GUARANTEED MINIMUM DEATH BENEFIT
REINSURANCE AGREEMENT
Between
CEDING COMPANY: THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE
UNITED STATES, a New York corporation (hereinafter
referred to as the "Ceding Company")
and
REINSURER: REINSURANCE COMPANY OF [ City, State],
a [State] Corporation (hereinafter referred to as "Reinsurer")
EFFECTIVE DATE: [Date]
Commencing on the effective date, the Ceding Company will cede and Reinsurer
will accept the Ceding Company's Guaranteed Minimum Death Benefit (GMDB) risks
as in accordance with the following terms and conditions.
TABLE OF CONTENTS
ARTICLES TITLE PAGE
I Automatic reinsurance 3
II Reinsurance premiums and reporting 4
III Errors and omissions 6
IV Claims 6
V Recapture 8
VI Inspection of records 8
VII Confidentiality 8
VIII Insolvency 9
IX Termination charge 10
X Parties to the agreement 10
XI Duration of agreement 10
XII Arbitration 11
XIII Currency 12
XIV Choice of law and forum 12
XV Dac tax 12
XVI Premium tax 13
XVII Miscellaneous 13
SCHEDULES
A Automatic Acceptance Limits 16
B Accepted Coverage 17
C Premium Rates 20
D Reporting Format 21
E Sub-Accounts 22
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ARTICLE I
AUTOMATIC REINSURANCE
1. Beginning with the effective date of this agreement, the Ceding Company
cedes and Reinsurer accepts, subject to the terms, limits and conditions
set forth in this Agreement and the Schedules attached hereto, a [#]% quota
share reinsurance of the guaranteed minimum death benefit amount at risk
(as defined and adjusted in Schedule A) under the variable annuity contract
provisions set forth in Schedule B hereto ("GMDB") and included in the
variable annuity contracts listed in Schedule B ("Contracts"), subject to
the provisions of paragraph 4 of this Article I.
2. This agreement covers only the Ceding Company's liability on GMDB claims
under the contract forms that Reinsurer has reviewed. Reinsurer
acknowledges that it has reviewed all of the Contract forms listed in
Schedule B.
3. If the Ceding Company intends to cede to Reinsurer liability with respect
to a new annuity contract, or a revised version of a variable annuity
contract where such revision effects the GMDB, it must provide Reinsurer
written notice of such intention together with a copy of the proposed
variable annuity contract or revision thereof.
(a) New or revised policy forms that do not materially impact the
guaranteed minimum death benefit risks shall be submitted to Reinsurer
by Ceding Company as a revised Schedule to be included in this
Agreement. A form that contains no increase above the rates shown in
Schedule B (as most recently amended) in the mortality and expense risk
charge, other Contract charges against the Annuity Account Value, or
surrender charges or in the investment management fees of the
underlying portfolios (which shall be deemed a change of form for
purposes of this Agreement) will be deemed to have no material impact
on the guaranteed minimum death benefit risk. Such new or revised forms
shall automatically be reinsured under this Agreement when a revised
Schedule is submitted to Reinsurer or at such later date as may be
specified in the notice.
(b) New or revised policy forms that materially impact the guaranteed
minimum death benefit risks and additions of eligible portfolios in
Schedule E shall be subject to the approval of Reinsurer within [number
(#)] days after such forms are submitted to Reinsurer. If Reinsurer
fails to provide written notice of approval or disapproval of such
forms within the thirty [number (#)] day period, such forms shall be
considered to have been approved by Reinsurer and shall become
reinsured under this Agreement on the first day following the
expiration of such [number (#)] day period or at such later date as
may have been specified in the notice.
4. Reinsurer's share of the maximum purchase amount for each contract shall
not exceed $[#] without prior notification and acceptance. The maximum
purchase amount is the sum of all premium contributions less withdrawals
in the contract. For purchase amounts that result in Reinsurer's share
being greater than $ [ # ] and where Reinsurer has not agreed to accept the
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entire amount, Reinsurer's quota share for such contract shall be set equal
to the ratio of $ [ # ] to the maximum purchase amount.
ARTICLE II
REINSURANCE PREMIUMS AND REPORTING
1. REINSURANCE PREMIUMS
A. Reinsurance premiums will be paid [time period] in arrears. Premiums
will be determined in accordance with Schedule C.
2. REINSURANCE REPORTING
A. Within [number (#)] days from the end of each [time period], the Ceding
Company will provide a report to Reinsurer in the format set forth in
Schedule D. Within [number (#)] days from the close of each calendar
[time period], the Ceding Company will forward to Reinsurer a statement
or electronic medium reflecting the premiums due to Reinsurer and the
benefits (including interest) due from Reinsurer, including any
adjustments from the prior [time period]. The Ceding Company will also
remit a check or make a wire transfer to an account specified in
writing by Reinsurer for the net balance due to Reinsurer or will
submit a request for payment of any net amount due from Reinsurer. No
interest is payable on amounts paid within [number (#)] days of
delivery of such statement.
B. If the amounts described in this Article cannot be determined by said
due dates on an exact basis, such payments will be made with a
generally agreed upon formula which will approximate the actual
payments. Adjustments will then be made to reflect actual amounts when
they become available.
3. UNPAID AMOUNTS
A. If any reinsurance premium (net of claims payable by Reinsurer) is not
paid within the allotted time, Reinsurer may terminate the reinsurance
on Contracts for which reinsurance premium was not paid by giving the
Ceding Company [number (#)] days written notice. The Ceding Company
will be liable for the payment of reinsurance premiums due for periods
prior to the effective date of termination. Failure by Reinsurer to
exercise its right under this paragraph in any specific situation will
not be deemed a waiver of Reinsurer's right under this paragraph with
respect to any subsequent unpaid premium.
B. Reinsurer will reinstate the reinsurance at any time within [number
(#)] days following such termination if the Ceding Company makes
payment, with interest, of all reinsurance premiums due and payable up
to the date of reinstatement and provides full disclosure of all claims
for
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which it has received notice between dates of termination and
reinstatement. With respect to claims incurred by the Ceding Company
between the dates of termination and reinstatement of which the Ceding
Company received notice during such period, Reinsurer will be liable
for reinsurance on only those claims disclosed by the Ceding Company at
the time it requested reinstatement All such claims will be subject to
the claims provisions specified in Article IV.
C. Balances remaining unpaid by either party for more than [number (#)]
days from the date due will incur interest retroactive from the due
date of the balance to the date of actual payment. Interest amounts
will be calculated using the 7 year Constant Maturity Treasury rate
reported for the last working day of the [time period] of the due date
as reported in the Federal Reserve H15 Report.
4. OFFSET
Obligations of one party to the other under this agreement, whether
liquidated or unliquidated, whether on account of premiums or on account of
losses or otherwise, shall be offset against each other and only a net
amount shall be due.
5. RESERVE AND VALUATION INFORMATION
The reserve held by Reinsurer for reinsurance of the variable annuity death
benefit will be determined in accordance with the NAIC Actuarial Guideline
[#], but in no event will be less than the required statutory reserve in
the state of domicile of the Ceding Company or any other state in which it
conducts business.
6. SELF ADMINISTERED REPORTING REQUIREMENTS
The Ceding Company will not materially change its existing
self-administered reporting practices in effect on or after the effective
date, unless the Ceding Company notifies Reinsurer in writing and Reinsurer
approves of such changes. Reinsurer reserves the right, upon [number (#)]
days written notice to the Ceding Company with opportunity to cure, to
terminate all reinsurance, both in force and new business, if the reporting
practices of the Ceding Company deteriorate to the point that Reinsurer
cannot properly administer the risks reinsured under this agreement.
Reinsurer shall not make any change in its risk administration practices
that would materially affect the Ceding Company's self-administered
reporting practices.
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ARTICLE III
ERRORS AND OMISSIONS
Any inadvertent delay, error or omission shall not be held to relieve either
party hereto from any liability which would attach to it hereunder if such
delay, error or omission had not been made, provided such omission or error is
rectified upon discovery. The party first discovering such error or act
resulting from the error will notify the other party in writing promptly upon
discovery thereof, and the parties shall act to correct such error within
[number (#)] days of receipt of such. Exercise of the remedy provided in this
paragraph shall not be construed as a waiver by either party of its right to
enforce strictly the terms of this Agreement.
ARTICLE IV
CLAIMS
1. The Ceding Company is solely responsible for payment of its claims under
the underlying Annuity Contracts identified in Schedule B.
2. The Ceding Company will determine the Guaranteed Minimum Death Benefit for
each deceased annuitant.
3. Claims are self-administered.
4. The amount payable, or paid, on such claim will be furnished to Reinsurer
when the claim payment is reported to Reinsurer in the monthly report that
includes the claim.
5. Reinsurer will be liable to the Ceding Company for the benefits reinsured
hereunder to the same extent as the Ceding Company is liable to the
policyowner for such benefits, and all reinsurance will be subject to the
terms and conditions of the contract under which the Ceding Company will be
liable.
6. Reinsurer will pay its share in a lump sum to the Ceding Company without
regard to the form of claim settlement of the Ceding Company. Payment will
be included in the quarterly accounting pursuant to Paragraph 2 of
Article II.
7. Reinsurer agrees to pay to the Ceding Company a proportionate share of any
interest paid out to the claimant by the Ceding Company. Reinsurer's
liability to pay interest will be discharged on the date that Reinsurer
issues payment to the Ceding Company.
8. The Ceding Company will promptly notify Reinsurer of its intention to
contest benefits reinsured under this agreement or to assert defenses to a
claim for such benefits. If Reinsurer agrees to participate in the contest
or assertion of defenses and the Ceding Company's contest of such benefits
results in the reduction of its liability, Reinsurer will share in such
reduction in
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proportion to Reinsurer's liability. If Reinsurer declines to
participate in the contest or assertion of defenses, Reinsurer shall
discharge all of its liability by payment of the full amount of the
reinsurance to the Ceding Company.
9. Reinsurer will pay its share of the unusual expenses of the contest in
addition to its share of the claim itself as provided in the next
paragraph. Routine expenses incurred in the normal settlement of
uncontested claims, including interpleader cases and the salaries of
officers and employees of the Ceding Company, are excluded from this
provision.
10. The Ceding Company will notify Reinsurer of its intention to contest or
deny a claim which may involve reinsurance under this Agreement, and
Reinsurer shall then have [number (#)] days to notify the Ceding Company
whether it agrees that the claim should be contested or denied. If
Reinsurer fails to provide such notice, it shall pay the full amount or the
reinsurance as set forth in this Agreement and shall have no further
obligation with respect thereto. If Reinsurer participates in the contest,
in no event will Reinsurer participate in punitive or extra-contractual
compensatory damages which are awarded against the Ceding Company as a
result of an act, omission or course of conduct committed solely by the
Ceding Company in connection with the benefits reinsured under this
Agreement. Reinsurer will, however, pay its share of statutory penalties
awarded against the Ceding Company in connection with benefits reinsured
under this Agreement. The parties recognize that circumstances may arise in
which equity would require Reinsurer, to the extent permitted by law, to
share proportionately in certain assessed damages. Such circumstances are
difficult to define in advance, but generally would be those situations in
which Reinsurer was an active party and directed, consented to, or ratified
the act, omission, or course of conduct of the Ceding Company which
ultimately results in the assessment of punitive and/or compensatory
damages. In such situations, the Ceding Company and Reinsurer will share
such damages so assessed in equitable proportions. For purposes of this
provision, the following definitions will apply:
(a) "Punitive Damages" are those damages awarded as a penalty, the amount
of which is not governed nor fixed by statute;
(b) "Statutory Penalties" are those amounts which are awarded as a penalty,
but fixed in amount by statute;
(c) "Compensatory Damages" are those amounts awarded to compensate for the
actual damages sustained, and are not awarded as penalty, nor fixed in
amount by statute.
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ARTICLE V
RECAPTURE
Recapture is not available. However, if any amount due from Reinsurer (net of
premiums payable by the Ceding Company) is not paid within the allotted time,
the Ceding Company may recapture all business reinsured hereunder by giving
Reinsurer [number (#)] days written notice; in any such case, the Ceding Company
will be liable to Reinsurer only for reinsurance premiums (net of claims payable
by Reinsurer) due for periods prior to the effective date of termination.
ARTICLE VI
INSPECTION OF RECORDS
Upon [number (#)] days written notice, Reinsurer and the Ceding Company each
shall have the right to examine through their designated representatives, at the
office of the other, during normal business hours of the party being inspected,
all books, records, and documents relating to the reinsurance under this
Agreement. The expenses of any such inspection shall be born by the party
initiating the inspection. The information obtained by the inspecting party
shall be treated as confidential material subject to Article VII and shall be
used only for the purposes of this Agreement.
ARTICLE VII
CONFIDENTIALITY
Reinsurer and the Ceding Company may come into the possession or knowledge of
Confidential Information (as defined herein) of either party in fulfilling their
obligations under this agreement. Reinsurer and the Ceding Company agree to hold
such information in confidence and to take all reasonable steps to ensure that
such Confidential Information is not disclosed in any form by any means by its
employees or third parties of any kind, except by advance written authorization
by an officer of Reinsurer or the Ceding Company; provided however, that
Reinsurer and the Ceding Company will be deemed to have satisfied their
obligations as to the Confidential Information by protecting its confidentiality
in the same manner that they would protect their own proprietary or confidential
information of like kind which will be at least a reasonable manner or, if it is
determined that such disclosure is necessary in order to avoid a violation or
potential violation of legal obligations in accordance with the following:
1. If Reinsurer or the Ceding Company, their employees, directors or
advisers are requested or required (by oral questions, interrogatories,
requests for information or documents, subpoena, civil investigative
demand or similar process) to disclose Confidential Information, it will
promptly notify the other party in writing. The party notified will
promptly determine whether to contest such attempted discovery by legal
means or to waive compliance by the notifying party with the terms of this
Agreement. If, in the opinion of its counsel, Reinsurer or the Ceding
Company is subject to contempt, sanction or other penalty for failure to
disclose the requested Confidential Information, it may, without violating
the terms of this Agreement, disclose only that
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portion of the Confidential Information that counsel advises is legally
required to be disclosed, provided that it exercises all reasonable efforts
to preserve the confidentiality of such information, including, without
limitation, by cooperating with Reinsurer or the Ceding Company in
obtaining a protective order or other reliable assurance that the
Confidential Information will be protected from re-disclosure, provided,
however, that all expenses of such efforts (other than allocated costs of
home office employees at such location) shall be borne by the party whose
confidential information is sought to be disclosed.
2. Confidential Information means any and all information acquired by
Reinsurer or the Ceding Company prior or subsequent to the execution of
this Agreement with the exception of the following:
o Information readily available in the public domain; or
o Information acquired from sources (who are not thereby violating a
confidentiality obligation) other than the other party.
ARTICLE VIII
INSOLVENCY
1. In the event of insolvency of either the Ceding Company or Reinsurer, any
debits or credits due the other party, whether matured or unmatured, under
this agreement, which exist on the date of the entry of a receivership or
liquidation order, shall be deemed mutual debits or credits as the case may
be and shall be offset and only the balance shall be allowed or paid.
2. In the event of insolvency of the Ceding Company, the reinsurance hereunder
of the GMDB benefit shall be payable by Reinsurer directly to the Ceding
Company or its liquidator, receiver or statutory successor on the basis of
the liability of the Ceding Company under the Contracts reinsured without
diminution because of the insolvency of the Ceding Company.
3. In the event of insolvency of the Ceding Company, the liquidator, receiver
or statutory successor will give Reinsurer written notice of any pending
claim and Reinsurer may, at its own expense, investigate the claim and
interpose any defense which it deems appropriate to the Ceding Company or
its liquidator, receiver or statutory successor. If the Ceding Company
benefits from the defense by Reinsurer, an equitable share of the expenses
incurred by the Reinsurer will be chargeable to the Ceding Company as part
of the expense of liquidation.
4. The Reinsurer's liability will not increase as a result of the insolvency
of the Ceding Company.
5. In the event of the insolvency of Reinsurer as determined by the Illinois
Department of Insurance, the liability of Reinsurer shall not terminate but
shall continue with respect to the reinsurance ceded to Reinsurer by the
ceding company prior to the date of such insolvency, and the Ceding
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Company shall have a security interest in any and all sums held by or under
deposit in the name of Reinsurer.
6. If the event in paragraph above occurs, Reinsurer shall have the right
within [number (#)] days notice period to transfer all new and existing
reinsurance ceded and all rights and obligations under this Agreement to
another reinsurer, subject to approval of the reinsurer by the Ceding
Company, and upon terms and conditions acceptable to the Ceding Company.
The Ceding Company shall not withhold its approval unreasonably and it is
understood that the terms and conditions of this Agreement shall be
acceptable to the Ceding Company for purposes of such transfer. In the
event that Reinsurer is unable to effect such transfer, upon expiration of
the applicable notice period all new and existing reinsurance ceded under
this Agreement shall terminate and be recaptured by the Ceding Company.
ARTICLE IX
TERMINATION CHARGE
If Reinsurer exercises its rights to terminate all new and existing inforce
reinsurance as stipulated in Article II 3, an appropriate charge will be
determined by, and paid to, Reinsurer. Such termination charge will equal costs
involved (including legal fees) necessary to recover the unpaid premiums, which
cost shall be measured from the date of termination.
ARTICLE X
PARTIES TO THE AGREEMENT
This is an agreement for indemnity reinsurance solely between the Ceding Company
and Reinsurer. The acceptance of reinsurance hereunder will not create any right
or legal relation whatsoever between Reinsurer and any annuitant, contract owner
or any beneficiary under any contracts of the Ceding Company which may be
reinsured hereunder.
ARTICLE XI
DURATION OF AGREEMENT
1. This Agreement will be effective on and after the Effective Date stated on
the cover page. Other than for nonpayment of reinsurance premiums and/or
failure to comply with reporting requirements giving rise to a right to
terminate under Article II, Paragraph 6, the Agreement is unlimited in
duration but may be amended by mutual written agreement of the Ceding
Company and Reinsurer.
2. This Agreement may be terminated as to new reinsurance by either party's
giving [number (#)] days written notice to the other, effective one year
after date of this agreement.
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ARTICLE XII
ARBITRATION
1. It is the intention of Reinsurer and the Ceding Company that this agreement
will be enforced in accordance with its terms. For purposes of resolving
any ambiguity that may arise, the parties will refer to the customs and
practices of the insurance and reinsurance industry. The parties agree to
act in all things with the highest good faith. If Reinsurer and the Ceding
Company cannot mutually resolve a dispute which arises out of or relates to
this Agreement, however, the dispute will be decided through arbitration.
This Agreement is the result of arms-length negotiations between the
parties hereto and has been prepared jointly by the parties; in applying
and interpreting the provisions of this Agreement, there shall be no
presumption that this Agreement was prepared by any one party or that this
Agreement shall be construed in favor of or against any one party.
2. Disagreements between Reinsurer and the Ceding Company will be submitted to
three arbitrators who must be current or former officers of other life
insurance or reinsurance companies. Within [number (#)] days of the date of
notice of the intent to submit the dispute to arbitration, Reinsurer and
the Ceding Company will each appoint one arbitrator and the third will be
selected by these two arbitrators within [number (#)] days of the
appointment of the second of them. If either party refuses or neglects to
appoint an arbitrator within such [number (#)] day period, the other party
may appoint the second arbitrator. If the two arbitrators do not agree on
a third arbitrator within such [number (#)] day period following their
appointments, then the appointment of said third arbitrator will be left
to the President of the American Arbitration Association. The arbitrators
are empowered to decide all substantive and procedural issues by a majority
of votes.
3. The arbitrators will base their decision on the terms and conditions of
this Agreement plus, as necessary to resolve any ambiguity, on the customs
and practices of the insurance and reinsurance industry. There will be no
appeal from their decision, and any court having jurisdiction of the
subject matter and the parties may reduce that decision to judgment.
4. The arbitration hearing will be held on the date and at the place fixed by
the arbitrators. In no event will this date be later than [number (#)]
months after the appointment of the third arbitrator. As soon as possible,
the arbitrators will establish pre-arbitration procedures as warranted by
the facts and issues of the particular case. At least [number (#)] days
prior to the arbitration hearings, each party will provide the other party
and the arbitrators with a detailed statement of the facts and arguments it
will present at the arbitration hearing. The arbitrators may consider any
relevant evidence; they will give the evidence such weight as they deem it
entitled to after consideration of any objections raised concerning it.
Each party may examine any witnesses who testify at the arbitration
hearing. Within [number (#)] days after the end of the arbitration hearing,
the arbitrators will issue a written decision. In their decision, the
arbitrators will apportion the costs
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of arbitration, which will include but not be limited to their own fees and
expenses, as they deem appropriate.
5. No right of one party to terminate this agreement for any act or omission
of the other party shall be exercised until completion of any arbitration
proceeding regarding such act or omission and in accordance with the
arbitrator's decision.
ARTICLE XIII
CURRENCY
All of the provisions of this Agreement involving dollar amounts are expressed
in the terms of United States dollars. Therefore, all statistics must be
reported in U.S. dollars, and all payments must be made in U.S. dollars.
ARTICLE XIV
CHOICE OF LAW AND FORUM
[State] law will govern the terms and conditions of the Agreement (except to the
extent the Uniform Arbitration Act applies). In the case of an arbitration, the
Uniform Arbitration Act will control except as provided in Article XII.
ARTICLE XV
DAC TAX ELECTION STATEMENT
1. The Ceding Company and Reinsurer hereby agree to the following pursuant to
Section 1.848-2(g)(8) of the Income Tax Regulation issued December 1992,
under Section 848 of the Internal Revenue Code of 1986, as amended. This
election will be effective for 1992 and all subsequent taxable years for
which this agreement remains in effect.
2. The term "party" will refer to either the Ceding Company or Reinsurer as
appropriate.
3. The terms used in this article are defined by reference to Regulation
1.848-2 in effect December 1992.
4. The party with net positive consideration for this agreement for each
taxable year will capitalize specified IRS policy acquisition expenses with
respect to this agreement without regard to the general deductions
limitation of Section 848(c)(1).
5. Both parties agree to exchange information pertaining to the amount of net
consideration under this agreement each year to ensure consistency or as
otherwise required by the Internal Revenue Service.
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6. Reinsurer will submit a schedule to the Ceding Company by [Month day] of
each year of its calculation of the net consideration for the preceding
calendar year. This schedule will be accompanied by a statement stating
that Reinsurer will report such net consideration in its tax return for the
preceding calendar year.
7. The Ceding Company may contest such calculation by providing an alternative
calculation to Reinsurer within [number (#)] days of the Ceding Company's
receipt of Reinsurer's calculation. If the Ceding Company does not so
notify Reinsurer, Reinsurer will report the net consideration as determined
by Reinsurer in Reinsurer's tax return for the previous calendar year.
8. If the Ceding Company contests Reinsurer's calculation of the net
consideration, the parties will act in good faith to reach an agreement as
to the correct amount within [number (#)] days of the date the Ceding
Company submits its alternative calculation. If the Ceding Company and
Reinsurer reach agreement on an amount of the net consideration, each party
will report such amount in their respective tax returns for the previous
calendar year.
ARTICLE XVI
PREMIUM TAX
Reinsurer will not be responsible for any taxes incurred now or in the
future, directly or indirectly, by the Ceding Company or its affiliated
companies.
ARTICLE XVII
MISCELLANEOUS
1. Entire Agreement. This agreement constitutes the entire agreement between
the parties with respect to the business being reinsured hereunder and
supersedes all prior agreements and understandings, both oral and written,
between the parties with respect to its subject matter.
2. Amendment. This Agreement may not be modified or amended except by a
written agreement signed by both parties.
3. Notices. All notices, requests, and other communications to any party
hereunder shall be in writing and shall be given.
4. Successors and assigns. The provisions of this agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that no party may transfer any of its
rights or obligations under this Agreement to a party that would replace
it hereunder without the consent of the other party hereto.
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5. Survival. The provisions of Articles VII and XII shall survive termination
of this Agreement. Following termination of this Agreement, Reinsurer shall
continue to be liable for all reinsured obligations incurred prior to
termination.
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IN WITNESS WHEREOF, Reinsurer and Ceding Company have caused their
names to be subscribed by their respective authorized officers.
Signed for Reinsurer: Reinsurance Company of City, State
By: _____________________________ Attest:________________________________
Name: Name:
Title: Title:
Date of Signatures:____________________________________
Signed for the Ceding Company: The Equitable Life Assurance Society of the
United States
By: _____________________________ Attest:________________________________
Name: Name:
Title: Title:
Date of Signatures:____________________________________
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SCHEDULES
SCHEDULE A AUTOMATIC ACCEPTANCE LIMITS
SCHEDULE B ACCEPTED COVERAGES
SCHEDULE C PREMIUM RATES
SCHEDULE D REPORTING FORMAT
SCHEDULE E SUB-ACCOUNTS
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SCHEDULE A
AUTOMATIC ACCEPTANCE LIMITS
GUARANTEED MINIMUM DEATH BENEFITS (GMDB)
The Reinsured Obligations under this Agreement shall be a [ # ]% Quota Share of
the Benefit Payments. Benefit payments are the excess of the death benefits
under a Contract over the Annuity Account Value on the date as which the death
benefit is determined under the policy. In the event of lapse or other policy
termination prior to the annuitant's death, no benefit will be payable under
this coverage. Benefits will be reported as contemplated by Schedule C.
CAPACITY
$[#] million of first year contributions for each calendar year cohort of
contracts issued. For any such cohort for which Reinsurer's quota share of first
year contributions has exceeded $[ # ], Reinsurer's quota share shall be
multiplied by the ratio of $[ # ] to [ # ]% of actual first year contributions
under the Contracts.
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SCHEDULE B
ACCEPTED COVERAGES
Guaranteed minimum death benefit payments as described in the Contract forms
attached hereto as Exhibits I and II to this Schedule B and the corresponding
provisions of the flexible premium deferred annuity contract forms listed below:
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MARKET STATE (STATE CERTIFICATE ENDORSEMENT
CODE) NUMBER NUMBER
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And such state specific versions as may be required by the states in which the
company conducts business.
The ratcheted death benefit applies only if such benefit has been elected in the
Contract.
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EXHIBIT I
Copy of Contract Form in use prior to [Date]
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EXHIBIT II
Copy of Contract Form in use from [Date] forward
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SCHEDULE C
PREMIUM RATE SCHEDULE
The reinsurance premium is equal to the cost of reinsurance as set forth below
multiplied by the Adjusted Aggregate Account Value under the reinsured
Contracts. The Adjusted Aggregate Account Value is the sum on a given date of
Reinsurer's quota share (as adjusted for Reinsurer's capacity limit under
Schedule A) of the Account Values in all of the Contracts subject to this
Agreement. The Adjusted Aggregate Account Value and the premium thereon is
calculated monthly on the average of beginning of the month and end of the month
account values and paid quarterly.
Issue Ages Cost of Reinsurance
The premium rate is guaranteed for the life of the Contract, with the following
caveat. If the benefits or charges to the policyholder are changed (including
contract charges, M&E charges, and administrative fees), Reinsurer reserves the
right, subject to the provisions of Article I, to adjust the premium rates on a
prospective basis. Fund management fees are allowed to fluctuate.
Subject to [number (#)] days written notice, Reinsurer reserves the right to
adjust premium rates for contracts with an effective date of [ # ] and later.
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SCHEDULE D
REPORTING FORMAT
Within [#] days after the end of each calendar month, the Ceding Company will
furnish Reinsurer an electronic and summarized paper report for the reinsurance
account, valued as of the last day of that month. The report will indicate for
all inforce annuitants the following information:
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Field # Field Name Description
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1 Report Date Report date is the last day of the
reporting month (mm/dd/yyyy)
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2 Direct Writing Company Name of your company
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3 Policy Number Policy or contract number
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4 Policyholder Name of the policyholder (last name_MI_
first name)
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5 Current Age Age of the policyholder as of the report date
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6 Issue Date Date of the policy issued (mm/dd/yyyy)
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7 Sex Gender of the policyholder (M or F)
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8 Plan Code # # #
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9 Date of Last Ratchet Last ratchet date (mm/dd/yyyy)
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10 Current Ratchet Value Ratchet value as of the report date ($xx.xx)
--------------------------------------------------------------------------------
11 Current Guaranteed GMDB as of the report date ($xx.xx)
Minimum Death Benefit
--------------------------------------------------------------------------------
12 Current Total Account Total account value as of the report date
Value ($xx.xx)
--------------------------------------------------------------------------------
13 Current Account Value Account value by individual fund as of the
by Fund report date. The sum of Field 13 should
equal Field 12. ($xx.xx)
--------------------------------------------------------------------------------
14 ITD Premium Premium paid since inception ($xx.xx)
--------------------------------------------------------------------------------
15 Current Withdrawal Total withdrawal amount in this reporting
Amount month ($xx.xx)
--------------------------------------------------------------------------------
16 ITD Withdrawal Amount Total withdrawal amount since inception
($xx.xx)
--------------------------------------------------------------------------------
22
SCHEDULE E
ELIGIBLE PORTFOLIOS FOR ACCOUNT VALUES
THE FOLLOWING ARE THE INVESTMENT OPTIONS AVAILABLE IN THE SERIES CONTRACT TODAY:
[Investment Options Listed]
23
