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INDEMNITY REINSURANCE AGREEMENT
by and between
THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK
and
AUSA LIFE INSURANCE COMPANY, INC.
Dated as of December 31, 1993
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TABLE OF CONTENTS
Page
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Article I Definitions......................................... 1
Article II Business Reinsured.................................. 3
Article III Option Letters; Assumption Certificates............. 4
Article IV Territory........................................... 4
Article V Termination......................................... 4
Article VI Premiums; Recoveries................................ 4
Article VII Accounting.......................................... 5
Article VIII Transfer of Assets.................................. 5
Article IX Insolvency.......................................... 5
Article X Offsets............................................. 6
Article XI Rights With Respect to Insurance Liabilities........ 6
Article XII Errors and Omissions................................ 6
Article XIII Duty of Cooperation................................. 6
Article XIV Arbitration......................................... 6
Article XV General Provisions.................................. 7
INDEMNITY REINSURANCE AGREEMENT
THIS INDEMNITY REINSURANCE AGREEMENT (this "Agreement"), dated as of
December 31, 1993, is made by and between The Mutual Life Insurance Company of
New York, a New York domiciled mutual life insurance company ("MONY"), and
AUSA Life Insurance Company, Inc., a New York domiciled stock life insurance
company ("AUSA").
WHEREAS, MONY has agreed to cede and transfer to AUSA the insurance
contracts issued by MONY in connection with certain segments of its group
pension business (as described below); and
WHEREAS, AUSA has agreed to reinsure the rights, obligations and
liabilities of MONY in respect of such insurance contracts under the terms and
conditions set forth herein; and
WHEREAS, MONY and AUSA are, concurrent with the execution of this
Agreement, entering into an Assumption Reinsurance Agreement (the "Assumption
Reinsurance Agreement") whereby AUSA agrees to assume such insurance contracts
on an assumption reinsurance basis; and
WHEREAS; MONY and AUSA are entering into this Agreement whereby AUSA will
reinsure the general account obligations of MONY under such insurance contracts
until the respective insurance contracts are assumed by AUSA pursuant to the
Assumption Reinsurance Agreement; and
WHEREAS; MONY has entered into an agreement with Diversified Investment
Advisors, Inc., an affiliate of AUSA, providing for Diversified Investment
Advisors, Inc. to perform certain administrative functions with respect to
such group pension business on behalf of MONY after the date hereof;
NOW THEREFORE, in consideration of the mutual covenants and promises, and
upon the terms and conditions set forth herein, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
The following terms shall have the respective meanings set forth below
throughout the Agreement:
"Affiliate" means, with respect to any Person, at the time in question,
any other Person controlling, controlled by or under common control with such
Person. Control for the purposes of this definition shall have the meaning set
forth in Section 1501(a)(2) of the New York Insurance Law.
payable on or after the Effective Date and (iii) all liability for commission
payments and other compensation payable with respect to the Insurance Contracts
to or for the benefit of agents and brokers, to the extent that such liability
arises from events that occur on or after the Effective Date.
"Investment Assets" shall mean those certain investment assets of MONY
described in Schedule 1.03 hereto, together with all accrued interest and income
thereon which is payable on or after the Effective Date.
"MONY" shall have the meaning set forth in the first paragraph of this
Agreement.
"MONY Extra Contractual Obligations" means all liabilities for
consequential, exemplary, punitive or similar damages which relate to or arise
in connection with any alleged or actual act, error or omission by MONY, or any
of its Affiliates or any insurance agent of MONY or any of its Affiliates acting
in such agent's capacity as an insurance agent of MONY, whether intentional or
otherwise, or from any reckless conduct or bad faith by MONY or any of its
Affiliates or any insurance agent of MONY or any of its Affiliates acting in
such agent's capacity as an insurance agent of MONY, in connection with the
handling of any claim under any of the Insurance Contracts or in connection with
the issuance, delivery or cancellation of any of the Insurance Contracts.
"MONY Separate Accounts" means those separate accounts of MONY
described on Schedule 1.04 thereto.
"MONY Separate Account Liabilities" means all insurance liabilities and
obligations of MONY Separate Accounts to holders of those Insurance Contracts
which participate in one or more of MONY Separate Accounts.
"Person" means any individual, corporation, partnership, firm, joint
venture, association, joint-stock company, trust, unincorporated organization,
governmental, judicial or regulatory body or other entity.
ARTICLE II
BUSINESS REINSURED
Upon the terms and subject to the conditions and other provisions of
this Agreement and any required governmental and regulatory consents and
approvals, effective as of 11:59 p.m., Eastern Time, December 31, 1993 (the
"Effective Date"), MONY hereby cedes to AUSA and AUSA hereby accepts and
indemnity reinsures, on a coinsurance basis, 100% of the Insurance Liabilities.
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ARTICLE III
OPTION LETTERS; ASSUMPTION CERTIFICATES
MONY and AUSA shall prepare and mail option letters and certificates
of assumption to the holders of the Insurance Contracts ("Contractholders") in
accordance with the provisions of the Assumption Reinsurance Agreement in order
to attempt to effectuate novations of the Insurance Contracts.
To the extent AUSA is unable for any reason to assume by novation any
Insurance Contracts or Insurance Liabilities, AUSA shall continue to reinsure
the Insurance Liabilities, on an indemnity basis, in accordance with the terms
and conditions of this Agreement.
ARTICLE IV
TERRITORY
This Agreement shall apply to Insurance Contracts covering lives and
risks wherever resident or situated.
ARTICLE V
TERMINATION
The Agreement shall terminate as to the Insurance Contracts on the
respective effective dates of the novation of the Insurance Contracts pursuant
to the Assumption Reinsurance Agreement.
ARTICLE VI
PREMIUMS; RECOVERIES
MONY shall promptly pay to AUSA 100% of all premiums, loan repayments
and other amounts received on and after the Effective Date by MONY with respect
to the Insurance Liabilities. In addition, with respect to the MONY Separate
Account Liabilities, MONY shall promptly pay to AUSA 100% of all administrative
expense and deposit charges deducted by MONY on or after the Effective Date from
the remittance of premiums or other amounts billed separately, asset charges
collected, market value adjustments collected and back-end loadings collected
under the applicable Insurance Contracts.
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ARTICLE VII
ACCOUNTING
AUSA shall provide accounting and settlement reports as to the
Insurance Contracts in the form attached hereto as Exhibit A within thirty days
after the end of each calendar quarter. Such reports shall contain sufficient
information regarding the Insurance Contracts to permit MONY to prepare its tax
returns and statutory financial statements.
ARTICLE VIII
TRANSFER OF ASSETS
As consideration for the indemnity reinsurance of Insurance Liabilities
by AUSA hereunder, MONY shall transfer to AUSA Investment Assets with a
statutory carrying value to MONY equal to the statutory reserves held by MONY as
the Effective Date in support of the Insurance Liabilities. A schedule of the
Investment Assets transferred shall be prepared by the parties within 180 days
after the Effective Date, and such schedule shall be attached to this Agreement
and designated as Schedule 1.03.
ARTICLE IX
INSOLVENCY
AUSA hereby agrees that, as to all reinsurance made, ceded, renewed or
otherwise becoming effective hereunder, the reinsurance shall be payable by AUSA
on the basis of the liability of MONY under the Insurance Contract or Contracts
reinsured, without diminution because of the insolvency, liquidation or
rehabilitation of MONY or the appointment of a conservator, receiver, liquidator
or statutory successor of MONY, directly to MONY or to its conservator,
liquidator, receiver or other statutory successor. It is agreed that the
conservator, receiver, liquidator or statutory successor of MONY shall give
prompt written notice to AUSA of the pendency or submission of a claim under any
such Insurance Contract or Contracts. During the pendency of such claim, AUSA
may investigate such claim and interpose, at its own expense, in the proceeding
where such claim is to be adjudicated any defense available to MONY or its
conservator, receiver, liquidator or statutory successor. The expense thus
incurred by AUSA is chargeable against MONY as a part of the expense of
insolvency, liquidation or rehabilitation to the extent of a proportionate share
of the benefit which accrues to MONY solely as a result of the defense
undertaken by AUSA.
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ARTICLE X
OFFSETS
Any debts or credits between MONY and AUSA arising under this Agreement
are deemed mutual debts or credits, as the case may be, and shall be netted or
set off, as the case may be, and only the balance shall be allowed or paid
hereunder.
ARTICLE XI
RIGHTS WITH RESPECT TO INSURANCE LIABILITIES
AUSA's reinsurance of the Insurance Liabilities is intended for the sole
benefit of the parties to this Agreement and shall not create any right on the
part of any other party, including, without limit, any Contractholder, insured,
claimant or beneficiary, against AUSA or any legal relation between any
Contractholders, insureds, claimants or beneficiaries and AUSA.
ARTICLE XII
ERRORS AND OMISSIONS
Inadvertent delays, errors or omissions made in connection with this
Agreement or any transaction hereunder shall not relieve either party from any
liability which would have attached had such delay, error or omission not
occurred, provided always that such error or omission is rectified as soon as
possible after discovery.
ARTICLE XIII
DUTY OF COOPERATION
Each party hereto shall cooperate fully with the other in all reasonable
respects in order to accomplish the objectives of this Agreement. The duty of
cooperation shall apply, but not be limited, to regulatory and litigation
matters.
ARTICLE XIV
ARBITRATION
It is the intention of the parties hereto that customs and usages of the
business of indemnity reinsurance and assumption reinsurance shall be given
full effect in the interpretation of this Agreement. The parties hereto shall
act in all things with the highest good faith. Any dispute or
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difference with respect to the operation or interpretation of this Agreement on
which an amicable understanding cannot be reached shall be submitted to
arbitration, which shall be non-binding except with respect to the allocation
of fees as hereinafter provided. The arbitrators shall be free to reach their
decision from the standpoint of equity and customary practices of the insurance
and reinsurance industry rather than from that of strict legal principles.
The arbitration shall be held in New York, New York, and shall consist of
three arbitrators who must be officers of life insurance companies other than
the parties to this Agreement, their Affiliates or subsidiaries. MONY shall
appoint one arbitrator and AUSA the second. Such arbitrators shall then select
the third arbitrator before arbitration commences. Should one of the parties
decline to appoint an arbitrator or should the two arbitrators be unable to
agree upon the choice of a third, such appointment shall be left to the
President of the American Council of Life Insurance.
Decisions of the arbitrators shall be by majority vote. The cost of
arbitration, including the fees of the arbitrators, shall be borne as the
arbitrators shall decide.
ARTICLE XV
GENERAL PROVISIONS
1. Notices. Any notice required or permitted hereunder shall be in
writing and shall be delivered personally (by courier or otherwise),
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage prepaid. Any such notice shall be deemed
given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, three days after the date of deposit in the United
States mails, as follows:
(1) If to AUSA to:
AUSA Life Insurance Company, Inc.
0 Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: President
Telecopier No.: 000-000-0000
With a concurrent copy to:
AEGON USA, Inc.
0000 Xxxxxxxx Xxxx X.X.
Xxxxx Xxxxxx, Xxxx 00000
Attention: Chief Financial Officer
Telecopier No.: 000-000-0000
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With a concurrent copy to:
AEGON USA, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopier No.: 000-000-0000
(2) If to MONY to:
The Mutual Life Insurance Company of New York
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
Telecopier No.: (000) 000-0000
With a concurrent copy to:
The Mutual Life Insurance Company of New York
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
Any party may, by notice given in accordance with this Agreement to the
other parties, designate another address or person for receipt of notices
hereunder.
2. Invalidity. The invalidity or unenforceability of any provision or
portion hereof shall not affect the validity or enforceability of the other
provisions or portions hereof.
3. Amendment. This Agreement cannot be modified, changed, discharged or
terminated, except by an instrument in writing signed by an authorized officer
of each of the parties hereto.
4. Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
5. No Third Party Beneficiaries. Nothing in this Agreement is intended or
shall be construed to five any Person, other than the parties hereto, their
successors and permitted assigns, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
6. Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their
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respective successors, permitted assigns and legal representatives. Neither
this Agreement, nor any right hereunder, may be assigned by either party (in
whole or in part) without the prior written consent of the other party hereto.
7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
8. Entire Agreement. This Agreement (together with an Agreement Regarding
Payments Made Relating To Indemnity Reinsurance Agreement entered into by and
between parties hereto and dated as of the date hereof) constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties.
IN WITNESS WHEREOF, MONY and AUSA have executed this Agreement as of the
Effective Date.
THE MUTUAL LIFE INSURANCE
COMPANY OF NEW YORK
By Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: EVP/CIO
By Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: VP/CFO
