Note: Using this form of agreement, Metropolitan Life Insurance Company (and
its affiliated insurance companies*) has entered into separate agreements with
each of the following reinsurers:
Canada Life Assurance Company
General Re Life Corporation
Generali USA Life Reassurance Company
Hannover Life Reassurance Company of America
Metropolitan Life Insurance Company
Munich American Reassurance Company
Optimum Re Insurance Company
RGA Reinsurance Company
SCOR Global Life U.S. Re Insurance Company
Scottish Re (US) Inc
Swiss Re Life & Health America
Transamerica Financial Life Insurance Company
* New England Life Insurance Company/General American Life insurance Company/
MetLife Investors USA Insurance Company/ MetLife Investors Insurance
Company/ First MetLife Insurance Company/ Metropolitan Tower Life Insurance
Company/MetLife Insurance Company of Connecticut
Page 1 of 57
EXHIBIT(G)
AUTOMATIC AND FACULTATIVE YRT AGREEMENT
BETWEEN
THE METROPOLITAN LIFE INSURANCE COMPANIES
WHICH SHALL INCLUDE THE FOLLOWING COMPANIES:
METROPOLITAN LIFE INSURANCE COMPANY, A NEW YORK INSURANCE COMPANY,
NEW ENGLAND LIFE INSURANCE COMPANY, A MASSACHUSETTS INSURANCE COMPANY,
GENERAL AMERICAN LIFE INSURANCE COMPANY, A MISSOURI INSURANCE COMPANY,
METLIFE INVESTORS USA INSURANCE COMPANY, A DELAWARE INSURANCE COMPANY,
METLIFE INVESTORS INSURANCE COMPANY, A MISSOURI INSURANCE COMPANY,
FIRST METLIFE INVESTORS INSURANCE COMPANY, A NEW YORK INSURANCE COMPANY,
METROPOLITAN TOWER LIFE INSURANCE COMPANY, A DELAWARE INSURANCE COMPANY, AND
METLIFE INSURANCE COMPANY OF CONNECTICUT, A CONNECTICUT INSURANCE COMPANY.
(HEREINAFTER INDIVIDUALLY OR COLLECTIVELY REFERRED TO AS "THE CEDING COMPANY" OR
"COMPANIES")
AND
GENERALI USA LIFE REASSURANCE COMPANY, A MISSOURI REINSURANCE COMPANY
(HEREINAFTER REFERRED TO AS "THE REINSURER")
EFFECTIVE 1/1/2012
Page 2 of 57
INDEX
Article Name Article Number Page Number
------------ -------------- -----------
Preamble 4
Automatic Cessions I 5
Underwriting II 7
Facultative Cessions III 8
Reinsurance Premiums IV 9
Reinsurer's Liability V 11
Claims VI 12
Administration and Accounting VII 14
DAC Tax VIII 16
Conversions and Exchanges IX 17
Terminations, Reductions/Increases and Changes X 19
Recapture and Retention Changes XI 21
Reinstatements, Reduced Paid-Up Insurance and
Extended Term Insurance XII 23
Insolvency XIII 24
Arbitration XIV 26
Duration of Agreement XV 29
Miscellaneous XVI 30
A. Choice of Law
B. Severability
C. Reserve Credit
D. Statement Credit
E. Assignment
F. Rights Under Agreement
G. Confidentiality
H. Inspection of Records
I. Damages
J. Errors and Omissions
K. Indemnification and Limitation of Liability
L. Entire Agreement
M. Modifications to Agreement
N. Survival
O. Right of Offset
P. Currency
Q. Independent Contractor
R. Agents, Intermediaries, and Representatives
S. Construction Rules
T. Compliance With Law
U. Notices and Communications
V. Representation of Authority and
Acknowledgement of Understanding
W. Representation of Valid Signature
X. Counterparts
Y. Retained Amounts
Execution XVII 36
Page 3 of 57
INDEX (CONTINUED)
-----------------
Exhibit Name Exhibit Number
------------ --------------
Limits and Reinsurer's Share I 39
Ceding Company Retention Limits and Share II 42
Policies and Riders III 45
Reinsurance Rates IV 48
Exhibit IV, Table A 51
Exhibit IV, Single Life Mortality Rate Tables 57
Monthly Statements V 58
Page 4 of 57
PREAMBLE
--------
This Reinsurance Agreement ("the Agreement") shall be effective as of 12:01
a.m.(EST) January 1, 2012 (the "Effective Date") between the Metropolitan Life
Insurance Companies, ("the Ceding Company" or "Companies") and Generali USA
Life Reassurance Company ("the Reinsurer").
The background of this Agreement is that the Ceding Company cedes and the
Reinsurer accepts, on a yearly renewable term ("YRT") basis, the Reinsurer's
quota share, as shown in Exhibit I, of the risks associated with Single Life
and Joint Policies ("the Policies") and associated Riders that the Ceding
Company may issue during the term of this Agreement.
In consideration of the mutual promises set forth herein, the parties agree as
follows:
Page 5 of 57
ARTICLE I
AUTOMATIC CESSIONS
------------------
The Ceding Company shall cede and the Reinsurer shall accept as indemnity
reinsurance, on a YRT basis, in accordance with the terms and conditions
hereof, the portions of the Ceding Company's risk on all Policies as provided
in Exhibit I, with respect to each Policy and the Ceding Company shall retain
for its own account the portions of the risk on each Policy as provided in
Exhibit II not to exceed its per life retention, provided that the following
conditions are met:
A. The Ceding Company shall have retained the specified portion of the risk on
each ceded Policy.
B. The amount applied for as stated on a signed application or signed
application amendment accepted by the Ceding Company, and in force on that
life with the Ceding Company does not exceed the Automatic Binding Limit as
shown in Exhibit I.
Notwithstanding the above and for purposes of this Section B only, the
total amount in force shall not include any amounts in respect of a policy
that replaces an equal or lesser amount of inforce coverage and has been
issued as an internal replacement by the Ceding Company. The Ceding
Company shall be responsible for effectuating any such replacement.
For joint life policies, the amount described above in this Section B that
is compared to the Automatic Binding Limit shall be the greater of the
amounts on each of the lives.
C. The sum of the amount of insurance already in force in all insurers,
including any coverage to be replaced, and the amount applied for on that
life in all insurers, according to information received by the Ceding
Company as stated on a signed application or signed application amendment
accepted by the Ceding Company, does not exceed the Jumbo Limit as shown in
Exhibit I.
To the best of the Ceding Company's knowledge at the time of policy
issuance, the information in the signed application is accurate and the
Ceding Company has reviewed the following information to confirm inforce
coverage:
1. A check of the Ceding Company's inforce amounts on the life per section
B above
2. MIB Checking Service for all policy amounts
3. Insurance Activity Index for policy amounts of $250,000 or more
4. The following additional information when available based on the Ceding
Company's normal individual ordinary life underwriting rules and
practices in effect at the time of issuance:
a. Personal History Interview/Investigative Consumer Report
b. Statement of Policyowner Intent
Notwithstanding the above and for purposes of this Section C only, the
total amount in force shall not include any amounts in respect of a policy
that meets one of the following conditions:
Page 6 of 57
1. The policy is one with another carrier that will be replaced in exchange
for a new policy issued by the Ceding Company and the Ceding Company has
received a signed, original Absolute Assignment form to effect an IRC
Sec. 1035 exchange (regardless as to whether the replacement qualifies
as a Sec. 1035 exchange); or
2. The policy replaces an equal or lesser amount of inforce coverage and
has been issued as an internal replacement by the Ceding Company.
The Ceding Company shall be responsible for effectuating any such
replacement.
For joint life policies, the amount described above in this Section C that
is compared to the Jumbo Limit shall be the greater of the amounts on each
of the lives.
D. The Ceding Company has not applied for facultative coverage on that life
within the last thirty- six (36) months.
This Section D shall not apply if:
1. the reason for any prior facultative submission was solely due to the
prior application exceeding the Automatic Binding Limit or Jumbo Limit
in effect for the prior application, or
2. the reason for any prior facultative submission was solely due to the
prior application not meeting the Ceding Company's guidelines for
foreign residents and citizens or travel abroad in effect for the prior
application.
Policies submitted through RGA's Automatic Selection and Assessment Program
are ceded automatically for purposes of this section.
E. The Policy is listed in Exhibit III.
F. The Policy is issued to a resident of the United States, Canada, Guam or
Puerto Rico, or meets the Ceding Company's guidelines for foreign residents
and citizens or permanent residents of the United States, Canada, Guam or
Puerto Rico traveling abroad.
G. The Policy is not submitted through RGA's Automatic Selection and
Assessment Program.
Page 7 of 57
ARTICLE II
UNDERWRITING
------------
A. The Policies reinsured under this Agreement shall be issued in accordance
with the Ceding Company's normal individual ordinary life underwriting
rules and practices in effect at the time of issuance, or issued in
accordance with the reasonable exercise of the underwriter's discretion and
judgment.
B. The Ceding Company provided the Reinsurer with a copy of the Ceding
Company's THE Life Underwriting GUIDE pursuant to the reinsurance quote
process. THE Life Underwriting GUIDE summarizes the Ceding Company's normal
individual ordinary life underwriting rules. Prior to the date of
termination of this Agreement with respect to new business, any proposed
changes to THE Life Underwriting GUIDE that materially impact mortality
will be provided to the Reinsurer in advance.
Page 8 of 57
ARTICLE III
FACULTATIVE CESSIONS
--------------------
The Ceding Company has the option to, in accordance with the provisions of this
Article, facultatively submit to the Reinsurer any Policy that is not
obligatorily ceded under the provisions of Article I, provided that the
provisions of Sections A through D below are met. In addition, there is no
limitation on the Ceding Company's right to submit a case facultatively to
other reinsurers.
A. the Ceding Company shall have provided to the Reinsurer copies of the
original Policy application. The Ceding Company shall also have provided to
the Reinsurer medical reports, inspection reports, attending physician
statements in possession of the Ceding Company at the time of submission to
the Reinsurer, and other information known to the Ceding Company at time of
submission that is material to the insurability of the risk unless
otherwise agreed upon by the Ceding Company and the Reinsurer;
B. the Ceding Company shall have notified the Reinsurer of any outstanding
underwriting requirements at the time of the facultative submission unless
otherwise agreed upon by the Ceding Company and the Reinsurer;
C. the Ceding Company shall have notified the Reinsurer of its acceptance of
the Reinsurer's proposed terms and conditions for the facultative cession
within 120 days of receipt, or the termination date specified in the
Reinsurer's offer unless the Reinsurer in writing expressly extends the
period for the Ceding Company's acceptance or rejection; and
D. the facultative cessions shall not be limited to those Policies that are
listed in Exhibit III.
Page 9 of 57
ARTICLE IV
REINSURANCE PREMIUMS
--------------------
A. Life reinsurance shall be on the yearly renewable term basis for the net
amount at risk (death benefit less cash value or fund value) on that
portion of the policy which is reinsured by the Reinsurer. Premiums and
allowances shall be based on the rates specified in Exhibit IV.
B. The Reinsurer shall not indemnify the Ceding Company for premium taxes or
guaranty fund assessments. In the event that the Reinsurer becomes an alien
company, the Reinsurer shall reimburse the Ceding Company for any federal
excise tax payable on business ceded under this Agreement.
C. The Ceding Company shall report and pay reinsurance premiums on an annual
basis in advance without regard to the Policy mode of premium payment.
D. For technical reasons relating to statutory reserve requirements, the YRT
rates described in Exhibit IV cannot be guaranteed for more than one year.
The Reinsurer anticipates continuing to accept premiums on the basis of the
YRT rates described in Exhibit IV. The guaranteed reinsurance premium for
each age and duration shall be the higher of the premium based on the
reinsurance rates shown in Exhibit IV or the premium based on the statutory
minimum valuation mortality table, as specified in Exhibit III, and the
statutory maximum valuation interest rate permitted for the underlying
Policy under the National Association of Insurance Commissioners' Standard
Valuation Law.
E. During the fifteen (15) years following the issue date of the original
Policy, the Reinsurer may increase the YRT rates only due to actual
mortality experience poorer than originally priced for on this business and
all similar business and only if the Reinsurer also concurrently increases
the reinsurance rates on all similar business by a like amount. Similar
business would include all reinsurance assumed on fully underwritten
products issued in the five (5) years prior or subsequent to the effective
date of the Agreement where the Reinsurer has the right to raise rates.
Notwithstanding the above, if the Ceding Company increases it's charges to
the Policyholder based on changes in actual or expected mortality, the
Reinsurer may increase rates on this Agreement on a consistent basis. The
Reinsurer shall provide one hundred and eighty (180) days written notice
prior to any increase in YRT rates taking effect.
Should the Reinsurer at any time be required to establish or maintain any
additional reserves, including deficiency reserves, on the inforce business
ceded under this Agreement by the insurance regulatory authority in its
state of domicile by virtue of the assurances provided above, upon the
Reinsurer's written notice to the Ceding Company, this Section E will be
modified and amended as mutually agreed upon by the Ceding Company and
Reinsurer to eliminate any additional reserves, including deficiency
reserves, on the inforce business ceded under this Agreement. If, after
thirty (30) days following this notice, this Section E language cannot be
agreed to by the Ceding Company and the Reinsurer, the
Page 10 of 57
first paragraph of this Section E will be deleted without any further
formalities or actions.
F. For Policies that terminate, reduce or change, the Reinsurer shall refund
any unearned reinsurance premium net of any allowances.
G. For Policies that are reinstated after coverage has ceased, the Ceding
Company shall pay to the Reinsurer reinsurance premiums net of any
allowances for the period for which the Ceding Company received Policy
premiums in arrears.
Page 11 of 57
ARTICLE V
REINSURER'S LIABILITY
---------------------
A. The Reinsurer's liability for cessions under Article I of this Agreement or
automatic cessions as specified in Article IX or Article X shall commence
simultaneously with that of the Ceding Company.
B. The Reinsurer shall have no liability for Policy proceeds paid under the
Ceding Company's temporary insurance agreement ("TIA") unless conditions
for automatic cessions under Article I of this Agreement are met or the
Reinsurer has made a Facultative offer and the Ceding Company would have
accepted that offer. If offers have been received from at least one other
reinsurer, the Ceding Company will allocate coverage based on the Ceding
Company's normal allocation rules for placement of Facultative cases. The
Reinsurer will accept liability provided that the Ceding Company has
followed its normal cash-with-application procedures for such coverage.
C. The Reinsurer's liability for facultatively accepted cessions shall
commence when all of the conditions specified in Article III for
facultative acceptances or the conditions specified in Article IX or
Article X shall have been met.
Page 12 of 57
ARTICLE VI
CLAIMS
------
A. The Reinsurer shall in all cases be obligated to follow the Ceding
Company's fortunes and settlements. The Reinsurer shall be unconditionally
bound by the judgment of the Ceding Company as to the obligations and
liabilities of the Ceding Company under any Policy. The Ceding Company's
decision to pay contractual Policy claims without contest, compromise or
litigation shall be unconditionally binding on the Reinsurer. The Reinsurer
shall consider participating in the Ceding Company's EX GRATIA payments on
a case-by-case basis but is not legally bound to participate in such
payments.
B. The Ceding Company shall give written notice within a reasonable timeframe
of Policy claims to the Reinsurer. In respect of any claim, the Ceding
Company shall, at the Reinsurer's request, provide copies to the Reinsurer
of the proof of payment by the Ceding Company and a copy of the insured's
death certificate. For those claims where documentation is provided, the
Reinsurer shall accept copies of the proof of payment by the Ceding Company
and copy of the insured's death certificate provided by the Ceding Company
as sufficient evidence of the Ceding Company's liability.
C. The Ceding Company shall give written notice within a reasonable timeframe
to the Reinsurer that the Ceding Company intends to contest, compromise or
litigate a Policy claim over $2,000,000. The Ceding Company shall also
provide the Reinsurer written notice within a reasonable timeframe of any
legal proceedings initiated against the Ceding Company in response to its
contest of a Policy claim over $2,000,000. Upon receipt of the Ceding
Company's notice of its intent to contest, compromise or litigate a Policy
claim, the Reinsurer shall promptly pay its share of the amount that would
have been payable had there been no controversy. For any Policy claim of
$2,000,000 or less, the Reinsurer shall be deemed to have agreed to
participate in the contest; however, for purposes of extra-contractual
damages as described in Article XVI, Section I, the Reinsurer shall not be
deemed to have agreed in writing to participate in the contest. If the
Reinsurer has agreed to participate in the contest and the contest,
compromise or litigation results in a reduction in the liability of the
Policy, the Reinsurer shall share in the reduction in the same proportion
that the amount of reinsurance bore to the amount payable under the terms
of the Policy on the date of death of the insured.
D. The Reinsurer shall pay its share of specific claim investigation and legal
expenses relative to contested, compromised or litigated claims, the
investigation of contestable death claims, accelerated death benefit
claims, foreign death claims or investigative expenses associated with a
fraudulent life insurance matter unless the Reinsurer has discharged its
liability in accordance with Section C, above. If the Reinsurer has so
discharged its liability, it shall not participate in any expenses incurred
thereafter.
The Reinsurer shall not be liable for any portion of any administrative
expenses incidental to the settlement of claims or for the compensation of
salaried officers and employees of the Ceding Company involved in the
settlement or investigation of claims, provided however that compensation
as used in this
Page 13 of 57
paragraph shall not include the hourly fees and expenses associated with
the investigation or litigation of a particular claim by salaried officers
and employees of the Ceding Company. The Reinsurer shall not be liable for
expenses incurred by the Ceding Company solely to resolve a dispute arising
out of conflicting claims of entitlement to policy proceeds or benefits.
E. In the event that the amount of insurance provided by a Policy or Policies
reinsured hereunder shall be increased or reduced because of a misstatement
of age or sex established after the death of the insured, the Reinsurer
shall share in the increase or reduction in the proportion to the net
liability that the Reinsurer bore to the total net liability under the
Policy immediately prior to such increase or reduction. The Policy or
Policies shall be restated in accordance with the terms and rules of the
Ceding Company; however, no adjustment in age or sex shall be deemed to
cause a Policy or Policies to exceed the Automatic Binding Limits or Jumbo
Limits. Any adjustment for the difference in reinsurance premiums shall be
made without interest.
F. The Reinsurer shall pay interest on its share of any Policy claim
settlement calculated at the same rate and for the same period of time as
that used by the Ceding Company.
G. The Reinsurer shall share in the same proportion of any claim under an
accelerated death benefit rider (and any continued coverage under the
policy) that the Reinsurer would share in the absence of the rider.
H. Policy Rescission: If it is determined that a policy reinsured under this
Agreement should be rescinded due to misrepresentation by the policyholder
or the insured, the Reinsurer will pay its share of reasonable
investigation and legal expenses connected with the rescission action.
The Reinsurer shall not be liable for any portion of any administrative
expenses incidental to the rescission action or for the compensation of
salaried officers and employees of the Ceding Company involved in the
rescission action other than third party expenses incurred by the Ceding
Company, provided however that compensation as used in this paragraph shall
not include the hourly fees and expenses associated with the investigation
or litigation of a particular rescission by salaried officers and employees
of the Ceding Company.
If the Ceding Company returns premiums to the policy owner or beneficiary
as a result of misrepresentation, or if the Ceding Company pays a suicide
benefit equal to the premiums paid for the policy, the Reinsurer will
refund net reinsurance premiums received on that policy to the Ceding
Company, without interest.
Page 14 of 57
ARTICLE VII
ADMINISTRATION AND ACCOUNTING
-----------------------------
A. The Ceding Company shall administer the Policies, establish and maintain
necessary and appropriate Policy records in accordance with its general
standards and practices and shall furnish monthly statements for the month
just past to the Reinsurer in a form substantially similar to that shown in
Exhibit V within thirty (30) days following the close of each month showing
the net amount due to or from the Reinsurer. The net amount shall be based
on reinsurance premiums net of allowances, including any adjustments due to
termination or changes, less claims.
B. The Ceding Company shall include with each monthly statement payment of the
net amount, if any, due to the Reinsurer as shown on the monthly statement.
Amounts that have not been paid within thirty (30) days following the close
of each month shall be in default. The Reinsurer shall pay to the Ceding
Company any amounts due to the Ceding Company as shown on the monthly
statement within thirty days after the Reinsurer receives the monthly
statement from the Ceding Company. Any amounts due to the Ceding Company
that have not been paid within thirty (30) days after the due date shall be
in default.
C. Subject to the provisions of Article XVI, Section J, Error and Omissions,
the Reinsurer may terminate the reinsurance on risks for which reinsurance
premiums are in default by giving thirty (30) days written notice of
termination to the Ceding Company; provided, however, that the Ceding
Company may cure the default as provided herein. Except to the extent the
default shall have been cured, as of the close of the last day of this
thirty (30) day period, the Reinsurer's liability for reinsurance shall
terminate with respect to risks that are the subject of the termination
notice and risks for which the reinsurance premiums went into default
during the thirty (30) day notice period.
D. Notwithstanding termination of reinsurance as provided in Section C of this
Article, the Ceding Company shall continue to be liable to the Reinsurer
for all unpaid reinsurance premiums earned by the Reinsurer under this
Agreement.
E. Reinsurance terminated under Section C of this Article may be reinstated by
the Ceding Company if, within sixty (60) days after the effective date of
its termination, the Ceding Company pays in full all of the unpaid
reinsurance premiums for the reinsurance that was in force prior to its
termination. The effective date of reinstatement shall be the day on which
the Reinsurer receives all of the required reinsurance premiums. The
Reinsurer shall have no liability in connection with any claims incurred
between the date of termination of reinsurance applicable to a Policy and
the date of reinstatement of reinsurance of that Policy.
F. The first day of the thirty (30) day notice of termination under Section C
of this Article shall be the day on which the Ceding Company receives the
termination notice. If all premiums in default are received by the
Reinsurer within the thirty (30) day notice period, the reinsurance shall
remain in effect.
Page 15 of 57
G. The Ceding Company shall bear the expense of all medical examinations,
inspection fees and other charges incurred in connection with Policy
issuance.
Page 16 of 57
ARTICLE VIII
DAC TAX
-------
A. The Parties are making a joint election under Treas. Reg. (S)1.848-2(g)(8)
under which:
1. The Party with the net positive consideration under this Agreement is
required to capitalize specified policy acquisition expenses with
respect to such Agreement without regard to the general deductions
limitation of Section 848(c)(1) of the Internal Revenue Code.
2. This election shall be effective with the effective date of this
Agreement.
3. Each party shall attach a schedule to its federal income tax return for
its first taxable year ending after the election becomes effective
which identifies the Agreement for which this joint election under
Treas. Reg. (S)1.848-2(g)(8) has been made.
B. The Parties agree to exchange information pertaining to the amount of net
consideration as determined under Treas. Reg. (S)1.848-2(f) for this
Agreement to ensure consistency as to amount and timing or as is otherwise
required by the Internal Revenue Service.
C. The exchange of information described in section B above shall follow the
procedures set forth below:
1. the Ceding Company shall submit its calculation of the "net
consideration" as defined under the above referenced regulation to the
Reinsurer not later than April 1 for each and every tax year for which
this Agreement is in effect;
2. the Reinsurer may challenge such calculation within thirty
(30) calendar days of receipt of the Ceding Company's calculation; and
3. if the Reinsurer contests the Ceding Company's calculation of the net
consideration, the parties shall act in good faith to reach an
agreement as to the correct amount within thirty (30) days of the date
the Reinsurer submits its alternative calculation. If the Ceding
Company and the Reinsurer reach an agreement on an amount of net
consideration, each party shall report the agreed upon amount in their
respective tax returns for the preceding taxable year.
D. The Parties represent and warrant that they are subject to U.S. taxation
under Subchapter L of Chapter 1 of the Internal Revenue Code or Subpart F
of Part III of Subchapter N of chapter 1 of the Internal Revenue Code.
Page 17 of 57
ARTICLE IX
CONVERSIONS AND EXCHANGES
-------------------------
A. If any policy greater than or equal to $1,750,000 that was ceded
automatically
1. under this Agreement by any of the Ceding Companies, or
2. another reinsurance agreement by any of the Ceding Companies excluding
any policy issued prior to January 1, 2007 by MetLife Insurance Company
of Connecticut
is exchanged for or converted to a policy that is not underwritten at time
of exchange or conversion in accordance with the Ceding Company's normal
individual ordinary life underwriting rules and practices, the new Policy,
up to the amount of the original policy, shall be reinsured under this
Agreement based upon the Reinsurer's shares shown in Exhibit I and based
upon the policy date, age and underwriting classification of the original
policy.
B. If any policy greater than or equal to $1,750,000 that was ceded
facultatively
1. to the Reinsurer under this Agreement by any of the Ceding Companies, or
2. another reinsurance agreement by any of the Ceding Companies excluding
any policy issued prior to January 1, 2007 by MetLife Insurance Company
of Connecticut
is exchanged for or converted to another policy, the new Policy shall be
reinsured under this Agreement to the Reinsurer, up to the amounts
reinsured with the Reinsurer on the original policy, based upon the policy
date, age and underwriting classification of the original policy, unless
otherwise agreed upon on a policy by policy basis.
C. If a Policy less than $1,750,000 that was ceded automatically or
facultatively under this Agreement is exchanged for or converted to another
policy, the Ceding Company shall recapture the reinsurance under this
Agreement.
D. If existing business that was not ceded under this Agreement and that is
not specifically covered under this Agreement as described in Paragraph A
or Paragraph B above is exchanged for, or converted to another policy, it
shall not be considered reinsured under this Agreement, unless otherwise
agreed upon.
E. Notwithstanding Paragraphs A through D above,
1. For any Policy reinsured automatically under this Agreement that is
exchanged under an Exchange Program initiated by the Ceding Company,
the Ceding Company shall reinsure the new Policy under this Agreement
based upon the Reinsurer's share shown in Exhibit I and based upon the
policy date, age, and underwriting classification of the original
policy, unless otherwise agreed upon by the Reinsurer and Ceding
Company.
2. For any Policy reinsured facultatively under this Agreement that is
exchanged under an Exchange Program initiated by the Ceding Company,
the Ceding Company shall reinsure the new Policy under this Agreement,
up to the
Page 18 of 57
amount reinsured with the Reinsurer on the original Policy, based upon
the policy date, age, and underwriting classification of the original
policy, unless otherwise agreed upon by the Reinsurer and Ceding
Company.
3. For any policy not reinsured under this Agreement that is exchanged
under an Exchange Program initiated by the Ceding Company to a policy
listed in Exhibit III, the Ceding Company shall not reinsure the new
policy under this Agreement, unless otherwise agreed upon by the
Reinsurer and Ceding Company.
4. For purposes of this Agreement, the term "Exchange Program" shall mean
any program initiated by the Ceding Company relating to a particular
block of policies in which a policy or any portion of the cash value of
a policy can be exchanged extra-contractually for another policy which
is written by the Ceding Company, its affiliates, successors or
assigns, upon terms which are more favorable to the policyholder than
those which would apply in the absence of the program.
F. Group Conversions shall not be considered reinsured under this Agreement,
unless otherwise agreed upon by the Reinsurer and Ceding Company.
Page 19 of 57
ARTICLE X
TERMINATIONS, REDUCTIONS/INCREASES AND CHANGES
----------------------------------------------
A. If a Policy that was ceded automatically under this Agreement that is less
than or equal to $10,000,000 and is not issued to a professional athlete is
increased, reduced, or terminated, the total amount ceded to the Reinsurer
after the increase, reduction, or termination, shall be based upon the
Reinsurer's share as described in Exhibit I. For Policies ceded
automatically for which the increase will cause the amount ceded to exceed
the autobind or jumbo limits as shown in Exhibit I, increases with
underwriting at time of the increase shall be reinsured on the basis
described in Article III.
B. If a Policy that was ceded facultatively under this Agreement or a Policy
that was ceded automatically under this Agreement that is greater than
$10,000,000 or is issued to a professional athlete is increased, reduced,
or terminated, the total amount ceded to the Reinsurer after the increase,
reduction, or termination shall be based upon the Reinsurer's share of the
Policy immediately before the change. For Policies ceded facultatively or
for Policies ceded automatically for which the increase will cause the
amount ceded to exceed the autobind or jumbo limits as shown in Exhibit I,
increases with underwriting at time of the increase shall be reinsured on
the basis described in Article III.
C. If the Ceding Company recaptures up to its retention limit as described in
Article XI and a Policy, reinsured in excess of the Ceding Company's
retention limit, is subsequently reduced or terminated, reinsurance of the
policy on that life shall be reduced, to restore, as far as possible, the
Ceding Company's retention on the risk. If the reinsurance on any policy
has been ceded to more than one reinsurer, the reduction in reinsurance
with the Reinsurer on such policy shall be the same fraction of the total
reinsurance on that policy immediately before the reduction.
D. If a Policy that was ceded under this Agreement is increased under
contractual increase without underwriting at time of the increase, the
increase shall be reinsured under this Agreement based upon the policy
date, age and underwriting classification of the original policy. If a
Policy that was ceded automatically under this Agreement is increased with
underwriting at time of the increase, in accordance with the Ceding
Company's normal individual ordinary life underwriting rules and practices
at the time of the increase, the increase shall be reinsured on the basis
described in Article I based upon the policy date, age and underwriting
classification of the Policyholder at time of the increase. For Policies
ceded facultatively or for Policies ceded automatically for which the
increase will cause the amount ceded to exceed the autobind or jumbo limits
as shown in Exhibit I, increases with underwriting at time of the increase
shall be reinsured on the basis described in Article III based upon the
policy date, age and underwriting classification of the Policyholder at
time of the increase.
E. For Policies ceded automatically, reduction or removal of table ratings and
flat extras and changes in smoking classification shall be underwritten
according to the Ceding Company's normal rules and practices and the
Reinsurer shall be
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bound automatically. For Policies ceded facultatively, risk classification
changes shall be subject to the Reinsurer's approval.
F. Reduction and termination are permitted only when the underlying
policyholder directs such a reduction or termination of the reinsured
policy or when the reduction or termination occurs pursuant to the terms of
the contract.
Page 21 of 57
ARTICLE XI
RECAPTURE AND RETENTION CHANGES
-------------------------------
A. The Ceding Company shall provide the Reinsurer within a reasonable
timeframe with written notification of the new maximum retention limits and
the effective date.
B. For Policies ceded pursuant to this Agreement, the Ceding Company may
recapture business to reflect changes in its retention limits, provided
that:
1. Fifteen (15) years have elapsed since the issue date of the original
policy. For policies issued as a result of exchange or conversion, the
duration for recapture eligibility shall be based on the date used for
premium calculations.
2. Recapture shall become effective on the policy anniversary date
following notification to the Reinsurer of the Ceding Company's intent
to recapture unless otherwise agreed upon by the Ceding Company and the
Reinsurer.
3. If the reinsurance on the Policy has been ceded to more than one
reinsurer, the reduction in reinsurance with the Reinsurer on such
Policy shall be the same fraction of the total recapture on that Policy
as the Reinsurer held of the total reinsurance on that Policy
immediately before the recapture.
4. For Policies ceded on a First Dollar Quota Share Basis, the Ceding
Company will maintain its existing quota share percentage of retention
on the Policy; however, it may apply the percentage up to the new
increased retention limits.
C. The Ceding Company shall have the unilateral right to recapture inforce
reinsurance or amounts thereof up to its retention limit, provided that
fifteen (15) years have elapsed since the issued date of the original
policy. For policies issued as a result of exchange or conversion, the
duration for recapture eligibility shall be based on the date used for
premium calculations.
D. If the Reinsurer increases YRT reinsurance premiums on inforce business as
described in Article IV, the Ceding Company may recapture all inforce
cessions or amounts thereof up to its retention limit within one hundred
and eighty (180) days following the notice of the premium change.
Notwithstanding the above, if the Ceding Company increases its charges to
the Policyholder based on changes in actual or expected mortality, the
Reinsurer may increase rates on this Agreement on a consistent basis
without the Ceding Company having the right to recapture inforce YRT
cessions under this Paragraph.
E. The Ceding Company shall have the right to recapture inforce reinsurance if
either:
1. the ratio of Reinsurer's total adjusted capital (TAC) to the
Reinsurer's Authorized Control Level (ACL) risk based capital, as
defined and calculated in accordance with the process set forth in the
insurance laws and regulations
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promulgated by Reinsurer's state of domicile falls below and remains
below two hundred fifty percent (250%) for two (2) consecutive
quarterly accounting periods, or
2. the Reinsurer is required by the Insurance Department of Reinsurer's
state of domicile to file a plan of action responding to the negative
trend in such ratio, in accordance with applicable insurance
regulations ("Negative Trend Plan").
The Reinsurer agrees to report to Ceding Company its ACL risk based capital
annually and its TAC quarterly simultaneously with reporting to the
Insurance Department of Reinsurer's state of domicile. Such recapture shall
be effective as of the date of the occurrence of the event specified in
Section E.
F. If any reinsurance is recaptured under any provisions of this Agreement,
all reinsurance eligible for recapture under the provisions of this Article
must be recaptured.
G. If the Ceding Company intends to recapture inforce reinsurance, it shall
provide ninety (90) days prior written notice to the Reinsurer unless
otherwise agreed upon by the Ceding Company and the Reinsurer. The first
day of the notice period shall be deemed to be the date on which notice is
received by the other party.
H. For recapture under any provision of this Agreement the parties will agree
to a settlement based on any unearned premiums and the Reinsurer shall
remain liable for any claims with a date of death prior to the effective
date of recapture for each policy unless otherwise agreed upon by the
Ceding Company and the Reinsurer.
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ARTICLE XII
REINSTATEMENTS, REDUCED PAID-UP INSURANCE AND EXTENDED TERM INSURANCE
----------------------------------------------------------------------
A. Reinsurance of any lapsed Policy that was ceded on an automatic basis in
accordance with the terms and conditions of this Agreement may be
automatically reinstated so long as the Policy is reinstated in accordance
with terms and rules of the Ceding Company. If a policy reinsured on a
facultative basis is reinstated, approval by the Reinsurer(s) will be
required prior to reinstatement if the Ceding Company's regular
reinstatement rules indicate that more evidence than a Statement of Good
Health is required. The Ceding Company shall pay the Reinsurer reinsurance
premiums net of any allowances for the period for which the Ceding Company
received premiums in arrears from the policyholders.
B. Policy changes that are the result of extended term insurance or reduced
paid-up insurance (nonforfeiture options) shall continue to be reinsured
proportionately and shall be handled in accordance with Article IV.
Page 24 of 57
ARTICLE XIII
INSOLVENCY
----------
A. A party to this Agreement will be deemed insolvent when it:
1. applies for or consents to the appointment of a receiver,
rehabilitator, conservator, liquidator or statutory successor of its
properties or assets;
2. is adjudicated as bankrupt or insolvent;
3. files or consents to the filings of a petition in bankruptcy, seeks
reorganization to avoid insolvency or makes formal application for any
bankruptcy, dissolution, liquidation or similar law or statute; or
4. 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.
B. In the event of the insolvency of the Ceding Company all reinsurance
benefits shall be payable by the Reinsurer directly to the Ceding Company
or to the liquidator, receiver or statutory successor of the Ceding Company
on the basis of the liability of the Ceding Company under the policies
reinsured without diminution because of the insolvency of the Ceding
Company.
C. In the event of the insolvency of the Ceding Company, the liquidator,
receiver, or statutory successor shall give the Reinsurer written notice of
the pendency of a claim on a reinsured Policy within a reasonable time
after such claim is filed in the insolvency proceeding. During the pendency
of any such claim, the Reinsurer may investigate such claim and interpose
in the name of the Ceding Company (or its liquidator, receiver, or
statutory successor), but at its own expense, in the proceeding where such
claim is to be adjudicated, any defense or defenses that the Reinsurer may
deem available to the Ceding Company or its liquidator, receiver, or
statutory successor.
D. The expense thus incurred by the Reinsurer shall be chargeable, subject to
court approval, against the Ceding Company as part of the expense of
liquidation to the extent of a proportionate share of the benefit which may
accrue to the Ceding Company solely as a result of the defense undertaken
by the Reinsurer. Where two or more reinsurers are participating in the
same claim and a majority in interest elect to interpose a defense or
defenses to any such claim, the expense shall be apportioned in accordance
with the terms of the reinsurance agreements as though such expense had
been incurred by the Ceding Company.
E. In the event of the insolvency of the Reinsurer, the Ceding Company may
recapture all of the business reinsured by the Reinsurer under this
Agreement. Such recapture shall be effective as of the date of the
insolvency.
F. In the event of the insolvency of either party, the insolvent party must
notify the other party of its insolvency within thirty (30) days.
G. In the event of the insolvency of the Reinsurer, the Ceding Company must
notify the Reinsurer (or its liquidator, receiver, or statutory successor)
whether or not it
Page 25 of 57
is going to recapture the business within sixty (60) days after being
notified of the Reinsurer's insolvency.
Page 26 of 57
ARTICLE XIV
ARBITRATION
-----------
A. All disputes and differences arising from or related to this Agreement
between the Ceding Company and the Reinsurer shall be decided by
arbitration, regardless of the insolvency of either party, unless the
liquidator, receiver or statutory successor is specifically exempted from
an arbitration proceeding by applicable law.
B. A party may only initiate an arbitration by providing written notification
to the other party that shall expressly set forth (a) a brief statement of
the issue(s); (b) the failure of the parties to reach agreement; (c) the
date of the demand for arbitration and (d) the specific dollar value of the
claim asserted, exclusive of (i) interest, (ii) consequential, special or
punitive damages, and (iii) attorney's fees. In the event that more than
one Reinsurer is involved in the same dispute, all such reinsurers shall
act as one party.
C. Where the dollar amount claimed in the notice of arbitration is equal to or
less than $500,000, the arbitration panel shall consist of a single
disinterested arbitrator who must, at that time, be accredited as an umpire
by XXXXX-US. The Umpire Selection Procedures of XXXXX-US, as in force at
that time, shall be used to select the arbitrator. The arbitration shall be
conducted in accordance with this Article subject to the following
exceptions: (i) There shall be no discovery permitted in cases heard by a
single arbitrator, unless by mutual agreement of the parties; (ii) the
arbitrator's decision shall be based on the submission of briefs,
affidavits and documents, and there shall be no hearing permitted unless
requested by all parties; and (iii) there shall be no ex parte
communication with the arbitrator. In an arbitration presented to a single
arbitrator, the arbitrator shall render his decision within 120 days of his
or her appointment.
Where the dollar amount claimed in the notice of arbitration is in excess
of $500,000, the arbitration panel shall consist of three arbitrators who
must be disinterested and each of whom must, at that time, either be
accredited as an arbitrator by XXXXX-US, attorneys who are neither current
nor former employees of either party to this Agreement or any entity
affiliated with either party to this Agreement, or be an active or former
officer of a life insurance or life reinsurance company other than the
parties or their affiliates.
D. In arbitrations requiring three arbitrators, each party shall select an
arbitrator within thirty (30) days from the date of the demand. If either
party refuses or fails to appoint an arbitrator within the time allowed,
the party that has appointed an arbitrator may notify the other party that,
if it has not appointed its arbitrator within the following ten (10) days,
the arbitrator shall appoint an arbitrator on its behalf. Within thirty
(30) days of the appointment of the second arbitrator the two
(2) arbitrators shall select the third arbitrator, who must also be, at
that time, accredited by XXXXX-US as an umpire. If the two arbitrators fail
to agree on the selection of the third arbitrator within the time allowed,
the Umpire Selection Procedures of XXXXX-US, as in force at that time,
shall be used to select the third arbitrator. The arbitration panel shall
hold an organizational meeting within thirty (30) days of the selection of
the last member of the panel. At the panel's sole
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discretion, all meetings and hearings before the arbitrators may be
conducted telephonically. There shall be no ex parte communication with the
Umpire.
E. The arbitrator(s) shall interpret this Agreement as both an honorable
engagement and a legal obligation and, in the absence of controlling
language in this Agreement, shall consider equitable principles as well as
industry custom and practice regarding the applicable insurance and
reinsurance business. The arbitrator(s) are released from judicial
formalities and shall not be bound by strict rules of procedure and
evidence, provided, however, that the arbitrator(s) will abide by
applicable laws and precedents concerning evidentiary privileges or
doctrines that restrict a party's obligation to produce evidence,
including, but not limited to, the attorney-client privilege and attorney
work product doctrine.
F. After a notice demanding arbitration is received and the arbitrators
appointed, each party to the arbitration shall be required to disclose
within thirty days to the other party all documents in its control and not
protected by the attorney client privilege or otherwise protected from
disclosure by applicable law pertaining to any of the disputes,
controversies or claims contained in the notice demanding arbitration or as
directed by any two of the arbitrators, provided, however, that nothing
herein shall prohibit any party from seeking relief from the arbitrators
with respect to any discovery obligation or request that imposes an undue
burden on a party
Any two of the arbitrators shall be empowered at any time to: (i) compel
disclosure of documents or submissions of interrogatories or depositions
and (ii) determine the relevance or pertinence of any document or person to
the dispute, controversy, or claim submitted for arbitration. The
arbitrators shall have the discretion to decide all disputed issues
following the submissions of briefs and/or affidavits without a formal
hearing. If the arbitrators deem it an appropriate case, the arbitrators
shall have the authority to decide all or any of the issues in dispute on a
motion for summary judgment without need for a formal hearing.
The arbitrators shall adhere to, and require compliance, with the following
timetable: (i) the length of time from the formation of the panel to the
final award rendered by the arbitrators shall be no longer than eight
months; (ii) no longer than ninety days shall transpire for purposes of
document disclosure and, if permitted by the arbitrators, production of
witness interrogatories and depositions; and, if a hearing is required,
(iii) no longer than five days shall transpire for presentation of the case
to the arbitrators, and the arbitrators shall be directed to use their best
efforts to reach their decision and render an award no longer than thirty
days thereafter. Notwithstanding anything to the contrary set forth above,
any award rendered shall not be invalidated or otherwise rendered
ineffective solely as a result of any failure to comply with any component
of the above timetable.
Organizational and other meetings shall be conducted in English and, unless
conducted telephonically, be held in New York, New York.
G. The arbitrators shall decide all matters by majority vote. The decisions of
the arbitrator(s) shall be issued in the form of written reasoned opinion
expressly stating the panel's (or the arbitrator's, as the case may be)
specific findings of
Page 28 of 57
fact and conclusions of law, and shall be final and binding on both
parties. The arbitrators may, in their discretion, award costs and
expenses, as they deem appropriate, including but not limited to legal fees
and interest. Judgment may be entered upon the final decisions of the
arbitrator(s) in any court of competent jurisdiction. The arbitrator(s) may
not award any exemplary or punitive damages.
H. Unless the arbitrators provide otherwise, each party shall be responsible
for (a) all fees and expenses charged by its respective counsel,
accountants, actuaries and other representatives in connection with the
arbitration and (b) one-half of the expenses of the arbitration, including
the fees of the arbitrators.
Page 29 of 57
ARTICLE XV
DURATION OF AGREEMENT
---------------------
A. Except as otherwise provided herein or as the parties may otherwise agree,
the Agreement shall be unlimited in duration. Either party may terminate
this Agreement with respect to new business at any time upon ninety
(90) days prior written notice to the other party. The first day of the
notice period shall be deemed to be the date on which notice is received by
the other party.
B. During the ninety (90) day period following delivery of a notice of
termination, this Agreement shall continue in force in accordance with its
terms.
C. Except as the parties may otherwise agree, this Agreement shall continue to
apply, after the date of termination, to cessions that became effective
prior to the termination of this Agreement.
D. The Ceding Company shall have the option to recapture Policies reinsured
under this Agreement that exchange or convert to another policy after the
date of termination with respect to new business.
E. The parties shall cooperate in seeking to obtain any required regulatory
approvals for this Agreement and, in the event that any required regulatory
approval cannot be obtained after reasonable effort, the Agreement and any
cessions previously effected hereunder shall be deemed void as of the
inception and the parties shall be restored to the position they would have
been in had this Agreement never become effective.
Page 30 of 57
ARTICLE XVI
MISCELLANEOUS
-------------
A. Choice of Law and Submission to Jurisdiction: This Agreement is subject to
and is to be interpreted in accordance with the laws of the State of New
York without regard to the New York choice of law rules. Each of the Ceding
Companies and the Reinsurer expressly and irrevocably submits to the
exclusive jurisdiction of (i) the United States District Court for the
Southern District of New York and (ii) the Supreme Court of the State of
New York, County of New York for the purposes of enforcing awards from
arbitration or any right to specific performance arising out of this
Agreement or any transaction contemplated thereby. Each of the Ceding
Companies and the Reinsurer agree to commence any action, suit or
proceeding relating to this Agreement either in the United States District
Court for the Southern District of New York or, if such suit, action or
proceeding may not be brought in such court for jurisdictional reasons, in
the Supreme Court of the State of New York, County of New York.
B. Severability: In the event that any provision or term of this Agreement is
held invalid, illegal or unenforceable, all of the other provisions and
terms shall remain in full force and effect to the extent that their
continuance is practicable and consistent with the original intent of the
parties. In addition, if provisions or terms are held invalid, illegal or
unenforceable, the parties shall attempt in good faith to renegotiate the
Agreement to carry out its original intent.
C. Reserve Credit: For the New York domiciled Ceding Companies, the Reinsurer
shall establish and maintain reserves with respect to ceded Policy
liabilities that equal or exceed the Reinsurer's proportionate share of the
reserve credit taken by the Ceding Company. For non-New York domiciled
Ceding Companies, the Reinsurer shall establish and maintain reserves for
their proportionate share with respect to the ceded Policy liabilities.
The Ceding Company shall on a monthly basis provide the Reinsurer with a
reserve summary for ceded Policy liabilities hereunder. The Ceding Company
shall provide the Reinsurer with an annual actuarial certification of
reserves applicable to such Policy liabilities following the calendar year
end. The Reinsurer shall provide the Ceding Company with a certification of
reserves on a quarterly basis. Accordingly, the Reinsurer shall provide a
certification of reserves held as of January 15 for the prior year's end,
as of April 15 for March 31, as of July 15 for June 30 and as of October 15
for September 30.
D. Statement Credit: The intent of this Agreement is for the Ceding Company to
obtain credit on its annual statement for the reinsurance provided
hereunder. If the Ceding Company is unable to take credit for the
reinsurance in the Ceding Company's state of domicile, Reinsurer agrees to
take such reasonable steps that may be necessary for the Ceding Company to
obtain statement credit pursuant to the then applicable regulatory
requirements through obtaining a clean, unconditional, irrevocable and
evergreen Letter of Credit, establishing a trust account, or amending this
Agreement to provide for reserves to be held by the Ceding Company or such
other method as is then allowed under applicable law and regulation in the
Ceding Company's state of domicile.
Page 31 of 57
If the Ceding Company is still unable to take credit on its annual
statement, at the Ceding Company's option, the Ceding Company may recapture
all inforce cessions or amounts thereof up to its retention limit.
E. Assignment: This Agreement shall be binding on the parties and their
respective successors and permitted assignees. This Agreement may not be
assigned by either party without the written consent of the other, which
consent shall not be unreasonably withheld.
F. Rights Under The Agreement: This Agreement is solely between the Ceding
Company and the Reinsurer. The acceptance of risks under this Agreement
will create no right or legal relation between the Reinsurer and any other
party, including the insured, owner or beneficiary of any insurance policy
or other contract of the Ceding Company. The Ceding Company shall be solely
liable to the insured, policyowner or beneficiary.
G. Confidentiality: Each party shall maintain the confidentiality of all
confidential information, including individually identifiable information
regarding customers, insureds and other persons ("Customer Information"),
that is provided to it by the other party in connection with this Agreement
in accordance with applicable laws and the terms of this Agreement. This
obligation shall include the implementation of physical, administrative and
electronic safeguards designed to ensure the confidentiality, security and
integrity of such confidential information. For these purposes,
confidential information does not include information that is (a) generally
available in the public domain and is derived or received from such public
sources; (b) received, obtained, developed or created independently from
the performance of obligations under this Agreement; or (c) disclosed by or
received from a third party, provided such disclosure was made without any
violation of an independent obligation of confidentiality or Applicable Law.
This obligation of confidentiality shall not apply if and to the extent
that disclosure is required by applicable law or any court, governmental
agency or regulatory authority or by subpoena or discovery request in
pending litigation. In the event that either party becomes legally
compelled to disclose any secret or confidential information of the other
party, such party shall give prompt written notice of that fact to the
other party so that such other party may seek an appropriate remedy to
prevent such disclosure; provided, however, that this provision shall not
apply to information that is or otherwise becomes available to the public
or that was previously available on a non-confidential basis. This
provision does not prohibit the sharing of information with
Retrocessionaires or other parties engaged to provide services in
connection with this Agreement, to the extent necessary to provide such
services, provided that such Retrocessionaires and parties shall have
agreed to maintain the confidentiality of such information in accordance
with the terms of this Agreement.
In the event that the Reinsurer becomes aware of the unauthorized access to
or disclosure of Customer Information to a third party, it shall give
prompt written notice of that fact to the Ceding Company and shall take
reasonable steps prevent further unauthorized access or disclosure and
mitigate damages and will cooperate with the Ceding Company to satisfy, at
the Reinsurer's expense, all legal requirements including any required
notification to affected individuals.
Page 32 of 57
H. Inspection of Records: Each party and its employees and authorized
representatives, respectively, may audit, during regular business hours, at
the home office of the other party or at an alternate location as mutually
agreed upon by the parties, provided that reasonable advance notice has
been given, any and all books, records, statements, correspondence,
reports, and other documents that relate to this Agreement or a Policy,
unless such a record is protected from disclosure by the Attorney-client
privilege or work product doctrine. Provided, however, that a party seeking
to inspect records shall not have right of access to the records of the
other party if the party seeking the inspection is not current in all
payments due the other party. The audited party agrees to provide a
reasonable work space for such audit, to cooperate fully and to disclose
the existence of and to produce any and all necessary and reasonable
materials requested by such auditors. Each party shall bear its own audit
expenses. All such information, including audit reports and analyses, shall
be kept confidential.
The Reinsurer may perform claim, administration and underwriting audits in
such form and detail as the parties may, from time to time, mutually agree
upon.
I. Damages: The Reinsurer will not participate in punitive or compensatory
damages that are awarded against the Ceding Company as a result of an act,
omission, or course of conduct committed solely by the Ceding Company, its
agents, or representatives in connection with claims covered under this
Agreement. The Reinsurer will, however, pay its share of statutory
penalties awarded against the Ceding Company in connection with claims
covered under this Agreement if the Reinsurer agrees in writing to endorse
the contest of the coverage in question.
The parties recognize that circumstances may arise in which equity would
require the Reinsurer, to the extent permitted by law, to share
proportionately in punitive and compensatory damages. Such circumstances
are difficult to define in advance, but would generally be those situations
in which the Reinsurer was an active party and, in writing, recommended,
consented to, or ratified the act or course of conduct of the Ceding
Company that ultimately resulted in the assessment of the extra-contractual
damages. In such situations, the Reinsurer and Ceding Company will share
such damages so assessed, in equitable proportions.
For purposes of this Article, the following definitions will apply.
"Punitive Damages" are those damages awarded as a penalty, the amount of
which is neither governed nor fixed by statute.
"Compensatory Damages" are those amounts awarded to compensate for the
actual damages sustained, and are not awarded as a penalty, nor fixed in
amount by statute.
"Statutory Penalties" are those amounts awarded as a penalty, but are fixed
in amount by statute and exclude penalties arising under any applicable
unfair trade practices statutes or regulations.
Page 33 of 57
J. Errors and Omissions: If either the Ceding Company or the Reinsurer commits
an unintentional error, oversight or misunderstanding (collectively
referred to as "errors") in administering this Agreement, and upon the
discovery of the error by either party the other party is promptly
notified, the error shall be corrected by restoring both parties to the
positions they would have occupied had the error not occurred.
If it is not possible to restore each party to the position it would have
occupied had the error not occurred, the parties shall endeavor in good
faith to fashion a resolution to the situation created by the error that is
fair and reasonable and most closely approximates the intent of the parties
as evidenced by this Agreement.
K. Indemnification and Limitation of Liability: Each party shall indemnify and
hold the other, its affiliates, directors, officers, employees and all
other persons and entities acting on behalf of or under the control of any
of them harmless from and against any and all claims, including reasonable
legal expenses, that result from any negligent, dishonest, malicious,
fraudulent or criminal act or omission or arising out of or related to any
incorrect representation, warranty or obligation of this Agreement or any
failure or breach of this Agreement by the indemnifying party, its
directors, officers, employees, other representatives or any other person
or entity acting on behalf of or under the control of any of them. In no
event shall any party to this Agreement be liable to the other party for
punitive, indirect or consequential damages arising under this Agreement
for any cause whatsoever, whether or not such party has been advised or
could have foreseen the possibility of such damages.
L. Entire Agreement: This Agreement supersedes all prior discussions and
agreements between the parties and constitutes their sole and entire
agreement with respect to its subject matter and there are no
understandings between the parties with respect thereto other than as
expressed in the Agreement.
M. Modifications to Agreement: Any change or modification of this Agreement
shall be null and void unless made by written amendment to the Agreement
and signed by both parties. No waiver by either party of any default by the
other party in the performance of any promise, term or condition of this
Agreement shall be construed to be a waiver by such party of any other or
subsequent default in performance of the same or any other promise, term or
condition of this Agreement. No prior transactions or dealings between the
parties shall be deemed to establish any custom or usage waiving or
modifying any provision hereof. The failure of either party to enforce any
part of this Agreement shall not constitute a waiver by such party of its
right to do so, nor shall it be deemed to be an act of ratification or
consent.
N. Survival: All of the provisions of this Agreement, to the extent necessary
to carry out the purposes of this Agreement or to ascertain and enforce the
parties' rights hereunder, shall survive the termination of this Agreement.
O. Right of Offset: The Ceding Company or the Reinsurer may offset any balance
or balances, including without limitation, premiums, claims or interest due
from such party against any balance or balances due to the other party
under this
Page 34 of 57
Agreement; provided, that in the event of insolvency of a party to this
Agreement, such offsets shall be allowed only in accordance with the
provisions of applicable law. All payments shall be effected through
offsetting balances, electronic funds transfers or as the parties may
otherwise agree in order to carry out the purposes of this Agreement.
P. Currency: All financial transactions under this Agreement shall be paid in
the lawful currency of the United States.
Q. Independent Contractor: The parties shall be deemed to be independent
contractors, each with full control over its respective business affairs
and operations. This Agreement shall not be construed as a partnership or
joint venture and neither party hereto shall be liable for any obligations
incurred by the other party except as expressly provided herein.
R. Agents, Intermediaries, and Representatives: Each party represents that all
negotiations relative to this Agreement and the transactions contemplated
hereby have been carried out by the parties directly and without the
intervention of any person in such manner as to give rise to any valid
claim by any other person for a finder's fee, brokerage commission or
similar payment.
S. Construction Rules: Each party represents that it has had sufficient
opportunity to review and negotiate the terms of this Agreement and is
fully aware of all the obligations and responsibilities created hereunder.
Therefore, the parties agree that the rule of construction that any
ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement or any Exhibit attached
hereto. Exhibits attached hereto are incorporated into this Agreement.
Captions are provided for reference only.
T. Compliance With Law: The Ceding Company has established and will maintain
policies and procedures to comply with applicable laws and regulations
relating to specially designated nationals or blocked persons, and any
other laws, regulations, executive orders or similar actions that impose
sanctions or prohibit or restrict transactions or relations with designated
persons, entities, organizations or governments.
U. Notices and Communications: Unless provided elsewhere in this Agreement,
routine communications, including those related to facultative submissions,
claims, and monthly reports, that are required or permitted to be given
under this Agreement shall be deemed to have been duly given if
communicated, or confirmed, between the parties by facsimile, electronic
mail or regular mail and/or telephone to the recipients designated by the
Parties. Written notices and other non-routine communications related to
all other matters under this Agreement shall be effective when delivered to
any party at the address provided herein
1. If to the Ceding Company:
Xxxxxx Xxx
Metropolitan Life Insurance Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
email address: xxxx0@xxxxxxx.xxx
Page 35 of 57
2. If to the Reinsurer:
Generali USA Life Reassurance Company
General Counsel
00000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
3. Either party may change its address by giving the other party written
notice of its new address; provided, however, that any notice of
change of address shall be effective only upon receipt.
V. Representation of Authority and Acknowledgement of Understanding: Each
party represents that it has full power and authority to enter into and to
perform this Agreement and that the person signing this Agreement on its
behalf has been properly authorized and empowered to do so. Each party
further acknowledges that it has read this Agreement, understands it and
agrees to be bound by it.
W. Representation of Valid Signature: Each party represents and warrants that
this Agreement has been duly and validly signed on its behalf; that it has
the full corporate power and authority necessary to perform its obligations
hereunder; and that it shall maintain in force all necessary legal and
regulatory authorizations.
X. Counterparts: This Agreement may be signed in any number of counterparts,
each of which shall be deemed an original and all of which shall constitute
one and the same instrument.
Y. Retained Amounts: During the ten (10) years following the issue date of the
original Policy, the Ceding Company shall not reinsure on any basis any
portion of the amount it has retained on the business covered under this
Agreement without written notification to the Reinsurer, except that the
Ceding Company shall not be required to notify the Reinsurer of any
reinsurance with any Company affiliated with the Ceding Company.
Page 36 of 57
ARTICLE XVII
EXECUTION OF AGREEMENT
----------------------
In witness of the above,
THE METROPOLITAN LIFE INSURANCE COMPANIES
WHICH SHALL INCLUDE THE FOLLOWING COMPANIES:
METROPOLITAN LIFE INSURANCE COMPANY, A NEW YORK INSURANCE COMPANY,
NEW ENGLAND LIFE INSURANCE COMPANY, A MASSACHUSETTS INSURANCE COMPANY,
GENERAL AMERICAN LIFE INSURANCE COMPANY, A MISSOURI INSURANCE COMPANY,
METLIFE INVESTORS USA INSURANCE COMPANY, A DELAWARE INSURANCE COMPANY,
METLIFE INVESTORS INSURANCE COMPANY, A MISSOURI INSURANCE COMPANY,
FIRST METLIFE INVESTORS INSURANCE COMPANY, A NEW YORK INSURANCE COMPANY,
METROPOLITAN TOWER LIFE INSURANCE COMPANY, A DELAWARE INSURANCE COMPANY, AND
METLIFE INSURANCE COMPANY OF CONNECTICUT, A CONNECTICUT INSURANCE COMPANY.
("THE CEDING COMPANY" OR "COMPANIES")
and
GENERALI USA LIFE REASSURANCE COMPANY, A MISSOURI REINSURANCE COMPANY
("THE REINSURER")
have by their respective officers executed and delivered this Agreement,
effective JANUARY 1, 2012.
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxx
-------------------------
Name: Xxxxxxx Xxxxx
-------------------------
Title: Senior Vice President
-------------------------
NEW ENGLAND LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxx
-------------------------
Name: Xxxxxxx Xxxxx
-------------------------
Title: Vice President
-------------------------
Page 37 of 57
GENERAL AMERICAN LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
------------------------------
Title: Vice President
------------------------------
METLIFE INVESTORS USA INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
------------------------------
Title: Vice President
------------------------------
METLIFE INVESTORS INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
------------------------------
Title: Vice President
------------------------------
FIRST METLIFE INVESTORS INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
------------------------------
Title: Vice President
------------------------------
METROPOLITAN TOWER LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
------------------------------
Title: Vice President
------------------------------
Page 38 of 57
METLIFE INSURANCE COMPANY OF CONNECTICUT
By: /s/ Xxxxxxx Xxxxx
------------------
Name: Xxxxxxx Xxxxx
------------------
Title: Vice President
------------------
GENERALI USA LIFE REASSURANCE COMPANY
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxxx Xxxxxxxx
---------------- --------------------
Name: Xxxxx Xxxxx Name: Xxxxxx Xxxxxxxx
---------------- --------------------
Title: SVP Title: Treaty Counsel
---------------- --------------------
Page 39 of 57
EXHIBIT I
LIMITS AND REINSURER'S SHARE
----------------------------
REINSURER'S SHARE:
For policies with an Excess Reinsurance Basis as shown in Exhibit III:
0% of the Policy face amount for amounts of $1.75MM or less
5% of the Policy face amount for amounts over $1.75MM up to $46.75MM (or
automatic binding limit if less)
0% of the Policy face amount for amounts over $46.75MM (or automatic
binding limit if less)
For policies with a First Dollar Reinsurance Basis as shown in Exhibit III:
5% of the Policy face amount for amounts up to $46MM (or automatic
binding limit if less)
0% of the Policy face amount for amounts over $46MM (or automatic
binding limit if less)
Note 1: In the event the Ceding Company can not retain its full share as
described in Exhibit II, the Reinsurer shall also accept a 5/90 share of the
difference between the dollar amount of the Ceding Company's share and the
amount that the Ceding Company actually retains. The Reinsurer's acceptance of
this share of this difference shall result in the Reinsurer having the same
fraction of the total reinsurance on such Policy as the Reinsurer would have
had if the Ceding Company had retained its full share.
Page 40 of 57
AUTOMATIC BINDING LIMIT
-----------------------
The Ceding Company may not cede Policy amounts pursuant to Article I when the
face amount of the Policy plus amounts in force with the Ceding Company exceeds
the following.
Single Life Joint Life
Above Table D Above Table Above Table D Above Table
through Table H through through Table H through
H (or greater Table P (or H (or greater Table P (or
than greater than than greater than
Std through $10.00/1000 $20.00/1000 Std through $10.00/1000 $20.00/1000
Table D (or flat extra and flat extra and Table D (or flat extra and flat extra and
up to up to up to up to up to up to
Issue $10.00/1000 $20.00/1000 $40.00/1000 Issue $10.00/1000 $20.00/1000 $40.00/1000
Ages flat extra)# flat extra)# flat extra)# Ages flat extra)# flat extra)# flat extra)#
----- ------------ -------------- -------------- ----- ------------ -------------- --------------
0-17 $20 MM $10 MM $10 MM
18-75 $60 MM $30 MM $25 MM 18-75 $60 MM $30 MM $25 MM
76-80 $25 MM $12.5 MM $12.5 MM 76-80 $35 MM $17.5 MM $17.5 MM
81-85 $10 MM $0 $0 81-85 $15 MM $0 $0
86 & over $0 $0 $0 86 & over $0 $0 $0
# Also includes combinations of flat extras and table ratings (Using a table
equivalent of $2.50/1000, the sum of the table equivalent + flat should not
exceed the flat limits referenced in column headings above).
For Joint Life, if one life is uninsurable, use limits for the insurable life
from the single life tables to determine the appropriate joint life limits;
otherwise, if both lives are insurable, use limits for each life from the joint
life tables and take greater of the two to determine the appropriate joint life
limits.
Civilian Aviation Risks $25,000,000 (Standard through $2/M)
$20,000,000 (Over $ 2/M through $3.50/M)
$15,000,000 (Over $3.50/M)
Professional Athletes^ $10,000,000
Foreign Risks* $15,000,000 ("A" countries)
$30,000,000 ("B" countries)
$15,000,000 ("C" countries)
^ A Professional Athlete is defined as a player or coach on a National Hockey
League, National Football League, National Basketball Association or Major
League Baseball team.
Page 41 of 57
*U.S./Canada/Guam/Puerto Rico Citizens/permanent residents of each traveling
abroad for more than 12 weeks in a 12 month period to "A" countries and Foreign
Residents of "A" countries; U.S./Canada/Guam/Puerto Rico Citizens/permanent
residents of each traveling abroad for no more than 12 weeks in a 12 month
period to "B" countries; U.S./Canada/Guam/Puerto Rico Citizens/permanent
residents of each traveling abroad for no more than 12 weeks in a 12 month
period to "C" countries.
Temporary Insurance Agreement $1,000,000 ($2,000,000 for Joint Life)
JUMBO LIMIT
----- -----
$65,000,000 for Issue Ages 0-80 and $30,000,000 for Issue Ages 81-85 (lesser of
previous amounts and $40,000,000 for Foreign Risks and $25,000,000 for
Professional Athletes.)
Page 42 of 57
EXHIBIT II
CEDING COMPANY RETENTION LIMITS AND SHARE
-----------------------------------------
CEDING COMPANY SHARE: The percentage of the Policy face amount shown below in
---------------------
Part A, but not to exceed the retention limits shown in Part B.
A. Retained Percentage:
For policies with an Excess Reinsurance Basis as shown in Exhibit III:
100% of the Policy face amount for amounts of $1.75MM or less
10% of the Policy face amount for amounts over $1.75MM up to $46.75MM
(or automatic binding limit if less)
100% of the Policy face amount for amounts over $46.75MM (or automatic
binding limit if less)
For policies with a First Dollar Reinsurance Basis as shown in Exhibit III:
10% of the Policy face amount for amounts up to $46MM (or automatic
binding limit if less)
100% of the Policy face amount for amounts over $46MM (or automatic
binding limit if less)
Note 1: Professional Athlete Share for policies with an Excess Reinsurance
Basis as shown in Exhibit III is 25%. Professional Athlete Share for policies
with a First Dollar Reinsurance Basis as shown in Exhibit III is 20%.
Page 43 of 57
B. Retention Limits: For policies with amounts of $10MM or less, the amounts as
shown below per policy. For policies with amounts greater than $10MM, the
amounts as shown below per life.
Single Life Joint Life
Std through
Table D (or up Above Table D Std through Above Table D
to $10.00/1 (or greater than Table D (or up (or greater than
Issue 000 flat $10.00/1000 Issue to $10.00/1000 $10.00/1000
Ages extra)# flat extra) Ages flat extra)# flat extra)
----- -------------- ---------------- ----- -------------- ----------------
0-17 $7 MM $5 MM
18-75 $20 MM $15 MM 18-75 $20 MM $15 MM
76-80 $7 MM $3.5 MM 76-80 $10 MM $5 MM
81-85 $4 MM $2 MM 81-85 $5 MM $2.5 MM
86-90 $1.5 MM $0 86-90 $2 MM $0
91 & over $0 $0 91 & over $0 $0
# Also includes combinations of flat extras and table ratings (Using a table
equivalent of $2.50/1000, the sum of the table equivalent + flat should not
exceed the flat limits referenced in column headings above).
For Joint Life, if one life is uninsurable, use limits for the insurable life
from the single life tables to determine the appropriate joint life limits;
otherwise, if both lives are insurable, use limits for each life from the joint
life tables and take greater of the two to determine the appropriate joint life
limits.
Civilian Aviation Risks $12,500,000 (Standard through $2/M)
$10,000,000 (Over $ 2/M through S3.50/M)
$7,500,000 (Over $3.50/M)
Professional Athletes^ $5,000,000
Foreign Risks* $5,000,000 ("A" countries)
$12,500,000 ("B" countries)
$5,000,000 ("C" countries)
^ A Professional Athlete is defined as a player or coach on a National Hockey
League, National Football League, National Basketball Association or Major
League Baseball team.
* U.S./Canada/Guam/Puerto Rico Citizens/permanent residents of each traveling
abroad for more than 12 weeks in a 12 month period to "A" countries and
Foreign Residents of "A" countries; U.S./Canada/Guam/Puerto Rico
Citizens/permanent residents of each traveling abroad for no more than 12
weeks in a 12 month period to "B" countries; U.S./Canada/Guam/Puerto Rico
Citizens/permanent residents of each traveling abroad for no more than 12
weeks in a 12 month period to "C" countries.
Page 44 of 57
Note 1: The dollar amount retention limits shown in Part B above are for
Metropolitan Life Insurance Company (MLIC). In the event a Ceding Company other
than MLIC cannot retain its full share based on the dollar amount retention
limits for that particular Ceding Company, the Ceding Company shall reinsure
the difference between the amount of the Ceding Company's share and the amount
that the Ceding Company actually retains with MLIC.
Page 45 of 57
EXHIBIT III
POLICIES AND RIDERS
-------------------
The Policies and Riders underwritten by or on behalf of the Ceding Companies or
simplified issue with fully underwritten rates, as described below may be ceded
hereunder:
STATUTORY
VALUATION
REINSURANCE REINSURANCE REINSURANCE REINSURANCE CEDING MORTALITY RATES TO BE
PRODUCT CATEGORY BASIS MAXIMUM AGE TABLE COMPANY TABLE USED
------- ----------- ------------ ----------- ------------------ --------- --------- -------------------
90-95modified - MLI
GLT Term Excess 100 UW.xls USA/FMLI 2001 CSO 6 Class Level Term
UL/Accum 90-95modified - MLIC, MLI Permanent -5 class
JSUL 2005 Product First Dollar 120 UW to age 120.xls USA 2001 CSO (joint life)
Permanent -5 class
(single life);
Permanent -4 class
(single life);
UL/Accum 90-95modified - XXXX, XXX Xxxxxxxxx -0 class
GAUL07 Product First Dollar 121 UW to age 120.xls USA 2001 CSO (single life)
UL/Accum 90-95modified - XXXX, XXX Xxxxxxxxx -0 class
EAVUL08 Product Excess 121 UW to age 120.xls USA 2001 CSO (single life)
Life Paid up at UL/Accum 90-95modified - Permanent -5 class
Age 100 (WL 08) Product Excess 121 UW to age 120.xls XXXX 0000 CSO (single life)
EEA COLI UL/Accum 90-95modified - Permanent -5 class
(2001 CSO) Product Excess 100 UW.xls NELICO 2001 CSO (single life)
UL/Accum 90-95modified - Permanent -4 class
PPVUL Product Excess 100 UW.xls GALIC 2001 CSO (single life)
UL/Accum 90-95modified - Permanent -2 class
Premier BOLI Product Excess 100 UW - ALB.xls XXXX 0000 CSO (single life)
UL/Accum 90-95modified - XXXX, XXX Xxxxxxxxx -0 class
LASUL 09 Product First Dollar 120 UW to age 120.xls USA 2001 CSO (joint life)
Permanent -5 class
(single life);
Permanent -4 class
(single life);
UL/Accum 90-95modified - XXXX, XXX Xxxxxxxxx -0 class
XXXX 09 Product First Dollar 121 UW to age 120.xls USA 2001 CSO (single life)
UL/Accum 90-95modified - XXXX, XXX Xxxxxxxxx -0 class
WL 10 Product Excess 120 UW to age 120.xls USA 2001 CSO (single life)
UL/Accum 90-95modified - XXXX, XXX Xxxxxxxxx -0 class
LASUL 11 Product First Dollar 120 UW to age 120.xls USA 2001 CSO (joint life)
Page 46 of 57
STATUTORY
VALUATION
REINSURANCE REINSURANCE REINSURANCE REINSURANCE CEDING MORTALITY RATES TO BE
PRODUCT CATEGORY BASIS MAXIMUM AGE TABLE COMPANY TABLE USED
------- ----------- ------------ ----------- ------------------- --------- --------- -------------------
Permanent -5 class
(single life);
Permanent -4 class
(single life);
XX/Xxxxx 00-00xxxxxxxx - XX XXXX, XXX 0000 Permanent -2 class
XXXX 11 Product First Dollar 121 to age 120.xls USA CSO (single life)
Product
-------
GLT - Guaranteed Level Term
JSUL 2005 - Joint Universal Life with Secondary Guarantee
GAUL07 - Universal Life with Secondary Guarantee
EAVUL08 - Variable Universal Life
Life Paid up at Age 100 (WL08) - Whole Life
EEA COLI (2001 CSO) - Variable Universal Life
PPVUL - Variable Universal Life
Premier BOLI - Universal Life
LASUL 09 - Joint Universal Life with Secondary Guarantee
XXXX 09 - Universal Life with Secondary Guarantee
WL 10 - Whole Life
LASUL 11 - Joint Universal Life with Secondary Guarantee
XXXX 11 - Universal Life with Secondary Guarantee
Riders attached to the listed plans
-----------------------------------
ADBR - Accelerated Death Benefit Rider
Preliminary Term/Temporary Term
ART - Annually Renewable Term
JTCR - Joint Term Coverage Rider
RPR - Return of Premium Rider
EPTR - Estate Preservation Term Rider
SFIO - Scheduled Face Increase Option
PAIR - Option to Purchase Additional Insurance Rider
Inside Term Rider
Outside Term Rider
FTR - Flexible Term Rider
Other
-----
The Reinsurer shall pay its share of any claim after the Reinsurance Maximum
Age under the extended maturity coverage, including interest, as defined in
Article VI. For joint life policies with one life insurable, this will be the
Reinsurance Maximum Age of the insurable life and for joint life policies with
both lives insurable, this will be the Reinsurance Maximum Age of the younger
insured.
Products not listed above resulting from the exercise of business exchanges,
policy split options, and purchase options shall be covered on an excess
reinsurance basis.
Page 47 of 57
For Policies ceded with RPR/SFIO riders, the maximum net amount at risk
illustrated at the time of issue shall be used for purposes of underwriting,
autobind limits, and jumbo limits. For Policies ceded facultatively with RPR
rider, the ultimate amount ceded to the Reinsurers shall not exceed the maximum
net amount at risk included in the facultative offers from the Reinsurers.
Page 48 of 57
EXHIBIT IV
REINSURANCE RATES
-----------------
There shall be no policy fees.
Premium rates shall be the same for automatic and facultative reinsurance.
For joint life policies with one life uninsurable, the life reinsurance
premiums shall be equal to the single life reinsurance premiums for the
insurable life. For all other joint life policies, the life reinsurance
premiums shall be equal to the greater of the joint life reinsurance premiums
or the minimum premium per thousand as shown in Table A. The joint life
reinsurance premiums shall be calculated using the attached Joint Mortality
Rate Formula and the single life reinsurance rates for each life. The single
life reinsurance rates shall be equal to the attached single life mortality
rates, as appropriate based on the Reinsurance Table shown in Exhibit III,
multiplied by the appropriate percentage as shown in Table A, adjusted for
substandard table ratings and single life flat extras as described below.
For single life policies, the life reinsurance premiums shall be equal to the
attached single life mortality rates, as appropriate based on the Reinsurance
Table shown in Exhibit III, multiplied by the appropriate percentage as shown
in Table A, adjusted for substandard table ratings and single life flat extras
as described below.
Life reinsurance premiums shall be payable to the Reinsurance Maximum Age as
shown in Exhibit III and the reinsurance shall continue beyond the Reinsurance
Maximum Age as shown in Exhibit III without any additional reinsurance
premiums. For joint life policies with one life insurable, this will be the
Reinsurance Maximum Age of the insurable life and for joint life policies with
both lives insurable, this will be the Reinsurance Maximum Age of the younger
insured.
Policies issued on a unisex basis shall be reinsured on a sex distinct basis.
Substandard table ratings shall increase the single life mortality rates by
25% per table.
The premiums shall be increased by any flat extra premium charged the insured
less allowances. For flat extra premiums which are payable for six years or
more, the first year allowance shall be 85% of the flat extra premium while the
renewal allowance shall be 15% of the flat extra premium. For flat extra
premiums which are payable for five years or less, the allowance shall be 15%
in all years.
All substandard charges (table ratings and flat extras) reduce to standard at
the earlier of 20 years from issue and attained age 80, but not before the end
of the 10th year.
There is no reinsurance premium charged for the Accelerated Death Benefit Rider.
Premiums for Preliminary Term/Temporary Term for all underwriting classes shall
be the same as the duration one rates for Life reinsurance premiums described
above.
Riders that offer coverage on the base insured(s), use the same Reinsurance
table and rates as the base plan. Additional coverages added after issue for
RPR, SFIO, PAIR and FTR shall use point-in-scale rates.
Page 49 of 57
Policies resulting from the exercise of business exchanges, policy split
options, and purchase options shall be reinsured on a point-in-scale basis.
Life reinsurance premiums for table shaved policies shall be based on the
actual substandard charges prior to table shaving.
For Policies covered under this agreement where the product is not listed in
Exhibit III, the parties shall mutually agree upon the appropriate rates to be
used at the time the Policy is issued.
Page 50 of 57
EXHIBIT IV
JOINT MORTALITY RATE FORMULA
A = younger issue age B = older issue age
qx\\A +t\\= younger age mortality at duration t qx\\B +t\\= older age mortality at duration t
C = Reinsurance Maximum Age as shown in Exhibit III
1. Extend the stream of q's for the older age to duration C-A. Individual
rates for ages C+1 through C+20 are calculated by interpolating between the
value at C and the value at age C+20. Use 1 for ages C+20 and beyond. If
the Reinsurance Maximum Age = 120, individual rates for ages C+1 through
C+10 are calculated by interpolating between the value at C and the value
age C+10. If the Reinsurance Maximum Age = 120, use 1 for ages C+10 and
beyond.
2. px\\A\\ = 1 - qx\\A\\ px\\B\\ = 1 - qx\\B\\
px\\A + 1\\ = 1-qx\\A + 1\\ etc. px\\B + 1\\ = 1 -qx\\B + 1\\
3. \\t\\px\\A\\ = (px\\A\\)(px\\A+1\\)..
(\\t\\px\\A + t-1\\) Probability that issue age A will survive to age A + t
tpx\\B\\ =
(px\\B\\)(px\\B+1\\)..(\\t\\px\\B+t-
1\\) Probability that issue age B will survive to age B + t
4. jp\\t\\ = \\t\\px\\A\\ + \\t\\px\\B\\ -
(\\t\\px\\A\\)( \\t\\px\\B\\) Probability that issue age A or issue age B will survive t years
5. jq\\1\\ = (qx\\A\\)(qx\\B\\) Probability that issue age A and issue age B will die in the 1/st/ year
For t = 2, 3, ..., C-A,
jq\\t\\ = 1 - (jP\\t\\)/(jp\\t-1\\) Probability that second death will occur between year (t-1) and year t
Note: Single life mortality rates are capped at 1.
Clarifying Note: The formulas above are based on q's expressed as rates per
dollar of net amount at risk. If q's are expressed as rates per 1000 of net
amount at risk, they should be adjusted to per dollar rates before being used
in the above formulas.
Page 51 of 57
EXHIBIT IV
SINGLE LIFE MORTALITY RATE TABLES
---------------------------------
The following single life mortality rate tables are attached:
. 90-95 modified - UW pages 1-12
. 90-95 modified - UW - ALB pages 1-12
. 90-95 modified - UW to age 120 pages 1-12
Page 52 of 57
EXHIBIT V
MONTHLY STATEMENTS
------------------
The Ceding Company shall provide the Reinsurer reports each month in
substantial accord with those shown in this Exhibit.
Page 53 of 57
MONTHLY BILLING SUMMARY
mm/dd/yyyy
XXX LIFE REINSURANCE
PREMIUM AMOUNT $0.00
SHORT TERM PREMIUM $0.00
LONG TERM PREMIUM $0.00
COMMISSION ALLOW $0.00
SHORT TERM COMMISSION $0.00
LONG TERM COMMISSION $0.00
DEATH CLAIM AMOUNT $0.00
DELAYED SETTLE INTEREST $0.00
PREMIUM ADJUSTMENT $0.00
SHORT TERM PREM ADJ $0.00
LONG TERM PREM ADJ $0.00
COMMISSION ADJ $0.00
SHORT TERM COMM ADJ $0.00
LONG TERM COMM ADJ $0.00
NET PAYMENT $0.00
Page 54 of 57
MONTHLY TRANSACTION FILE
mm/dd/yyyy
REINSURER:
TREATY:
Policy Number
Branch
Suffix
Joint Life Indicator
Record Type
Name of Insured
Date of Birth
Sex
Issue Age
Effective Date
Issue Date
Insured Underwriting Class
Automatic/Facultative Indicator
Plan Code
Plan Identifier
Series Type
Current Face Amount
Net Amount at Risk
Flat Extra Short Term Premium
Flat Extra Short Term Commission
Flat Extra Duration
Flat Extra Long Term Premium
Flat Extra Long Term Commission
Transaction Date
Transaction Thru Date
Policy Duration
Rating
Prior Policy Number
Prior Branch
Prior Suffix
Insured State of Residence at Issue
Transaction Code
Annual Premium
Premium Adjustment
Face Amount Paid
Delayed Settlement Interest
Page 55 of 57
POLICY EXHIBIT
EXHIBIT OF LIFE INSURANCE REINSURED BY
REINSURER FOR ADMIN COMPANY MET RUN DATE: xx-xx-xxxx
REPORTED AS OF MONTH xxxx FOR TREATY Lxx-ULxxxx PAGE : xx
NUMBER OF AMOUNT OF AMOUNT OF AMOUNT OF
POLICIES INSURANCE STAT RESERVES TAX RESERVES
--------- ------------- ------------- ------------
x. INFORCE END OF PREVIOUS YEAR........... xx,xxx x,xxx,xxx,xxx x,xxx,xxx.xx x,xxx,xx.xx
xA. ISSUED DURING YEAR..................... xx,xxx x,xxx,xxx,xxx x,xxx,xxx.xx x,xxx,xxx.xx
xB. TERM CONVERSIONS ISSUED DURING YEAR.... x,xxx xx,xxx,xxx xxx,xxx.xx xxx,xxx.xx
xC NEGATIVE ISSUES........................ -x,xxx -xxx,xxx,xxx -xx,xxx.xx -xx,xxx.xx
xD. TOTAL ISSUES FROM LINES xA TO xC....... xx,xxx x,xxx,xxx,xxx x,xxx,xxx.xx x,xxx,xxx.xx
x. REINSURANCE ASSUMED....................
x. REVIVED DURING YEAR.................... xx x,xxx,xxx x,xxx.xx x,xxx.xx
x. INCREASED DURING YEAR (NET)............ xxx x,xxx,xxx xx,xxx.xx xx,xxx.xx
xA. SUBTOTALS, LINES x TO x................ xx,xxx x,xxx,xxx,xxx x,xxx,xxx.xx x,xxx,xxx.xx
x . ADDITIONS BY DIVIDEND DURING YEAR...... xxx x x.xx x.xx
x. AGGREGATE WRITE-INS FOR INCREASES......
x. TOTALS (LINE X AND xA TO x)............ xxx,xxx x,xxx,xxx,xxx x,xxx,xxx.xx x,xxx,xxx.xx
x. DEATH.................................. xxx x,xxx,xxx x,xxx.xx x,xxx.xx
xx. MATURITY............................... x x x.xx x.xx
xx. DISABILITY.............................
xx. EXPIRY................................. x,xxx xxx,xxx,xxx x.xx x.xx
xx. SURRENDER.............................. x,xxx xx,xxx,xxx xx,xxx.xx xx,xxx.xx
xx. LAPSE.................................. x,xxx xxx,xxx,xxx xxx,xxx.xx xxx,xxx.xx
xx. CONVERSION.............................
xx. DECREASED (NET)........................ xx x,xxx,xxx xx,xxx.xx xx,xxx.xx
xx. REINSURANCE............................
xx. AGGREGATE WRITE-INS FOR DECREASES......
xx. TOTALS (LINES x TO xx)................. xx,xxx xxx,xxx,xxx xxx,xxx.xx xxx,xxx.xx
xx. INFORCE END OF YEAR (LINE x - LINE xx). xx,xxx x,xxx,xxx,xxx x,xxx,xxx.xx x,xxx,xxx.xx
xx. REINSURANCE CEDED END OF YEAR..........
xx. TOTALS (LINE XX TO LINE xx)............ xx,xxx x,xxx,xxx,xxx x,xxx,xxx.xx x,xxx,xxx.xx
Page 56 of 57
INFORCE DETAIL REPORT
mm/dd/yyyy
REINSURER:
TREATY:
Policy Number
Branch
Suffix
Joint Life Indicator
Name of Insured
Date of Birth
Sex
Effective Date
Issue Date
Smoker Code
Automatic/Facultative Indicator
Plan Code
Plan Identifier
Series Type
Current Face Amount
Net Amount at Risk
Flat Extra Short Term Premium
Flat Extra Duration
Flat Extra Long Term Premium
Premium Start Date
Premium Thru Date
Policy Duration
Prior Policy Number
Prior Branch
Prior Suffix
Insured State of Residence at Issue
Annual Premium
Statutory Reserve
Page 57 of 57
AMENDMENT
EFFECTIVE MARCH 5, 2012
to the
AUTOMATIC AND FACULTATIVE YRT AGREEMENT
EFFECTIVE JANUARY 1, 2012
between
THE METROPOLITAN LIFE INSURANCE COMPANIES
WHICH SHALL INCLUDE THE FOLLOWING COMPANIES:
METROPOLITAN LIFE INSURANCE COMPANY, A NEW YORK INSURANCE COMPANY,
NEW ENGLAND LIFE INSURANCE COMPANY, A MASSACHUSETTS INSURANCE COMPANY,
GENERAL AMERICAN LIFE INSURANCE COMPANY, A MISSOURI INSURANCE COMPANY,
METLIFE INVESTORS USA INSURANCE COMPANY, A DELAWARE INSURANCE COMPANY,
METLIFE INVESTORS INSURANCE COMPANY, A MISSOURI INSURANCE COMPANY,
FIRST METLIFE INVESTORS INSURANCE COMPANY, A NEW YORK INSURANCE COMPANY,
METROPOLITAN TOWER LIFE INSURANCE COMPANY, A DELAWARE INSURANCE COMPANY, AND
METLIFE INSURANCE COMPANY OF CONNECTICUT, A CONNECTICUT INSURANCE COMPANY.
(HEREINAFTER INDIVIDUALLY OR COLLECTIVELY REFERRED TO AS "THE CEDING COMPANY" OR
"COMPANIES")
AND
GENERALI USA LIFE REASSURANCE COMPANY, A MISSOURI REINSURANCE COMPANY
(HEREINAFTER REFERRED TO AS "THE REINSURER")
This Agreement originally executed effective January 1, 2012 is hereby amended,
effective March 5, 2012 for all eligible policies issued on or after the
effective date of this amendment, including policies backdated for up to six
(6) months to save age.
NOW THEREFORE, in consideration of the mutual and foregoing recitals and the
mutual covenants and undertakings herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows.
1. Exhibit III is hereby replaced by the attached Exhibit 111- One additional
product is added (L120).
All terms, provisions, and conditions of this Agreement will continue unchanged
except as specifically revised in this Amendment.
Page 1 of 7
In witness of the above,
THE METROPOLITAN LIFE INSURANCE COMPANIES
WHICH SHALL INCLUDE THE FOLLOWING COMPANIES:
METROPOLITAN LIFE INSURANCE COMPANY, A NEW YORK INSURANCE COMPANY,
NEW ENGLAND LIFE INSURANCE COMPANY, A MASSACHUSETTS INSURANCE COMPANY,
GENERAL AMERICAN LIFE INSURANCE COMPANY, A MISSOURI INSURANCE COMPANY,
METLIFE INVESTORS USA INSURANCE COMPANY, A DELAWARE INSURANCE COMPANY,
METLIFE INVESTORS INSURANCE COMPANY, A MISSOURI INSURANCE COMPANY,
FIRST METLIFE INVESTORS INSURANCE COMPANY, A NEW YORK INSURANCE COMPANY,
METROPOLITAN TOWER LIFE INSURANCE COMPANY, A DELAWARE INSURANCE COMPANY, AND
METLIFE INSURANCE COMPANY OF CONNECTICUT, A CONNECTICUT INSURANCE COMPANY.
("THE CEDING COMPANY" OR "COMPANIES")
and
GENERALI USA LIFE REASSURANCE COMPANY, A MISSOURI REINSURANCE COMPANY
("THE REINSURER")
have by their respective officers executed and delivered this Amendment,
effective MARCH 5, 2012.
METROPOLITAN LIFE INSURANCE
COMPANY
By: /s/ Xxxxxxx Xxxxx
-------------------------
Name: Xxxxxxx Xxxxx
-------------------------
Title: Senior Vice President
-------------------------
NEW ENGLAND LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxx
-------------------------
Name: Xxxxxxx Xxxxx
-------------------------
Title: Vice President
-------------------------
Page 2 of 7
GENERAL AMERICAN LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxx
-------------------------
Name: Xxxxxxx Xxxxx
-------------------------
Title: Vice President
-------------------------
METLIFE INVESTORS USA INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxx
-------------------------
Name: Xxxxxxx Xxxxx
-------------------------
Title: Vice President
-------------------------
METLIFE INVESTORS INSURANCE
COMPANY
By: /s/ Xxxxxxx Xxxxx
-------------------------
Name: Xxxxxxx Xxxxx
-------------------------
Title: Vice President
-------------------------
FIRST METLIFE INVESTORS INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxx
-------------------------
Name: Xxxxxxx Xxxxx
-------------------------
Title: Vice President
-------------------------
METROPOLITAN TOWER LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxx
-------------------------
Name: Xxxxxxx Xxxxx
-------------------------
Title: Vice President
-------------------------
Page 3 of 7
METLIFE INSURANCE COMPANY OF
CONNECTICUT
By: /s/ Xxxxxxx Xxxxx
-----------------------------
Name: Xxxxxxx Xxxxx
-----------------------------
Title: Vice President
-----------------------------
GENERALI USA LIFE REASSURANCE COMPANY
By: /s/ Xxxxx X.Xxxxx By: /s/ Xxxxxx Xxxxxxxx
----------------------------- -----------------------------
Name: Xxxxx X.Xxxxx Name: Xxxxxx Xxxxxxxx
----------------------------- -----------------------------
Title: SVP Title: Treaty Counsel
----------------------------- -----------------------------
Page 4 of 7
EXHIBIT III
POLICIES AND RIDERS
-------------------
The Policies and Riders underwritten by or on behalf of the Ceding Companies or
simplified issue with fully underwritten rates, as described below may be ceded
hereunder:
STATUTORY
REINSURANCE VALUATION
REINSURANCE REINSURANCE MAXIMUM REINSURANCE CEDING MORTALITY RATES TO BE
PRODUCT CATEGORY BASIS AGE TABLE COMPANY TABLE USED
------- ----------- ------------ ----------- ------------------- -------- --------- --------------------
90-95modified - MLI
GLT Term Excess 100 UW.xls USA/FMLI 2001 CSO 6 Class Level Term
UL/Accum 90-95modified - MLIC, Permanent - 5 class
JSUL 2005 Product First Dollar 120 UW to age 120. xls MLI USA 2001 CSO joint life)
Permanent - 5 class
(single life);
Permanent - 4 class
(single life);
UL/Accum 90-95modified - MLIC, Permanent - 2 class
GAUL07 Product First Dollar 121 UW to age 120.xls MLI USA 2001 CSO (single life)
UL/Accum 90-95modified - MLIC, Permanent - 5 class
EAVUL08 Product Excess 121 UW to age 120.xls MLI USA 2001 CSO (single life)
Life Paid up at UL/Accum 90-95modified - Permanent - 5 class
Age 100 (WL 08) Product Excess 121 UW to age 120.xls XXXX 0000 CSO (single life)
EEA COLI UL/Accum 90-95modified - Permanent - 5 class
(2001 CSO) Product Excess 100 UW.xls NELICO 2001 CSO (single life)
UL/Accum 90-95modified - Permanent - 4 class
PPVUL Product Excess 100 UW.xls GALIC 2001 CSO (single life)
UL/Accum 90-95modified - Permanent - 2 class
Premier BOLI Product Excess 100 UW- ALB.xls XXXX 0000 CSO (single life)
UL/Accum 90-95modified - MLIC, Permanent - 5 class
LASUL 09 Product First Dollar 120 UW to age 120.xls MLI USA 2001 CSO joint life)
Permanent - 5 class
(single life);
Permanent - 4 class
(single life);
UL/Accum 90-95modified - MLIC, Permanent - 2 class
XXXX 09 Product First Dollar 121 UW to age 120.xls MLI USA 2001 CSO (single life)
UL/Accum 90-95modified - MLIC, Permanent - 5 class
WL 10 Product Excess 120 UW to age 120.xls MLI USA 2001 CSO (single life)
UL/Accum 90-95modified - MLIC, Permanent - 5 class
LASUL 11 Product First Dollar 120 UW to age 120.xls MLI USA 2001 CSO joint life)
Page 5 of 7
STATUTORY
REINSURANCE VALUATION
REINSURANCE REINSURANCE MAXIMUM CEDING MORTALITY RATES TO BE
PRODUCT CATEGORY BASIS AGE REINSURANCE TABLE COMPANY TABLE USED
------- ----------- ------------ ----------- ------------------ --------- --------- --------------------
Permanent - 5 class
(single life);
Permanent - 4 class
UL/ (single life);
Accum 90-95modified - MLIC, MLI Permanent - 2 class
XXXX 11 Product First Dollar 121 UW to age 120.xls USA 2001 CSO (single life)
UL/
Life Paid up at Accum 90-95modified - MLIC, MLI Permanent - 5 class
Age 120 (L120) Product Excess 120 UW to age 120.xls USA 2001 CSO (single life)
Product
-------
GLT - Guaranteed Level Term
JSUL 2005 - Joint Universal Life with Secondary Guarantee
GAUL07 - Universal Life with Secondary Guarantee
EAVUL08 - Variable Universal Life
Life Paid up at Age 100 (WL08) - Whole Life
EEA COLI (2001 CSO) - Variable Universal Life
PPVUL - Variable Universal Life
Premier BOLI - Universal Life
LASUL 09 - Joint Universal Life with Secondary Guarantee
XXXX 09 - Universal Life with Secondary Guarantee
WL 10 - Whole Life
LASUL 11 - Joint Universal Life with Secondary Guarantee
XXXX 11 - Universal Life with Secondary Guarantee
Life Paid up at Age 120 (L120) - Whole Life
Riders attached to the listed plans
-----------------------------------
ADBR - Accelerated Death Benefit Rider
Preliminary Term/Temporary Term
ART - Annually Renewable Term
JTCR - Joint Term Coverage Rider
RPR - Return of Premium Rider
EPTR - Estate Preservation Term Rider
SFIO - Scheduled Face Increase Option
PAIR - Option to Purchase Additional Insurance Rider
Inside Term Rider
Outside Term Rider
FTR - Flexible Term Rider
Other
-----
The Reinsurer shall pay its share of any claim after the Reinsurance Maximum
Age under the extended maturity coverage, including interest, as defined in
Article VI. For joint life policies with one life insurable, this will be the
Reinsurance Maximum Age of the insurable life and for joint life policies with
both lives insurable, this will be the Reinsurance Maximum Age of the younger
insured.
Page 6 of 7
Products not listed above resulting from the exercise of business exchanges,
policy split options, and purchase options shall be covered on an excess
reinsurance basis.
[ ] maxiumum net amount at risk illustrated at the time of issue shall be used
for purposes of underwriting, autobind limits, and jumbo limits. For Policies
ceded facultatively with RPR rider, the ultimate amount ceded to the Reinsurers
shall not exceed the maximum net amount at risk included in the facultative
offers from the Reinsurers.
Page 7 of 7
