreement to indemnify and hold harmless
REINSURER in paragraph H(1) extends to all liability not assumed
pursuant
to this Agreement. Any liability of the CEDENT under this paragraph
expires 24 months from the conversion date(s) of the relevant policies.
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3. Litigation.
|
3.1.
|
A
reasonable time prior to the effective date of any conversion, CEDENT
shall provide a schedule setting forth a description of each lawsuit
involving a Policy subject to this Agreement and shall disclose any
potential litigation for which it has received written notice. CEDENT
shall retain the defense of all litigation pending as of the Effective
Date. In the event any judgment, settlement or compromise of pending
litigation contemplates continued coverage under a Policy reinsured
by
REINSURER, CEDENT shall notify REINSURER and REINSURER will have
the right
to participate in any proceeding related to the terms of continuation
of
coverage.
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3.2.
|
For
any lawsuit filed after the effective date of any conversion, REINSURER
shall have the sole right and shall at its own costs and expense
investigate, pay, settle, compromise or defend any demand, threat
of
litigation or litigation arising from Policies as it deems best;
provided,
however:
|
(a) In
the
event such demand, threat of litigation or litigation involves liability not
assumed by REINSURER under this Agreement, REINSURER shall promptly notify
CEDENT of such claim in writing, and CEDENT shall have the sole right to
investigate, pay, settle, compromise, defend against, or otherwise deal with
such claim as it deems best, and REINSURER shall be obligated to pay only that
part of the payment, settlement, compromise or judgment attributable to contract
liability. If such payment, settlement, compromise or judgment arises from
Claim(s), REINSURER’s payment will be made from the Claim Reserve. However, if
any such payment, settlement, compromise, or judgment which is attributable,
in
whole or in part, to contract liability Claims is made after the return of
the
Claim Reserve (and the parties have not continued the Claim Reserve to address
the risk at issue), then CEDENT shall be responsible for any portion
attributable to contract liability.
(b) In
the
event a demand, threat of litigation or litigation involves both contract and
tort liability, then the expenses of handling such demand, threat of litigation
or litigation, shall be borne by REINSURER and CEDENT in the proportion of
their
respective exposure.
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3.3.
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In
the event service of process or other legal notice is served on CEDENT
in
any legal action instituted against CEDENT in connection with any
Policy
reinsured by REINSURER under this Agreement, it will promptly forward
such
notice to REINSURER at its Home Office. In the event service of process
or
other legal notice is served on REINSURER in any legal action instituted
against CEDENT and/or REINSURER in connection with a claim under
any
Policy reinsured by REINSURER under this Agreement, for which CEDENT
remains liable hereunder, REINSURER will promptly forward such notice
to
CEDENT at its Home Office.
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4. A
reasonable time prior to the effective date of any conversion, CEDENT shall
provide copies of agents or brokers agreements, which agents or brokers may
have
commissions payable to them on and after the effective date of conversion.
REINSURER assumes only the contractual liability of any written agency or broker
agreements solely with respect to the commissions provided in such agent
agreements and due after the effective date of the conversion of the Policies
subject to all remedies, rights of defense, set off or counterclaim that CEDENT
may or might have against agents or brokers.
5. On
or
immediately after the effective date of conversion, CEDENT agrees that it will
deliver to REINSURER all of its books, files and records, including all
electronic files, spreadsheets, databases and records, forms and supplies
pertaining to the Policies, the policyholders, and samples of its said policy
forms and policy contracts, if any not previously provided. CEDENT agrees to
cooperate with REINSURER, including but not limited to, issues related to
electronic data transfer and interpretation, software compatibility, transfer
of
paper records, claims handling practices and procedures and the
like.
Q. Confidentiality
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1.
|
Pursuant
to the provisions of the Health Insurance Portability and Accountability
Act of 1996 and federal regulations issued pursuant thereto, and/or
the
Xxxxx-Xxxxx-Xxxxxx Act, the NAIC Insurance Information and Privacy
Protection Model Act, the NAIC Privacy of Consumer Financial and
Health
Information Model Regulation and/or similar laws and regulations
as
enacted in various states, the parties recognize that, in the performance
of their respective obligations under this Agreement, they each may
obtain
from the other nonpublic personal or privileged information about
individuals collected or received in connection with insurance
transactions under the Policies. Each of the parties agrees not to
disclose such information to third-parties without the individual’s
written authorization unless such disclosure is otherwise permitted
by
law, and each of the parties shall also maintain the confidentiality
of
all other information related to the Policies and all other information
denominated as confidential by the other party provided to it in
connection with this Agreement and shall not disclose such information
to
any third parties without prior written consent of the other party,
except
as may be required by regulatory authorities, or pursuant to legal
process.
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R. Entire
Agreement
|
1.
|
This
Agreement represents the entire contract between CEDENT and REINSURER
and
supersedes, with respect to its subject, any prior oral or written
agreement. There are no understandings between the parties other
than
those expressed in this Agreement.
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2. Any
change or modification to the Agreement shall be null and void unless made
by
amendment to the Agreement and signed by both parties.
S. Duration
of Agreement
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1.
|
At
the end of any accounting period, this Agreement shall automatically
terminate if none of the Policies hereunder are in force, or if they
have
been assumed by a company other than
CEDENT.
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T. Severability
of Provisions
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1.
|
If
any provisions of this Agreement were declared null and void by a
regulatory authority in any jurisdiction within which either party
operates, the remaining provisions shall nevertheless continue to
have
full force and effect.
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U. Other
Conditions
|
1
|
The
obligations of the CEDENT and the REINSURER to consummate the transactions
described hereunder are expressly subject
to:
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|
(i)
|
the
approvals of the insurance commissioners, directors, or superintendents,
as the case may be, of the insurance departments necessary for the
consummation of the transactions contemplated by this Agreement,
and such
approvals shall be in full force and effect, and shall not impose
upon
either the CEDENT or the REINSURER any material conditions or other
requirements that would impose upon either party any material additional
costs;
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(ii)
|
the
REINSURER having discovered no material errors, omissions or liabilities
previously undisclosed to it in the due diligence investigation and
documentation provided the REINSURER by the CEDENT prior to the date
hereof;
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(iii)
|
the
CEDENT and the REINSURER having all requisite corporate power and
authority to execute and deliver the Agreement and to consummate
the
transactions contemplated hereunder;
and
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|
(iv)
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there
being no material change in the amount of the Policy Reserves or
the
annualized premium in force of the CEDENT from December 15, 2006
to the
date of the execution of the Agreement. Notwithstanding the foregoing,
a
"material change" shall be deemed to have occurred if, on the Effective
Date of the Agreement the CEDENT's reserves are less than $88,000,
or its
annualized premium in force is less than
$454,000.
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V. Execution
of Agreement
IN
WITNESS OF THE AGREEMENT that is detailed in the Provisions and attached
Schedules, the PARTIES have had their respective officers execute this Agreement
in duplicate below.
TEXAS
IMPERIAL LIFE INSURANCE COMPANY
Houston,
Texas
By:
/s/ Xxxxxxxx X. Xxxxxx
Title:
Senior Vice President
Witness:
/s/ Xxxxxxx X. Xxxxxx
RESERVE
NATIONAL INSURANCE COMPANY
Oklahoma
City, Oklahoma
By:
/s/ Kempner Xxx Xxxx
Title:
President
Witness:
/s/ Xxxx Xxxxxxxx
2672
SCHEDULE
I
A. Policies
Subject to Reinsurance
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1.
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The
Medicare supplement policies and the hospital indemnity policies,
if any,
included on the attached Exhibit
“A”.
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SCHEDULE
II
A. Coinsurance
Percentages
Policies Quota
Share Reinsured
All
policies in Schedule I 100%
