MARKETING AGREEMENT
This MARKETING AGREEMENT, made and entered into as of the 1st day of
January 1996 by and between MASSACHUSETTS GENERAL LIFE INSURANCE COMPANY
("MGLIC"), a Massachusetts stock life insurance corporation with principal
offices at 0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, WABASH LIFE
INSURANCE COMPANY ("WLIC"), a Kentucky corporation with principal offices at
0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, and American Financial
Reinsurance, Inc. ("Life Company"), an Arizona corporation with principal
offices at 000 Xxxxx 000 Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxx 00000, and American
Financial Marketing, Inc. ("Marketing Company"), a Utah corporation with
principal offices at 000 Xxxxx 000 Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxx 00000.
WITNESSETH
WHEREAS, MGLIC desires to increase their sale and issuance of life
insurance and similar products ("Insurance Business") and to maximize the
persistency thereof through the sale of such products by general agents of MGLIC
recruited by Marketing Company (hereinafter called "Agents"), and the
reinsurance by MGLIC to Life Company of part of such Insurance Business, all in
accordance with and subject to the following terms, conditions and provisions.
NOW, THEREFORE, in consideration of the premises and of the mutual promises
of the parties hereto, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. General Agents. To the extent they have not previously done so, MGLIC
and each Agent, as more specifically set forth and identified in Exhibit "A",
which is attached hereto and incorporated herein, including persons or other
entities recruited as Agents subsequent to the date hereof, shall promptly enter
into a General Agents' Compensation Agreement (herein so-called) in the form
attached hereto as Exhibit "A" and incorporated herein to solicit applications
for Insurance Business; provided, however, that MGLIC shall not be obligated to
enter into a General Agents' Compensation Agreement with any given Agent unless
such Agent meets the reasonable appointment criteria for general agents applied
by MGLIC in the ordinary course of business. Marketing Company agrees to
identify in writing at the contract date all Agents to be included in the
Marketing Company. Such Agents are hereinafter individually referred to as
"General Agent" and collectively referred to as "General Agents."
2. Reinsurance. Simultaneously with the execution of this Marketing
Agreement, MGLIC and Life Company shall enter into a reinsurance agreement
("Modified Coinsurance Agreement") on a modified coinsurance basis attached
hereto as Exhibit "B" and incorporated herein. Under the Modified Coinsurance
Agreement MGLIC will cede and Life Company will reinsure, on a quota share
basis, certain percentages of the Insurance Business produced by General Agents
as more specifically set forth in Exhibit "B" hereto.
3. Administrative Services. Simultaneously with the execution of this
Marketing Agreement, Life Company and WLIC shall enter into an Administrative
Services Agreement (herein so-called) in substantially the form attached hereto
as Exhibit "C" and incorporated herein.
4. Production Goals. Marketing Company agrees to use reasonable efforts to
cause General Agents to solicit applications for Insurance Business to be issued
by MGLIC for not less than the following aggregate cumulative First Year
Premiums ("Cumulative Production Goals") on or before the following
Target Dates (herein so-called):
TARGET DATES CUMULATIVE PRODUCTION GOALS
December 31, 1996 2,000,000
December 31, 1997 4,000,000
December 31, 1998 6,000,000
December 31, 1999 8,000,000
December 31, 2000 10,000,000
For the purposes of this Agreement the term "First-Year Premiums" shall
mean the aggregate life insurance premiums payable during the first year a
policy or contract of insurance is in effect, exclusive of (i) lump-sum cash
deposits in excess of published premium rates, (ii) premiums for flexible
premium life insurance contracts in excess of control premiums and (iii)
premiums for single pay contracts. All First-Year Premiums associated with any
application for Insurance Business submitted by a General Agent to MGLIC shall
be counted in full unless and until such application is rejected by MGLIC. All
First-Year Premiums associated with any rejected application shall cease to be
counted as of the date of such rejection.
Insurance policies and contracts which have been issued prior to the date
hereof by MGLIC as a result of applications for Insurance Business solicited by
General Agents after July 1, 1995, shall be deemed to have been issued
subsequent to the date hereof but prior to December 31, 1996, for the purpose of
calculating the aggregate Cumulative First Year Premiums.
5. Termination. For the purpose of this Agreement, the term "Completion
Date" shall mean (i) December 31, 2000, or (ii) the date by which MGLIC has
issued Insurance Business as a result of applications solicited by General
Agents with aggregate cumulative First-Year Premiums in the aggregate amount of
$10,000,000, whichever occurs first.
(a) Prior to Completion Date. This Agreement may not be terminated prior to
the Completion Date, except:
(i) By the mutual consent of the parties hereto; or
(ii) By MGLIC and WLIC if any one or more of the Cumulative Production
Goals set forth herein are not achieved by their respective Target Dates, and
then only upon six (6) months' prior written notice by MGLIC and WLIC to
Marketing Company and Life Company; or
(iii) By MGLIC and WLIC in the event of a material breach on the part of
Marketing Company, Life Company or any General Agent of this Agreement, the
Administrative Services Agreement, any Modified Coinsurance Agreement between
MGLIC and Life Company or any General Agents' Compensation Agreement and such
breach is not cured or eliminated within thirty (30) days after receipt of
written notice thereof to Marketing Company and Life Company from MGLIC and
WLIC; or
(iv) By Marketing Company and Life Company in the event of a material
breach on the part of MGLIC and WLIC of this Agreement, the Administrative
Services Agreement, the Modified Coinsurance Agreement or any General Agents'
Compensation Agreement and such breach is not cured or eliminated within thirty
(30) days after receipt of written notice thereof to MGLIC and WLIC from
Marketing Company and Life Company.
(b) After Completion Date. This Agreement may not be terminated any time
after the Completion Date except:
(i) By the mutual consent of the parties hereto; or
(ii) By MGLIC and WLIC upon thirty (30) days, written notice to Marketing
Company and Life Company; or
(iii) By Marketing Company and Life Company upon thirty (30) days' written
notice to MGLIC and WLIC.
6. Recapture of Reinsured Business. If any Cumulative Production Goal is
not met by the Target Date applicable thereto, or if this Agreement is
terminated prior to the Completion Date pursuant to the provisions of Paragraph
5(a)(i) or 5(a)(iii) above, MGLIC shall have the right, upon six months' prior
written notice to Marketing Company and Life Company, to recapture all of the
Insurance Business ceded by MGLIC to Life Company under the Modified Coinsurance
Agreement and Life Company shall transfer to MGLIC cash equal to the preceding
Accounting Period's Reserve Liability and any future liability shall cease.
7. Right of First Refusal. In the event that Life Company receives an Offer
(herein so-called) from an unaffiliated party ("Offeror") to purchase or to
reinsure all or part of the Insurance Business previously assumed and reinsured
by Life Company from MGLIC, before Offerees accept such Offer they shall deliver
a copy of the Offer to MGLIC and WLIC. During the thirty (30) day period
following such delivery, MGLIC and WLIC shall have a right of first refusal for
either MGLIC or WLIC or any of their affiliates to elect to reinsure such
Insurance Business, on the same terms and conditions contained in such Offer.
Upon the earlier of (i) the delivery by MGLIC and WLIC to Life Company of
written notification of their intent not to exercise such right of first
refusal, or (ii) the expiration of such thirty (30) day period without receipt
by Life Company of MGLIC and WLIC's written notice of intent not to exercise
such right of first refusal, the Life Company shall have the right to accept the
Offer.
If MGLIC and WLIC exercise such right of first refusal but fail to
consummate the purchase within ninety (90) days after receipt by Life company of
MGLIC and WLIC's written notice of exercise, and if such failure is for any
reason other than the refusal of Life Company to consummate the transaction in
accordance with the terms of the offer or the failure of MGLIC and WLIC, despite
diligent efforts, to obtain all necessary regulatory approval, MGLIC and WLIC's
right of first refusal shall terminate completely and permanently. If, despite
diligent efforts, MGLIC and WLIC fail to obtain all necessary regulatory
approvals within the ninety (90) day period specified above, the right of
refusal shall terminate on the earliest of (1) the date on which the receipt of
regulatory approvals is no longer possible or regulatory disapproval is
announced, (2) the date thirty days after the date on which regulatory approval
is granted if the purchase remains unconsummated (unless Life Company has
refused to consummate the transaction in accordance with the terms of the
Offer), or (3) the date on which MGLIC and WLIC cease to make diligent efforts
to obtain all necessary regulatory approvals. Such ninety (90) day period may be
extended by mutual consent of MGLIC, WLIC and Life Company.
8. Miscellaneous.
(a) Assignments. This Agreement shall be binding on the parties hereto and
their respective successors and permitted assigns, but no party may assign this
Agreement without the prior written consent of the other parties.
(b) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
(c) Section Headings. The headings set forth herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
(d) Waiver. No delay or omission by any party hereto to exercise any right
or power arising upon any noncompliance or default by any other party with
respect to any of the terms of this Agreement shall impair any such right or
power or be construed as a waiver thereof. A waiver by any of the parties hereto
of the fulfillment of any of the covenants, conditions or agreements to be
performed by any other shall not be construed to be a waiver of any succeeding
breach thereof or of any other covenant, condition or agreement herein
contained. All remedies provided for in this Agreement shall be cumulative in
addition to and not in lieu of any other remedies available to any party at law,
in equity or otherwise.
(e) Amendments. This Agreement may not be amended, nor shall any waiver,
change, modification, consent or discharge be effected, except by an instrument
in writing duly executed by the parties hereto or their respective successors or
permitted assigns.
(f) Arbitration. Any disagreement that should arise between the parties
regarding the rights or liabilities of the parties under any transaction
pursuant to this Agreement shall be referred to arbitrators. One arbitrator is
to be chosen by each party from among officers of other life insurance
companies, which said officers are familiar with reinsurance transactions. A
fifth arbitrator shall be chosen by the said arbitrators before entering into
arbitration. An arbitrator may not be a present or former officer, attorney, or
consultant of the parties or either's affiliates. If the arbitrators appointed
by the parties cannot agree on a fifth person then either party may apply to
the President of the American Life Insurance Association for appointment of a
fifth arbitrator. The arbitrators' decision will be final and binding upon
both parties.
The place of the meeting of the arbitrators will be decided by a majority
vote of the members thereof. All expenses and fees of the arbitrators will be
borne equally by the parties, unless the arbitrators decide otherwise.
(g) Notices. Any notices required or permitted under this Agreement shall
be in writing and shall be deemed to have been duly given if delivered,
telecopied, or mailed, by certified mail, return receipt requested to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
If to MGLIC:
Xxxxx X. Xxxxxxxxx
Massachusetts General Life Insurance Company
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
If to WLIC:
Xxxxx X. Xxxxxxxxx
Wabash Life Insurance Company
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
If to Life Company:
Xxxxxx Xxxxxxx, President
XX Xxx 000
225 South 000 Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000-0000
If to Marketing Company:
Xxxxxx Xxxxxxx, President
XX Xxx 000 225 South 000 Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000-0000
All notices and other communications required or permitted hereunder that are
addressed as provided in this Section 8(g) will, if delivered personally or by
mail in the manner described above, be deemed given upon receipt, and will if
delivered by telecopy, be deemed delivered when confirmed.
(h) Force Majeure. The parties shall be excused from performance hereunder
for any period when the parties are prevented from performing any services to be
provided hereunder, in whole or in part, as a result of an Act of God, fire,
war, civil disturbance, court order, insurance department regulatory order,
labor dispute, or other cause beyond its reasonable control, and such
nonperformance shall not be a ground for Termination hereof or assertion of
default hereunder. In the event either party hereto shall be excused from
performance under this provision, said party shall use its best efforts to
provide, directly or indirectly, alternative and, to the extent practicable,
equivalent fulfillment of its obligation hereunder.
(i) Oversight. If nonpayment of premiums within the time specified or
failure to comply with any of the other terms of this Agreement is shown to be
unintentional and the result of oversight or misunderstanding on the part of
either parties hereto, this Agreement will not be considered abrogated thereby,
but the parties to this Agreement will be restored to the position they would
have occupied had no such oversight or misunderstanding occurred.
(j) Severable Provisions. If any provisions of this Agreement shall be
found to be invalid by any administrative agency or court of competent
jurisdiction, such finding shall not affect the remaining provisions of this
Agreement and all other provisions herein shall remain in full force and effect.
(k) Approvals, Consents. etc. In any instance where agreement,
approval, acceptance or consent of any parties is required by any
provision of this Agreement, such action shall not be unreasonably
delayed or withheld.
(1) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of
Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed and delivered by their officers "hereunto duly authorized, all as of the
date first hereinabove written.
ATTEST: MASSACHUSETTS GENERAL LIFE INSURANCE COMPANY
/s/ Xxxxx Xxxxxx
Secretary President
ATTEST: WABASH LIFE INSURANCE COMPANY
/s/ Xxxxx Xxxxxx
Secretary President
AMERICAN FINANCIAL HOLDINGS, INC. dba
ATTEST: AMERICAN FINANCIAL MARKETING, INC.
/s/ Xxxxxxx X. Punta /s/ Xxxxxx X. Xxxxxxx
Secretary President
ATTEST: AMERICAN FINANCIAL REINSURANCE, INC.
/s/ Xxxxxxx X. Punta /s/ Xxxxxx X. Xxxxxxx
Secretary Chief Executive Officer
EXHIBIT A
GENERAL AGENT AGREEMENT
Effective this ----- day of ------, 19-----
MASSACHUSETTS GENERAL LIFE Insurance Company
(hereinafter referred to as Company) hereby appoints -------------------
(General Agent's Name)
to act as the Company's General Agent (hereinafter referred to as General Agent
or You), for the solicitation of applications for insurance. The title of the
General Agent shall be -----------
The parties hereby agree as follows:
RELATIONSHIP OF PARTIES
1. The General Agent is an independent contractor. Nothing contained in
this contract or in any course of dealing between you and the Company
whether in the past or currently shall be construed or interpreted to
create an employer-employee relationship between the Company and you.
You shall be free to exercise your own judgment as to the persons from
whom applications are solicited and as to the time, place and manner of
solicitation; however, the applicable statutes and governmental
regulations pertaining to the conduct of business covered hereby as well
as the regulations from time to time adopted by the Company respecting its
methods of doing business shall be observed and conformed to by you.
AUTHORITY
2. Your authority shall extend no further than is stated in this
contract. You are hereby authorized to solicit applications for insurance
and annuity contracts on behalf of the Company. You are further authorized
to collect in cash a first-year premium on applications solicited or on
policies forwarded to you for delivery. You may not collect any deferred
first-year or renewal premium unless a receipt is forwarded by the Company
to you for that purpose. You shall not collect any premiums past due
except upon conditions specifically prescribed by the Company. You shall
not undertake to make, alter, or discharge any contract or waive any
forfeiture, or extend the time for payment of any premium or note, or
waive payments in cash, or contract debts or obligations in the name of
the Company or obligate it in any way. Except in cases where the first
full premium has been paid in advance, you shall not deliver any policy
where you have knowledge of any conditions suffered by the applicant
subsequent to the application date which might affect insurability.
You have the authority to recruit insurance producers (Producers) to
solicit insurance and annuities under your supervision and recommend their
licensing to the Company. The Company reserves the right of refusal to
license any such proposed Producer. You shall contract directly with your
Producers under agreements suitable to you for solicitation of insurance
as authorized herein; provided, however, that you agree to provide the
Company with copies of all such agreements.
LITIGATION
3. You shall not institute legal proceedings against any applicant,
policyholder or any other person for any cause arising out of the business
transacted under this appointment unless the Company shall have been
notified in writing of such action or the proposed action simultaneously
with the institution of such legal proceedings. Should the Company be sued
because of any alleged act by you, the Company shall, upon receipt of
notification of such suit, notify you immediately in order that you and
the Company may mutually agree upon the appropriate defense, the
employment of counsel and a determination as to which party shall be
liable for the cost of such defense. The Company, at its sole discretion
and expense, may settle any claim or claims of applicants for insurance,
policyholders or others against the Company arising out of the business
transacted under this appointment, upon receipt of proof satisfactory to
the Company of the justice of such claim or claims. No settlement calling
for payment by you in whole or in part (whether directly or indirectly, or
whether contributed to in whole or in part by any insurance carrier) shall
be made without your consent.
MODIFICATIONS
4. The Company shall not be bound by a promise, agreement,
understanding, or representation heretofore or hereafter made unless made
in writing and signed by an officer of the Company expressing by its terms
an intention to modify this contract.
DISPUTES
5. If a claim to compensation is disputed by another General Agent or
Producer, the decision of the Company thereon shall be binding and
conclusive.
RULES AND REGULATIONS
6. This agreement shall be deemed to be supplemented by any provisions,
rules and instructions for the conduct of its business which may be set
forth in any rate book, instruction manual, or other publication, or
written directives issued by the Company from time to time to the same
extent as if such provisions, rules, and instructions were included
herein.
REPLACEMENT AND REINSTATEMENTS
7. If a policy issued by the Company is terminated and a new policy is
issued on the same life which, in the judgment of the Company, is to take
the place 'of the terminated policy, no compensation shall be allowed
thereon. If any policy obtained through you lapses and is then restored
through the action of some other person, the Company shall not be liable
for any further compensation thereon.
ADVERTISING
8. You shall comply with the rules of the Company and any applicable
statutes and governmental regulations relating to advertising, publicity
releases, and the use of written or printed material pertaining to the
Company policies, plans, financial condition, or statements concerning
production.
COMPENSATION
9. As compensation for the services to be rendered, you will be paid at
the rates and under the conditions set forth in the attached schedule(s)
of compensation on premiums paid in cash and accepted by the Company for
first and subsequent policy years on account of policies issued on
applications obtained by you or your Producers, and only after the due
date of the premium.
The Compensation Schedules may be changed upon written notice to you by
the Company and any applications solicited by you shall be affected by
such change thirty (30) days after the date of such written notice. Any
such change will not affect vesting requirements.
You hereby agree that any obligation due from you may be offset by the
Company against any money payable to you under this contract, and that any
such indebtedness shall be a first lien upon any funds due to you under
this contract. The Company may, moreover, require an immediate repayment
of such indebtedness regardless of whether future compensation becoming
payable to you appears to be adequate to offset such indebtedness. In the
event ;he Company is required to pursue formal collection procedure in
order to collect any indebtedness under the terms of this contract, you
agree to be, responsible for any expense incurred, be it the fee of a
collection agency, attorney. or other cost, including court costs.
In the event you have been appointed by an affiliate of the Company, any
indebtedness owing the Company may be offset by compensation due you from
the affiliate and any indebtedness owing the affiliate may be offset by
compensation due you under this appointment.
REJECTIONS
10. The Company may reject any application for insurance obtained by you
or your Producers without specifying the reason therefor and return the
premium thereon.
RETURN OF PREMIUM
11. Should the Company for any reason return a premium on a policy, you
shall repay to the Company on demand, the amount of compensation received
on the premium so returned.
INDEBTEDNESS
12. Any indebtedness incurred by you and/or by any producers and general
agents on whose business you receive compensation shall, in the absence of
any agreement in writing to the contrary, be loans payable upon demand. As
security for any such loans, the Company shall have a first lien upon any
compensation payable to you under this or any other contract between you
and the Company and may at any time deduct from any such compensation any
such indebtedness.
ASSIGNMENT
13. No assignment of compensation payable hereunder shall be valid unless
accepted in writing by the Company.
INTENT NOT TO WAIVE
14. The failure of the Company to enforce any provision in this contract
or any regulation it promulgates shall not constitute a waiver thereof.
TERMINATION
15. This contract shall terminate: (1) Upon your death or in the event you
become totally and permanently disabled; (2) Upon the giving of written
notice by you or the Company, said notice being delivered personally or
mailed to the last known address of the other party via United States
mail.
In the event of termination as described above, you agree to deliver all
Company property to the Company and to repay any existing indebtedness to
the Company. If the contract terminates by reason of your health, or in
the event you die prior to receipt of all compensation due to you,
compensation due, or thereafter becoming due, shall be paid to your
estate. In the event you are a corporation, this contract shall
automatically terminate in the event the corporation ceases to do business
as a corporation, in which case all compensation due and thereafter
becoming due to it shall be payable to its successor or duly appointed
representative.
PRIOR AGREEMENTS SUPERSEDED
16. This agreement supersedes all prior agreements between the Company
and you with respect to policies issued :through you after the effective
date hereof.
WITHDRAWAL
17. Company retains the right to withdraw any policy form or withdraw
from any territory or jurisdiction.
IN WITNESS WHEREOF, this appointment has been executed on this ---- day of ----
----, 19--
MASSACHUSETTS GENERAL LIFE Insurance Company
By /s/ vice president
AMERICAN FINANCIAL HOLDING, INC.,
d/b/a AMERICAN FINANCIAL MARKETING, INC.
[name of agency]
By /s/ Xxxxxx X. Xxxxxxx, president and CEO
EXHIBIT B
MODIFIED COINSURANCE AGREEMENT
THIS MODIFIED COINSURANCE AGREEMENT, made and entered into as of the 1st
day of January 1996 by and between MASSACHUSETTS GENERAL LIFE INSURANCE COMPANY
("Ceding Insurer"), a Massachusetts corporation with principal offices located
at 0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, and American Financial
Reinsurance, Inc. ("Reinsurer"), an Arizona corporation with principal offices
located at 000 Xxxxx 000 Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxx 00000.
WITNESSETH:
WHEREAS, Ceding Insurer, Reinsurer, WABASH LIFE INSURANCE COMPANY ("WLIC"), a
Kentucky corporation, and American Financial Marketing, Inc. ("Marketing
Company"), a Utah corporation and an affiliate of Reinsurer, are parties to a
Marketing Agreement (herein so-called) dated as of even date herewith, under
which, among other things, Ceding Insurer and Reinsurer agreed to enter into
this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises of the
parties hereto, and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Definitions. Except as otherwise indicated herein, all terms used in the
Marketing Agreement shall have the same meaning in this Agreement. In addition,
the following terms shall mean:
1.1 "Abatement" means the termination of the provisions of this Agreement
relating to the cession of additional Insurance Business Produced, but excludes
the termination of the remaining provisions of the Modified Coinsurance
Agreement.
1.2 "Accounting Period" means each calendar quarter ending on March 31, June 30,
September 30 and December 31 of each year.
1.3 "Beginning Calendar Year" means the period commencing with the effective
date of this Agreement and ending December 31, 1995.
1.4 "Calculation Period" means the Beginning Calendar Year, the Ending Calendar
Year and each Calendar Year occurring in between them.
1.5 "Calendar Year" means the each twelve month period beginning January 1 and
ending December 31.
1.6 "Ending Calendar Year" means the period commencing on January 1 of the year
in which this Agreement is Abated and ending on the date of Abatement.
1.7 "First Year Paid Life Insurance Premiums" means the life insurance premiums
received by the Ceding Insurer on the Policies reinsured hereunder during the
first year each of such Policies is in effect, exclusive of (i) lump-sum cash
deposits in excess of published premium rates, (ii) premiums for flexible
premium life insurance contracts in excess of control premiums and (iii)
premiums for single pay contracts.
1.8 "Gross Rate of Interest" for any Accounting Period for each product type
shall be the sum of (a) the amount of basis points (interest spread) as dictated
in Schedule A by product type and (b) the effective weighted average of the
rates of interest credited by Ceding Insurer, excluding additional interest
credits, if any, to policyowners on interest-sensitive whole life and flexible
premium adjustable life insurance policies as authorized by Ceding Insurer's
Board of Directors and in effect from time to time during the Accounting Period.
1.9 "Gross Investment Income" for any Accounting Period shall be an amount equal
to:
(a) Twenty-five percent of the Gross Rate of Interest multiplied by an amount
equal to (i) Reinsurer's Quota Share of the Reserve Liability at the beginning
of such Accounting Period less (ii) an amount equal to Reinsurer's Quota Share
of the principal amount of all policy loans on the Policies reinsured hereunder
("Policy Loans'') at the beginning of the Accounting Period less (iii) any
unpaid settlements due to the Ceding Insurer plus (iv) any unpaid settlements
due to the Reinsurer;
Plus (b) An amount equal to Reinsurer's Quota Share of the interest received by
Ceding Insurer during such Accounting Period on all Policy Loans.
1.10 "Gross Premium" means all of the paid premiums received by Ceding Insurer
on the Policies reinsured hereunder including (i) lump sum cash deposits in
excess of published premium rates, (ii) premiums for flexible premium life
insurance contracts in excess of control premiums and (iii) premiums for single
pay contracts.
1.11 "Insurance Business Produced" means one hundred percent (100~) of Ceding
Insurer's liability under all insurance policies and contracts ("Policies")
issued by Ceding Insurer on the basis of applications solicited by Marketing
Company or its subagents pursuant to the Marketing Agreement.
1.12 "Quota Share" means for any given Calculation Period:
(a) For Calendar year 1995, a thirty-three and one-third percent (33.33~)
undivided interest in the Insurance Business Produced during that Calendar Year;
and
(b) For Calendar Years after 1995, if (i) Insurance Business Produced by
Marketing Company is $5,000,000 or more of First Year Paid Life Insurance
Premiums received by Ceding Insurer in any Calendar Year, the Quota Share for
the subsequent Calendar year shall be a fifty percent (50%) undivided interest
in the Insurance Business Produced, or (ii) if Insurance Business Produced by
Marketing Company is less than $5,000,000 of First Year Paid Life Insurance
Premiums received by Ceding Insurer in any Calendar Year, the Quota Share for
the subsequent Calendar Year shall be a thirty-three and one-third percent
(33.33%) undivided interest in the Insurance Business Produced. Insurance
Business Produced by Marketing Company must be greater than $2,000,000 of First
Year Paid Life Insurance Premiums received by Ceding Insurer in any Calendar
Year for Reinsurer to continue to be eligible to participate.
1.13 "Reserve Liability" means the actuarial reserves relating to the Policies
reinsured hereunder as reported in Exhibit 8 of Ceding Insurer's Annual
Statement prepared on forms prescribed by the National Association of Insurance
Commissioners ("NAIC Statement"). Such reserves shall be determined on the same
basis as that used by the Ceding Insurer in computing its Reserve Liability. In
addition, a reserve shall be calculated based upon the block's experience
through cash flow testing by a statement actuary. If such testing of cash flows
indicates an additional reserve is to be established for the block of business
then such reserve will be established to comply with regulatory provisions.
1.14 "Claims Liability" means the claims incurred but not paid relating to the
Policies reinsured hereunder as reported in Exhibit 11 of Ceding Insurer's
Annual Statement prepared on forms prescribed by the National Association of
Insurance Commissioners ("NAIC Statement"). Such claims shall be determined on
the same basis as that used by the Ceding Insurer in computing its Claims
Liability.
1.15 "Termination" means the termination of all of the provisions of this
Agreement and includes the recapture by Ceding Insurer of all Policies
previously reinsured hereunder.
2. Reinsurance. Ceding Insurer agrees to cede to Reinsurer and Reinsurer agrees
to assume and reinsure from Ceding Insurer, on a modified coinsurance basis,
Reinsurer's Quota Share of the Insurance Business Produced on the terms and
conditions stated herein.
2.1 This Agreement is an indemnity reinsurance agreement solely between the
Ceding Insurer and the Reinsurer and, except as otherwise provided herein, the
performance of the obligations of each party hereunder shall be rendered solely
to the other party. Except as otherwise provided herein, no person other than
Ceding Insurer and Reinsurer shall have any rights under this Agreement and the
Ceding Insurer shall be and remain solely liable to any insured, policyowner, or
beneficiary under the Policies reinsured hereunder.
2.2 Reinsurer shall, except for Reserves, Policy Loans and Policy Issue Expenses
and Policy Maintenance Expenses, share with the Ceding Insurer, on the basis of
Reinsurer's Quota Share, in all transactions relating to the Policies reinsured
hereunder, including, without limitation:
(a) All premium transactions effected;
(b) All commissions, fees and bonuses paid to or for the benefit of the
Marketing Company and/or General Agents.
(c) All policy benefits paid.
(d) All policyholder dividends paid. (e) All premium taxes paid.
(e) All premium taxes paid.
(f) All nonforfeiture benefits paid.
2.3 Except as provided herein, the liability of Reinsurer with respect to the
Policies reinsured hereunder shall begin and end simultaneously with the
liability of the Ceding Insurer.
2.4 Reinsurer's Quota Share of reinsurance hereunder shall be maintained in
force as to the Policies reinsured hereunder without reduction so long as the
amount of insurance for which the Ceding Insurer is obligated under such
Policies remains in force without reduction.
3. Reserves. Ceding Insurer shall be solely responsible for furnishing all of
the assets necessary to satisfy the Reserve Liability on the Policies reinsured
hereunder ("Reserves").
3.1 Ceding Insurer shall retain ownership of all assets held as Reserves on the
Policies reinsured hereunder and Reinsurer shall have no legal, equitable or
security interest in such assets.
3.2 Reinsurer shall not participate in any long or short term capital gains or
losses incurred by Ceding Insurer with respect to such assets and no part of any
such gains and losses of Ceding Insurer from, or considered as being from, the
sale or exchange of any asset shall be treated as gains or losses from the sale
or exchange of assets owned by or belonging to the Reinsurer.
3.3 Reinsurer shall be solely responsible for paying all Federal, State and
local income taxes, if any, relating to the Gross Investment Income paid by the
Ceding Insurer to the Reinsurer hereunder.
4. Expenses. Except as otherwise provided herein, Ceding Insurer shall bear all
expenses relating to the issuance and maintenance of the Policies reinsured
hereunder.
4.1 For purposes of this Agreement, Policy Issue Expenses (herein so-called) for
each new Policy reinsured hereunder and Policy Maintenance Expenses (herein
so-called) for each Policy reinsured hereunder are detailed in Schedule A
(attached). Reinsurer shall reimburse the Ceding Insurer for Policy Issue
Expenses and Policy Maintenance Expenses in an amount equal to Reinsurer's Quota
Share of the Policies reinsured hereunder, expressed as a percentage of the
Policy Issue Expenses and the Policy Maintenance Expenses.
4.2 For purposes of this Agreement, a DAC Tax allowance shall be charged based
upon Reinsurer's Quota Share of nonpension premium less the DAC Tax basis as
calculated under IRS Regulation 848. The solution shall be multiplied by the
present value of future DAC Tax Capitalization and Amortization based upon the
ceding insurers marginal tax rate for Federal Income Tax purposes. Assuming a
34% tax rate, the solution would be multiplied by 1.5%.
4.3 Service Fees shall be paid by the Reinsurer as detailed in Exhibit C for
Services performed by WLIC pursuant to the Administrative Services Agreement, as
long as the business described herein remains in force.
5. Payments by Ceding Insurer. Within sixty (60) days after the end of each
Accounting Period, Ceding Insurer shall deliver to Reinsurer an accounting with
respect to all Policies reinsured hereunder and Ceding Insurer shall pay to
Reinsurer the sum of:
(a) Reinsurer's Quota Share of Gross Premiums for such Accounting
Period.
(b) The Gross Investment Income for such Accounting Period.
(c) Reinsurer's Quota Share of any decrease in Reserve Liability and Claims
Liability for such Accounting Period.
5.1 All sums due Reinsurer shall be offset, to the extent applicable, against
all sums due Ceding Insurer under Paragraph 6 below.
6. Payments by Reinsurer. Within sixty (60) days after the end of each
Accounting Period, Reinsurer shall pay Ceding Insurer the sum of:
(a) Reinsurer's Quota Share of all disbursements made by Ceding Insurer with
respect to the Policies for such Accounting Period, (other than disbursements
relating to Policy Issue Expenses, Policy Maintenance Expenses, Reserves, Claims
Liability and Policy Loans) including, without limitation, all death benefits,
nonforfeiture benefits, matured endowments, disability waiver of premium
benefits, policyholder dividends, premium taxes, commissions and bonuses and
Reinsurer agrees that it will pay all costs and expenses incurred by it or on
its behalf in connection with the retrocession of any liability on the Policies
reinsured hereunder.
(b) Reinsurer's Quota Share of all Policy Issue Expenses and Policy Maintenance
Expenses for such Accounting Period.
(c) Reinsurer's Quota Share of all increases in Reserve Liability and Claims
Liability for such Accounting Period.
(d) Reinsurance premiums due on Retrocession pursuant to Article IV of Exhibit D
(Reinsurance Agreement).
6.1 All sums due Ceding Insurer shall be offset, to the extent applicable,
against all sums due Reinsurer under Paragraph 5 above.
7. Tax Reserves. Reinsurer shall be responsible for its pro-rata share of any
tax liability resulting from the difference between tax reserves and statutory
reserves. A tax reserve adjustment shall be calculated on an annual basis and
allocated to Reinsurer for this tax purpose.
8. Oversight. It is understood and agreed that if failure to comply with any
terms of this Agreement is shown to be unintentional and the result of
misunderstanding or oversight on the part of either the Ceding Insurer or
Reinsurer, both the Ceding Insurer and Reinsurer shall be restored to the
positions they would have been in had no such misunderstanding or oversight
occurred.
9. Reinstatement. If a Policy reinsured hereunder lapses for nonpayment of
premium and is subsequently reinstated by the Ceding Insurer under its regular
rules, Reinsurer will automatically reinstate its reinsurance with respect to
such Policy. The Ceding Insurer will promptly notify Reinsurer regarding any
such reinstatement and will pay to Reinsurer its share of premiums in arrears,
with interest at the same rate and in the same manner as received by the Ceding
Insurer in connection with the reinstatement.
10. Misstatement of Age or Sex. If there is an increase or reduction in any
Policy reinsured hereunder because of an overstatement or understatement of age
or misstatement of sex being established either before or after the death of the
life insured, Ceding Insurer and Reinsurer shall share in such increase or
reduction in proportion to their respective liabilities under the Policy.
11. Settlement of Claims.
11.1 The Ceding Insurer shall give the Reinsurer prompt notice of any claim
submitted on a policy reinsured hereunder and prompt notice of any instigation
of any legal proceedings in connection therewith. Copies of proofs of other
documents bearing on such claim or proceeding shall be furnished to the
Reinsurer when requested.
11.2 The Reinsurer shall accept the good faith decision of the Ceding Insurer in
settling any claim or suit and shall pay its share of net reinsurance liability
upon receiving proper evidence of the Ceding Insurer's having settled with the
claimant. Payment of net reinsurance liability on account of death or
dismemberment shall be made in one lump sum. In settlement of reinsurance
liability for Waiver of Premium benefits, the Reinsurer shall pay to the Ceding
Insurer its proportionate share of the gross premium waived.
11.3 If the Ceding Insurer should contest or compromise any claim or proceeding,
and the amount of net liability thereby be reduced, the Reinsurer's reinsurance
liability shall be reduced in the proportion that the net liability of the
Reinsurer bore to the sum of the retained net liability of the Ceding Insurer
and the net liability of other reinsurers existing as of the occurrence of the
claim.
11.4 Any unusual expenses incurred by the Ceding Insurer in defending or
investigating a claim for policy liability or in taking up or rescinding a
policy reinsured hereunder shall be participated in by the Reinsurer in the same
proportion as described in Section 11.3 above.
11.5 In no event shall the following categories of expenses or liabilities be
considered, for purposes of this agreement, as "unusual expenses" or items of
"net reinsurance liability":
(a) routine investigative or administrative expenses;
(b) expenses incurred in conjunction with a dispute or contest arising out of
conflicting claims of entitlement to policy proceeds or benefits which the
Ceding Insurer admits are payable;
(c) expenses, fees, settlements, or judgments arising out of or in conjunction
with claims against the Ceding Insurer for punitive or exemplary damages;
(d) expenses, fees, settlements, or judgments arising out of or in conjunction
with claims made against the Ceding Insurer and based on alleged or actual bad
faith, failure to exercise good faith, or tortious conduct.
11.6 For purposes of this Agreement, penalties, attorney's fees, and interest
imposed automatically by statute against the Ceding Insurer and arising solely
out of judgment being rendered against the Ceding Insurer in a suit for policy
benefits reinsured hereunder shall be considered "unusual expenses."
11.7 In the event that the amount of insurance provided by a policy or policies
reinsured hereunder is increased or reduced because of a misstatement of age or
sex established after the death of the insured, the net reinsurance liability of
the Reinsurer shall increase or reduce in the proportion that the net
reinsurance liability of the Reinsurer bore to the sum of the net retained
liability of the Ceding Insurer and the net liability of other reinsurers
immediately prior to the discovery of such misstatement of age or sex.
Reinsurance policies in force with the Reinsurer shall be reformed on the basis
of the adjusted amounts, using premiums and reserves applicable to the correct
age and sex. Any adjustment in reinsurance premiums shall be made without
interest.
11.8 The Reinsurer shall refund to the Ceding Insurer any reinsurance premiums,
without interest, unearned as of the date of death of the life reinsured
hereunder.
11.9 If the Ceding Insurer pays interest from a specific date, such as the date
of death of the insured, on the contractual benefit of a policy reinsured under
this Agreement, the Reinsurer shall indemnify the Ceding Insurer for the
Reinsurer's share of such interest. Interest paid by the Reinsurer under this
Section 11.9 shall be computed at the same rate and commencing as of the same
date as that paid by the Ceding Insurer. The computation of interest paid by the
Reinsurer under this Section 11.9 shall cease as of the earlier of (a) the date
of payment of the Reinsurer's share of reinsurance liability and (b) the date of
termination of the period for which the Ceding Insurer has paid such interest.
12. Inspection of Records. Each party shall have the right at any reasonable
time during normal business hours to inspect, at the office of the other party,
all books and documents relating to reinsurance under this Agreement.
13. Insolvency. In the event of the insolvency of the Ceding Insurer, all
reinsurance shall be payable directly to the liquidator, receiver, or statutory
successor of said Ceding Insurer, without diminution because of the insolvency
of the Ceding Insurer; provided, however, that any obligations of the Ceding
Insurer to Reinsurer shall be offset against the obligations of Reinsurer to
Ceding Insurer.
13.1 In the event of the insolvency of the Ceding Insurer, the liquidator,
receiver, or statutory successor of the Ceding Insurer shall give the Reinsurer
written notice of the pendency of any claim on a Policy reinsured within a
reasonable time, to be not less than thirty days, after such claim is filed in
the insolvency proceeding. During the pendency of any such claim, Reinsurer may
investigate such claim and in the name of the Ceding Insurer (or its liquidator,
receiver, or statutory successor), but at its own expense, interpose in the
proceeding where such claim is to be adjudicated any defense or defenses which
it may deem available to the Ceding Insurer or its liquidator, receiver, or
statutory successor.
13.2 Any expense thus incurred by Reinsurer shall be chargeable, subject to
court approval, against the Ceding Insurer as part of the expense of liquidation
to the extent of a proportionate share of the benefit which may accrue to the
Ceding Insurer solely as a result of the defense undertaken by 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
resulting expense shall be apportioned in accordance with the terms of the
reinsurance agreement as though such expense had been incurred by the Ceding
Insurer.
14. Abatement. This Agreement may not be Abated until such time as the Marketing
Agreement has been terminated, after which time this Agreement may be Abated:
(a) By the mutual consent of the Ceding Insurer and the Reinsurer; or
(b) By Ceding Insurer upon thirty (30) days' written notice to Reinsurer; or
(c) By Reinsurer upon thirty (30) days' written notice to Ceding Insurer.
15. Termination. This Agreement may not be terminated until such time as the
Marketing Agreement has been terminated, after which time this Agreement may
only be terminated:
(a) By the mutual consent of the Ceding Insurer and the Reinsurer; or
(b) By Ceding Insurer in the event of a material breach hereof by Reinsurer and
such breach is not cured or eliminated within thirty (30) days after receipt of
written notice thereof to Reinsurer from Ceding Insurer; or
(c) By Reinsurer in the event of a material breach hereof by Ceding Insurer and
such breach is not cured or eliminated within thirty (30) days after receipt of
written notice thereof to Ceding Insurer from Reinsurer.
16. Recapture of Reinsured Business. If any Cumulative Production Goal is not
met by the Target Date applicable thereto, the Ceding Insurer shall have the
right, upon six months' prior written notice to Marketing Company and Reinsurer,
to recapture all of the Insurance Business ceded by the Ceding Insurer to
Reinsurer under this Agreement. No consideration shall be paid by the Ceding
Insurer to Marketing Company or to Reinsurer for the recapture of such insurance
business.
17. Right of First Refusal. Ceding Insurer shall have a right of first refusal
to reinsure the Policies reinsured hereunder to Reinsurer under the terms,
conditions and provisions set forth in Paragraph 7 of the Marketing Agreement.
18. Waiver. No delay or omission by any party hereto to exercise any right or
power arising upon any noncompliance or default by any other party with respect
to any of the terms of this Agreement shall impair any such right or power to be
construed as a waiver thereof. A waiver by any of the parties hereto of the
fulfillment of any of the covenants, conditions, or agreements to be performed
by any other shall not be construed to be a waiver of any succeeding breach
hereof or of any other covenant, condition or agreement herein contained. All
remedies provided for in this Agreement shall be cumulative in addition to and
not in lieu of any other remedies available to any party at law, in equity or
otherwise.
l9. Amendments. This Agreement may not be amended, nor shall any waiver, change,
modification, consent or discharge be effected, except by an instrument in
writing duly executed by the parties hereto or their respective successors or
permitted assigns.
20. Approvals, Consents. etc. In any instance where agreement, approval,
acceptance or consent of any party is required by any provision of this
Agreement, such action shall not be unreasonably delayed or withheld.
21. Force Majeure. Ceding Insurer or Reinsurer shall be excused from performance
hereunder for any period when either is prevented from performing any services
to be provided hereunder, in whole or in part, as a result of an Act of God,
fire, war, civil disturbance, court order, insurance department regulatory
order, labor dispute, or other cause beyond its reasonable control, and such
nonperformance shall not be a ground for Termination hereof or assertion of
default hereunder. In the event either party hereto shall be excused from
performance under this-provision, said party shall use its best efforts to
provide, directly or indirectly, alternative and, to the extent practicable,
equivalent fulfillment of its obligations hereunder.
22. Severability. If any provision of this Agreement is declared or found to be
illegal, unenforceable or void by any administrative agency, regulatory body, or
court of competent jurisdiction, such finding shall not affect the remaining
provisions of this Agreement, and all other provisions hereof shall remain in
full force and effect.
23. Arbitration. Any disagreement that should arise between Ceding Insurer and
Reinsurer regarding the rights or liabilities of either party under any
transaction pursuant to this Agreement shall be referred to arbitrators. One
arbitrator is to be chosen by each party from among officers of other life
insurance companies, which said officers are familiar with reinsurance
transactions. A third arbitrator shall be chosen by the said two arbitrators
before entering into arbitration. An arbitrator may not be a present or former
officer, attorney, or consultant of Ceding Insurer or Reinsurer or either's
affiliates. If the arbitrators appointed by the two parties cannot agree on a
third person then either party may apply to the President of the American Life
Insurance Association for appointment of a third arbitrator. The arbitrators'
decision will be final and binding upon both parties.
The place of the meeting of the arbitrators will be decided by a majority vote
of the members thereof. All expenses and fees of the arbitrators will be borne
equally by Ceding Insurer and Reinsurer, unless the arbitrators decide
otherwise.
24. Notice. Any notices required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given if delivered, telecopied or
mailed, by certified mail, return receipt requested to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
If to Reinsurer to:
Xxxxxx Xxxxxxx XX Xxx 000
225 South 000 Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000-0000
If to Ceding Insurer:
Xxxxx X. Xxxxxxxxx
Massachusetts General Life Insurance Company
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
25. Assignment. This Agreement shall not be assigned by either party hereto
without the prior written consent of the other party hereto.
26. Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Massachusetts; provided, however, that
the services to be rendered to Reinsurer shall be rendered in conformity with
the laws of its domiciliary states.
27. Oversight. If nonpayment of premium within the time specified or failure to
comply with any of the other terms of this agreement is shown to be
unintentional and the result of oversight or misunderstanding on the part of
either party hereto, this Agreement will not be considered abrogated thereby,
but both the parties to this Agreement will be restored to the position they
would have occupied had no such oversight or misunderstanding occurred.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
and delivered by their respective officers "hereunto duly authorized, all as the
date first hereinabove written.
ATTEST: MASSACHUSETTS GENERAL LIFE INSURANCE COMPANY
/s/ /s/ Xxxxx Xxxxxx
Secretary President
ATTEST: AMERICAN FINANCIAL REINSURANCE, INC.
/s/ Xxxxxxx X. Punta /s/ Xxxxxx X. Xxxxxxx
Secretary Chief Executive Officer
EXHIBIT C
ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT made and entered into as of the 1st day
of January, 1996 by and between WABASH LIFE INSURANCE COMPANY ("WLIC"), a
Kentucky corporation with principal offices located at 0000 Xxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, and American Financial Reinsurance, Inc.
("Life Company"), an Arizona corporation with administrative offices at 000
Xxxxx 000 Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxx 00000.
WITNESSETH:
WHEREAS, MASSACHUSETTS GENERAL LIFE INSURANCE COMPANY ("MGLIC"), American
Financial Marketing, Inc. ("Marketing Company"), WLIC and Life Company have
entered into a Marketing Agreement (herein so-called) both of even date herewith
under which, among other things, WLIC and Life Company agreed to enter into this
Administrative Services Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises of the
parties hereto, and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Definitions. All terms used in the Marketing Agreement shall have the same
meaning in this Agreement unless otherwise indicated herein.
2. Administrative Services. WLIC agrees to provide to Life Company all
administrative services and to perform all functions necessary to fully process,
administer and account for all Insurance Business issued as a result of
applications solicited by General Agents which Insurance Business is ceded by
MGLIC to and reinsured by Life Company under the Modified Coinsurance Agreement
and any other Coinsurance Agreement between Life Company and MGLIC (the
"Reinsured Business"). Such administrative services and functions shall include,
without limitation, all necessary actuarial, accounting and retrocession
reinsurance services required to fully process, administer and account for all
of the Reinsured Business.
3. Service Fee. As consideration for rendering the administrative services and
performing the functions specified in Paragraph 2 above, Life Company agrees to
pay to WLIC a monthly Service Fee (herein so-called) equal to one-sixth of one
percent (.167~) of the Quota Share of the premiums on the policies of MGLIC in
force each month and reinsured by Life Company. For purposes of this
calculation, premiums in force shall consist of (i) annualized premiums for all
fixed premium policies in force, excluding single premium whole life and (ii)
units in force multiplied by the control premium at date of issue for all
universal life policies. The Service Fee shall be payable to WLIC within sixty
(60) days after the end of each Accounting Period as defined in the certain
Modified Coinsurance Agreement of even date herewith and shall constitute full
compensation to WLIC for the rendition of such administrative services and the
performance of such functions, including WLIC's costs and expenses related to
such services. Such Service Fee shall be payable to WLIC in addition to any
fees, expenses or allowances payable by Life Company to MGLIC under the said
Modified Coinsurance Agreement and any other Coinsurance Agreement between MGLIC
and Life Company. In the event that such payment would be in violation of
applicable insurance or state laws, WLIC shall not accept the payment and shall
be released from future obligations under this Agreement.
4. Supervision of Life Company. All services performed by WLIC hereunder shall
at all times be subject to the review, control and supervision of Life Company's
Board of Directors. WLIC shall at all times act in a fiduciary capacity with
respect to Life Company. WLIC shall prepare and submit to Life Company such
reports as to services provided and costs incurred as Life Company may
reasonably request. WLIC shall allow representatives of Life Company to inspect
and copy, at all reasonable times, WLIC's financial and other records pertaining
to services provided to Life Company.
5. Third Party Agreements. Life Company acknowledges that WLIC may, as a part of
its normal business, perform similar services and functions for its affiliates
and for other nonaffiliated third parties ("Other Parties") and that WLIC may
utilize the same office space, equipment and personnel to perform such services
and functions for its affiliates and Other Parties as it utilizes to perform
such services and functions for Life Company.
6. Responsible Officer. Life Company shall designate an officer who shall be
authorized to direct WLIC in the performance of its duties hereunder.
7. Termination. This Agreement may not be terminated until such time as all
Modified Coinsurance Agreements between MGLIC and Life Company have been
terminated, after which this Agreement may only be terminated: (a) By the mutual
consent of the parties hereto; or (b) By WLIC in the event of a material breach
hereof by Life Company and such breach is not cured or eliminated within thirty
(30) days after receipt of written notice thereof to Life Company from WLIC; or
(c) By Life Company in the event of a material breach hereof by WLIC and such
breach is not cured or eliminated within thirty (30) days after receipt of
written notice thereof to WLIC from Life Company.
8. Further Assurance. Upon the sale of Life Company, or upon the sale of all or
substantially all the assets, or upon the sale or transfer of any Insurance
Business ceded to Life Company for which WLIC provides administrative services,
WLIC will cooperate and cause its affiliates to cooperate to effect the orderly
transition of the business, operations, or affairs (as the case may be) of Life
Company and will take such action as Life Company reasonably requests in
connection therewith.
9. Miscellaneous.
(a) Assignments. This Agreement shall be binding on the parties hereto and their
respective successors and permitted assigns, but no party may assign this
Agreement without the prior written consent of the other parties.
(b) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
(c) Section Headings. The headings set forth herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
(d) Waiver. No delay or omission by any party hereto to exercise any right or
power arising upon any noncompliance or default by any other party with respect
to any of the terms of this Agreement shall impair any such right or power to be
construed as a waiver thereof. A waiver by any of the parties hereto of the
fulfillment of any of the covenants, conditions, or agreements to be performed
by any other shall not be construed to be a waiver of any succeeding breach
thereof or of any other covenant, condition, or agreement herein contained. All
remedies provided for in this Agreement shall be cumulative in addition to and
not in lieu of any other remedies available to any party at law, in equity or
otherwise.
(e) Amendments. This Agreement may not be amended, nor shall any waiver, change,
modification, consent or discharge be effected, except by an instrument in
writing duly executed by the parties hereto or their respective successors or
permitted assigns.
(f) Relationship of Parties. In furnishing services to Life Company, WLIC shall
be deemed to be acting as an independent contractor. WLIC does not undertake by
this Agreement or otherwise to perform any obligation of Life Company, whether
regulatory or contractual, except as provided herein. WLIC shall not be deemed
to be joint venturer with, or an employee of, Life Company.
(g) Approvals, Consents. etc. In any instance where agreement, approval,
acceptance or consent of any party is required by any provision of this
Agreement, such action shall not be unreasonably delayed or withheld.
(h) Force Majeure. WLIC or Life Company shall be excused from performance
hereunder for any period when either is prevented from performing any services
to be provided hereunder, in whole or in part, as a result of an Act of God,
fire, war, civil disturbance, court order, insurance department regulatory
order, labor dispute, and such nonperformance shall not be a ground for
termination hereof or assertion of default hereunder. In the event WLIC shall be
excused from performance under this provision, WLIC shall use its best efforts
to provide, directly or indirectly, alternative and, to the extent practicable,
equivalent fulfillment of its obligations hereunder.
(i) Severability. If any provision of this Agreement is declared or found to be
illegal, unenforceable or void by any administrative agency, regulatory body, or
court of competent jurisdiction, such finding shall not affect the remaining
provisions of this Agreement, and all other provisions hereof shall remain in
full force and effect.
(j) Arbitration. Any disagreement that should arise between Life Company and
WLIC regarding the rights or liabilities of either party under any transaction
pursuant to this Agreement shall be referred to arbitrators. One arbitrator is
to be chosen by each party from among officers of other life insurance
companies, which said officers are familiar with reinsurance transactions. A
third arbitrator shall be chosen by the said two arbitrators before entering
into arbitration. An arbitrator may not be a present or former officer,
attorney, or consultant of Life Company or WLIC or either's affiliates. If the
arbitrators appointed by the two parties cannot agree on a third person then
either party may apply to the President of the American Life Insurance
Association for appointment of a third arbitrator. The arbitrators' decision
will be final and binding upon both parties.
The place of the meeting of the arbitrators will be decided by a majority vote
of the members thereof. All expenses and fees of the arbitrators will be borne
equally by Ceding Insurer and Reinsurer, unless the arbitrators decide
otherwise.
(k) Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Massachusetts.
(1) Notice. Any notices required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given if delivered, telecopied or
mailed, by certified mail, return receipt requested to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
If to WLIC:
Xxxxx X. Xxxxxxxxx
Wabash Life Insurance Company
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
If to Life Company:
Xxxxxx Xxxxxxx, President
XX Xxx 000
225 South 000 Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000-0000
(m) Oversight. If nonpayment of premiums within the time specified or failure to
comply with any of the other terms of this Agreement is shown to be
unintentional and the result of oversight or misunderstanding on the part of
either party hereto, this Agreement will not be considered abrogated thereby,
but both the parties to this Agreement will be restored to the position they
would have occupied had no such oversight or misunderstanding occurred.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
and delivered by their respective officers "hereunto duly authorized, all as of
the date first hereinabove written.
ATTEST: WABASH LIFE INSURANCE COMPANY
/s/ /s/ Xxxxx Xxxxxx
Secretary President
ATTEST: AMERICAN FINANCIAL REINSURANCE, INC.
/s/ Xxxxxxx X. Punta /s/ Xxxxxx X. Xxxxxxx
Secretary Chief Executive Officer
EXHIBIT D
REINSURANCE AGREEMENT
THIS REINSURANCE AGREEMENT, made and entered into as of the 1st day of January
1996 by and between American Financial Reinsurance, Inc. ("Life Company"), an
Arizona corporation with principal offices located at 000 Xxxxx 000 Xxxx, Xxxxx
000, Xxxxxxxxxx, Xxxx 00000, and MASSACHUSETTS GENERAL LIFE INSURANCE COMPANY
("MGLIC"), a Massachusetts corporation with principal offices located at 0000
Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
W-I-T-N-E-S-S-E-T-H
The Life Company and MGLIC mutually agree to reinsure on the terms and
conditions set out below. This agreement is solely between the Life Company and
MGLIC, and performance of the obligations of each party under this agreement
shall be rendered solely to the other party. In no instance shall anyone other
than the Life Company or MGBIC have any rights under this agreement.
ARTICLE I. Automatic Reinsurance
1. Insurance. The Life Company will cede (retrocede) and MGLIC will accept
reinsurance under policies which are written by MGLIC and quota share reinsured
to the Life Company under a Modified Coinsurance Agreement or Coinsurance
Agreement between MGLIC and Life Company, of even date herewith. When the Life
Company retains its maximum limit of retention, as shown in Schedule A,
attached, the Life Company will cede (retrocede) and MGLIC will accept
automatically amounts in excess of the Life Company's retention.
It is hereby understood by Life Company and MGLIC that Life Company shall not be
liable for any such amounts ceded (retroceded) to MGLIC hereunder and that the
liability of Life Company shall always be limited to its maximum limit of
retention as shown in the attached Schedule A.
2. Coveraqes. Life insurance, waiver of premium disability benefit for an amount
not greater than the corresponding life insurance, and benefits under associated
riders are exclusively the coverages or risks reinsured automatically under
Paragraph 1 (to the extent that limits are specified in Schedule A, attached).
The life insurance includes both basic policies and term riders providing life
insurance protection. Reinsurance under this agreement will be limited to the
Plans listed in Schedule D attached to this agreement.
3. Reqular Limits of Retention. The regular limits of retention detailed in
Schedule A and referred to in this agreement may be modified by the Life Company
by thirty (30) days' written notice to MGLIC. The amount of reinsurance to be
ceded and accepted automatically after the new limits take effect will be
determined by mutual agreement.
4. Procedures to Effect Reinsurance. MGLIC will notify the Life Company
quarterly of all new policies assumed by the Life Company where the Life
Company's quota share of the face amount exceeds the Life Company's retention
limit as detailed in Schedule A. These policies will be automatically ceded
(retroceded) to MGLIC. A sample listing of such reporting of policies is
attached as Schedule B to this agreement.
ARTICLE II. Liability
1. Automatic Reinsurance Liability. The liability of MGLIC on any automatic
reinsurance under this agreement begins and ends at the same time as that of the
Life Company.
ARTICLE III. Amount of Insurance
1. Amounts. Life insurance under this agreement shall be on the Yearly Renewable
Term plan for the amount at risk under the policy reinsured. The Life Company's
net amount at risk shall be calculated in the following manner:
At the end of each month, the reinsured risk amount shall be determined as
follows:
(a) If Death Benefit Option A:
Reinsured Risk Amount =
Reinsured Risk Amount =
Value of Accumulation Account
--------------------------------------
Ceded Amt x 1 - Value of Accumulation Account
--------------------------------------
Death Benefit
(b) If Death Benefit option B:
Reinsured Risk Amount = Ceded Amount
When the original policy is issued on a level term plan for twenty years or less
or on a reducing term plan for any period of years, the reinsurance shall be for
the face amount, and cash values, if any, shall be disregarded. If desired,
amount at risk may be determined by other methods agreeable to the Life Company
and MGLIC. Reinsurance amounts for waiver of premium disability benefit, for
additional indemnity for accidental death or death by accidental means, and for
benefits under associated riders are on the same basis as coverages assumed by
the Life Company.
2. Reductions and Terminations. Reinsurance amounts are calculated in terms of
coverages on the life of a person. If any of the Life Company's policies or
riders on the person are reduced or terminated, the reinsurance will be reduced
or terminated by the corresponding amount. The reduction will not be applied,
however, to force the Life Company to reassume more than its regular retention
limit at the time of the reduction for the age at issue, mortality rating and
form of the policy or policies for which reinsurance is being terminated.
3. Reinstatements. A policy which has been ceded to MGLIC on an automatic basis,
that was reduced, terminated or lapsed, if reinstated will be reinstated
automatically to the amount that would be in force had the policy not been
reduced, terminated or lapsed.
In connection with all such reinstatements, the Life Company shall pay MGLIC all
reinsurance premiums in arrears with interest at the same rate and in like
manner as the Life Company has been credited under its Modified Coinsurance
Agreement with MGLIC.
4. Nonforfeiture Benefits. Reduced paid-up will be treated as a reduction in
accordance with Paragraph 2 above. Extended term will be continued on a basis
proportionate to the reinsurance risk before the extended term option was
effected. Approximations and methods to simplify handling may be agreed upon by
the Life Company and MGLIC.
ARTICLE IV. Premiums
1. Life Reinsurance. The monthly premiums for standard and substandard life
reinsurance shall be computed in accordance with the rates contained in the
attached Schedule C, using MGLIC's applicable monthly modal factor. If a flat
extra premium is charged, the amount will be payable to MGLIC, in addition to
the standard and any substandard premiums, less an allowance for commissions as
shown in Schedule C.
The basic premiums payable for reinsurance of opted insurance issued under the
provisions of guaranteed insurability riders will be calculated at the rates
effective for regular new reinsurance ceded under this agreement at the date of
option. A single extra payment will also be payable for such reinsurance and
will be calculated at the rates shown in Schedule E, attached hereto. This extra
payment will be payable at issue of the opted policy and will not be subject to
refund for any reason.
MGLIC anticipates that those premium rates will be continued indefinitely for
all business ceded using these rate schedules; however, because of the technical
questions in some states regarding deficiency reserve requirements, for those
premiums less than those which are based on the 1980 CSO Table at 4 1/2%
interest, only the later premiums shall be guaranteed for renewal by MGLIC.
2. Disability Waiver of Premium and Payor Benefits. Premiums for these benefits,
if included in this Agreement, will be paid at the same rate as MGLIC charges
for the benefit, less allowances for commissions as shown in Schedule C.
3. Preliminary Term Insurance. If the Life Company issues a policy with
preliminary term insurance, the reinsurance premium for the preliminary term
period will be paid to MGLIC at the same rate the Life Company has been credited
for the policies on which reinsurance in MGLIC is based. This rule applies to
all benefits under the preliminary term insurance. For the first policy year
after the preliminary term period, the premiums for all benefits will be
computed at first year rates.
4. Accidental Death Benefits. The Life Company shall cede 100% of its Quota
Share of Accidental Death Benefits to MGLIC and will be "Bulk Reported" to MGLIC
on an annual basis. The total amount of such Accidental Death Benefits in force
as of December 31 in any year, shall be determined from
line 39, Page 26 (Exhibits of Life Insurance), as shown in the Company's annual
statement filed with the State Insurance Department.
The premium due MGLIC from the Company will be determined for each calendar year
as follows:
(a) At the beginning of each calendar year an advance premium at the rate of
$0.60 per $1,000 of Accidental Death Benefits in force on December 31st
immediately preceding the beginning of each calendar year shall be payable; and
(b) at the close of such calendar year, premium at the rate of $0.30 per $1,000
of increase of such insurance in force, from the preceding December 31st to the
current December 31st, shall be payable.
5. Payments. Premiums are payable quarterly. If reinsurance is reduced,
terminated or increased by reinstatement during the quarter, pro rata adjustment
will be made by MGLIC and the Life Company on all premium items except policy
fees.
6. Procedure. Each calendar quarter MGLIC will send to the Life Company one copy
of a statement of reinsurance due. The statement will show the premium due on
new reinsurance effected in the preceding quarter and on existing reinsurance,
the pro rata adjustments for changes in reinsurance and death claim benefits
payable to the Life Company. The settlement of any amounts due under this
Paragraph 6 shall be adjusted by any monies due and payable in accordance with
Paragraph 6 of Exhibit B (Modified Coinsurance Agreement). If a balance is due
the Life Company, it will be remitted promptly by MGLIC. The Life Company will
note to MGLIC any discrepancies and proper adjustment will be made. Except as
provided in this Article, the payment of reinsurance premiums shall be a
condition precedent to the liability of MGLIC under reinsurance covered by this
agreement. In the event of nonpayment of reinsurance premiums as provided in
this paragraph, MGLIC shall have the right to terminate the reinsurance under
all policies having reinsurance premiums in arrears.
7. Aqe or Sex Adjustment. If the insured's age or sex was misstated and the
amount of insurance on the reinsured's policy is adjusted after his death, the
Life Company and MGLIC will share the adjustment in proportion to the amount of
liability of each at the time of issue of the policies. Premiums will be
recalculated for the correct ages and amounts but according to the proportion as
above and adjusted without interest. If the insured is still alive, the method
above will be used for past years and the amount of reinsurance and premium
adjusted for the future to the amount that would have been correct at issue.
ARTICLE V. DAC Tax
1. Life Company and MGLIC, herein collectively called the "Parties" or
singularly, the "Party." The Parties hereby elect under Treasury Regulation
("REG.") Section1.848-2(g)(8) to compute "specified policy acquisition
expenses," as defined under Internal Revenue Code ("IRC") Section848(c)(1) in
the following manner:
The party with net positive consideration as determined under Reg.
Section1.848-2 (f) and Reg. Section1.848-3 shall compute specified policy
acquisition expenses without regard to the general deductions limitation of IRC
Section848 (c)(1) for each taxable year commencing with the year ending on or
after December 29, 1992.
The parties will exchange information pertaining to the aggregate amount of net
consideration as determined under Reg. Section1.848-2(f) and Section1.848-3,
for all Reinsurance Agreements in force between them, to ensure consistency for
purposes of computing specified policy acquisition expenses. MGLIC shall provide
to the Life Company the amount of such net consideration for each taxable year
no later than June 1 following the end of the year. The Life Company shall
advise MGLIC within thirty (30) days of receipt of such information if it
disagrees with the amounts provided. If the Life Company fails to notify MGLIC
within the specified period, MGLIC shall assume that the Life Company agrees
with the amounts provided by MGLIC.
If the Parties should disagree as to the amount of the net considerations, the
Parties agree to resolve any differences by basing the net consideration
calculation on MGLIC's books and records. In addition, MGLIC agrees to allow the
Life Company access to its books and records only as it pertains to this
Reinsurance Agreement in order to confirm MGLIC's computations.
The Life Company and MGLIC represent and warrant that they are subject to U.S.
taxation under subchapter L of the IRC.
2. For purposes of this Agreement, a DAC Tax allowance shall be charged based
upon MGLIC's retrocession of nonpension premium less the DAC Tax basis as
calculated under IRS Regulation 848. The solution shall be multiplied by the
present value of future DAC Tax Capitalization and Amortization based upon the
ceding insurers marginal tax rate for Federal Income Tax purposes. Assuming a
34% tax rate, the solution would be multiplied by 1.5~.
ARTICLE VI. Recapture
1. Recapture. If the Life Company increases its limits of retention, it may make
a corresponding reduction in the reinsurance in force under this agreement on
all persons where the Life Company has maintained its maximum limit of retention
as detailed in Schedule A.
2. Method of Recapture. If the Life Company elects to recapture, it will notify
MGLIC in writing within 90 days from the effective date of its increase in
retention. At the next anniversary (or the tenth anniversary, if later) of the
reinsured's policy, the reinsurance will be reduced to increase the total
retained by the Life Company to its new maximum. Recapture is allowed on only
one retention during any twelve month period and the amount of increase subject
to recovery shall not exceed 100 percent of the previous retention detailed in
Schedule A. If reinsurance on any policy for any person is reduced under this
provision, all must be reduced.
ARTICLE VII. Arbitration
Any disagreement that should arise between Ceding Insurer and Reinsurer
regarding the rights or liabilities of either party under any transaction
pursuant to this Agreement shall be referred to arbitrators. One arbitrator is
to be chosen by each party from among officers of other life insurance
companies, which said officers are familiar with reinsurance transactions. A
third arbitrator shall be chosen by the said two arbitrators before entering
into arbitration. An arbitrator may not be a present or former officer,
attorney, or consultant of Ceding Insurer or Reinsurer or either's affiliates.
If the arbitrators appointed by the two parties cannot agree on a third person
then either party may apply to the President of the American Life Insurance
Association for appointment of a third arbitrator. The arbitrators' decision
will be final and binding upon both parties.
The place of the meeting of the arbitrators will be decided by a majority vote
of the members thereof. All expenses and fees of the arbitrators will be borne
equally by Ceding Insurer and Reinsurer, unless the arbitrators decide
otherwise.
ARTICLE VIII. Duration of Agreement
1. Duration of Agreement. This agreement will be effective on and after the
effective date first set forth above. It is unlimited in duration but may be
amended by mutual consent of the Life Company and MGLIC. It may be terminated as
to new reinsurance by either party giving 90 days' written notice to the other.
Termination as to new reinsurance does not affect existing reinsurance. That
reinsurance will remain in force until termination of the Life Company's policy
or policies on which the reinsurance is based in accordance with the terms of
this agreement.
ARTICLE IX. General Provisions
1. Reinsurance Conditions. The reinsurance is subject to the same limitations
and conditions as the insurance under the policy or policies reinsured is based.
2. Errors and Omissions. It is expressly understood and agreed that if
nonpayment of premiums within the time specified or failure to comply with any
terms of this contract is shown to be unintentional and the result of
misunderstanding or oversight on the part of either the Life Company or MGLIC,
both the Life Company and MGLIC shall be restored to the positions they would
have occupied had no such error or oversight occurred.
3. Insolvency. All reinsurance under this agreement will be paid by MGLIC
directly to the Life Company, its liquidator, receiver, or statutory successor,
on the basis of the liability of the Life Company under the policy or policies
reinsured without diminution because of the insolvency of the Life Company. In
the event of the insolvency of the Life Company, the liquidator, receiver, or
statutory successor of the Life Company will give written notice of a pending
claim against the Life Company on any policy reinsured within a reasonable time
after the claim is filed in the insolvency proceedings. While the claim is
pending, MGLIC may investigate and interpose, at its own expense, in the
proceedings where the claim is to be adjudicated, any defenses which it may deem
available to the Life Company or its liquidator, receiver, or statutory
successor. The expense incurred by MGLIC will be charged subject to court
approval, against the Life Company as an expense of liquidation to the extent of
a proportionate share of the benefit that accrues to the Life Company as a
result of the defenses by MGLIC. Where two or more reinsurers are involved and a
majority in interest elect to defend a claim, the expense will be apportioned in
accordance with the terms of the reinsurance agreement as if the expense had
been incurred by the Life Company.
4. Oversight. It is understood and agreed that if failure to comply with any
terms of this Agreement is shown to be unintentional and the result of
misunderstanding or oversight on the part of either the Ceding Insurer or
Reinsurer, both the Ceding Insurer and Reinsurer shall be restored to the
positions they would have been in had no such misunderstanding or oversight
occurred.
5. Waiver. No delay or omission by any party hereto to exercise any right or
power arising upon any noncompliance or default by any other party with respect
to any of the terms of this Agreement shall impair any such right or power to be
construed as a waiver thereof. A waiver by any of the parties hereto of the
fulfillment of any of the covenants, conditions or agreements to be performed by
any other shall not be construed to be a waiver of any succeeding breach hereof
or of any other covenant, condition or agreement herein contained. All remedies
provided for in this Agreement shall be cumulative in addition to and not in
lieu of any other remedies available to any party at law, in equity or
otherwise.
6. Amendments. This Agreement may not be amended, nor shall any waiver, change,
modification, consent or discharge be effected, except by an instrument in
writing duly executed by the parties hereto or their respective successors or
permitted assigns.
7. Approvals, Consents. etc. In any instance where agreement, approval,
acceptance or consent of any party is required by any provision of this
Agreement, such action shall not be unreasonably delayed or withheld.
8. Force Majeure. Ceding Insurer or Reinsurer shall be excused from performance
hereunder for any period when either is prevented from performing any services
to be provided hereunder, in whole or in part, as a result of an Act of God,
fire, war, civil disturbance, court order, insurance department regulatory
order, labor dispute, or other cause beyond its reasonable control, and such
nonperformance shall not be a ground for Termination hereof or assertion of
default hereunder. In the event either party hereto shall be excused from
performance under this provision, said party shall use its best efforts to
provide, directly, or indirectly, alternative and, to the extent practicable,
equivalent fulfillment or its obligations hereunder.
9. Severability. If any provision of this Agreement is declared or found to be
illegal, unenforceable or void by any administrative agency, regulatory body, or
court of competent jurisdiction, such finding shall not affect the remaining
provisions of this Agreement, and all other provisions hereof shall remain in
full force and effect.
10. Notice. Any notices required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given if delivered, telecopied or
mailed, by certified mail, return receipt requested to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
If to Life Company:
Xxxxxx Xxxxxxx, President
XX Xxx 000
225 South 000 Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000-0000
If to MGLIC:
Xxxxx X.Xxxxxxxxx
Massachusetts General Life Insurance Company
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
11. Section Headings. The headings set forth herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
12. Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Massachusetts.
13. Assignment. This Agreement shall be binding on the parties hereto and their
respective successors and permitted assigns, but no party may assign this
Agreement without the prior written consent of the other parties.
ATTEST: AMERICAN FINANCIAL REINSURANCE, INC.
/s/ Xxxxxxx X. Punta /s/ Xxxxxx X. Xxxxxxx
Secretary (Chief Executive Officer)
ATTEST: MASSACHUSETTS GENERAL LIFE INSURANCE
COMPANY
/s/ /s/ Xxxxx Xxxxxx
Secretary President
