CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED. AMENDED AND RESTATED...

Exhibit 10.2

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

AMENDED AND RESTATED FUNDS WITHHELD COINSURANCE AND MODIFIED COINSURANCE AGREEMENT

(MYGA and FIA BUSINESS)

between

CRESTLINE RE SPC, for and on behalf of CRESTLINE RE SP 1

and

AMERICAN LIFE & SECURITY CORP.

effective as of April 24, 2020

Treaty Number 01

	TABLE OF CONTENTS

		Page
ARTICLE I GENERAL PROVISIONS		1

Section 1.01	Defined Terms	1

Section 1.02	Other Definitional Provisions	8

ARTICLE II COVERAGE		9

Section 2.01	Scope and Basis of Reinsurance	9

Section 2.02	Policy Changes	9

Section 2.03	Reinstatement of Surrendered Policies	10

Section 2.04	Misstatement of Fact	10

Section 2.05	Non-Guaranteed Elements	10

Section 2.06	Crediting Rates	10

Section 2.07	Programs of Internal Replacement	10

Section 2.08	Conservation Program	11

Section 2.09	Net Retention	11

Section 2.10	Asset Reserves	11

Section 2.11	Valuation of Liabilities	11

Section 2.12	Credit For Reinsurance	11

Section 2.13	ModCo Reserves Allocation	11

Section 2.14	Options Budget and Payoff for FIA	12

Section 2.15	FATCA	12

ARTICLE III REINSURANCE PREMIUMS		13

Section 3.01	Reinsurance Premiums	13

Section 3.02	Initial Settlement Amount	13

ARTICLE IV CEDING COMMISSION		14

Section 4.01	Ceding Commission	14

Section 4.02	Excise Tax	14

ARTICLE V ADMINISTRATION FEE		14

Section 5.01	Policy Expenses	14

	TABLE OF CONTENTS
	(continued)

		Page
ARTICLE VI REINSURED LIABILITIES		14

Section 6.01	Reinsured Liabilities	14

Section 6.02	Claims Settlement	14

Section 6.03	Recoveries	14

ARTICLE VII REPORTING AND SETTLEMENTS		15

Section 7.01	Ceding Company Reporting	15

Section 7.02	Reinsurer Reporting	16

Section 7.03	Settlements & Adjustments	16

ARTICLE VIII THE MODCO DEPOSIT, THE FUNDS WITHHELD ACCOUNT, THE TRUST ACCOUNT, AND INVESTMENT MANAGEMENT AGREEMENT		19

Section 8.01	ModCo Deposit	19

Section 8.02	Funds Withheld Account	20

Section 8.03	Trust Account	21

Section 8.04	Excess Withdrawals	21

Section 8.05	Investment Management Agreement	22

ARTICLE IX RESERVED		23

ARTICLE X ADMINISTRATION		23

Section 10.01	Policy Administration	23

Section 10.02	Record-Keeping	23

ARTICLE XI TERM AND TERMINATION		24

Section 11.01	Duration of Agreement	24

Section 11.02	Recapture	24

Section 11.03	Recapture Payment	25

Section 11.04	Survival	26

ARTICLE XII ERRORS AND OMISSIONS		26

Section 12.01	Errors and Omissions	26

	TABLE OF CONTENTS
	(continued)

		Page
ARTICLE XIII DISPUTE RESOLUTION		27

Section 13.01	Negotiation	27

Section 13.02	Arbitration; Waiver of Trial by Jury	27

ARTICLE XIV INSOLVENCY		28

Section 14.01	Insolvency	28

ARTICLE XV TAXES		29

Section 15.01	Taxes	29

Section 15.02	DAC Tax Election	29

Section 15.03	US Taxpayer	30

ARTICLE XVI REPRESENTATIONS, WARRANTIES AND COVENANTS		30

Section 16.01	Representations and Warranties of the Ceding Company	30

Section 16.02	Representations and Warranties of the Ceding Company in Respect of the In Force Reinsured Policies	33

Section 16.03	Covenants of the Ceding Company	34

Section 16.04	Representations and Warranties of the Reinsurer	35

Section 16.05	Covenants of the Reinsurer	36

ARTICLE XVII MISCELLANEOUS		37

Section 17.01	Currency	37

Section 17.02	Interest	37

Section 17.03	Right of Setoff and Recoupment	37

Section 17.04	No Third-Party Beneficiaries	37

Section 17.05	Amendment	38

Section 17.06	Notices	38

Section 17.07	Consent to Jurisdiction	39

Section 17.08	Service of Process	39

Section 17.09	Inspection of Records	39

Section 17.10	Confidentiality	40

Section 17.11	Successors	41

iii

	TABLE OF CONTENTS
	(continued)

		Page
Section 17.12	Entire Agreement	41

Section 17.13	Severability	41

Section 17.14	Construction	41

Section 17.15	Non-Waiver	42

Section 17.16	Further Assurances	42

Section 17.17	Governing Law	42

Section 17.18	Counterparts	42

AMENDED AND RESTATED FUNDS WITHHELD COINSURANCE AND MODIFIED COINSURANCE AGREEMENT

(MYGA and FIA BUSINESS)

This AMENDED AND RESTATED FUNDS WITHHELD COINSURANCE AND MODIFIED COINSURANCE AGREEMENT (this “Agreement”), dated as of December 8, 2020 and effective as of April 24, 2020 (the “Effective Date”), is made by and between American Life & Security Corp., an insurance company organized under the laws of the State of Nebraska (the “Ceding Company”), and Crestline Re SPC, an exempted segregated portfolio company incorporated under the laws of the Cayman Islands, for and on behalf of Crestline Re SP 1, one of its segregated portfolios (the “Reinsurer”) (as successor by novation to Seneca Incorporated Cell, LLC 2020-02, an incorporated cell of Seneca Reinsurance Company, LLC, a sponsored captive insurance company formed as a limited liability company under the Laws of the State of Vermont).

W I T N E S S E T H:

WHEREAS, the Ceding Company, Seneca Reinsurance Company, LLC and Crestline Management, L.P. have entered into that certain letter agreement, dated as of April 24, 2020 (the “Master Letter Agreement”), pursuant to which (i) the Ceding Company established a segregated account (the “Appendix-B Account”) to hold assets that support the liabilities arising under the MYGA and FIA contracts that the Ceding Company issued in accordance with the Master Letter Agreement and (ii) Crestline Management, L.P. delivered to the Ceding Company funds to support the capital of the Reinsurer, which funds were held by the Ceding Company in the Appendix-B Account, pending transfer in accordance with the Master Letter Agreement;

WHEREAS, pursuant to the Master Letter Agreement, the Ceding Company has agreed to enter into this Agreement with the Reinsurer;

WHEREAS, subject to the terms, conditions and limitations contained herein, the Ceding Company desires to cede, on a funds withheld coinsurance and modified coinsurance basis, and the Reinsurer desires to accept, a Quota Share of certain liabilities with respect to certain MYGA and FIA business of the Ceding Company;

NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein, the Ceding Company and the Reinsurer hereby agree as follows:

ARTICLE I
GENERAL PROVISIONS

Section 1.01 Defined Terms. As used in this Agreement, the following terms shall have the following meanings:

“3^rd Party Actuary” shall initially mean a member of the Academy of Actuaries that meets the Academy of Actuaries Qualifications Standards for issuing an actuarial opinion related to the matters of this Agreement to be mutually agreed-upon by the parties no later than thirty (30) calendar days following the Initial Settlement Date but may be replaced by the Ceding Company with the consent of the Reinsurer (such consent not to be unreasonably withheld).

“Accounts” shall mean collectively the ModCo Deposit and the Funds Withheld Account, each one an “Account.”

“Account Adjustment” shall mean a payment made pursuant to Section 7.03(b).

“Accounts Balance” shall mean the aggregate of book value the ModCo Deposit Balance and Funds Withheld Account Balance, as of any date of determination, as such book value is determined in accordance with Nebraska SAP.

“Accounts Required Reserves” shall mean Accounts Required Reserves-Funds Withheld plus Accounts Required Reserves-ModCo, as of any date of determination.

“Accounts Required Reserves-Funds Withheld” shall mean an amount equal to the Quota Share of the Net Statutory Reserves times the Funds Withheld Allocation Percentage plus the Asset Reserves for assets included in the Funds Withheld Account, as of any date of determination.

“Accounts Required Reserves-ModCo” shall mean an amount equal to the Quota Share of the Net Statutory Reserves times the ModCo Allocation Percentage plus the Asset Reserves for assets included in the ModCo Deposit, as of any date of determination.

“Action” shall mean (a) any civil, criminal or administrative action, suit, claim, litigation, arbitration or similar proceeding, in each case, before a Governmental Entity, or (b) any investigation or written inquiry by a Governmental Entity other than any examination by a taxing authority, including a tax audit.

“Affiliate” shall mean, with respect to any Person, another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with, such first Person, and the term “Affiliated” shall have a correlative meaning. For the purposes of this definition, “control”, when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly through the ownership of voting securities, and the terms “controlling” and “controlled” have the meanings correlative to the foregoing. For the avoidance of doubt, the Ceding Company and the Reinsurer shall not be deemed “Affiliates” for purposes of this Agreement.

“Agreement” shall have the meaning specified in the Preamble hereto.

“Allocation Percentage” shall mean the percentages set forth in Schedule VIII for the ModCo Deposit and the Funds Withheld Account.

“Appendix-B Account” shall have the meaning specified in the Recitals hereto.

“Asset Reserves” shall have the meaning specified in Schedule XI.

“Authorized Representative” shall have the meaning specified in Section 14.01(a)(i).

“Business Day” shall mean any day other than a Saturday, Sunday or any other day on which banking institutions are authorized or required by Law to close in New York, New York or the Cayman Islands.

“Capital Contribution” shall have the meaning set forth in Schedule X.

“Capital Contribution Date” shall have the meaning set forth in Schedule X.

“Ceding Commission” shall mean the percentage initially as set forth on Schedule VII, as may be amended by mutual agreement of the parties from time to time.

“Ceding Company” shall have the meaning specified in the Preamble hereto.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Covered Business” shall have the meaning specified in Section 2.01(b)(i).

“Crediting Rate” shall be the percentage determined based on the procedures set forth on Schedule V.

“Custodian” shall have the meaning specified in Section 8.01.

“Delayed Payment Rate” shall have the meaning set forth in Section 17.02.

“[***] Notes” shall have the meaning specified in Exhibit A of the Investment Management Agreement (ModCo and Funds Withheld Accounts) effective as of the date hereof, entered into by and between the Ceding Company and the Investment Manager, the terms of which are hereby incorporated by reference.

“Effective Date” shall have the meaning specified in the Preamble hereto.

“Escrowed Assets” shall have the meaning specified in the Master Letter Agreement.

“Excess Withdrawal” shall have the meaning specified in Section 8.04(a).

“Excess Withdrawal Amount” shall have the meaning specified in Section 8.04(b).

“Excluded Liabilities” shall mean, without duplication, (a) any Losses or other liabilities arising or attributable to periods prior to the Effective Date, (b) all Extra-Contractual Obligations other than Reinsurer Extra-Contractual Obligations, (c) any liabilities resulting from any change to the terms of any Reinsured Policy after the Effective Date, unless such change is required by an act, order or decree of a Governmental Entity, a change in applicable Law or by the express terms of the Reinsured Policies, or has been approved in writing in advance by the Reinsurer and (d) any ex gratia payments made by the Ceding Company (i.e., payments the Ceding Company is not required to make under the terms of the Reinsured Policies) unless such payment has been approved in writing in advance by the Reinsurer, or is set forth in Schedule IV.

“Extra-Contractual Obligations” shall mean any and all costs, expenses, damages, liabilities or obligations of any kind or nature which arise out of, result from or relate to any act, error or omission of the Ceding Company (inclusive of its agents and Affiliates), whether or not in bad faith, intentional, willful, negligent, reckless, careless or otherwise, in connection with a Reinsured Policy, and which are not contractually covered by the terms and conditions of the Reinsured Policy.

“Factual Information” shall have the meaning specified in Section 16.01(d).

“Fair Market Value” means with respect to any asset, and as of any date of determination, the price that would be received in a sale of such asset in accordance with GAAP accounting at the determination date (the “Price”), determined as: (i) for liquid assets, the Price for such asset as published by a nationally recognized pricing service where such prices are available and (ii) otherwise, the Price for such asset as determined by a qualified independent securities valuation firm, each pricing service or valuation firm to be selected by the Investment Manager with the consent of the Ceding Company, such consent not to be unreasonably withheld, conditioned or delayed. In the event that the Ceding Company and the Investment Manager cannot agree on a valuation firm, such valuation firm shall be Xxxxxxxx Xxxxx. The “Fair Market Value” of any asset shall include any accrued but unpaid interest or dividend reasonably expected to be received on such asset.

“Funds Withheld Account” shall have the meaning specified in Section 8.02(a).

“Funds Withheld Account Balance” shall mean, as of any date of determination, the sum of (a) the Statutory Carrying Value of assets in the Funds Withheld Account, including all paid or accrued investment income thereon, plus (b) the amount of any Excess Withdrawal Amount outstanding as of such date plus (c) the sum of all undisputed amounts owing to the Reinsurer under the terms of this Agreement (including amounts owing due to breaches of representations, warranties or covenants or indemnification payments) which have not been paid by the Ceding Company as of such date.

“GAAP” means generally accepted accounting principles in effect in the United States, consistently applied.

“Governmental Entity” shall mean any foreign, federal, state, local or other governmental, legislative, judicial, administrative or regulatory authority, agency, commission, board, body, court or entity or any instrumentality thereof or any self-regulatory body or arbitral body or arbitrator.

“Hedge” and “Xxxxxx” shall have the meaning specified in Section 2.14(a).

“Initial Reserve Amount” means the Quota Share of the Net Statutory Reserves attributable to the In Force Reinsured Policies (if any) as of the Effective Date.

“Initial Settlement Amount” means [***], being the result of (a) minus (b) minus (c) plus (d), where:

(a) is the sum of Reinsurance Premiums received in respect of the period from the Effective Date through and including June 30, 2020;

(b) is the sum of Reinsured Liabilities incurred and settled during the period from the Effective Date through and including June 30, 2020;

(c) is the sum of (i) Acquisition and Administrative Expenses, (ii) Commission Expense Allowances, (iii) Product Development Fees, and (iv) Ceding Commissions accumulated during the period from the Effective Date through and including June 30, 2020; and

(d) is the aggregate amount of investment income and realized gains on the assets held in the Appendix-B Account through June 30, 2020 (other than the Escrowed Assets).

“Initial Settlement Date” shall mean July 24, 2020.

“Investment Guidelines” means the investment guidelines attached to the Investment Management Agreement and the Trust IMA, as such investment guidelines may be amended from time to time.

“Investment Manager” shall have the meaning specified in Schedule XIV.

“Investment Management Agreement” shall have the meaning specified in Section 8.05 (as may be amended or supplemented from time to time).

“Investment Manager” shall have the meaning specified in Section 8.05 and in the Investment Management Agreement.

“Law” shall mean any law, statute, ordinance, written rule or regulation, order, injunction, judgment, decree, principle of common law, constitution or treaty enacted, promulgated, issued, enforced or entered by any Governmental Entity.

“Leverage Measure” shall have the meaning set forth in Schedule X.

“Liquid IG Assets” has the meaning set forth in Schedule X.

“Loss” or “Losses” shall mean (i) claim payments made by the Ceding Company arising under the express terms of the Reinsured Policies (including returns of premium in accordance with the terms of the applicable Reinsured Policy) and (ii) guaranty fund assessments incurred by the Ceding Company to the extent relating to premiums received by the Ceding Company with respect to the Reinsured Policies and attributable to periods on and after the Effective Date, as determined by, the Ceding Company in good faith but in any event excluding Extra Contractual Obligations other than Reinsurer Extra Contractual Obligations.

“Master Letter Agreement” shall have the meaning specified in the Recitals hereto.

“Minimum Leverage Measure” shall have the meaning set forth in Schedule X.

“ModCo Deposit” shall have the meaning specified in Section 8.01(a).

“ModCo Deposit Balance” shall mean the Statutory Carrying Value of assets in the ModCo Deposit, as of any date of determination.

“Monthly Accounting Period” shall have the meaning specified in Section 7.01(a).

“Monthly Settlement” shall mean the making of all payments and adjustments specified in Section 7.03, including, without limitation, Account Adjustments and Reinsurer Top-Up Payments.

“NAIC” shall mean the National Association of Insurance Commissioners.

“Nebraska SAP” shall mean the statutory accounting principles and practices prescribed for Nebraska domiciled life insurance companies by the Nebraska Department of Insurance, provided that, if the Ceding Company redomesticates to a different domicile (the “Redomesticated Domicile”), the Redomesticated Domicile’s statutory accounting principles and practices shall apply, except that if the Redomesticated Domicile’s statutory accounting principles and practices are adverse to the Reinsurer, then Nebraska’s statutory accounting principles and practices will continue to apply in respect of those principles and practices which are adverse to the Reinsurer.

“Net Statutory Reserves” shall mean the statutory reserves of the Ceding Company in respect of the Reinsured Policies, which shall be calculated in good faith in accordance with Nebraska SAP and determined in a manner consistent with the Ceding Company’s historical practices; provided, however, that Net Statutory Reserves shall not include (a) any asset valuation reserves (as used in connection with Nebraska SAP) established by the Ceding Company, (b) any interest maintenance reserves (as used in connection with Nebraska SAP) established by the Ceding Company, (c) any additional actuarial reserves (as used in connection with Nebraska SAP), if any, established by the Ceding Company as a result of its annual cash flow testing or (d) any other reserve not directly attributable to specific Reinsured Policies.

“Non-Guaranteed Elements” shall have the meaning specified in Schedule XV.

“Non-Public Personal Information” shall have the meaning specified in Section 17.10.

“Other Assets” shall have the meaning set forth in Schedule X.

“Option Budget” shall have the meaning specified in Section 2.14(b).

“Permits” shall mean any licenses, certificates of authority or other similar certificates, registrations, franchises, permits, approvals or other similar authorizations issued to a Person by a Governmental Entity.

“Permitted Assets” shall mean any asset which: (i) is a permitted asset under applicable Law, (ii) is an admitted asset of the Ceding Company under the applicable Laws of the State of Nebraska and (iii) is permitted under the Investment Guidelines set forth in the Investment Management Agreement and the Trust IMA (as applicable) (it being agreed that compliance with the Investment Guidelines shall be measured in aggregate against the assets in the Accounts and the Trust Account) , and (iv) solely with respect to the Accounts, is a permissible asset to provide credit for reinsurance with respect to the ModCo Deposit or Funds Withheld Account (as the case may be) under Nebraska SAP.

“Person” shall mean an individual, corporation, partnership, joint venture, limited liability company, association, trust, unincorporated organization, Governmental Entity or other entity.

“Policy Expenses” shall have the meaning specified in Section 5.01.

“Prior Highest Leverage Measure” shall have the meaning set forth in Schedule X.

“Prior Highest Leverage Measure Date” shall have the meaning set forth in Schedule X.

“Proprietary Information” shall have the meaning specified in Section 17.10(a).

“Quota Share” shall have the meaning specified in Schedule V.

“Recapture Effective Date” shall mean the date on which the liability of the Reinsurer with respect to all of the Reinsured Liabilities is terminated pursuant to Section 11.02 or the effective date of the rejection of this Agreement by any Receiver or of a recapture in full.

“Reallocation Payment” shall mean a payment made pursuant to Section 7.03(a)(iii).

“Receiver” shall have the meaning specified in Section 11.03(a).

“Reinsurance Premiums” shall mean the Quota Share of the premiums and other fees, amounts, payments and collections received by the Ceding Company with respect to the Reinsured Policies, except for amounts received from Third-Party Reinsurers.

“Reinsured Block” shall have the meaning specified in Section 2.01(b)(ii).

“Reinsured Liabilities” shall mean the Quota Share of (a) Losses, (b) the Reinsurer Extra-Contractual Obligations divided by the applicable Quota Share and (c) trail commissions payable to producers with respect to the Reinsured Policies, and other commissions payable with respect to premiums received by the Ceding Company, in each case after the Effective Date and paid to the Reinsurer; provided, that in no event shall “Reinsured Liabilities” include any Excluded Liabilities.

“Reinsured Policies” shall mean (i) the insurance policies of the Ceding Company in force on the Effective Date and listed on Schedule IX and, in connection with such insurance policies, any riders that are listed on Schedule I and any amendments or endorsements attached to such policies, all as disclosed in writing to the Reinsurer on or prior to the Effective Date (the “In Force Reinsured Policies”) and (ii) all insurance policies of the Ceding Company issued after the Effective Date that are written on the policy forms that are listed on Schedule I, and any riders that are listed on Schedule I and any amendments or endorsements attached to such policies, all as disclosed in writing to the Reinsurer on or prior to the Effective Date, and ceded in accordance with the provisions of this Agreement (including without limitation Schedule V).

“Reinsurer” shall have the meaning specified in the Preamble hereto.

“Reinsurer Extra-Contractual Obligations” shall mean Extra-Contractual Obligations relating to the Reinsured Policies to the extent caused by, arising from or related to any act of the Reinsurer or any of its Affiliates following the Effective Date.

“Reinsurer Top-Up Payment” shall have the meaning specified in Section 7.03(c).

“Replacement Reinsured FIA Policy” shall have the meaning set forth in Schedule VII.

“Statutory Carrying Value” shall mean, with respect to any asset, as of the relevant date of determination, the carrying value amount permitted to be carried by the Ceding Company as an admitted asset consistent with Nebraska SAP in its statutory financial statements.

“Substitute Administrator” shall have the meaning specified in Section 10.01

“Terminal Accounting Report” shall have the meaning specified in Section 11.03(a).

“Third-Party Reinsurer” shall mean any Person (other than any Affiliate of the Ceding Company) to which the Ceding Company has or will cede Losses or liabilities arising under the Reinsured Policies.

“Treasury Regulations” shall mean all proposed, temporary and final regulations promulgated under the Code, as such regulations may be amended from time to time.

“Trust Account” shall have the meaning specified in Section 8.03 and attached as Exhibit B.

“Trust Account Balance” shall mean the Statutory Carrying Value of assets in the Trust Account, as of any date of determination.

“Trust IMA” shall have the meaning specified in Section 8.05 (as may be amended or supplemented from time to time).

“Trustee” shall have the meaning specified in Section 8.03.

Section 1.02 Other Definitional Provisions.

(a) For purposes of this Agreement, the words “hereof,” “herein,” “hereby” and other words of similar import refer to this Agreement as a whole, including all Schedules and Exhibits to this Agreement, unless otherwise indicated.

(b) 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.

(d) Whenever used in this Agreement, the masculine gender shall include the feminine and neutral genders and vice versa.

(e) The Schedules and Exhibits hereto are hereby incorporated by reference into the body of this Agreement.

(f) All references herein to Articles, Sections, Subsections, Paragraphs, Exhibits and Schedules shall be deemed references to Articles and Sections and Subsections and Paragraphs of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require.

(g) All terms defined in this Agreement shall have the defined meaning when used in any Schedule, Exhibit, certificate, report or other documents attached hereto or made or delivered pursuant hereto unless otherwise defined therein.

(h) Any reference to an agreement, statute, regulation or rule is to the same as amended from time to time, and at any time.

ARTICLE II
COVERAGE

Section 2.01 Scope and Basis of Reinsurance.

(a) This Agreement shall be effective as of 12:00:01 a.m. Eastern Time on the Effective Date.

(b) Cession:

(i) Subject to the terms, conditions and limits of this Agreement (including the exclusion from coverage of Excluded Liabilities), the Ceding Company shall automatically cede, and the Reinsurer shall automatically reinsure, on a funds withheld coinsurance and a modified coinsurance basis, respectively based on the Allocation Percentage, the Reinsured Liabilities (the “Covered Business”).

(ii) Subject to the terms, conditions and limits of this Agreement (including the exclusion from coverage of Excluded Liabilities), the Ceding Company shall cede, and the Reinsurer shall reinsure, on a funds withheld coinsurance and a modified coinsurance basis, respectively based on the Allocation Percentage, the Reinsured Liabilities attributable to those Reinsured Policies described in clause (i) of the definition of “Reinsured Policies” (the “Reinsured Block”).

(c) Subject to the terms, conditions and limits of this Agreement (including the exclusion from coverage of Excluded Liabilities), the Reinsurer shall follow the fortunes of the Ceding Company, and to that end the Reinsurer’s liability for the Reinsured Policies shall be identical to that of the Ceding Company and shall be subject to the same risks, terms, conditions, interpretations, waivers, modifications, alterations and cancellations to which the Ceding Company is subject with respect to the Reinsured Policies, subject in each case to the Ceding Company’s duty to adhere to its obligations pursuant to Article X.

(d) Notwithstanding anything to the contrary herein, the Reinsurer shall not be liable for any Excluded Liabilities.

Section 2.02 Policy Changes.

(a) The Ceding Company shall not, without the prior written consent of the Reinsurer, terminate, amend, modify or waive any provision or provisions of the Reinsured Policies, except to the extent required by applicable Law or the express terms of the Reinsured Policies.

(b) Any such terminations, amendments, modifications or waivers made without the prior written consent of the Reinsurer shall be disregarded for purposes of this Agreement, and the reinsurance with respect to the affected Reinsured Policy will continue as if such termination, amendment, modification or waiver had not been made.

Section 2.03 Reinstatement of Surrendered Policies. If a Reinsured Policy that has been surrendered (other than in connection with a surrender upon maturity) is reinstated according to its terms and the Ceding Company’s reinstatement policies, the Reinsurer will, upon notification, automatically reinstate the reinsurance with respect to such Reinsured Policy; provided, that, to the extent that the reinstatement of such Reinsured Policy requires payment of premiums in arrears or reimbursement of claims paid, the Ceding Company shall pay to the Reinsurer all Reinsurance Premiums in arrears and Reinsurer shall pay all reimbursements of Reinsured Liabilities paid on such Reinsured Policy.

Section 2.04 Misstatement of Fact. In the event of a change in the amount payable under a Reinsured Policy due to a misstatement of fact, the Reinsurer’s liability with respect to such Reinsured Policy will change proportionately. Such Reinsured Policy will be rewritten from commencement on the basis of the adjusted amounts using premiums and such other terms based on the correct facts, and the proper adjustment for the difference in Reinsurance Premiums, without interest, will be made.

Section 2.05 Non-Guaranteed Elements. The Ceding Company will be responsible for determining the Non-Guaranteed Elements of the Reinsured Policies in good faith and consistent with its standard business practices, subject to the Renewal Crediting Rate limitation set forth in Schedule XV; provided, that the Reinsurer shall be permitted to provide recommendations regarding the Non-Guaranteed Elements and, to the extent such recommendations comply with applicable Law, generally accepted actuarial standards of practice and the terms of the Reinsured Policies, the Ceding Company shall not unreasonably take any actions that contravene such recommendations and shall promptly incorporate such recommendations. Except as set forth in Schedule XV where Reinsurer consent is not required, (i) if the Ceding Company fails to adopt such recommendations in any material respect, then the Ceding Company shall promptly notify the Reinsurer in writing of such failure and (ii) the Reinsurer shall not be responsible or liable for any Reinsured Liabilities resulting from the Ceding Company’s failure or refusal to adopt such recommendations. Crediting Rates shall be subject to Section 2.06 exclusively and not to this Section 2.05.

Section 2.06 Crediting Rates. The Ceding Company and the Reinsurer shall establish the Crediting Rate on any date of determination as set forth based on the procedures in Schedule V.

Section 2.07 Programs of Internal Replacement. The Ceding Company shall not solicit, or allow any of its Affiliates to solicit, directly or indirectly, policy holders of the Reinsured Policies in connection with any program of internal replacement without the prior written consent of the Reinsurer. The term “program of internal replacement” means any program sponsored or supported by the Ceding Company or any of its Affiliates that is offered to a class of policy owners and in which a Reinsured Policy or a portion of a Reinsured Policy is exchanged for another policy that is written by the Ceding Company or any Affiliate of the Ceding Company or any successor or assignee of any of them.

Section 2.08 Conservation Program. Upon the request of the Reinsurer, the Ceding Company shall reasonably cooperate and work with the Reinsurer in good faith to develop and implement a conservation program with respect to the Reinsured Policies.

Section 2.09 Net Retention. The Ceding Company shall retain net for its own account and unreinsured at least [***] percent ([***]%) of the Net Statutory Reserves associated with each Reinsured Policy, provided that reinsurance with an Affiliate, including a Protected Cell of Seneca Reinsurance Company, LLC in which the capital and surplus is contributed or otherwise supplied by an Affiliate of the Ceding Company, shall be treated as net for the Ceding Company’s own account and unreinsured for purposes of this Section 2.09.

Section 2.10 Asset Reserves. The Ceding Company and the Reinsurer agree that the Asset Reserves shall be ceded to the Reinsurer and maintained in the ModCo Deposit and/or Funds Withheld Account (as the case may be).

Section 2.11 Valuation of Liabilities. The Ceding Company shall calculate the Net Statutory Reserves with respect to the Reinsured Policies in good faith in accordance with Nebraska SAP and determined in a manner consistent with the Ceding Company’s historical practices; provided, that, the Ceding Company shall provide the Reinsurer supporting information promptly upon request and in the event there is a disagreement with respect to the calculation, the Dispute Resolution procedures herein shall be applied.

Section 2.12 Credit For Reinsurance. In the event the Ceding Company does not receive credit for reinsurance in its statutory financial statements for the Reinsured Liabilities in the Ceding Company's state of domicile, the Reinsurer shall consent to any commercially reasonable amendments to this Agreement, and take such commercially reasonable actions as are required, to provide the Ceding Company with full credit for the reinsurance ceded hereunder in the Ceding Company’s state of domicile (it being agreed that if the Ceding Company is no longer domiciled in the State of Nebraska and the credit for reinsurance requirements in the Redomesticated Domicile are in any material respect more burdensome on the Reinsurer than those in the State of Nebraska, then the Reinsurer’s obligations in this sentence shall be determined with reference to the State of Nebraska rather than the Redomesticated Domicile). If, notwithstanding the Reinsurer’s commercially reasonable efforts as described in the preceding sentence, the Ceding Company does not receive credit for reinsurance in its statutory financial statements for the Reinsured Liabilities, the Ceding Company’s sole remedy shall be to recapture the Reinsured Policies pursuant to Section 11.02(d)(v).

Section 2.13 ModCo Reserves Allocation. The Ceding Company shall retain a proportional amount of reserves related to the Reinsured Liabilities equal to the Accounts Required Reserves-ModCo.

Section 2.14 Options Budget and Payoff for FIA.

(a) With respect to FIA Reinsured Policies, the Ceding Company shall purchase derivatives in respect of the Reinsured Policies (each, a “Hedge” and collectively, the “Xxxxxx”), in the form of futures contracts and equity index options, to hedge any index risk associated with the Reinsured Policies.

(b) The Reinsurer shall pay to the Ceding Company for each accounting period, in accordance with Section 7.03, the Quota Share of all amounts becoming due in connection with the purchase of derivatives by the Ceding Company (the “Option Budget”), as determined in accordance with Schedule XII.

(c) The Ceding Company shall pay to the Reinsurer for each accounting period, in accordance with Section 7.03, the Quota Share of all amounts becoming due and payable to the Ceding Company during the applicable period in connection with the exercise by the Ceding Company or maturity of any Xxxxxx, whether or not collected (the “Option Payoff”), as defined in Schedule XII.

(d) The Option Budget payable by the Reinsurer to the Ceding Company pursuant to subsection (b) above shall be paid without regard to the actual costs paid by the Ceding Company for the Xxxxxx purchased. The Option Payoff payable by the Ceding Company to the Reinsurer pursuant to subsection (c) above shall be paid without regard to the actual proceeds received by the Ceding Company with respect to the Xxxxxx collected. The Ceding Company shall have no obligation to pay to the Reinsurer any portion of the actual proceeds received by the Ceding Company with respect to the Xxxxxx, or any other amounts in respect of the Xxxxxx, other than the Option Payoff amounts. For the avoidance of doubt, the Reinsurer has no liability for any hedge effectiveness and hedging is assumed to be 100% effective for purposes of Settlement.

(e) The Ceding Company shall use reasonable care in its hedging activities with respect to the Reinsured Policies, and such activities shall (a) be conducted in good faith and (b) conform with applicable Law.

(f) For the avoidance of doubt, with respect to a FIA Fixed Interest Account, the Reinsurer shall pay the Option Budget to the Ceding Company and the Ceding Company shall pay an Option Payoff to the Reinsurer equal to the actual fixed interest rate for such FIA Fixed Interest Account established by the Ceding Company.

Section 2.15 FATCA.

(a) Prior to any payment being made under this Agreement, the Reinsurer shall provide to the Ceding Company (or the applicable withholding agent, as defined in Treasury Regulation Section 1.1471-1(b)(147) a valid IRS Form W-8BEN-E or other documentation establishing that they are not subject to any withholding requirement pursuant to the Foreign Account Tax Compliance Act (Sections 1471-1474 of the Code) (“FATCA”).

(b) The Reinsurer shall update the forms or other documentation referenced herein upon a change in facts or circumstance rendering such previously supplied information incorrect. If the Reinsurer has not provided the Ceding Company with updated documentation attesting to its FATCA compliance within thirty (30) calendar days prior to any premium due date, or becomes non-compliant with FATCA at any later date, the withholding agent (as defined in Treasury Regulation Section 1.1471-1(b)(147)) shall be entitled to 30% (or such other percentage as required by law) of any premium payment to the Reinsurer under this Agreement and shall promptly notify the Reinsurer of such withholding.

ARTICLE III
REINSURANCE PREMIUMS

Section 3.01 Reinsurance Premiums. The payment of Reinsurance Premiums is a condition precedent to the liability of the Reinsurer under this Agreement. All Reinsurance Premiums shall be payable in accordance with Section 3.02 on the Initial Settlement Date (if applicable) and in accordance with Section 7.03.

Section 3.02 Initial Settlement Amount.

(a) On the Initial Settlement Date, if applicable, the Ceding Company shall transfer to the Funds Withheld Account and/or the ModCo Deposit (in accordance with the Allocation Percentage) an amount equal to the sum of the Initial Reserve Amount (if any) plus the Initial Settlement Amount.

(b) The payment required under Section 3.02(a), if any, shall be effected as follows:

(i) With regard to the Allocation Percentage attributable to the Funds Withheld Account, the Ceding Company shall pay to the Reinsurer an amount equal to such Allocation Percentage of the Initial Reserve Amount (if any) plus the Initial Settlement Amount (being [***]) and the Reinsurer shall simultaneously pay to the Ceding Company an initial funds withheld reserve adjustment equal to such amount. The foregoing net payment shall be effected by the Ceding Company depositing into the Funds Withheld Account, not later than the close of business on the Initial Settlement Date, assets set forth in Paragraph A of Schedule III-B, the aggregate Statutory Carrying Value of which as of the Effective Date is equal to the relevant Allocation Percentage of the Initial Reserve Amount (if any) plus the Initial Settlement Amount, free and clear of all liens; and

(ii) With regard to the Allocation Percentage attributable to the ModCo Deposit, the Ceding Company shall transfer to the ModCo Deposit an amount equal to such Allocation Percentage of the Initial Reserve Amount (if any) plus the Initial Settlement Amount (being [***]). The foregoing deposit shall be effected by the Ceding Company depositing into the ModCo Deposit, not later than the close of business on the Initial Settlement Date, assets set forth set forth in Paragraph B of Schedule III-B, the aggregate Statutory Carrying Value of which as of the Effective Date is equal to the relevant Allocation Percentage of the Initial Reserve Amount (if any) plus the Initial Settlement Amount, free and clear of all liens.

(c) If a payment is due in accordance with Section 3.02(a), any amount paid and/or deposited pursuant to this Section 3.02 that was calculated using estimated data shall be subject to a customary true-up adjustment promptly after actual data becomes available.

ARTICLE IV
CEDING COMMISSION

Section 4.01 Ceding Commission. Except as set forth below in this Section 4.01, the Reinsurer shall pay to the Ceding Company the Ceding Commission on all Reinsurance Premiums paid to the Reinsurer.

Section 4.02 Excise Tax. In the event that any excise tax is due with respect to any amounts payable by the Ceding Company to the Reinsurer under this Agreement, the Ceding Company shall pay the entire amount of such excise tax. The Reinsurer shall reimburse the Ceding Company for any such excise tax paid by the Ceding Company.

ARTICLE V
ADMINISTRATION FEE

Section 5.01 Policy Expenses. The Reinsurer shall pay the ceding company an administrative expense fee (“Policy Expenses”) to cover the cost of providing all administrative and other services necessary or appropriate in connection with the administration and distribution (including the product development fee) of the Reinsured Policies and the Reinsured Liabilities, determined in accordance with Schedule II attached hereto and paid on a monthly basis in accordance with Section 7.03.

ARTICLE VI
REINSURED LIABILITIES

Section 6.01 Reinsured Liabilities. Subject to Sections 6.02 and 6.03, the Reinsurer shall pay to the Ceding Company all Losses on Reinsured Liabilities.

Section 6.02 Claims Settlement.

(a) Subject to Section 6.02(b) and 6.03, the Ceding Company shall be responsible for the settlement of claims with respect to the Reinsured Liabilities in accordance with Article X, applicable Law and the terms and conditions of the Reinsured Policies.

(b) The Ceding Company shall notify the Reinsurer in writing if the Ceding Company determines that a claim for payment under a Reinsured Policy either requires investigation or should be contested or denied. The Reinsurer and the Ceding Company shall consult in good faith regarding the disposition of any such claim. The Reinsurer may, but shall not be required to, recommend to the Ceding Company how to handle such claim. In the event of any disagreement between the Ceding Company and the Reinsurer as to the validity or amount of such a claim, the Ceding Company shall have final authority over the disposition of such claim, provided that the Reinsurer may discharge its payment obligation in respect of such claim by paying the Quota Share Percentage of the claim as originally presented to the Ceding Company,

Section 6.03 Recoveries. Subject to Section 6.02(b), if the Ceding Company obtains any recoveries in respect of a claim with respect to the Reinsured Liabilities paid by it in accordance with the terms of any Reinsured Policy, the Ceding Company shall promptly pay to the Reinsurer such recoveries (“Recoveries”).

ARTICLE VII
REPORTING AND SETTLEMENTS

Section 7.01 Ceding Company Reporting.

(a) Within ten (10) Business Days of the Initial Settlement Date and within five (5) Business Days following the end of each calendar month following the Initial Settlement Date, the Ceding Company shall deliver to the Reinsurer a monthly accounting report (a “Monthly Accounting Report”) substantially in the form set forth in Exhibit A for such calendar month (a “Monthly Accounting Period”). The First Monthly Accounting Report shall cover the period from July 1, 2020 through the end of the first month following the Initial Settlement Date. The parties shall from time to time amend Exhibit A as necessary to appropriately effectuate the terms and conditions of this Agreement and to ensure the accounting and settlements made hereunder are correctly computed. The net amount due as set forth in such Monthly Accounting Report shall be due within five (5) Business Days following the date of delivery of such Monthly Accounting Report.

(b) Within ten (10) Business Days following the end of each calendar quarter and any Recapture Effective Date, the Ceding Company shall deliver to the Reinsurer a report setting forth the Asset Reserves as of the end of such calendar quarter or such Recapture Effective Date, as applicable.

(c) Within ten (10) Business Days following the end of each Monthly Accounting Period or Recapture Effective Date, the Ceding Company shall deliver to the Reinsurer, as of the end of such Monthly Accounting Period or the Recapture Effective Date, as applicable, a report of the Reinsured Policies in the form as mutually agreed by the parties.

(d) The Ceding Company shall deliver to the Reinsurer, as of the end of such Monthly Accounting Period or the Recapture Effective Date, as applicable, within ten (10) Business Days following the end of each Monthly Accounting Period or the Recapture Effective Date, an investment accounting report of the assets held in the Funds Withheld Account, the ModCo Deposit and the Trust Account which shall include the holdings, Statutory Carrying Value, and such other information agreed to by the parties in each case, on a CUSIP level.

(e) The Ceding Company shall deliver to the Reinsurer: (i) within five (5) Business Days following the filing of the Ceding Company’s unaudited annual statement with the Nebraska Department of Insurance but no later than March 20 of each year, a copy of such unaudited annual statement; (ii) within five (5) Business Days of the filing of the Ceding Company’s audited annual statutory financial statements with the Nebraska Department of Insurance but no later than June 20 of each year, a copy of such annual statutory financial statements; and (iii) within five (5) Business Days following the filing of the Ceding Company’s unaudited quarterly statutory financial statements with the Nebraska Department of Insurance but no later than sixty (60) calendar days following the end of each calendar quarter, a copy of such unaudited quarterly statutory financial statements.

(f) Upon request, the Ceding Company will, within a reasonable timeframe, promptly provide the Reinsurer with any additional information related to the Reinsured Policies reasonably available to the Ceding Company and not reasonably available to the Reinsurer which the Reinsurer requires in order to complete its financial statements or is otherwise required to comply with regulatory requirements. The Reinsurer will identify and communicate any such requests to the Ceding Company sufficiently in advance of any required deadlines such that the applicable information and timing for the provision thereof can be mutually agreed by the parties.

Section 7.02 Reinsurer Reporting.

(a) The Reinsurer shall deliver to the Ceding Company: (i) within five (5) Business Days of the filing of the Reinsurer’s audited annual financial statements with the Cayman Monetary Authority (“CIMA”) but no later than June 20 of each year, a copy of such annual financial statements; (ii) within fifteen (15) Business Days following the end of each calendar quarter a calculation of its Leverage Measure, and (iii) within five (5) Business Days following the filing of the Reinsurer’s unaudited quarterly financial statements with CIMA but no later than sixty (60) calendar days following the end of each calendar quarter, a copy of such unaudited quarterly financial statements.

(b) Upon request, the Reinsurer will, within a reasonable timeframe, provide the Ceding Company with any additional information related to the Reinsured Policies available to the Reinsurer and not reasonably available to the Ceding Company which the Ceding Company reasonably requires in order to complete its financial statements or is otherwise required to comply with regulatory requirements (if any). The Ceding Company will identify and communicate any such requests to the Reinsurer sufficiently in advance of any required deadlines such that the applicable information and timing for the provision thereof can be mutually agreed by the parties.

Section 7.03 Settlements & Adjustments.

(a) Following the Initial Settlement Date, there shall be an adjustment to the Accounts based on the following:

(i) Investment Performance; Transfers. On a monthly basis, the Funds Withheld Account Balance and the ModCo Deposit Balance, as determined as of the end of the immediately preceding Monthly Accounting Period shall be:

(A) increased by the amount of any increase in Statutory Carrying Value of the investments in the applicable Account and any transfers from the Trust Account as set forth in 7.03(b)(i); and

(B) decreased by the amount of any reductions in Statutory Carrying Value of the investments in the applicable Account and any transfers to the Trust Account as set forth in 7.03(b)(ii).

(ii) Additional Premiums and Other Recoveries. On a weekly basis, the Ceding Company shall deliver into the Accounts the Reinsurance Premiums and Recoveries received in connection with the Covered Business and Reinsured Block (allocation between the Funds Withheld Account and the ModCo Deposit shall be in accordance with the Allocation Percentage) and each of the Funds Withheld Account Balance and the ModCo Deposit Balance, as the case may be, shall be increased by such allocation of Reinsurance Premiums and Recoveries.

(iii) Reallocation Payments. On any day that the Allocation Percentage changes, the Ceding Company may reallocate funds between the Accounts by making a transfer from one Account to the other and such reallocation shall be reflected in the Funds Withheld Account Balance and the ModCo Deposit Balance.

(iv) Payments due from Reinsurer. On any day the Ceding Company may apply funds from the Accounts to pay any net amount due from the Reinsurer in connection with Losses and as such the Accounts Balance will be decreased by an amount equal to any payments due from the Reinsurer to the Ceding Company hereunder, such deductions to be allocated between the Accounts according to the Allocation Percentage. All such deductions will be effectuated in cash or by the liquidation of assets (at the direction of the Investment Manager) in the applicable Account(s) into cash (in the event there is insufficient cash in the account) in an amount sufficient to pay all amounts owed by the Reinsurer to the Ceding Company and the transfer of such cash to the Ceding Company in settlement of the payments due from the Reinsurer to the Ceding Company.

(b) At the end of each Monthly Accounting Period, following the delivery of each Monthly Accounting Report:

(i) Top-Up of Accounts.

(A) In the event the Accounts Required Reserves-Funds Withheld is greater than the Funds Withheld Account Balance, the Reinsurer shall pay the absolute value of such difference to the Ceding Company within ten (10) Business Days of a demand by the Ceding Company, and the Ceding Company shall deposit such amounts into the Funds Withheld Account. If the Reinsurer fails to make such payment within ten (10) Business Days of such demand, the Ceding Company may withdraw the absolute value of such difference from the Trust Account (in accordance with the terms of the Trust Agreement) and the Ceding Company shall deposit such drawn amounts into the Funds Withheld Account. Any assets other than cash that are withdrawn from the Trust Account and deposited into the Funds Withheld Account must satisfy clause (iv) of the definition of Permitted Asset and shall be valued according to Fair Market Value.

(B) In the event the Accounts Required Reserves-ModCo is greater than the ModCo Deposit Balance, the Reinsurer shall pay the absolute value of such difference to the Ceding Company within ten (10) Business Days of a demand by the Ceding Company, and the Ceding Company shall deposit such amounts into the ModCo Deposit. If the Reinsurer fails to make such payment within ten (10) Business Days of such demand, the Ceding Company may withdraw the absolute value of such difference from the Trust Account (in accordance with the terms of the Trust Agreement) and the Ceding Company shall deposit such drawn amounts into the ModCo Deposit. Any assets other than cash that are withdrawn from the Trust Account and deposited into the ModCo Deposit must satisfy clause (iv) of the definition of Permitted Asset and shall be valued according to Fair Market Value.

(ii) Over-Funding of Accounts Balance.

(A) In the event the Funds Withheld Account Balance is greater than the Accounts Required Reserves-Funds Withheld, the absolute value of such difference shall be paid to the Trust Account at the direction of the Reinsurer; provided any payment made hereunder in assets other than cash shall be at the Fair Market Value of such asset.

(B) In the event the ModCo Deposit Balance is greater than the Accounts Required Reserves-ModCo, the absolute value of such difference shall be paid to the Trust Account at the direction of the Reinsurer; provided any payment made hereunder in assets other than cash shall be at the Fair Market Value of such asset.

(c) Reinsurer’s Top-Up Obligation. In the event there are insufficient funds in the Trust Account to pay an amount required to be withdrawn under Section 7.03(b)(i) above, the Reinsurer shall pay the amount of such insufficiency to the Ceding Company promptly and in any event, within fifteen (15) Business Days, to the account or accounts designated by the Ceding Company; provided however, in the event the Reinsurer disputes any determinations made by the Ceding Company, then the Reinsurer shall pay the full amount and the Ceding Company shall deposit such disputed amounts into the Funds Withheld Account or ModCo Deposit (as applicable) until the calculation is re-determined by the 3^rd Party Actuary and the determinations of the 3^rd Party Actuary shall be conclusive absent manifest error (any such payment by the Reinsurer under this Section 7.03(c), a “Reinsurer Top-Up Payment”).

(d) Other.

(i) The Reinsurer may at any time withdraw amounts from the Trust Account in accordance with Section 8.03 and the terms of the Trust Agreement, such amounts to be limited such that after the withdrawal the Leverage Measure will be equal to or greater than the Minimum Leverage Measure; provided that the Reinsurer shall not be permitted to withdraw assets from the Trust Account at any time that the Fair Market Value of the [***] Notes exceeds [***]; provided, further, that the Reinsurer and the Investment Manager shall be permitted to apply cash held in the Trust Account to reduce the balance of the [***] Notes irrespective of whether the Fair Market Value of the [***] Notes exceeds [***], so long as said reduction of the balance of the [***] Notes results in an equal amount of cash returning to the Trust Account.

(ii) Except as otherwise set forth herein, any amount due under this Agreement shall be paid by wire transfer of immediately available funds to the account or accounts designated by the recipient thereof.

ARTICLE VIII
THE MODCO DEPOSIT, THE FUNDS
WITHHELD ACCOUNT, THE TRUST ACCOUNT, AND INVESTMENT MANAGEMENT AGREEMENT

Section 8.01 ModCo Deposit.

(a) Prior to the Initial Settlement Date, the Ceding Company shall establish a modified coinsurance account (the “ModCo Deposit”) to hold the modified coinsurance deposit on the books and records of the Ceding Company, which shall consist of a custody account established by the Ceding Company with Xxxxx Fargo Bank N.A. (as custodian of such custody account, the “Custodian”).

(b) The ModCo Deposit and the assets maintained therein will be owned and maintained by the Ceding Company and will be used exclusively for the purposes set forth in this Agreement. The assets maintained in the ModCo Deposit shall be invested by the Investment Manager and consist only of Permitted Assets, and the Permitted Assets shall be valued, for the purposes of this Agreement, according to their Statutory Carrying Value. For so long as one or more assets in the ModCo Deposit do not comply with the definition of Permitted Assets as a result of the downgrade of such asset or assets, the Reinsurer shall not be permitted to effect substitutions of any assets in the ModCo Deposit or withdraw any funds or assets from the Trust Account without the Ceding Company’s prior written consent.

(c) Notwithstanding any other provision hereof, assets held in the ModCo Deposit may be withdrawn by the Ceding Company at any time and shall be utilized and applied by the Ceding Company or any of its successors in interest by operation of law, including any liquidator, rehabilitator, receiver or conservator of the Ceding Company, without diminution because of insolvency on the part of the Ceding Company or the Reinsurer, only in accordance with Section 7.03.

(d) Determinations of statutory impairments of assets maintained in the ModCo Deposit shall be made by the Ceding Company and shall be (i) based upon the statutory rules and guidelines and the impairment policy used by the Ceding Company and its auditors for purposes of calculating statutory impairments reflected in the Ceding Company’s statutory financial statements and (ii) subject to consultation between the Investment Manager, the Reinsurer and the Ceding Company. The Ceding Company shall promptly notify the Reinsurer in writing if the Ceding Company determines that any assets maintained in the ModCo Deposit have become impaired for purposes of determining Statutory Carrying Value. Such notice shall describe any such assets, the reason for the impairment and the effect on Statutory Carrying Value of such assets.

(e) The Ceding Company shall bear the administrative costs and expenses related to the establishment and maintenance of the ModCo Deposit, including the fees of the Custodian to the extent relating to the ModCo Deposit.

(f) The performance of the assets maintained in the ModCo Deposit, including of all investment income paid or accrued, investment gains or losses, defaults and/or statutory impairments, will inure to the sole benefit or cost of the Reinsurer.

Section 8.02 Funds Withheld Account.

(a) Prior to the Initial Settlement Date, the Ceding Company shall establish a funds withheld account (the “Funds Withheld Account”) to secure the payment liability of the Reinsurer on the books and records of the Ceding Company, which shall consist of a custody account established by the Ceding Company with the Custodian. For avoidance of doubt, the balance of the Funds Withheld Account shall be considered a payable to the Reinsurer and as an amount held on behalf of the Reinsurer. The Reinsurer shall consider such amount as a receivable.

(b) The Funds Withheld Account and the assets maintained therein will be owned and maintained by the Ceding Company and will be used exclusively for the purposes set forth in this Agreement. The assets maintained in the Funds Withheld Account shall be invested by the Investment Manager and consist only of Permitted Assets, and the Permitted Assets shall be valued, for the purposes of this Agreement, according to their Statutory Carrying Value. For so long as one or more assets in the Funds Withheld Account do not comply with the definition of Permitted Assets as a result of the downgrade of such asset or assets, the Reinsurer shall not be permitted to effect substitutions of any assets in the Funds Withheld Account or withdraw any funds or assets from the Trust Account without the Ceding Company’s prior written consent..

(c) Notwithstanding any other provision hereof, assets held in the Funds Withheld Account may be withdrawn by the Ceding Company at any time and shall be utilized and applied by the Ceding Company or any of its successors in interest by operation of law, including any liquidator, rehabilitator, receiver or conservator of the Ceding Company, without diminution because of insolvency on the part of the Ceding Company or the Reinsurer, only in accordance with Section 7.03.

(d) Determinations of statutory impairments of assets maintained in the Funds Withheld Account shall be made by the Ceding Company and shall be (i) based upon the statutory rules and guidelines and the impairment policy used by the Ceding Company and its auditors for purposes of calculating statutory impairments reflected in the Ceding Company’s statutory financial statements and (ii) subject to consultation between the Investment Manager, the Reinsurer and the Ceding Company. The Ceding Company shall promptly notify the Reinsurer in writing if the Ceding Company determines that any assets maintained in the Funds Withheld Account have become impaired for purposes of determining Statutory Carrying Value. Such notice shall describe any such assets, the reason for the impairment and the effect on Statutory Carrying Value of such assets.

(e) The Ceding Company shall bear the administrative costs and expenses related to the establishment and maintenance of the Funds Withheld Account, including the fees of the Custodian to the extent relating to the Funds Withheld Account.

(f) The performance of the assets maintained in the Funds Withheld Account, including of all investment income paid or accrued, investment gains or losses, defaults and/or statutory impairments, will inure to the sole benefit or cost of the Reinsurer.

Section 8.03 Trust Account.

(a) Prior to the Initial Settlement Date, the Ceding Company and the Reinsurer shall establish a trust account (the “Trust Account”) with U.S. Bank, National Association (as trustee of such Trust Account, the “Trustee”) with the Reinsurer as grantor thereof, and the Ceding Company as beneficiary. The Trust Account shall initially contain certain capital assets of the Reinsurer (which prior to the Initial Settlement Date shall be set out in Schedule XIII and such additional amounts as distributed in accordance with Section 7.03.

(b) The Reinsurer expects to contribute additional amounts to the Trust Account as set out in Schedule XIII. The maximum amount the Reinsurer is required to deposit into the Trust Agreement, inclusive of any amount deposited as of the Effective Date or the date of execution of this Agreement, is [***].

(c) The assets maintained in the Trust Account shall be invested by the Investment Manager and consist only of Permitted Assets. For so long as an asset or assets in the Trust Account do not comply with the definition of Permitted Assets as a result of the downgrade of such asset or assets, the Reinsurer shall not be permitted to effect substitutions of assets in the Trust Account or withdraw funds or assets from the Trust Account without the Ceding Company’s prior written consent.

(d) Subject to the requirements of the Trust Agreement, assets held in the Trust Account may be withdrawn by the Reinsurer at any time, and from time to time for any lawful purpose, in accordance with the Trust Agreement.

(e) The administrative costs and expenses related to the establishment and maintenance of the Trust Account shall be paid out of the assets of the Trust Account.

(f) The performance of the assets maintained in the Trust Account, including of all investment income paid or accrued, investment gains or losses, defaults and/or statutory impairments, will inure to the sole benefit or cost of the Reinsurer.

(g) The Reinsurer shall be obligated to deposit assets into the Trust Account as required by the Trust Agreement. Assets may be withdrawn from the Trust Account only in accordance with the provisions of the Trust Agreement.

Section 8.04 Excess Withdrawals.

(a) The Ceding Company shall return to the Funds Withheld Account, ModCo Deposit and/or Trust Account (as applicable), amounts which are withdrawn in excess of amounts required or permitted under Section 7.03 or otherwise in this Agreement (“Excess Withdrawals”) immediately upon becoming aware of such Excess Withdrawal. In the event of an Excess Withdrawal, the Ceding Company shall return to the Account or Trust Account from which such amounts were withdrawn the specific assets withdrawn in excess of the amounts required or permitted under Section 7.03, together with any realized interest or other income thereon, all in a manner such that the Reinsurer is restored to the position it would have been in if the Excess Withdrawal had not occurred. To the extent that the Excess Withdrawal was composed of cash, the Ceding Company shall return the amount of such cash plus interest thereon at a rate per annum equal to Delayed Payment Rate, from the date of withdrawal to but excluding the date on which the Excess Withdrawal is returned to the Funds Withheld Account, ModCo Deposit and/or Trust Account (as applicable). Until such amounts are so returned, such amounts shall be deemed to be held in trust by the Ceding Company for the benefit of the Reinsurer.

(b) The balance of the amount held or required to be so held in trust separate and apart as of any date of determination shall be an amount (the “Excess Withdrawal Amount”) equal to (i) the amount withdrawn from the Funds Withheld Account, ModCo Deposit and/or Trust Account (as applicable) in excess of amounts required or permitted under Section 7.03 minus (ii) any amounts applied by the Ceding Company therefrom for purposes required or permitted under Section 7.03 or returned to the Funds Withheld Account, ModCo Deposit and/or Trust Account (as applicable) plus (iii) any realized interest or other income on the withdrawn assets plus interest on any cash amount as determined in accordance with Section 8.04(a).

Section 8.05 Investment Management Agreement.

(a) Pursuant to an investment management agreement (the “Investment Management Agreement”), the Ceding Company shall appoint the Investment Manager as investment manager to provide investment management services with respect to the assets maintained in the ModCo Deposit and the Funds Withheld Account. The Ceding Company shall not amend, modify or change the terms of the Investment Management Agreement, including the Investment Guidelines attached as an exhibit thereto, or remove or replace the Investment Manager without the prior written consent of the Reinsurer, such consent not to be unreasonably withheld. If the Ceding Company and the Reinsurer agree to any amendments, modifications or changes to the investment management agreement, then the Ceding Company shall propose such changes in writing to the Investment Manager in accordance with the terms of the Investment Management Agreement. The Ceding Company shall not propose any additional limitations (including with respect to asset allocations) on the assets maintained in the ModCo Deposit or the Funds Withheld Account without the prior written consent of the Reinsurer. In the event that the Investment Manager is removed or resigns, the Ceding Company and the Reinsurer shall mutually agree (in good faith) on a replacement investment manager. The replacement investment manager shall accept its appointment by entering into an investment management agreement in a form acceptable to the Ceding Company and the Reinsurer.

(b) Pursuant to an investment management agreement (the “Trust IMA”), the Reinsurer shall appoint the Investment Manager to provide investment management services with respect to the assets maintained in the Trust Account. The Reinsurer shall not amend, modify or change the terms of the Trust IMA, including the Investment Guidelines attached as an exhibit thereto, or remove or replace the Investment Manager without the prior written consent of the Ceding Company, such consent not to be unreasonably withheld. If the Ceding Company and the Reinsurer agree to any amendments, modifications or changes to the investment management agreement, then the Reinsurer shall propose such changes in writing to the Investment Manager in accordance with the terms of the Trust IMA. The Reinsurer shall not propose any additional limitations (including with respect to asset allocations) on the assets maintained in the Trust Account without the prior written consent of the Ceding Company. In the event that the Investment Manager is removed or resigns, the Ceding Company and the Reinsurer shall mutually agree (in good faith) on a replacement investment manager. The replacement investment manager shall accept its appointment by entering into an investment management agreement in a form acceptable to the Ceding Company and the Reinsurer.

ARTICLE IX
RESERVED

ARTICLE X
ADMINISTRATION

Section 10.01 Policy Administration. The Ceding Company shall provide all required, necessary and appropriate claims, administrative and other services, including reporting under Article VII, with respect to the Reinsured Policies and the Accounts. The Ceding Company shall conduct its administration and claims practices with respect to the Reinsured Policies (a) with a level of skill, diligence and expertise that would reasonably be expected from experienced and qualified personnel performing such duties in similar circumstances, (b) in accordance with applicable Law and the terms of the Reinsured Policies, and (c) in a manner no less favorable to the Reinsurer and the Reinsured Policies than those used by the Ceding Company with respect to other policies of the Ceding Company not reinsured by the Reinsurer hereunder or other xxxxxx of the Ceding Company. The Ceding Company shall not outsource any administrative functions or claims administration to a non-Affiliate with respect to the Reinsured Policies or this Agreement without the prior written consent of the Reinsurer, such consent not to be unreasonably withheld. If the Reinsurer consents to any outsourcing of any administrative functions or claims administration with respect to the Reinsured Policies or this Agreement, the Ceding Company shall secure the Reinsurer’s right to audit and inspect the party performing such outsourced services. If the Ceding Company is adjudicated pursuant to the Dispute Resolution provisions of this Agreement to have persistently and materially breached its administration obligations set forth in this Section 10.01, the Reinsurer may require the Ceding Company to appoint and retain, at the Ceding Company’s expense, a professional third party administrator that is acceptable to the Reinsurer and has appropriate experience in the administration of annuity reinsurance claims (a “Substitute Administrator”) to perform such administration obligations on behalf of the Ceding Company; provided that the Reinsurer shall have obtained the prior written unanimous approval of all Third-Party Reinsurers of the appointment and retention of the Substitute Administrator. Any Substitute Administrator shall provide written evidence that it has obtained (and maintains in force) errors & omissions insurance policies with insurance coverage of at least [***] .

Section 10.02 Record-Keeping.

(a) Each of the Ceding Company and Reinsurer shall maintain all records and correspondence for services performed by such party hereunder relating to the Reinsured Policies in accordance with industry standards of insurance record- keeping. In addition, such records shall be made available for examination, audit, and inspection by the other party, or the department of insurance of any jurisdiction within which either the Ceding Company or the Reinsurer operates. The Ceding Company and the Reinsurer further agree that in the event of the termination of this Agreement, any such records in the possession of the Reinsurer shall promptly be duplicated and forwarded to the Ceding Company unless otherwise instructed.

(b) The Ceding Company shall establish and maintain an adequate system of internal controls and procedures for financial reporting relating to the Reinsured Policies and the Accounts, including associated documentation, and shall make such documentation available for examination and inspection by the Reinsurer. All reports provided by the Ceding Company pursuant to Article VII shall be prepared in accordance with such system and procedures and shall be consistent with the Ceding Company’s books and records.

ARTICLE XI
TERM AND TERMINATION

Section 11.01 Duration of Agreement. This Agreement shall continue in force until:

(a) Such time as the Ceding Company has no further liabilities or obligations with respect to the Reinsured Liabilities;

(b) Such time as this Agreement is terminated as to new business as set forth in Schedule V; or

Section 11.02 Recapture.

(a) Neither party shall be permitted to cause a recapture of the Reinsured Policies except in accordance with this Section 11.02. For the avoidance of doubt, neither party shall be permitted to cause a partial recapture of the Reinsured Policies pursuant to this Section 11.02 other than as set out in Section 11.02(c).

(b) Recapture for Non-Payment. Either party may cause the Reinsured Policies to be recaptured in full and this Agreement to be terminated as to all Reinsured Policies if the other party fails to pay any amounts due under this Agreement within thirty (30) calendar days following written notice of non-payment from the non-defaulting party.

(c) Recapture of Renewals. In the event that this Agreement has been terminated with respect to new business under Section 11.01(b), the Ceding Company may recapture any Reinsured Policy under this Agreement that is either subject to a renewal under its terms for MYGAs (starting on the 10th anniversary of each MYGA policy) or out of its surrender charge period for FIAs; provided the Ceding Company must provide notice to the Reinsurer no later than ten (10) Business Days prior to the maturity date of each such Reinsured Policy. If the Ceding Company so elects to recapture, it must recapture all future renewed Reinsured Policies.

(d) Recapture by Ceding Company for Other Material Breach. In addition to all of the other recapture rights set forth in this Agreement, the Ceding Company may terminate this Agreement and recapture all of the Reinsured Policies, if:

(i)

the Reinsurer ceases doing business;

(ii)

the Reinsurer fails to be authorized for reinsurance in its country of domicile;

(iii)

the Reinsurer (A) is held guilty or liable for fraud, embezzlement, or other intentional wrongful acts or (B) is found by a Governmental Entity after exhaustion or cessation of all avenues of appeal and review to have violated a material regulatory requirement imposed by the insurance supervisory authority in its country of domicile;

(iv)

the Reinsurer fails to make any payment, funding or contribution required hereunder (including a failure to make a Reinsurer Top-Up Payment) within the cure period specified in Section 7.03(c); or

(v)

the Ceding Company does not receive full credit for reinsurance of the Reinsured Liabilities in its state of domicile.

(e) Recapture for Insolvency of Reinsurer. The Ceding Company may terminate this Agreement and recapture all of the Reinsured Policies in the event that the Reinsurer becomes insolvent (as set forth in Article XIV) by promptly providing the Reinsurer or its Authorized Representative with written notice of recapture, to be effective as of the date on which the Reinsurer’s insolvency is established by the authority responsible for such determination. Any requirement for a notification period prior to the termination of this Agreement shall not apply under such circumstances.

Section 11.03 Recapture Payment.

(a) In the event the Reinsured Policies are recaptured in full (including if this Agreement is rejected by any liquidator, receiver, rehabilitator, trustee or similar Person acting on behalf of the Ceding Company (a “Receiver”)), a net accounting and settlement as to any balance due under this Agreement shall be undertaken by the Ceding Company which calculations shall be as of the Recapture Effective Date in an amount equal to the net result of the following, in each case calculated as of the Recapture Effective Date (the “Recapture Payment”):

(i) the net amount due to the Ceding Company or the Reinsurer, as applicable, pursuant to Sections 7.03(a) and (b); and

(ii) if the Ceding Company is electing to recapture solely pursuant to Section 11.02(d)(v) and there is no basis to recapture under Section 11.02(b) or clauses (i), (ii), (iii) or (iv) of Section 11.02(d), an amount payable to the Reinsurer equal to the aggregate amount of Ceding Commissions paid by the Reinsurer that are unearned by the Ceding Company as of the Recapture Effective Date, where Ceding Commissions shall be considered earned on a straight-line basis and considered fully earned on the scheduled maturity date of the applicable Reinsured Policy (or renewal thereof, if applicable).

(b) Within ten (10) Business Days following the later of the Recapture Effective Date or becoming aware that a recapture event has occurred, the Ceding Company shall deliver to the Reinsurer a final Monthly Accounting Report starting as of the prior Monthly Accounting Report and ending on the Recapture Effective Date together with the amount calculated pursuant to clause (ii) of the preceding sentence (as applicable) (the “Terminal Accounting Report”), and all amounts required to be paid in connection with the final settlement (including all Account Adjustments and Reinsurer Top-Up Payments) set forth in such Terminal Accounting Report shall be paid in accordance with Section 7.03 as if the Recapture Effective Date were the end of the month. In addition to all amounts required to be paid in connection with the final settlement, the Reinsurer shall pay an amount equal to the Accounts Required Reserves to the Ceding Company, such payment to be effectuated by the Ceding Company retaining assets in the Accounts with an aggregate Statutory Carrying Value equal to the Accounts Required Reserves. Following the making of all payments required to be made by the Reinsurer hereunder (including any Account Adjustments and/or Reinsurer Top-Up Payments and the payment of the Accounts Required Reserves to the Ceding Company) any remaining assets in the Accounts or the Trust Account shall be delivered to one or more accounts as directed by the Reinsurer.

(c) Either party’s right to terminate the reinsurance provided hereunder will not prejudice its right to collect amounts owed to it hereunder, including applicable interest as specified in Section 17.02, for the period during which such reinsurance was in force, through and including any notice period.

(d) In the event of a renewal recapture under Section 11.02(c), the Reinsured Liability with respect to such Reinsured Policy shall be extinguished upon the Reinsurer’s settlement of those items in Section 7.03 and the payment of the Quota Share of the Net Statutory Reserves with respect to the recaptured policy (such payment to be effectuated by the Ceding Company retaining assets in the Accounts with an aggregate book value equal to the Net Statutory Reserves), and in each case, solely related to such Reinsured Policy.

(e) For the avoidance of doubt, in the event this Agreement terminates for new business pursuant to Section 11.01 Reinsurer shall remain liable for the Reinsured Policies ceded hereunder in accordance with the terms of this Agreement. Reinsurer shall not be liable for any risks arising after the recapture date of any recaptured Reinsured Policies as provided for in Section 11.02.

Section 11.04 Survival. All provisions of this Agreement will survive any termination of this Agreement and recapture of the Reinsured Policies to the extent necessary to carry out the purpose of this Agreement.

ARTICLE XII
ERRORS AND OMISSIONS

Section 12.01 Errors and Omissions. Any unintentional or accidental failure to comply with the terms of this Agreement which can be shown to be the result of an oversight or clerical error relating to the administration of reinsurance by either party will not constitute a breach of this Agreement; provided, that, upon discovery, the error shall be promptly corrected so that both parties are restored to the position they would have occupied had the oversight or clerical error not occurred. In the event a payment is corrected, the party receiving the payment shall be entitled to interest in accordance with Section 17.02. Should it not be possible to restore both parties to this position, the party responsible for the oversight or clerical error will be responsible for any resulting liabilities and expenses.

ARTICLE XIII
DISPUTE RESOLUTION

Section 13.01 Negotiation.

(a) Within fifteen (15) calendar days after the Reinsurer or the Ceding Company has given the other party written notification of a specific dispute arising out of or relating to this Agreement, each party will appoint a designated officer of its company to attempt to resolve such dispute. The officers will meet at a mutually agreeable time and location as soon as reasonably possible and as often as reasonably necessary in order to gather and furnish the other with all appropriate and relevant information concerning the dispute. Any such meetings may be held by telephone or video conference. The officers will discuss the matter in dispute and will negotiate in good faith without the necessity of formal arbitration proceedings. During the negotiation process, all reasonable requests made by one officer to the other for information will be honored. The specific format for such discussions will be decided by the designated officers.

(b) If the officers cannot resolve the dispute within thirty (30) calendar days of their first meeting, the dispute will be submitted to formal arbitration pursuant to Section 13.02, unless the parties agree in writing to extend the negotiation period for an additional thirty (30) calendar days.

Section 13.02 Arbitration; Waiver of Trial by Jury.

(a) It is the intention of the Reinsurer and the Ceding Company that the customs and practices of the insurance and reinsurance industry will be given full effect in the operation and interpretation of this Agreement. If the Reinsurer and the Ceding Company cannot mutually resolve a dispute that arises out of or relates to this Agreement, including the validity of this Agreement, and the dispute cannot be resolved through the negotiation process, then the dispute will be finally settled by arbitration in accordance with the provisions of this Section 13.02.

(b) To initiate arbitration, either the Ceding Company or the Reinsurer will notify the other party by certified mail of its desire to arbitrate, stating the nature of the dispute and the remedy sought.

(c) Any arbitration pursuant to this Section 13.02 will be conducted before a panel of three (3) arbitrators who will be current or former officers of life insurance or reinsurance companies other than officers or directors of the parties to this Agreement, their Affiliates or subsidiaries, or other professionals with experience in life insurance or reinsurance; provided, that such professionals shall not have performed services for either party or its Affiliates within the previous three (3) years. Each of the arbitrators will be familiar with the prevailing customs and practices for reinsurance in the life insurance and reinsurance industry in the United States. Each of the parties will appoint one arbitrator and the two (2) so appointed will select the third arbitrator who shall be independent and impartial. If either party refuses or fails to appoint an arbitrator within sixty (60) calendar days after the other party has given written notice to such party of its arbitrator appointment, the party that has given notice may appoint the second arbitrator. If the two (2) arbitrators do not agree on a third arbitrator within thirty (30) calendar days of the appointment of the second arbitrator, then the third arbitrator shall be selected by the XXXXX-U.S. Umpire Selection Procedure (available at xxx.XXXXX-XX.xxx), subject to the arbitrator qualification requirements of this paragraph.

(d) Each arbitration hearing under this Agreement will be held on the date set by the arbitrators at a mutually agreed upon location. In no event will this date be later than six (6) months after the appointment of the third arbitrator. As soon as possible, the arbitrators will establish arbitration procedures as warranted by the facts and issues of the particular case. Notwithstanding Section 17.17, the arbitration and this Section 13.02 shall be governed by Title 9 (Arbitration) of the United States Code.

(e) The arbitrators will base their decision on the terms and conditions of this Agreement and the customs and practices of the insurance and reinsurance industries rather than on strict interpretation of the law. The decision of the arbitrators will be made by majority rule and will be final and binding on both parties, unless (i) the decision was procured by corruption, fraud or other undue means; (ii) there was evident partiality by an arbitrator or corruption in any of the arbitrators or misconduct prejudicing the rights of any party; or (iii) the arbitrators exceeded their powers. Subject to the preceding sentence, neither party may seek judicial review of the decision of the arbitrators. The arbitrators shall enter an award which shall do justice between the parties and the award shall be supported by written opinion. The parties agree that the federal courts in the State of Nebraska, or the State courts of such State, have jurisdiction to hear any matter relating to compelling arbitration or enforcing the judgment of an arbitral panel, and the parties hereby consent to such jurisdiction. Each party hereby waives, to the fullest extent permitted by Law, any objection it may now or hereafter have to the laying of such venue, or any claim that a proceeding has been brought in an inconvenient forum. In addition, the Ceding Company and the Reinsurer hereby consent to service of process out of such courts at the addresses set forth in Section 17.06.

(f) Unless the arbitrators decide otherwise, each party will bear the expense of its own arbitration activities, including its appointed arbitrator and any outside attorney and witness fees. The parties will jointly bear the expense of the third arbitrator.

(g) Waiver of Trial by Jury. THE REINSURER AND THE CEDING COMPANY HEREBY WAIVE ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT.

ARTICLE XIV
INSOLVENCY

Section 14.01 Insolvency.

(a) A party to this Agreement will be deemed “insolvent” when it:

(i) applies for or consents to the appointment of a receiver, rehabilitator, conservator, liquidator or statutory successor (the “Authorized Representative”) of its properties or assets;

(ii) is adjudicated as bankrupt or insolvent;

(iii) files or consents to the filing of a petition in bankruptcy, seeks reorganization or an arrangement with creditors or takes advantage of any bankruptcy, dissolution, liquidation, rehabilitation, conservation or similar Law;

(iv) becomes the subject of an order to rehabilitate or an order to liquidate as defined by the insurance code of the jurisdiction of the party’s domicile.

(v) In the event of the insolvency of either party, the rights or remedies of this Agreement will remain in full force and effect.

(b) Insolvency of the Ceding Company. In the event of the insolvency, liquidation or rehabilitation of the Ceding Company or the appointment of a liquidator, receiver or statutory successor of the Ceding Company, the reinsurance coverage provided hereunder shall be payable by the Reinsurer directly to the Ceding Company or to its liquidator, receiver or statutory successor except (1) when the contract or other written agreement specifically provides another payee of such reinsurance in the event of the insolvency of the ceding insurer or (2) when the assuming insurer, with the consent of the direct insured, has assumed such policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under such policies and in substitution for the obligations of the ceding insurer to such payees, on the basis of the liability of the Ceding Company for the Reinsured Liabilities without diminution because of such insolvency, liquidation, rehabilitation or appointment or because such liquidator, receiver or statutory successor has failed to pay any claims or any portion thereof. In any such event, the reinsurance being provided hereunder shall be payable immediately upon demand, with reasonable provision for verification, on the basis of claims allowed against the Ceding Company by any court of competent jurisdiction or by any liquidator, receiver or statutory successor. In any such event, the liquidator, receiver or statutory successor of the Ceding Company shall give written notice to the Reinsurer of the pendency of each claim against the Ceding Company with respect to such Reinsured Liabilities within a reasonable time after each such claim is filed in the insolvency, liquidation or rehabilitation proceeding. During the pendency of any such claims, the Reinsurer may, at its own expense, investigate such claim and interpose in the proceeding in which such claim is to be adjudicated any defense or defenses that the Reinsurer may reasonably deem available to the Ceding Company or its liquidator, receiver or statutory successor. For the avoidance of doubt, the Reinsurer will be liable only for benefits reinsured as benefits become due under the terms of the Reinsured Policies and will not be or become liable for any amounts or reserves to be held by the Ceding Company as to the Reinsured Policies or for any damages or payments resulting from the termination or restructuring of the Reinsured Policies, in each case, that are not otherwise expressly covered by this Agreement.

ARTICLE XV
TAXES

Section 15.01 Taxes. No taxes, allowances, or other expenses will be paid by the Reinsurer to the Ceding Company for any Reinsured Policy, except as specifically referred to in this Agreement.

Section 15.02 DAC Tax Election.

(a) The Ceding Company and the Reinsurer agree to elect, pursuant to U.S. Treasury Regulations Section 1.848-2(g)(8), to determine specified policy acquisition expenses with respect to this Agreement without regard to the general deductions limitation of Section 848(c)(1) of the Code (the "DAC Tax Election").

(b) This DAC Tax Election will be effective for the first taxable year in which this Agreement is effective and for all years for which this Agreement remains in effect, and each party agrees that is will take no action to revoke such DAC Tax Election.

(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) of the Code.

(d) The parties agree to sign the DAC Tax Election in the format provided in Schedule VI upon the execution of this Agreement.

(e) The parties agree to exchange information pertaining to the amount of net consideration under this Agreement each year to ensure consistency. If requested, the Ceding Company will provide supporting information reasonably requested by the Reinsurer. (The term "net consideration" means "net consideration" as defined in Regulation Section 1.848-2(f)).

(f) The Ceding Company and the Reinsurer will each attach a schedule to their respective federal income tax returns filed for the first taxable year for which this DAC Tax Election is effective, and each year thereafter. Such schedules will identity the Agreement as a reinsurance agreement for which the DAC Tax Election under Regulation Section 1.8482(g)(8) has been made.

(g) The Ceding Company and the Reinsurer represent and warrant that each is respectively subject to U.S. taxation under with the provision of subchapter L of Chapter 1 or the provisions of subpart F of subchapter N of Chapter 1 of the Code.

Section 15.03 US Taxpayer. Both the Ceding Company and the Reinsurer are U.S. taxpayers that are corporations for United States federal income tax purposes and are “United States persons” within the meaning of Section 7701(a)(30) of the Code.

ARTICLE XVI
REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 16.01 Representations and Warranties of the Ceding Company. The Ceding Company hereby represents and warrants to the Reinsurer, as of the Effective Date, as follows:

(a) Organization and Qualification. The Ceding Company is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Nebraska and has all requisite corporate power and authority to operate its business as now conducted, and is duly qualified as a foreign corporation to do business, and, to the extent legally applicable, is in good standing, in each jurisdiction where the character of its owned, operated or leased properties or the nature of its activities makes such qualification necessary, except for failures to be so qualified or be in good standing that, individually or in the aggregate, do not have, and would not reasonably be expected to have, a material adverse effect on the Ceding Company’s ability to perform its obligations under this Agreement.

(b) Authorization. The Ceding Company has all requisite corporate power to enter into, consummate the transactions contemplated by and carry out its obligations under, this Agreement. The execution and delivery by the Ceding Company of this Agreement, and the consummation by the Ceding Company of the transactions contemplated by, and the performance by the Ceding Company of its obligations under, this Agreement have been duly authorized by all requisite corporate action on the part of the Ceding Company. This Agreement has been duly executed and delivered by the Ceding Company, and (assuming due authorization, execution and delivery by the Reinsurer) this Agreement constitutes the legal, valid and binding obligation of the Ceding Company, enforceable against it in accordance with its terms, subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium, or similar Laws relating to or affecting creditors’ rights generally.

(c) No Conflict. The execution, delivery and performance by the Ceding Company of, and the consummation by the Ceding Company of the transactions contemplated by, this Agreement do not and will not (i) violate or conflict with the organizational documents of the Ceding Company, (ii) conflict with or violate any Law or Permit of any Governmental Entity applicable to the Ceding Company or by which it or its properties or assets is bound or subject, or (iii) result in any breach of, or constitute a default (or event which, with the giving of notice or lapse of time, or both, would become a default) under, or give to any Person any rights of termination, acceleration or cancellation of, any agreement, lease, note, bond, loan or credit agreement, mortgage, indenture or other instrument, obligation or contract of any kind to which the Ceding Company or any of its subsidiaries is a party or by which the Ceding Company or any of its subsidiaries or any of their respective properties or assets is bound or affected, except, in the case of clause (iii), any such conflicts, violations, breaches, loss of contractual benefits, defaults or rights that, individually or in the aggregate, do not have, and would not reasonably be expected to have, a material adverse effect on the Ceding Company’s ability to perform its obligations under this Agreement.

(d) Factual Information Relating to the Reinsured Policies. The information relating to the business reinsured under this Agreement and the Reinsured Policies that was supplied by or on behalf of the Ceding Company to the Reinsurer or any of the Reinsurer’s representatives in connection with this Agreement, including information with respect to the historical practices of the Ceding Company (such information, the “Factual Information”), as of the date supplied (or if later corrected or supplemented prior to the date hereof, as of the date corrected or supplemented), was complete and accurate in all material respects taken as a whole, as of the date of such information, provided that the Ceding Company makes no representation or warranty with respect to any projection, model, methodology, forecasting, analysis, assumption or estimate other than that the projections, models, methodologies, forecasts, analyses, assumptions or estimates on the basis of which such projection, model, methodology, forecasting, analysis, assumption or estimate were prepared (i) are reasonable and (ii) were prepared in good faith and in accordance with sound actuarial principles. The Ceding Company makes no representation or warranty as to the sufficiency or adequacy of any reserves or the future profitability of the Reinsured Policies. Any actuarial data included in the Factual Information was compiled in accordance with generally accepted actuarial principles in all material respects given the intended purpose at the time compiled. The Factual Information was compiled in a commercially reasonable manner given its intended purpose. The Ceding Company is not aware of any omissions, errors, changes or discrepancies that would materially affect the Factual Information since such date of supply, correction or supplement.

(e) Solvency. The Ceding Company is and will be Solvent on a statutory basis immediately after giving effect to this Agreement. For the purposes of this Section 16.01(e), “Solvent” means that: (i) the aggregate assets of the Ceding Company are greater than the aggregate liabilities of the Ceding Company, in each case determined in accordance with Nebraska SAP; (ii) the Ceding Company does not intend to, and does not believe that it will, incur debts or other liabilities beyond its ability to pay such debts and other liabilities as they come due; and (iii) the Ceding Company is not engaged in a business or transaction, and does not contemplate engaging in a business or transaction, for which the Ceding Company’s assets would constitute unreasonably insufficient capital.

(f) Governmental Licenses. The Ceding Company has all Permits necessary to conduct its business as currently conducted and execute and deliver, and perform its obligations under, this Agreement, except in such cases where the failure to have a Permit has not had and would not reasonably be expected to have a material adverse effect on the Ceding Company’s ability to perform its obligations under this Agreement. All Permits that are material to the conduct of the Ceding Company’s business are valid and in full force and effect.

(g) Actions. The Ceding Company has not received any notice from any Governmental Entity alleging any violation of any applicable Law by the Ceding Company that would, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Reinsured Policies or the Ceding Company’s ability to satisfy its obligations hereunder. The Ceding Company is not subject to any pending Action or, to the knowledge of the Ceding Company, any threatened Action that seeks the revocation, suspension, termination, modification or impairment of any Permit that, if successful, would reasonably be expected to have, or with the passage of time become, a material adverse effect on the Ceding Company’s ability to perform its obligations under this Agreement. There is no outstanding order, decree (including a consent decree), judgment, writ, injunction, directive, decision, award, stipulation, or ruling by or with any Governmental Entity, arbitrator or arbitration board binding upon the Ceding Company, except as would not reasonably be expected to have a material adverse effect on the Reinsured Policies or the Ceding Company’s ability to satisfy its obligations hereunder.

(h) Accounts. Each Account has been maintained in accordance with applicable Law. No plan of operations with respect to the Accounts was required to be filed and approved by any Governmental Entity.

(i) Broker Fees. No intermediary, broker or finder has acted directly or indirectly for the Ceding Company, nor has the Ceding Company incurred any obligations to pay any intermediary, brokerage or finder’s fee or other commission, in connection with the transactions contemplated by this Agreement.

Section 16.02 Representations and Warranties of the Ceding Company in Respect of the In Force Reinsured Policies. In respect of, and limited to, the In Force Reinsured Policies (if any), the Ceding Company hereby represents and warrants to the Reinsurer, as of the Effective Date, as follows:

(a) Accuracy of Data. The Ceding Company is not aware of any material errors inaccuracies or discrepancies in respect of the data described in Schedule IX.

(b) Statutory Reserves. Subject to the next sentence, the Net Statutory Reserves as of the Effective Date (i) have been computed by the Ceding Company for purposes hereof in accordance with generally accepted actuarial principles and practices applicable to the Ceding Company, consistently applied, and are fairly stated in accordance with Nebraska SAP; (ii) are based on actuarial assumptions which produce reserves at least as great as those called for in any In Force Reinsured Policy provision; and (iii) include provision for all actuarial reserves and related statement items which ought to be established by the Ceding Company pursuant to Nebraska SAP, including additional reserves for benefits that may be included in rider provisions. On certain monthly reports, the Ceding Company uses estimates for Net Statutory Reserves, which are adjusted and trued up quarterly based on its actuary’s calculations.

(c) Form of Contracts. All In Force Reinsured Policies have been issued substantially in the form of one of the specimen policy forms provided to the Reinsurer and listed in Schedule I, without any riders thereto or other deviations therefrom except as expressly disclosed to the Reinsurer in writing. All In Force Reinsured Policies comply with applicable Laws in all material respects, including with respect to applicable rate and form filing requirements under applicable Law.

(d) Administration. The Ceding Company has administered and provided policy holders and claims servicing with respect to the In Force Reinsured Policies since their respective dates of issuance in a manner consistent in all material respects in accordance with the standards set forth in the second sentence of Section 10.1.

(e) Compliance with Applicable Law. The Ceding Company has filed all material reports, registrations, filings or submissions required to be filed with any Governmental Entity with respect to the In Force Reinsured Policies or the issuance or administration thereof. All such reports, registrations, filings or submissions were in compliance in all material respects with applicable Law when filed or as amended or supplemented, and no material deficiencies have been asserted by any such Governmental Entity with respect to such registrations, filings or submissions that have not been satisfied or resolved, except in each case as would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Reinsured Policies or the Ceding Company’s ability to satisfy its obligations hereunder. The Ceding Company has endeavored in good faith to furnish to the Reinsurer all correspondence with respect to the In Force Reinsured Policies between the Ceding Company and any Governmental Entity, including all state insurance regulatory authorities, regarding any material violations of applicable Law.

(f) No Governmental Orders or Investigations. There is no investigation or proceeding pending or, to the knowledge of the Ceding Company, threatened by, any Governmental Entity against the Ceding Company with respect to any In Force Reinsured Policies, except as would not reasonably be expected to have a material adverse effect on the Reinsured Policies or the Ceding Company’s ability to satisfy its obligations hereunder.

(g) Title to Assets. The Ceding Company has good and marketable title to the asset set forth on Schedule III-B, free and clear of all liens.

(h) Broker Fees. There are no fees or commissions which are unpaid, due and owing to any agent, broker or intermediary in respect of the In Force Reinsured Policies.

Section 16.03 Covenants of the Ceding Company.

(a) Investigations. To the extent permitted by applicable Law, the Ceding Company shall promptly notify the Reinsurer, in writing, of any and all investigations of the Ceding Company conducted by any Governmental Entity commencing after the date hereof, other than routine State insurance department examinations that do not relate to the business reinsured pursuant to this Agreement or would not otherwise reasonably be expected to adversely affect the performance by the Ceding Company of its obligations under this Agreement.

(b) Statutory Accounting Principles. The Ceding Company shall prepare its financial statements as required by, and in accordance with, Nebraska SAP in all material respects.

(c) Existence; Conduct of Business. The Ceding Company shall do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect its legal existence and the rights, Permits and privileges material to the conduct of its business.

(d) Compliance with Law. The Ceding Company shall comply with all Laws applicable to, and all Permits issued by any Governmental Entity to, the Ceding Company or by which it or its properties or assets is bound or subject, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the Ceding Company’s ability to perform its obligations, or on the Reinsurer’s rights or obligations, under this Agreement.

(e) Governmental Notices. The Ceding Company shall provide the Reinsurer, within five (5) Business Days after receipt thereof, copies of any material written notice or report from any Governmental Entity with respect to the business reinsured under this Agreement and a written summary of any material oral communication with any Governmental Entity with respect to the business reinsured under this Agreement.

(f) Restrictions on Liens. The Ceding Company shall not create, incur, assume or suffer to exist any material liens on the assets in the ModCo Deposit or the Funds Withheld Account or on any interest therein or the proceeds thereof.

(g) Reliance. The Ceding Company hereby represents, warrants and covenants that it has not relied, and shall not rely, on any representation, warranty or statement or duty of the Reinsurer other than the representations and warranties contained in Section 16.04 and the covenants contained in Section 16.05 and elsewhere in this Agreement. The Reinsurer makes no representations or warranties in connection herewith other than those contained in Section 16.04, and makes no covenants other than those contained in Section 16.05 and elsewhere in this Agreement.

Section 16.04 Representations and Warranties of the Reinsurer. The Reinsurer hereby represents and warrants to the Ceding Company, as of December 8, 2020, as follows:

(a) Organization and Qualification. (i)The Reinsurer is an incorporated cell of Crestline Re SPC, validly existing and in good standing under the Laws of the Cayman Islands and has all requisite corporate power and authority to operate its business as now conducted, and is duly qualified as a foreign corporation to do business, and, to the extent legally applicable, is in good standing, in each jurisdiction where the character of its owned, operated or leased properties or the nature of its activities makes such qualification necessary, except for failures to be so qualified or be in good standing that, individually or in the aggregate, do not have, and would not reasonably be expected to have, a material adverse effect on the Reinsurer’s ability to perform its obligations under this Agreement.

(b) Authorization. The Reinsurer has all requisite corporate power to enter into, consummate the transactions contemplated by and carry out its obligations under, this Agreement. The execution and delivery by the Reinsurer of this Agreement, and the consummation by the Reinsurer of the transactions contemplated by, and the performance by the Reinsurer of its obligations under, this Agreement have been duly authorized by all requisite corporate action on the part of the Reinsurer. This Agreement has been duly executed and delivered by the Reinsurer, and (assuming due authorization, execution and delivery by the Ceding Company) this Agreement constitutes the legal, valid and binding obligation of the Reinsurer, enforceable against it in accordance with its terms, subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium, or similar Laws relating to or affecting creditors’ rights generally.

(c) No Conflict. The execution, delivery and performance by the Reinsurer of, and the consummation by the Reinsurer of the transactions contemplated by, this Agreement do not and will not (i) violate or conflict with the organizational documents of the Reinsurer, (ii) conflict with or violate any Law or Permit of any Governmental Entity applicable to the Reinsurer or by which it or its properties or assets is bound or subject, or (iii) result in any breach of, or constitute a default (or event which, with the giving of notice or lapse of time, or both, would become a default) under, or give to any Person any rights of termination, acceleration or cancellation of, any agreement, lease, note, bond, loan or credit agreement, mortgage, indenture or other instrument, obligation or contract of any kind to which the Reinsurer or any of its subsidiaries is a party or by which the Reinsurer or any of its subsidiaries or any of their respective properties or assets is bound or affected, except, in the case of clause (iii), any such conflicts, violations, breaches, loss of contractual benefits, defaults or rights that, individually or in the aggregate, do not have, and would not reasonably be expected to have, a material adverse effect on the Reinsurer’s ability to perform its obligations under this Agreement.

(d) Solvency. The Reinsurer is and will be Solvent on a statutory basis immediately after giving effect to this Agreement. For the purposes of this Section 16.04(d), “Solvent” means that: (i) the aggregate assets of the Reinsurer are greater than the aggregate liabilities of the Reinsurer, in each case determined in accordance with the laws of the Cayman Islands; (ii) the Reinsurer does not intend to, and does not believe that it will, incur debts or other liabilities beyond its ability to pay such debts and other liabilities as they come due; and (iii) the Reinsurer is not engaged in a business or transaction, and does not contemplate engaging in a business or transaction, for which the Reinsurer’s assets would constitute unreasonably insufficient capital.

(e) Governmental Licenses. The Reinsurer has all Permits necessary to conduct its business as currently conducted and execute and deliver, and perform its obligations under, this Agreement, except in such cases where the failure to have a Permit has not had and would not reasonably be expected to have a material adverse effect on the Reinsurer’s ability to perform its obligations under this Agreement. All Permits that are material to the conduct of the Reinsurer’s business are valid and in full force and effect.

(f) Actions. The Reinsurer has not received any notice from any Governmental Entity alleging any violation of any applicable Law by the Reinsurer that would, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Reinsurer’s ability to satisfy its obligations hereunder. The Reinsurer is not subject to any pending Action or, to the knowledge of the Reinsurer, any threatened Action that seeks the revocation, suspension, termination, modification or impairment of any Permit that, if successful, would reasonably be expected to have, or with the passage of time become, a material adverse effect on the Reinsurer’s ability to perform its obligations under this Agreement. There is no outstanding order, decree (including a consent decree), judgment, writ, injunction, directive, decision, award, stipulation, or ruling by or with any Governmental Entity, arbitrator or arbitration board binding upon the Reinsurer, except as would not reasonably be expected to have a material adverse effect on the Reinsured Policies or the Reinsurer’s ability to satisfy its obligations hereunder.

(g) Broker Fees. No intermediary, broker or finder has acted directly or indirectly for the Reinsurer, nor has the Reinsurer incurred any obligations to pay any intermediary, brokerage or finder’s fee or other commission, in connection with the transactions contemplated by this Agreement.

Section 16.05 Covenants of the Reinsurer.

(a) Investigations. To the extent permitted by applicable Law, the Reinsurer shall promptly notify the Ceding Company, in writing, of any and all investigations of the Reinsurer conducted by any Governmental Entity commencing after the date hereof, other than routine State insurance department examinations that do not relate to the business reinsured pursuant to this Agreement or would not otherwise reasonably be expected to adversely affect the performance by the Reinsurer of its obligations under this Agreement.

(b) Statutory Accounting Principles. The Reinsurer shall prepare its financial statements as required by, and in accordance with GAAP.

(c) Existence; Conduct of Business. The Reinsurer shall do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect its legal existence and the rights, Permits and privileges material to the conduct of its business.

(d) Compliance with Law. The Reinsurer shall comply with all Laws applicable to, and all Permits issued by any Governmental Entity to, the Reinsurer or by which it or its properties or assets is bound or subject, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the Reinsurer’s ability to perform its obligations, or on the Ceding Company’s rights or obligations, under this Agreement.

(e) Governmental Notices. The Reinsurer shall provide the Ceding Company, within five (5) Business Days after receipt thereof, copies of any written notice or report from any Governmental Entity with respect to the business reinsured under this Agreement and a written summary of any material oral communication with any Governmental Entity with respect to the business reinsured under this Agreement.

(f) Reliance. The Reinsurer hereby represents, warrants and covenants that it has not relied, and shall not rely, on any representation, warranty or statement or duty of the Ceding Company other than the representations and warranties contained in Sections 16.01 and 16.02 and the covenants contained in Section 16.03 and elsewhere in this Agreement. The Ceding Company makes no representations or warranties in connection herewith other than those contained in Sections 16.01 and 16.02, and makes no covenants other than those contained in Section 16.05 and elsewhere in this Agreement.

ARTICLE XVII
MISCELLANEOUS

Section 17.01 Currency. All payments due under this Agreement shall be made in U.S. Dollars.

Section 17.02 Interest. All amounts due and payable by the Ceding Company or the Reinsurer under this Agreement that remain unpaid for more than fifteen (15) calendar days from the date due hereunder will incur interest from the date due hereunder. Except as otherwise set forth in this Agreement, such interest shall accrue at the rate equal to [***]% per annum (the “Delayed Payment Rate”).

Section 17.03 Right of Setoff and Recoupment.

(a) Each of the Ceding Company and the Reinsurer shall have, and may exercise at any time and from time to time, the right to setoff or recoup any balance or balances, whether on account of Reinsurance Premiums, allowances, credits, Reinsured Liabilities or otherwise, due from one party to the other under this Agreement and may setoff or recoup such balance or balances against any balance or balances due to the former from the latter under this Agreement.

(b) The parties’ setoff rights may be enforced notwithstanding any other provision of this Agreement including the provisions of Article XIV.

Section 17.04 No Third-Party Beneficiaries. This Agreement is an indemnity reinsurance agreement solely between the Ceding Company and the Reinsurer. The acceptance of risks under this Agreement by the Reinsurer will create no right or legal relation between the Reinsurer and the insured, owner, beneficiary, or assignee of any insurance policy of the Ceding Company. In addition, nothing expressed or implied in this Agreement is intended to or shall confer remedies, obligations or liabilities upon any Person other than the parties hereto and their respective administrators, successors, legal representatives and permitted assigns or relieve or discharge the obligation or liability of any third party to any party to this Agreement.

Section 17.05 Amendment. This Agreement may not be changed or modified or in any way amended except by a written instrument duly executed by the proper officers of both parties to this Agreement, and any change or modification to this Agreement will be null and void unless made by amendment to this Agreement and duly executed by the proper officers of both parties to this Agreement.

Section 17.06 Notices.

(a) All demands, notices, reports and other communications provided for herein shall be delivered by the following means: (i) hand-delivery; (ii) overnight courier service (e.g., FedEx, Airborne Express, or DHL); (iii) registered or certified U.S. mail, postage prepaid and return receipt requested; or (iv) facsimile transmission or e-mail; provided, that the fax or e-mail is confirmed by delivery using one of the three (3) methods identified in clauses (i) through (iii). All such demands, notices, reports and other communications shall be delivered to the parties as follows:

if to the Ceding Company:

American Life & Security Corp.

0000 X. 00xx Xxxxxx

Xxxxx 000

Xxxxxxx, XX 00000

Attn: Xxxxxxx Xxxxx and Xxxx Xxxxxxx

Tel:

Email:

if to the Reinsurer:

Crestline Re SPC

Crestline Re SP 1

c/o Aon Insurance Managers

00 Xxxxx Xxxx, 0xx Xxxxx

Xxxxxx Xxx

P.O. Box 69

Grand Cayman, KY1-1102

Cayman Islands

Attn: Xxxxxxxx X’Xxxxxxx and Sjoerd van der Westhuizen

Email:

With a copy to:

Crestline Management, L.P.

000 Xxxx Xxxxxx, Xxxxx 0000

Xxxx Xxxxx, XX 00000

Attn: Xxxx Xxxxxxx

Email:

(b) Either party hereto may change the names or addresses where notice is to be given by providing notice to the other party of such change in accordance with this Section 17.06.

(c) If either party hereto becomes aware of any change in applicable Law restricting the transmission of notices or other information in accordance with the foregoing, such party shall notify the other party hereto of such change in Law and such resulting restriction.

Section 17.07 Consent to Jurisdiction. Subject to the terms and conditions of Article XIII, each party hereto hereby irrevocably and unconditionally submits to the non-exclusive jurisdiction of any United States court sitting in Nebraska and of any Nebraska state court for purposes of all legal proceedings arising out of or relating to this Agreement or for recognition and enforcement of any judgment in respect thereof. In any action, suit or other proceeding, each party hereby irrevocably waives, to the fullest extent permitted by applicable Law, any objection that it may now or hereafter have to the laying of the venue of any such proceedings brought in such court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. Each party hereto also agrees that any final and nonappealable judgment against a party in connection with any action, suit or other proceeding shall be conclusive and binding on such party and that such award or judgment may be enforced in any court of competent jurisdiction, either within or outside of the United States. A certified or exemplified copy of such award or judgment shall be conclusive evidence of the fact and amount of such award or judgment. Each party hereto agrees that any process or other paper to be served in connection with any action or proceeding under this Agreement shall, if delivered, sent or mailed in accordance with Section 17.06, constitute good, proper and sufficient service thereof. This Section 17.07 is not intended to conflict with or override Article XIII.

Section 17.08 Service of Process. The Reinsurer hereby designates the CT Corporation, located at 0000 Xxxxx 00xx Xxxxxx, Xxxxx X, Xxxxxxx, Xxxxxxxx 00000, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Ceding Company. A copy of any such process shall be delivered to the Reinsurer in accordance with Section 17.06. This Section 17.08 is not intended to conflict with or override Article XIII.

Section 17.09 Inspection of Records.

(a) Upon giving at least five (5) Business Days’ prior written notice, the Reinsurer, or its duly authorized representatives, will have the right to audit, examine and copy, electronically or during regular business hours, at the home office of the Ceding Company, any and all books, records, statements, correspondence, reports, and other documents that relate to the Reinsured Policies, the assets maintained in the Funds Withheld Account, the assets maintained in the ModCo Deposit or this Agreement, subject to the confidentiality provisions contained in this Agreement and preservation of attorney-client privilege . In the event the Reinsurer exercises its inspection rights, the Ceding Company must provide a reasonable work space for such audit, examination or copying, cooperate fully and faithfully, and produce any and all materials reasonably requested to be produced, subject to confidentiality provisions contained in this Agreement. The expenses related to any two (2) such inspections in any calendar year shall be borne by the Ceding Company; provided, that if any breach of this Agreement by the Ceding Company has occurred, the expenses relating to all such inspections shall be borne by the Ceding Company.

(b) The Reinsurer’s right of access as specified above will survive until all of the Reinsurer’s obligations under this Agreement have terminated or been fully discharged.

Section 17.10 Confidentiality.

(a) The parties will keep confidential and not disclose or make competitive use of any shared Proprietary Information, as defined below, unless:

(i) The information becomes publicly available or is obtained other than through unauthorized disclosure by the party seeking to disclose or use such information;

(ii) The information is independently developed by the recipient; or

(iii) The disclosure is required by Law; provided, that, if applicable, the party required to make such disclosure will allow the other party to seek an appropriate protective order.

“Proprietary Information” includes, but is not limited to, underwriting manuals and guidelines, applications, policy forms, agent lists and premium rates and allowances of the Reinsurer and the Ceding Company, but shall not include the existence of this Agreement and the identity of the parties. Additionally, Proprietary Information may be shared by either party on a need-to-know basis with its officers, directors, employees, Affiliates, third-party service providers, auditors, consultants or retrocessionaires, or in connection with the dispute process specified in this Agreement.

(b) Except as embedded in records during an audit as set forth in 17.09, the Ceding Company shall not provide to the Reinsurer, and the Reinsurer shall have no right to access, any Non-Public Personal Information except to the extent (i) necessary for purposes of administration of this Agreement and (ii) requested in writing by a duly authorized representative of the Reinsurer. The Reinsurer and its representatives and service providers will protect the confidentiality and security of Non-Public Personal Information (as defined below) provided to it hereunder by:

(i) holding all Non-Public Personal Information in strict confidence;

(ii) maintaining appropriate measures that are designed to protect the security, integrity and confidentiality of Non-Public Personal Information; and

(iii) disclosing and using Non-Public Personal Information received under this Agreement solely for purposes of carrying out the Reinsurer’s obligations under this Agreement, for purposes of retrocession (provided that the retrocessionaire has agreed to maintain the confidentiality of such Non-Public Personal Information to the same extent as the Reinsurer hereunder), or as may be required or permitted by Law, in each case solely to the extent permitted by Law.

“Non-Public Personal Information” is personally identifiable medical, financial, and other personal information about proposed, current and former applicants, policy owners, contract holders, insureds, annuitants, claimants, and beneficiaries of Reinsured Policies or contracts issued by the Ceding Company, and their representatives, that is not publicly available. Non-Public Personal Information does not include de-identified personal data, i.e., information that does not identify, or could not reasonably be associated with, an individual.

Section 17.11 Successors. This Agreement will be binding upon the parties hereto and their respective successors and assigns including any Authorized Representative of either party. Neither party may effect any novation or assignment of this Agreement without the prior written consent of the other party and the Nebraska Department of Insurance.

Section 17.12 Entire Agreement. This Agreement and the Schedules and Exhibits hereto constitute the entire agreement between the parties with respect to the business reinsured hereunder and supersede any and all prior representations, warranties, prior agreements or understandings between the parties pertaining to the subject matter of this Agreement. There are no understandings between the parties other than as expressed in this Agreement and the Schedules and Exhibits hereto. In the event of any express conflict between this Agreement and the Schedules and Exhibits hereto, the Schedules and Exhibits hereto will control.

Section 17.13 Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any Person or entity or any circumstance, is found by a court or other Governmental Entity of competent jurisdiction to be invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

Section 17.14 Construction. This Agreement will be construed and administered without regard to authorship and without any presumption or rule of construction in favor of either party. This Agreement is between sophisticated parties, each of which has reviewed this Agreement and is fully knowledgeable about its terms and conditions.

Section 17.15 Non-Waiver. Neither the failure nor any delay on the part of the Ceding Company or the Reinsurer to exercise any right, remedy, power, or privilege under this Agreement shall operate as a waiver thereof. No single or partial exercise of any right, remedy, power or privilege shall preclude the further exercise of that right, remedy, power or privilege or the exercise of any other right, remedy, power or privilege. No waiver of any right, remedy, power or privilege with respect to any occurrence shall be construed as a waiver of that right, remedy, power or privilege with respect to any other occurrence. No prior transaction or dealing between the parties will establish any custom, usage or precedent waiving or modifying any provision of this Agreement. No waiver shall be effective unless it is in writing and signed by the party granting the waiver.

Section 17.16 Further Assurances. From time to time, as and when requested by a party hereto, the other party hereto shall execute and deliver all such documents and instruments and shall take all actions as may be reasonably necessary to consummate the transactions contemplated by this Agreement.

Section 17.17 Governing Law. This Agreement will be governed by and construed in accordance with the Laws of the State of Nebraska without giving effect to any principles of conflicts of law thereof that are not mandatorily applicable by Law and would permit or require the application of the Laws of another jurisdiction.

Section 17.18 Counterparts. This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party hereto and delivered to the other party. Each party hereto may deliver its signed counterpart of this Agreement to the other party by means of electronic mail or any other electronic medium utilizing image scan technology, and such delivery will have the same legal effect as hand delivery of an originally executed counterpart. When this Agreement has been fully executed by the Ceding Company and the Reinsurer, it will become effective as of the Effective Date.

[Remainder of Page Intentionally Blank]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed effective as of the Effective Date.

	AMERICAN LIFE & SECURITY CORP.


	By:	/s/ Xxxxxxx Xxxx
	Name: Xxxxxxx Xxxx
	Title: General Counsel

	CRESTLINE RE SPC, for and on behalf of CRESTLINE RE SP 1


	By:	/s/ Xxxx Xxxxx
	Name: Xxxx Xxxxx
	Title: Director

[Signature Page to Coinsurance Agreement]

The following Schedules and Exhibits to this Exhibit 10.2 are filed herewith or, as indicated below with an asterisk, omitted on reliance of Item 601(a)(5) of Regulation S-K. In addition, certain information has been redacted from schedules thereto for which confidential treatment has been requested. All such omitted material has been filed with the Securities and Exchange Commission pursuant to Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended.

Schedule I – Policy Forms and Riders

Schedule II – Policy Expenses

Schedule III-A – Initial Settlement Date Reconciliation

Schedule III-B – Initial Modco and Funds Withheld Assets*

Schedule IV – Permitted Ex Gratia Payments*

Schedule V - Determination Of Crediting Rate And Quota Share; Termination For New Business

Schedule VI - §1.848-2(g)(8) DAC Tax Election*

Schedule VII - Determination Of Ceding Commission

Schedule VIII – Allocation Percentage

Schedule IX – Reinsured Policies Issued Prior to the Effective Date

Schedule X – Leverage Measure

Schedule XI – Asset Reserves*

Schedule XII – Hedging Returns

Schedule XIII – Trust Account Funding

Schedule XIV – Investment Manager*

Schedule XV – Non-Guaranteed Elements

Exhibit A – Monthly Accounting Report

Exhibit A-2 – Form of Amended and restated Trust Agreement (filed herewith as Exhibit 10.3)

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

SCHEDULE I

POLICY FORMS AND RIDERS

Schedule I consists of the listed policy forms and riders, as they may be amended and updated from time to time with different form numbers as approved by the Compact (or specific states as applicable). For informational purposes only, the Ceding Company will endeavor to provide the Reinsurer the updated form numbers.

For MYGA, the American Classic:

Reinsured Policies¹ with a 5-year initial term documented using Form ICC18-MYGA with the following riders:

•

Death Benefit Rider

•

Enhanced Interest Credit Rider

•

Enhanced Liquidity Rider

¹ Includes all variations and attachments to the policy forms (including, but not limited to, state variations, contract schedules, riders, and endorsements), which in each case have been disclosed in writing to the Reinsurer on or prior to the Effective Date.

For FIA, the following American Select versions²:

“AS10”: Reinsured Policies using Form ICC19-FIA-SCH with the below rider:

Enhanced Liquidity [***]% All Years on Form ICC19-FIALR

“AS10P”: Reinsured Policies using Form ICC19-FIA-SCHwith the below riders:

Enhanced Liquidity [***]% starting 2^nd year on Form ICC19-FIALR-10SP

Enhance Interest Credit using Form ICC19-FIAEIC-10P (1 or 2)

“AS10SP”: Reinsured Policies using Form ICC19-FIA-SCH with the below riders:

Enhanced Liquidity [***]% starting 2^nd year on Form ICC19-FIALR-10SP

Enhance Interest Credit with Bonus and Fee using Form ICC19-FIAEIC-10SP (1 or 2)

² Includes all variations and attachments to the policy forms (including, but not limited to, state variations, contract schedules, riders, and endorsements across applicable Index Account Riders), which in each case have been disclosed in writing to the Reinsurer on or prior to the Effective Date:

ICC19-FIA-PAR for various underlying indices.

ICC19-FIA-CAP for various underlying indices.

Schedule-I-1

SCHEDULE II

POLICY EXPENSES

MYGA:

Reinsurer shall pay the Ceding Company the following allowances for a MYGA to be paid on a monthly basis:

Acquisition and Administrative Expenses (Quota Share of per policy amounts)

Maintenance Expense:

$[***] per policy (with [***]% inflation applied

annually on each anniversary of the Effective

Date of this Agreement)

Policy Acquisition Cost:

$ [***] per policy one-time up-front cost

Policy Processing Cost:

$ [***] for each death or full surrender

Commission Expense Allowance

	[*]% of Reinsurance Premium (ages 0-[*[);
	[*]% of Reinsurance Premium (age [*]+);
	at renewal, [***]% of the original commission

Product Development Fee

[***]% of Reinsurance Premium

FIA:

Reinsurer shall pay the Ceding Company the following allowances for a FIA to be paid on a monthly basis:

Acquisition and Administrative Expenses (Quota Share of per policy amounts)

Maintenance Expense:

$[***] per policy (with [***]% inflation applied

annually on each anniversary of the Effective

Date of this Agreement)

Policy Acquisition Cost:

$[***] per policy one-time up-front cost

Policy Processing Cost:

$[***] for each death or full surrender

Commission Expense Allowance

	[*]% of Reinsurance Premium (ages 0-[*]);
	[*]% of Reinsurance Premium (age [*]+);

Product Development Fee

[***]% of account value per annum

Schedule-II-1

SCHEDULE III-A

INITIAL SETTLEMENT DATE RECONCILIATION

Period Start Date	4/24/2020
Period End Date	6/30/2020
Avg. In-Force Days - MYGA		35.00
Avg. In-Force Days - FIA		26.65


Gross premium income - MYGA		[***]
Gross FIA premium income – FIA		[***]
Gross commissions paid – MYGA		[***]
Gross commissions paid – FIA		[***]

Gross policy benefit payments - MYGA	$	-
Gross policy benefit payments - FIA	$	-

Policies in-force – MYGA		[***]
Policies in-force – FIA		[***]
New policies – MYGA		[***]
New policies – FIA		[***]
Deaths or full surrenders – MYGA		[***]
Deaths or full surrenders – FIA		[***]

Quota Share - MYGA (4.24-6.30)		[***]	%
Quota Share - FIA (4.24-6.30)		[***]	%
Ceding Commission - MYGA		[***]	%
Ceding Commission - FIA		[***]	%

Net Statutory Reserves (estimated) on new business – MYGA		[***]
Net Statutory Reserves (estimated) on new business – FIA		[***]

		Funds Withheld Account			ModCo Deposit Account
Allocation Percentage		[***]	%		[***]	%

Original Investment Income Paid at Settlement	$	[***]		$	-

7.03(a)(i) Investment Performance; Transfers
Change in Statutory Carrying Value of Investments	$	-		$	-
Transfers from Trust Account 7.03(b)	$	-		$	-

7.03(a)(ii) Additional Premium and Other Recoveries
Premium income	$	[***]		$	[***]
Option Payoff due to Reinsurer (Section 2.14)	$	-		$	-

7.03(a)(iii) Payments due from the Reinsurer
Policy Benefits	$	-		$	-
Ceding Commission	$	[***]		$	[***]
Excise Tax Reimbursement (Section 4.02)	$	-		$	-
Option Budget (Section 2.14)	$	[***]		$	[***]


Acquisition and Administrative Expenses (Schedule II)
Maintenance Expense	$	[***]		$	[***]
Policy Acquisition Expense	$	[***]		$	[***]
Policy Processing Cost	$	-		$	-
Total Acquisition and Administrative Expenses	$	[***]		$	[***]

Commission Expense Allowance (Schedule II)	$	[***]		$	[***]
Product Development Fee (Schedule II)	$	[***]		$	[***]

Investment Fees
Reimbursable Fees

Total Account Adjustment	$	[***]		$	[***]



Account IMR	$	-		$	-
Account AVR	$	-		$	-
Account Required Reserves	$	[***]		$	[***]



	$	[***]		$	-

Schedule-III-A-1

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED

MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE

COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES

EXCHANGE ACT OF 1934, AS AMENDED

SCHEDULE V

DETERMINATION OF CREDITING RATE AND QUOTA SHARE; TERMINATION FOR NEW BUSINESS

For the purposes of this Agreement, Crediting Rate shall be deemed to encompass the total payment guarantees to policyholder set at policy issuance inclusive of any crediting rate, Option Budget Rate, enhanced interest credit, interest bonus or rider charges. For FIA policies, the Reinsurer shall pay the Ceding Company an annual Option Budget Rate allowance equal to the initial period Option Budget Rate for the life of the Reinsured Policy.

Crediting Rate:

Following the Initial Settlement Date, the Crediting Rate on new policies may be modified solely on the procedures set forth herein:

(1)

The Ceding Company will set the Crediting Rate at its sole discretion (“Actual Rate”);

(2)

The Reinsurer may recommend an alternative Crediting Rate with thirty (30) calendar days’ prior notice (“Recommended Rate”);

(3)

If the Actual Rate is higher than the Recommended Rate, the Reinsurer, may in its sole discretion, increase its Recommended Rate to equal the Actual Rate.

The Parties may otherwise mutually agree on a different Crediting Rate.

The initial Crediting Rate for Reinsured Policies issued after the Effective Date but prior to July 1, 2020 shall be as set forth below:

	American Classic MYGA	AS10	AS10P	AS10SP
Crediting Rate	[***]%
Option Budget Rate		[***]%	[***]%	[***]%
Enhanced Interest Credit			[*]%; Age 0-[] []%; Age [*]+	[*]%; Age 0-[] []%; Age [*]+
Interest Bonus	[***]%			[***]%
Rider Charge				[***]%

Schedule-V-1

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED

MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE

COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES

EXCHANGE ACT OF 1934, AS AMENDED

The current Crediting Rate for Reinsured Policies issued on or after July 1, 2020 shall be as set forth below, subject to revision in accordance with this Schedule V:

	American Classic MYGA	AS10	AS10P	AS10SP
Crediting Rate	[***]%
Option Budget Rate		[***]%	[***]%	[***]%
Enhanced Interest Credit			[*]%; Age 0-[] []%; Age [*]+	[*]%; Age 0-[] []%; Age [*]+
Interest Bonus	[***]%			[***]%
Rider Charge				[***]%

Any change to the Option Budget Rate must be documented in writing between the Ceding Company and the Reinsurer.

Quota Share:

The Quota Share shall initially mean twenty-five percent (25%) for the MYGA policies and forty percent (40%) for the FIA policies. The Quota Share applicable to each Reinsured Policy shall be the Quota Share in effect on the date of issuance of such Reinsured Policies.

Termination for New Business; Adjustments to Quota Share

The “Maximum Limit” shall mean $[***].

Schedule-V-2

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED

MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE

COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES

EXCHANGE ACT OF 1934, AS AMENDED

The Quota Share in respect of new business shall be equal to zero (i) once the sum of the Reinsurance Premiums ceded under this Agreement exceeds the Maximum Limit or (ii) at any time the Reinsurer fails to transfer to the Ceding Company (including by the Ceding Company withdrawing from the Trust Account) when due the amount required to be deposited into the Accounts pursuant to Section 7.03(b), or (iii) for so long as the Reinsurer fails to maintain the Leverage Measure at or above the Minimum Leverage Measure regardless of whether the sum of the Reinsurance Premiums ceded under this Agreement exceeds the Maximum Limit.

The Quota Share in respect of new MYGA business shall be zero if the Crediting Rate is greater than [***]%, unless the Reinsurer specifically agrees to assume such new business. If the Reinsurer does not so agree, the Ceding Company may terminate this Agreement as to new MYGA business, regardless of whether the condition set forth in paragraph A has been met.

The Quota Share in respect of new FIA business shall be zero if the Option Budget Rate for such new business is greater than the Option Budget Rates set forth in the above schedule, unless Reinsurer specifically agrees to assume such new business. If the Reinsurer does not so agree, the Ceding Company may terminate this Agreement as to the applicable new FIA business, regardless of whether the condition set forth in paragraph A has been met.

The Ceding Company may terminate this Agreement as to new business on thirty (30) calendar days’ prior written notice if the Reinsurer fails to maintain its Leverage Measure at or above the Minimum Leverage Measure for two (2) consecutive quarters, regardless of whether the condition set forth in paragraph A has been met.

Schedule-V-3

SCHEDULE VII

DETERMINATION OF CEDING COMMISSION

The Ceding Commission is [***]% on the Quota Share Percentage of gross ceded MYGA annuity consideration received and issued; provided the parties may from time to time adjust the Ceding Commission upon delivery of an amendment in accordance with Section 17.05 of this Agreement. An additional Ceding Commission of [***]% shall be paid with respect to any policy renewal that is not recaptured.

The Ceding Commission is [***]% on the Quota Share Percentage of gross ceded FIA annuity consideration received and issued; provided the parties may from time to time adjust the Ceding Commission upon delivery of an amendment in accordance with Section 17.05 of this Agreement.

As used herein:

(a) a “Surrendered FIA Policy” refers to a Reinsured Policy that is a fixed indexed annuity (a “Reinsured FIA Policy”) of any Vintage and is surrendered in full in any period when a surrender charge applies,

(b) “Vintage” refers to those Reinsured FIA Policies issued (i) on any particular policy form (including applicable riders and state variations) as described on Schedule I and (ii) during the first twelve (12) months after the Effective Date or during any twelve (12) month period thereafter,

(c) “Excess FIA Surrenders” refers to such full surrenders in excess of [***] percent ([***]%), as measured by original premium, in respect of any Vintage, and

(d) “Excess Surrendered Reinsured FIA Policies” refers to those Reinsured FIA Policies of any Vintage constituting the Excess FIA Surrenders.

Schedule-VII-1

As promptly as possible following the full surrender of any Excess Surrendered Reinsured FIA Policy, the Ceding Company shall cede to the Reinsurer the Quota Share of one or more or partial newly issued FIA policy(ies) totaling the Account Value of the Excess FIA Surrenders the terms of which are substantially similar to the terms of the Excess Surrendered Reinsured FIA Policy (adjusted for then market-based pricing and other economics), and otherwise satisfy clause (ii) of the definition of “Reinsured Policy” (such newly issued policy, a “Replacement Reinsured FIA Policy”). A Replacement Reinsured FIA Policy shall be considered a Reinsured Policy for all purposes of this Agreement, and all expenses, allowances and commissions shall continue to be owed by the Reinsurer, except that the Reinsurer may set off against the Ceding Commission due on such Replacement Reinsured FIA Policy, the unearned portion of the Ceding Commission which was paid on the Excess Surrendered Reinsured FIA Policy

Schedule-VII-2

SCHEDULE VIII

ALLOCATION PERCENTAGE

The Allocation Percentage shall be as follows:

(i) 60% for the ModCo Deposit,

(ii) 40% for the Funds Withheld Account.

Upon approval of the Nebraska Department of Insurance, the Ceding Company may change the Allocation Percentage set forth above.

Schedule-VIII-1

SCHEDULE X

LEVERAGE MEASURE

The “Leverage Measure” shall be calculated as the ratio of (i) the Accounts Balance plus the Trust Account Balance over (ii) the Borrowing.

“Borrowing” shall be equal to the (x) Reinsurance Premiums less (y) Deferred Acquisition Cost (“DAC”) that the Reinsurer would record on its GAAP financials, plus (z) the Policy Accretion.

“Policy Accretion” shall be equal:

For MYGAs:	Crediting Rate times the account value for any period

For FIAs:	Option Payoff

The “Minimum Leverage Measure” means a Leverage Measure of [***]%; provided that:

(a) if the Fair Market Value of the [***] Notes is less than [***]% of the actual capital contributions to the Trust Account, then “Minimum Leverage Measure” means a Leverage Measure of [***]%;

(b) if the Fair Market Value of the [***] Notes (i) is less than [***]% of the actual capital contributions to the Trust Account and (ii) has been reduced to 30% or less of the Fair Market Value of the collateral securing the [***] Notes, then “Minimum Leverage Measure” means a Leverage Measure of [***]%; and

(c) if the Fair Market Value of the [***] Notes has been reduced to zero, then “Minimum Leverage Measure” means a Leverage Measure of [***]%.

Schedule-X-1

SCHEDULE XII

HEDGING RETURNS

With respect to each of the FIA Reinsured Policies that has an Index Term Period beginning during the current accounting period (including an election to remain in an Indexed Account at the expiration of an Index Term Period) an allowance shall be due to the Ceding Company equal to the Option Budget; and with respect to each of the FIA Reinsured Policies that has an Index Term Period ending during the accounting period, an allowance shall be due to the Reinsurer equal the Option Payoff (as defined below).

Definitions

Capitalized Terms not defined in the Agreement or this Schedule XII shall have the meaning ascribed to them in the applicable FIA form of the Ceding Company.

Quota Share, or QS, means the Quota Share as defined in the Reinsurance Agreement

Contract Value, or CV, equals the Fixed Interest Account Value plus the Index Account Accumulation Value. of the Reinsured Policy

Guaranteed Minimum Cash Surrender Value, or GSV, means the Guaranteed Minimum Cash Surrender Value as defined in the policy forms.

Option Budget Rate, or OBR. The OBR means the Option Budget Rate declared by the Ceding Company based on the procedures for determining Crediting Rates at policy issuance for the relevant Reinsured Policy.

Option Budget

With respect to each of the FIA Reinsured Policies, and utilizing the Reinsured Policy values at the Index Term Start Date, the Option Budget shall be equal to:

Option Budget = QS x CV x OBR

Option Payoff

With respect to each of the FIA Reinsured Policies, the Option Payoff shall be equal to:

For purpose of the following, the subscript t-1 shall reference the Reinsured Policy values at the beginning of the expiring Index Term Period and the subscript t shall reference the Policy values at the end of the expiring Index Term Period.

CV_t - CV_t-1

Schedule-XII-1

SCHEDULE XIII

TRUST ACCOUNT FUNDING

The Reinsurer has deposited into the Trust Account not less than $[***] (composed of $[***]in cash on or prior to the date of execution and delivery of this Agreement and $[***] in [***]Notes prior to August 31, 2020), and shall be permitted to deposit additional amounts into the Trust Account from time to time thereafter.

Schedule-XIII-1

SCHEDULE XV

NON-GUARANTEED ELEMENTS

“Non-Guaranteed Elements” means:

(i)

For MYGA policies, any renewal crediting rate (“Renewal Crediting Rate”), renewal Death Benefit Rider or additional renewal term with respect to any Reinsured Policy. For the avoidance of doubt, “Non-Guaranteed Elements” do not include any initial term, initial crediting rate or interest bonus credit of a Reinsured Policy set in accordance with Schedule V.

(ii)

For FIA policies, future period index availability, caps, par rates, and fixed account interest rates. For the avoidance of doubt, “Non-Guaranteed Elements” do not include any the lifetime Option Budget Rate, interest bonus credit, liquidity bonus, or rider charges of a Reinsured Policy set in accordance with Schedule V.

Certain Renewal Crediting Rates

Without the Reinsurer's prior written consent, Ceding Company shall not set the Renewal Crediting Rate (i) greater than [***]% higher than the average of the two highest crediting rates offered by Comparable Annuity Issuers with respect to MYGA policies of the same term offered by them in one or more states in the United States (under an approved rate and form in that state) or (ii) more than [***]% lower than the average crediting rate offered by five Comparable Annuity Issuers, as published by a recognized pricing source, with respect to MYGA policies of the same term offered by it in a state in the United States (under an approved rate and form in that state). “Comparable Annuity Issuer” shall mean, as of any date of determination, a life and annuity insurer that as of such date (i) is domiciled and licensed in an NAIC-accredited jurisdiction and (ii) has been assigned a credit rating by AM Best that is no lower than B+. Reinsurer must notify Ceding Company of any non-complying policy renewals within 60 days of policy issuance; otherwise Reinsurer shall be liable for any Reinsured Liability renewals.

Schedule-XIV-2

EXPLANATORY NOTE: PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BECAUSE THEY ARE BOTH (i) NOT MATERIAL AND (ii) WOULD BE COMPETITIVELY HARMFUL IF DISCLOSED PUBLICLY.

EXHIBIT A

MONTHLY ACCOUNTING REPORT

Period Start Date (e.g.)	5/31/2019
Period End Date (e.g.)	6/30/2019
Avg. In-Force Days		0.00

Gross premium income (e.g.)		$
Gross commissions paid

Gross policy benefit payments		$

Policies in-force		0.0
New policies		0.0
Deaths or full surrenders		0.0

Quota Share (MYGA)		[***] %
Quota Share (FIA)		[***] %
Ceding Commission		%

Net Statutory Reserves (estimated) on new business		$

	Funds Withheld Account	ModCo Deposit Account
Allocation Percentage	[***] %	[***] %

Beginning Account Balance

7.03(a)(i) Investment Performance; Transfers
Change in Statutory Carrying Value of Investments	$	$
Transfers from Trust Account 7.03(b)	$	$

7.03(a)(ii) Additional Premium and Other Recoveries	$	$

7.03(a)(iii) Payments due from the Reinsurer
Policy Benefits	$	$
Ceding Commission	$	$
Excise Tax Reimbursement (Section 4.02)	$	$
Option Budget (Section 2.14)	$	$
Option Payoff due to Reinsurer (Section 2.14)	$	$

Acquisition and Administrative Expenses (Schedule II)
Maintenance Expense	$	$
Policy Acquisition Expense	$	$
Policy Processing Cost	$	$
Total Acquisition and Administrative Expenses	$	$

Commission Expense Allowance (Schedule II)	$	$
Product Development Fee (Schedule II)	$	$

Total Account Adjustment	$	$



Initial Settlement Amount	$	$

Account IMR	$	$
Account AVR	$	$
Account Required Reserves	$	$



Trust Account Withdrawal on Settlement	$	$

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CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED. AMENDED AND RESTATED...

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