EXHIBIT 10.4
LETTER OF INTENT
between
ANNUITY AND LIFE REASSURANCE LTD
and
XL LIFE LTD
CEDING COMPANY
Annuity and Life Reassurance Ltd. ("ALRe")
REINSURER
XL Life Ltd ("XL")
REINSURANCE
Catastrophic Excess of Loss Cover
RISK REINSURED
ALRe's Incurred death benefit claims resulting from a single event during
the Coverage Period in which ALRe has incurred more than Five (5) deaths
from the Eligible Business. Multiple policies on any one life shall be
treated as one death. A Covered Event shall be limited to accidents that
occur during the Coverage Period that cause the deaths within 24 hours of
the time of the accident to at least five lives that are reinsured by ALRe.
Only the first occurrence of a Covered Event during the Coverage Period
shall be reinsured by XL.
ELIGIBLE BUSINESS
Life Insurance individually underwritten by U.S. and Canadian Insurance
Companies reinsured by ALRe. Any group-related business, such as Group
Insurance and Corporate Owned Life Insurance, is excluded.
COVERAGE PERIOD
January 1, 2002 through December 31, 2002
PREMIUM
The greater of $0.008 per $1000 of total risk reinsured of the Eligible
Business as measured at the beginning of the Coverage Period, or $1
million. The premium is payable to the XL 60 days after the start of the
Coverage Period.
EXCLUSIONS
- Deaths that occur more than 24 hours after a Covered Event are excluded.
- Covered Event shall not include any act of terrorism, military
terrorism, or any act of war, declared or undeclared.
EXCESS OF LOSS PAYMENT
The Excess of Loss Payment from XL to ALRe under this Contract shall be the
average of the eligible incurred claim payments per death, not to exceed
$25,000 per death, for each death in excess of 5 deaths, up to a maximum of
10 times the Premium payable under this Contract. The Excess of Loss
Payment is due 90 days after ALRe has reported to XL eligible claims under
this Contract from policies reinsured by ALRe.
RENEWAL
1. ALRe and XL may mutually agree to renew this contract on a yearly
basis on the existing terms. At any time, ALRe and XL Life may
mutually agree to terminate this contract on mutually agreeable terms.
2. In the event that incurred losses under this Contract exceed paid
premium under this Contract, XL has the right to mandate renewal of
this contract for 10 successive years on the existing terms.
TERMINATION
At any time, ALRe and XL may mutually agree to terminate this contract on
mutually agreeable terms.
CURRENCY
U.S. Dollars
OTHER PROVISIONS (to include, but not be limited to the following:)
Definitions
Access to records
Arbitration (Bermuda 1993 Act)
Insolvency
Offset
ALRe to warrant accuracy of Reserves and Incurred Losses
Governing Law (Bermuda)
30 Day due diligence period for final approval and final wording
WORDING
To be agreed.
CONDITION PRECEDENT
This transaction must be approved by ALRe's Board of Directors.
Accepted for Annuity & Life Reassurance, Ltd.
Signature: /s/ Xxxxxx Xxxxx
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Name: XXXXXX XXXXX
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Title: SVP & Chief Underwriter
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Date: Feb. 28, 2002
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Accepted for XL Life Ltd
Signature: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
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Title: Executive Vice President and Secretary
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Date: March 13, 2002
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