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EXCESS OF LOSS REINSURANCE AGREEMENT
(hereinafter referred to as "The Agreement")
entered into by and between
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
(hereinafter referred to as "The Company")
and
THE MANUFACTURERS LIFE INSURANCE COMPANY
(hereinafter referred to as "The Reinsurer")
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In consideration of the mutual promises set forth in this Agreement the
parties agree as follows:
ARTICLE I
INTERESTS AND RISK COVERED
This Agreement is to indemnify the Company as set forth in ARTICLE II
hereof, in respect of all losses incurred by the Company during the term hereof
from all claims sustained under policies, binders or contracts of insurance
(hereinafter called "Policies") now in force or which may hereafter come into
force and classified by the Company as VARIABLE ANNUITY BUSINESS.
ARTICLE II
REINSURING CLAUSE
The Reinsurer agrees to indemnify the Company with respect to claim
payments made by the Company for amounts in excess of $50,000 per policy.
The Company shall retain the first $50,000 of any one policy. Claim
payments are only in respect of the life risk of the business described in
Article I.
For the purposes of this Agreement, claims adjustment expenses or
litigation expenses of the Company are not to be included in calculating the
Reinsurer's liability hereunder.
ARTICLE III
NET RETAINED LINES CLAUSE
This Agreement applies only to that portion of any insurance which the
Company retains net for its own account, and in calculating the amount of any
loss hereunder, and also in computing the amount or amounts in excess of which
this Agreement attaches, only loss or losses in respect of that portion of any
insurance which the Company retains net for its own accounts shall be included.
The amount of the Reinsurer's liability hereunder in respect of any
loss or losses shall not be increased by reason of the inability of the Company
to collect from any other Reinsurers, whether specific or general, any amounts
which may have become due from them, whether such inability arises from the
insolvency of such other Reinsurers or otherwise.
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ARTICLE IV
TERMS AND CANCELLATION CLAUSE
This contract shall take effect at 12:01 a.m., April 1, 1994 and shall
remain in full force for an indefinite period but either party may cancel this
contract by giving the other party ninety (90) days prior written notice.
ARTICLE V
PREMIUM AND REMITTANCE CLAUSE
As soon as practicable following December 31, 1994 and after each
subsequent December 31st the payment of premiums shall be made at an annual
reinsurance rate of 0.02% of the total asset value as at each December 31st of
the policies covered hereunder. If premiums are not paid according to the terms
herein, the Reinsurer has the right to terminate this Agreement by giving 30
days written notice.
ARTICLE VI
NOTICE OF LOSS CLAUSE
In the event of a possible loss under this Agreement notice is to be
given to the Reinsurer as soon as practicable, and all papers connected with the
adjustment of same shall be at all times at the command of the Reinsurer or
parties designated by it for inspection.
ARTICLE VII
LOSS SETTLEMENTS CLAUSE
Amounts due from the Reinsurer shall be payable by it immediately after
the Company has furnished reasonable evidence of settlements made or agreed upon
by the Company under its original policies.
All recoveries and payments recovered or received subsequent to a loss
settlement under this Agreement shall be applied as if recovered or received
prior to the said settlement and all necessary adjustments shall be made by the
parties hereto.
ARTICLE VIII
ERRORS AND OMISSIONS CLAUSE
Any inadvertent delays, omissions or errors made in connection with
this Agreement shall not be held to relieve either party hereto from any
liability which would
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attach to it hereunder if such delays, omissions or errors had not been made
provided such errors or omissions are advised to the Reinsurer and rectified
immediately upon discovery.
Unless otherwise provided, in all things coming within the scope of
this Agreement, the Reinsurer shall follow, to the extent of its interest, the
fortunes of the Company.
ARTICLE IX
INSPECTION OF RECORDS CLAUSE
The Company shall allow the Reinsurer to inspect, at all reasonable
times, all records of the Company with respect to the business reinsured under
this Agreement, or with respect to claims, losses or legal proceedings which
involve or are likely to involve the Reinsurer.
ARTICLE X
INSOLVENCY CLAUSE
In the event of the insolvency of the Company, this reinsurance shall
be payable directly to the Company, or its liquidator, receiver, conservator or
statutory successor on the basis of the liability of the Company without
diminution due to the insolvency of the Company or because the liquidator,
receiver, conservator or statutory successor of the Company has failed to pay
all or a portion of any claims. It is agreed, however, that the liquidator,
receiver, conservator or statutory successor of the Company shall give written
notice to the Reinsurer of the pendency of any claims against the Company
indicating the policy reinsured, which claims would involve a possible liability
on the part of the Reinsurer, within a reasonable time after such claim is filed
in the conservation or liquidation proceeding or in the receivership, and that
during the pendency of such claim, the Reinsurer may investigate such claim and
interpose, at its own expense, in any proceeding where such claim is to be
adjudicated, any defense or defenses that it may deem available to the Company
or its liquidator, receiver, conservator or statutory successor. The expenses
thus incurred by the Reinsurer shall be chargeable, subject to the approval of
the Court, against the Company as part of the expense of conversion or
liquidation to the extent of a pro rata share of the benefit which may accrue to
the Company solely as a result of the defense undertaken by the Reinsurer.
The reinsurance shall be payable by the Reinsurer to the Company or its
liquidator, receiver, conservator or statutory successor, except (a) where the
Agreement specifically provides another payee of such reinsurance in the event
of the insolvency of the Company and (b) where the Reinsurer with the consent of
the direct Insured or Insured has assumed such policy obligations of the Company
as direct obligations of the
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Reinsurer to the payees under such policies and in substitution for the
obligations of the Company to such payees.
The Company or the Reinsurer may offset any balance, whether on account
of premium, commission, claims or losses, adjustment expense, salvage, or any
other amount due from one party to the other under this Agreement or under any
other agreement herefore or hereafter entered into between the Company and the
Reinsurer, whether acting as assuming reinsurer or as ceding company.
ARTICLE XI
ARBITRATION CLAUSE
If any dispute shall arise between the Company and the Reinsurer with
reference to the interpretation of this Agreement or their rights with respect
to any transactions involved, the dispute shall be referred to three
arbitrators, one to be chosen by each party and the third by the two so chosen.
If either party refuses or neglects to appoint an arbitrator within
sixty days after the receipt of written notice from the other party requesting
it to do so, the requesting party may nominate two arbitrators who shall choose
the third. Each party shall submit its case to the arbitrators within sixty days
of the appointment of the arbitrators.
The arbitrators shall consider this Agreement an honorable engagement
rather than merely a legal obligation and they are relieved of all judicial
formalities and may abstain from following the strict rules of law. The decision
of a majority of the arbitrators shall be final and binding on both the Company
and the Reinsurer. The expense of the arbitrators and of the arbitrations shall
be divided equally between the Company and the Reinsurer.
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ARTICLE XII
EXECUTION
IN WITNESS of the above, this Agreement is signed in duplicate on the
date and in the place indicated below.
DATE:____________________________ DATE:_____________________________
PLACE:___________________________ PLACE:____________________________
FOR: THE MANUFACTURERS FOR: THE MANUFACTURERS LIFE
LIFE INSURANCE INSURANCE COMPANY OF
COMPANY AMERICA
BY:_______________________________ BY:________________________________
TITLE:____________________________ TITLE:_____________________________
