REINSURANCE
AGREEMENT
Between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
TABLE OF CONTENTS
PAGE
----
I. REINSURANCE COVERAGE 1
II. REINSURANCE LIMITS 3
III. PLACING REINSURANCE IN EFFECTG 5
IV. COMPUTATION OF REINSURANCE PREMIUMS 5
V. PAYMENT OF REINSURANCE PREMIUMS 6
VI. SETTLEMENT OF CLAIMS 7
VII. CONDITIONAL RECEIPT REINSURANCE 10
VIII. EXPERIENCE REFUNDS 11
IX. PREMIUM TAX REIMBURSEMENT 11
X. POLICY CHANGES 11
XI. REINSTATEMENTS 11
XII. EXPENSES 12
XIII. REDUCTIONS 12
XIV. INSPECTION OF RECORDS 12
XV. INCREASE IN LIMIT OF RETENTION 13
XVI. ERRORS 14
XVII. ARBITRATION 14
XVIII. CHOICE OF LAW AND FORUM 15
XIX. INSOLVENCY 15
XX. PARTIES TO AGREEMENT 16
XXI. AGREEMENT 16
XXI. EXECUTION AND DURATION OF AGREEMENT 16
SCHEDULES
SUBJECT REINSURANCE SCHEDULE 18
RETENTION SCHEDULE 19
LIMITS SCHEDULE 21
ADMINISTRATIVE FORMS SCHEDULE 22
CONDITIONAL RECEIPT SCHEDULE 23
PREMIUM SCHEDULE, PART I 24
PREMIUM SCHEDULE, PART II 27
REINSURANCE AGREEMENT
between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
of
Worcester, Massachusetts,
hereinafter referred to as the "REINSURED," and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
of
Fort Xxxxx,
Indiana,
hereinafter referred to as the "LINCOLN."
I. REINSURANCE COVERAGE
A. On the basis hereinafter stated, the REINSURED'S excess of Last
Survivor plans as specified in the Subject Reinsurance Schedule
shall be reinsured with the LINCOLN automatically, shall be
submitted to the LINCOLN on a facultative basis, or shall be
reinsured with the LINCOLN as continuations. A continuation is a
new policy replacing a policy issued earlier by the REINSURED
("original policy") or a change in existing policy issued or made
either (l) in compliance with the terms of the original policy or
(2) without the same new underwriting information the REINSURED
would obtain in the absence of the original policy, without a
suicide exclusion period or a contestable period as long as those
contained in new issues by the REINSURED, or without the payment
of the same commissions in the first year that the REINSURED
would have paid in the absence of the original policy. A Last
Survivor policy is a policy which insures two persons wherein
upon the first death, there is no increase in the terminal
reserve or cash value of the policy, and which provides for
payment of a death benefit after the second insured has died.
B. Subject to the "CONDITIONAL RECEIPT REINSURANCE" article and, in
the case of facultative submissions for reinsurance, to the
REINSURED'S accepting the LINCOLN'S offer to reinsure, the
liability of the LINCOLN shall begin simultaneously with that of
the REINSURED. In no event shall the reinsurance be in force and
binding unless the insurance issued directly by the
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REINSURED is in force and unless the issuance and delivery of
such insurance constituted the doing of business in a
jurisdiction in which the REINSURED was properly licensed.
C. Life reinsurance under this Agreement shall be term insurance for
the amount at risk on the portion of the insurance of the
original insurance which is reinsured with the LINCOLN. The
amount of reinsurance shall be the death benefit provided by the
portion of the original insurance which is reinsured with the
LINCOLN. The amount at risk on such a policy shall be the death
benefit of the policy less the accumulated policy value under the
policy. This amount at risk shall be determined at the beginning
of each policy year and shall be amended during that year only if
there is a change in the amount of reinsurance on the life
arising from a change in the specified amount under the policy
reinsured hereunder. For the second and subsequent years, the
REINSURED shall notify the LINCOLN of the amount at risk for that
policy year at least fifteen days after the beginning of that
policy year. The portion reinsured shall be the amount at risk on
the policy less the REINSURED'S retention on the policy. The
basis for determining the amount at risk may be changed for new
reinsurance by agreement between the REINSURED and the LINCOLN.
D. If the face amount of the policy changes, the portion reinsured
hereunder shall continue to be determined as described in section
C of this article. If the face amount increases subject to the
approval of the REINSURED, provisions of the "REINSURANCE LIMITS"
article hereof shall apply to the increase in reinsurance
hereunder. If the face amount increases and such increase is not
subject to the REINSURED'S approval, the LINCOLN shall accept
automatically increases, in reinsurance arising from such
increases in the face amount.
E. Life reinsurance in amounts less than the amount at risk upon
$25,000 of insurance shall not be placed in effect under this
Agreement.
F. If the REINSURED issues a policy as a continuation of a policy
reinsured under this Agreement, reinsurance of the continuation
shall continue with the LINCOLN. Such reinsurance shall be in
effect under the
reinsurance agreement between the REINSURED and
the LINCOLN which provides reinsurance of the policy form issued
as a continuation if there is such an agreement in effect on the
effective date of the continuation; otherwise, reinsurance shall
be in effect under the terms of this Agreement.
G. In the event the Last Survivor policy permits the insureds to
split the Last Survivor policy into separate policies on each
life insured under the Last Survivor policy, the new policies
shall be continuations; provided, however, that the sum of the
amount of reinsurance on the continuations shall not exceed the
original amount of reinsurance on the Last Survivor policy. Any
substandard or flat extra premiums payable assessed on either
life shall be payable under the appropriate continuation policy.
H. Life reinsurance under any one cession shall be terminated at the
end of the year preceding the first year for which the amount at
risk on the cession is less than $10,001. The amount of
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reinsurance under this Agreement shall be maintained in force
without reduction so long as the amount of insurance carried by
the REINSURED on either life insured under the Last Survivor
policy remains in force without reduction, except as provided in
the "PAYMENT OF REINSURANCE PREMIUMS" and "INCREASE IN LIMIT OF
RETENTION" articles.
II. REINSURANCE LIMITS
A. If the following requirements are met, reinsurance may be ceded
automatically under this Agreement in amounts not to exceed those
specified in the Limits Schedule.
(1) The REINSURED shall retain its limit of retention.
(2) For each life, the sum of the amount of insurance already
in force on that life in the REINSURED and the amount
applied for from the REINSURED on the current application
shall not exceed the sum of the appropriate automatic
limit shown in the Limits Schedule, and the REINSURED'S
maximum limit of retention for the mortality class, plan
of insurance, and age at issue on the current
application.
(3) For each life, the sum of the amount of insurance already
in force on the life and the amount applied for
currently, in all companies, shall not exceed the
following amounts.
AGES LIFE INSURANCE
---- --------------
0-15 6,500,000
16-65 $10,000,000
66-80 3,500,000
(4) The REINSURED has not made facultative application for
reinsurance of the current application.
(5) The policy was issued in accordance with the REINSURED'S
normal individual ordinary life underwriting rules and
practices.
(6) The policy is not a continuation.
B. In determining whether the Last Survivor policy has satisfied all
the conditions for automatic reinsurance coverage as set forth in
section A of this article, the REINSURED may reinsure the policy
automatically if both insureds, before age adjustments are made
in accordance with the Premium Schedule, fall within appropriate
age limits and underwriting classes as specified in the Limits
Schedule.
C. If the requirements in section A of this article are not met or
if the REINSURED prefers to do so, it shall make an application
for reinsurance under this Agreement on a facultative basis for
all issues specified in the Subject Reinsurance Schedule other
than continuations; the REINSURED may, at its option, make
application for reinsurance under this Agreement on a facultative
basis for other issues.
D. The LINCOLN shall have no liability under facultative
applications for reinsurance unless the REINSURED has accepted
the LINCOLN'S offer to reinsure.
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E. Continuations shall be reinsured under this Agreement only if the
original policy was reinsured with the LINCOLN; the amount of the
reinsurance under this Agreement shall not exceed the amount of
reinsurance of the original policy with the LINCOLN immediately
prior to the new issue or change.
III. PLACING REINSURANCE IN EFFECT
A. To effect reinsurance, the REINSURED shall, within fifteen
working days after the end of each month, mail to the LINCOLN a
report in substantial accord with the appropriate forms of the
Administrative Forms Schedule.
B. The REINSURED shall send to the LINCOLN, within seven working
days after the end of each quarter, a report in substantial
accord with the appropriate forms of the Administrative Forms
Schedule.
C. When the REINSURED submits a risk to the LINCOLN for reinsurance
upon a facultative basis, a facultative application for such
reinsurance shall be made on a form in substantial accord with
the appropriate form of the Administrative Forms Schedule. Copies
of the original applications, all medical examinations,
microscopical reports, inspection reports, and all other
information which the REINSURED may have pertaining to the
insurability of the risk shall accompany the application. Upon
receipt of such application, the LINCOLN shall immediately
examine the papers and shall notify the REINSURED of its
underwriting action as soon as possible.
D. All offers of reinsurance made by the LINCOLN under this
Agreement shall, unless otherwise terminated by the LINCOLN,
automatically terminate on the earlier of (a) the date the
LINCOLN receives notice from the REINSURED of its withdrawal of
its application and (b) the later of (i) the date 120 days after
the date the offer was made by the LINCOLN and (ii) the date
specified in the LINCOLN'S approval of a written request from the
REINSURED to grant an extension of the offer.
IV. COMPUTATION OF REINSURANCE PREMIUMS
A. The premium to be paid to the LINCOLN for Life reinsurance shall
be based on the joint equal age of the insureds under the policy
and shall be the sum of:
(1) the appropriate premium rate from the schedule of
premiums in the Premium Schedule applied to the
appropriate amount at risk reinsured; plus
(2) the appropriate policy fee as shown in the Premium
Schedule.
The joint equal age shall be calculated by using the methodology
set forth in Exhibit A.
B. The portions of the reinsurance premiums described in the
subparagraphs of the preceding section shall hereinafter be
referred to as the basic premium.
C. The premium charged the REINSURED for increases in reinsurance
hereunder described in section D of the "REINSURANCE COVERAGE"
article hereof shall be computed using the age and date of issue
of the policy if the increase in face amount is not subject to
approval of the
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REINSURED and using the age at and date of the increase if the
increase in face amount is subject to the REINSURED'S approval.
D. For technical reasons relating to the uncertain status of
deficiency reserve requirements by the various state insurance
departments, the Life reinsurance rates cannot be guaranteed for
more than one year. On all reinsurance ceded at these rates,
however, the LINCOLN anticipates continuing to accept premiums on
the basis of the rates shown in the Premium Schedule.
V. PAYMENT OF REINSURANCE PREMIUMS
A. The REINSURED shall send the LINCOLN each month a report in
substantial accord with the appropriate form in the
Administrative Forms Schedule, showing all outstanding first-year
policies for which the REINSURED'S records have been completed
and all renewal reinsurance premiums on reinsurance policies
having anniversaries in the preceding month.
B. The amount due the LINCOLN shall accompany such report; if the
amount is due the REINSURED, the LINCOLN shall remit such amount
to the REINSURED within fifteen days of receipt of the report.
Premiums for reinsurance hereunder are payable at the Home Office
of the LINCOLN or any other location specified by the LINCOLN and
shall be paid on an annual basis without regard to the manner of
payment stipulated in the policy issued by the REINSURED.
C. The payment of reinsurance premiums in accordance with the
provisions of the preceding section shall be a condition
precedent to the liability of the LINCOLN under reinsurance
covered by this Agreement. In the event that reinsurance premiums
are not paid as provided in the preceding section, the LINCOLN
shall have the right to terminate the reinsurance under all
policies having reinsurance premiums in arrears. If the LINCOLN
elects to exercise its right of termination, it shall give the
REINSURED thirty days' notice of its intention to terminate such
reinsurance. If all reinsurance premiums in arrears, including
any which may become in arrears during the thirty-day period, are
not paid before the expiration of such period, the LINCOLN shall
thereupon be relieved of future liability under all reinsurance
for which premiums remain unpaid. Policies on which reinsurance
premiums subsequently fall due will automatically terminate if
reinsurance premiums are not paid when due as provided in section
B of this article. The reinsurance so terminated may be
reinstated at any time within sixty days of the date of
termination upon payment of all reinsurance premium in arrears;
but, in the event of such reinstatement, the LINCOLN shall have
no liability in connection with any claims incurred between the
date of termination and the date of reinstatement of the
reinsurance. The LINCOLN'S right to terminate reinsurance as
herein provided shall be without prejudice to its right to
collect premiums for the period reinsurance was in force prior to
the expiration of the thirty-day notice period.
D. Any payment which either the REINSURED or the LINCOLN shall be
obligated to pay to the other may be paid net of any amount which
is then due and unpaid under this Agreement.
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VI. SETTLEMENT OF CLAIMS
A. The REINSURED shall obtain proof of death upon the death of each
insured. It shall investigate each death and assert any defenses
from liability under the policy in accordance with its normal
claims procedures. The REINSURED shall notify LINCOLN of each
death. The LINCOLN shall pay its share of the net amount at risk
under the policy after receiving proof of the deaths of all
insureds. Copies of proofs or other documents bearing on such
claim or proceeding shall be furnished to the LINCOLN when
requested.
B. The LINCOLN shall accept the good faith decision of the REINSURED
in settling any claim or suit and shall pay, at its Home Office,
its share of net reinsurance liability upon receiving proper
evidence of the REINSURED'S having settled with the claimant.
Payment of net reinsurance liability on account of death shall be
made in one lump sum.
C. If the REINSURED should contest or compromise any claim or
proceeding and the amount of net liability thereby be reduced, or
if at any time the REINSURED should recover monies from any third
party in connection with or arising out of any claim reinsured by
the LINCOLN, the LINCOLN'S reinsurance liability shall be reduced
or the LINCOLN shall share in the recovery, as the case may be,
in the proportion that the net liability of the LINCOLN bore to
the total net liability existing as of the occurrence of the
claim. As used in this section, "recovery" shall include, but not
be limited to, settlements, judgments, awards and insurance
payments of any kind.
D. Any unusual expenses incurred by the REINSURED 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 LINCOLN in the same proportion as described in section C,
above.
E. 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:"
(1) routine investigative or administrative expenses;
(2) expenses incurred in connection with a dispute or contest
arising out of conflicting claims of entitlement to
policy proceeds or benefits which the REINSURED admits
are payable;
(3) expenses, fees, settlements, or judgments arising out of
or in connection with claims against the REINSURED for
punitive or exemplary damages; in determining the reason
for the assessment of any damages, fees, or expenses
against the REINSURED, the parties shall not be required
to follow the reason indicated by the court which awarded
such damages, fees, or expenses; rather, the parties
shall act in good faith to determine the actual reason
for the award;
(4) expenses, fees, settlements, or judgments arising out of
or in connection with claims made against the REINSURED
and based on alleged or actual bad faith, failure to
exercise good faith, or tortuous conduct; in determining
the reason for the assessment of any damages, fees, or
expenses against the REINSURED, the parties shall not be
required to follow the reason indicted by the court which
awarded such damages, fees, or expenses; rather, the
parties shall act in good faith to determine the actual
reason for the award;
F. For purposes of this Agreement, penalties, attorney's fees, and
interest imposed automatically by
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statute against the REINSURED and arising solely out of a
judgment being rendered against the REINSURED in a suit for
policy benefits reinsured hereunder shall be considered "unusual
expenses."
G. 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 LINCOLN shall
increase or reduce in the proportion that the net reinsurance
liability of the LINCOLN bore to the sum of the net retained
liability of the REINSURED 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 LINCOLN 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.
H. The LINCOLN shall refund to the REINSURED any reinsurance
premiums, without interest, unearned as of the date of death of
the life reinsured hereunder.
I. If the REINSURED pays interest from a specified date, such as the
date of death of the insured, on the contractual benefit of a
policy reinsured under this Agreement, the LINCOLN shall
indemnify the REINSURED for the LINCOLN'S share of such interest.
Interest paid by the LINCOLN under this section shall be computed
at the same rate and commencing as of the same date as that paid
by the REINSURED. The computation of interest paid by the LINCOLN
under this section shall cease as of the earlier of (1) the date
of payment of the LINCOLN'S share of reinsurance liability and
(2) the date of termination of the period for which the REINSURED
has paid such interest.
VII. CONDITIONAL RECEIPT REINSURANCE
A. Subject to the terms, conditions, and limits of this Agreement
and provided the conditions set forth in section B of this
article are fulfilled, LINCOLN shall reimburse the REINSURED for
a claim in excess of the appropriate retention set forth in the
Retention Schedule paid by the REINSURED pursuant to a
conditional receipt, except that in no event shall LINCOLN'S
liability pursuant to this article exceed one-third of $500,000.
B. The following conditions must be satisfied in order for
reinsurance of a conditional receipt to be effective:
(1) the REINSURED must become liable for a claim pursuant to
a conditional receipt issued in a form in conformity to
the appropriate form of the Conditional Receipt Schedule
of this Agreement; and
(2) the conditional receipt must be given in return for an
application on a policy form listed in the Subject
Reinsurance Schedule, and which would bear a register
date in the range set forth in the Subject Reinsurance
Schedule; and
(3) either the policy being applied for must qualify for
automatic reinsurance or the REINSURED has not received a
facultative offer of reinsurance on the application from
another reinsurer which is a better offer than any
facultative offer made by LINCOLN.
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C. If a policy is submitted to LINCOLN as facultative reinsurance
and LINCOLN'S facultative offer is the best offer received by the
REINSURED, the percentage specified in Section A, above, shall be
increased to 100% with respect to any claim incurred pursuant to
the conditional receipt after the date of LINCOLN'S offer.
VIII. EXPERIENCE REFUNDS
Reinsurance hereunder shall not be considered for experience refunds.
IX. PREMIUM TAX REIMBURSEMENT
When the LINCOLN is not required to pay state premium taxes upon
reinsurance premiums received from the REINSURED, it shall reimburse
the REINSURED for any such taxes the latter may be required to pay
with respect to that part of the premiums received under the
REINSURED'S original policies which is remitted to the LINCOLN as
reinsurance premiums.
X. POLICY CHANGES
If a change is made in the policy issued by the REINSURED to the
insured which affects reinsurance hereunder, the REINSURED shall
immediately notify the LINCOLN of such change.
XI. REINSTATEMENTS
If a policy reinsured hereunder lapses for nonpayment of premium and
is reinstated in accordance with its terms and the rules of the
REINSURED, the LINCOLN shall automatically reinstate its reinsurance
under such policy. The REINSURED shall mail notice of the
reinstatement to the LINCOLN not later than the tenth working day
after the reinstatement of the original policy. The REINSURED shall
pay the LINCOLN all reinsurance premiums in arrears in connection with
the reinstatement with interest at the same rate and in the same
manner as the REINSURED received under its policy.
XII. EXPENSES
The REINSURED shall bear the expense of all medical examinations,
inspection fees, and other charges incurred in connection with the
original policy.
XIII. REDUCTIONS
A. Except as provided in section C of the "REINSURANCE COVERAGE"
article hereof, if a portion of the insurance issued by the
REINSURED on a life reinsured hereunder is terminated,
reinsurance on that life hereunder shall be reduced as
hereinafter provided to restore, as far as possible, the
retention level of the REINSURED on the risk, provided, however,
that the REINSURED shall not assume on any policy being adjusted
as provided in this article an amount of insurance in excess of
the higher of, for the retention category of that policy, (1) its
retention
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limit at the time of the issue of that policy and (2) the
retention limit of that policy as already adjusted by the
provisions of the "INCREASE IN LIMIT OF RETENTION" article. The
reduction in reinsurance shall first be applied to the
reinsurance, if any, of the specific policy under which insurance
terminated. The reinsurance of the LINCOLN shall be reduced by an
amount which is the same proportion of the amount of reduction so
applied as the reinsurance of the LINCOLN on the policy bore to
the total reinsurance of the policy. The balance, if any, of the
reduction shall be applied to reinsurance of other policies on
the life, the further reduction, if any, in the reinsurance of
the LINCOLN again being determined on a proportional basis.
B. The LINCOLN shall return to the REINSURED any basic life
reinsurance premiums, without interest thereon, paid to the
LINCOLN for any period beyond the date of reduction of
reinsurance hereunder.
XIV. INSPECTION OF RECORDS
The LINCOLN shall have the right at any reasonable time to inspect, at
the office of the REINSURED, all books and documents relating to the
reinsurance under this Agreement.
XV. INCREASE IN LIMIT OF RETENTION
A. The REINSURED may increase its limit of retention and may elect,
subject to the other provisions of this article, to: (1) continue
unchanged reinsurance then in force under this Agreement; (2)
make reductions in both standard and substandard reinsurance then
in force under this Agreement; or (3) make reductions in standard
reinsurance then in force under this Agreement. The increased
limit of retention shall be effective with respect to new
reinsurance on the date specified by the REINSURED subsequent to
written notice to the LINCOLN. Such written notice shall specify
the new limit of retention, the effective date thereof, and the
election permitted by the first sentence of this section. If the
REINSURED makes election (2) or (3), the amount of reinsurance
shall be reduced, except as hereinafter provided, to the excess,
if any, over the REINSURED'S new limit of retention.
B. No reduction shall be made in the amount of any reinsurance
policy unless the REINSURED retained its maximum limit of
retention for the plan, age, and mortality classification at the
time the policy was issued, nor shall reductions be made unless
held by the REINSURED at its own risk without benefit of any
proportional or nonproportional reinsurance other than
catastrophe accident reinsurance. No reduction shall be made in
any class of reinsurance fully reinsured. The plan, age, and
mortality classification at issue shall be used to determine the
REINSURED'S new retention on any life on which reinsurance
policies are reduced in accordance with the provisions of this
article.
C. The reduction in each reinsurance policy shall be effective upon
the reinsurance renewal date of that policy first following the
effective date of the increased limit of retention or upon the
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twentieth reinsurance renewal date of the reinsurance policy, if
later. If there is reinsurance in other reinsurers on a life on
whom a reinsurance policy will be reduced hereunder, the LINCOLN
shall share in the reduction in the proportion that the amount of
reinsurance of the LINCOLN on the life bore to the amount of
reinsurance of other reinsurers on the life.
D. In the event the REINSURED overlooks any reduction in the amount
of a reinsurance policy which should have been made on account of
an increase in the REINSURED'S limit of retention, the acceptance
by the LINCOLN of reinsurance premiums under such circumstances
and after the effective date of the reduction shall not
constitute or determine a liability on the part of the LINCOLN
for such reinsurance. The LINCOLN shall be liable only for a
refund of premiums so received, without interest.
XVI. ERRORS
If either the REINSURED or the LINCOLN shall fail to perform an
obligation under this Agreement and such failure shall be the result
of an error on the part of the REINSURED or the LINCOLN, such error
shall be corrected by restoring both the REINSURED and the LINCOLN to
the positions they would have occupied had no such error occurred; an
"error" is a clerical mistake made inadvertently and excludes errors
of judgment and all other forms of error.
XVII. ARBITRATION
It is the intention of the REINSURED and the LINCOLN that the customs
and practices of the insurance and reinsurance industry shall be given
full effect in the operation and interpretation of this Agreement. The
parties agree to act in all things with the highest good faith. If the
REINSURED and the LINCOLN cannot mutually resolve a dispute which
arises out of or relates to this Agreement, however, the dispute shall
be decided through arbitration as set forth in the Arbitration
Schedule. The arbitrators shall base their decision on the terms and
conditions of this Agreement plus, as necessary, on the customs and
practices of the insurance and reinsurance industry rather than solely
on a strict interpretation of the applicable law. There shall be no
appeal from their decision, except that either party may petition a
court having jurisdiction over the parties and the subject matter to
reduce the arbitrator's decision to judgment.
XVIII. CHOICE OF LAW AND FORUM
Indiana law shall govern the terms and conditions of the Agreement. In
the case of an arbitration, the arbitration hearing shall take place
in Fort Xxxxx,
Indiana, and the
Indiana Uniform Arbitration Act shall
control except as provided in the "ARBITRATION" article.
XIX. INSOLVENCY
A. In the event of the insolvency of the REINSURED, all reinsurance
shall be payable directly to the liquidator, receiver, or
statutory successor of said REINSURED, without diminution because
of
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the insolvency of the REINSURED.
B. In the event of the insolvency of the REINSURED, all reinsurance
shall be payable directly to the liquidator, receiver, or
statutory successor shall give the LINCOLN written notice of the
pendency of a claim on a policy reinsured within a reasonable
time after such claim is filed in the insolvency proceeding.
During the pendency of any such claim, the LINCOLN may
investigate such claim and interpose, in the name of the
REINSURED (its liquidator, receiver, or statutory successor), but
at its own expense, in the proceeding where such claim is to be
adjudicated, any defense or defenses which the LINCOLN may deem
available to the REINSURED or its liquidator, receiver, or
statutory successor.
C. The expense thus incurred by the LINCOLN shall be chargeable,
subject to court approval, against the REINSURED as part of the
expense of liquidation to the extent of a proportionate share of
the benefit which may accrue to the REINSURED solely as a result
of the defense undertaken by the LINCOLN. Where two or more
reinsurers are participating in the same claim and a majority in
interest elect to interpose a defense or defenses to any such
claim, the expense shall be apportioned in accordance with the
terms of the
reinsurance agreement as though such expense had
been incurred by the REINSURED.
D. Any debts or credits, matured or unmatured, liquidated or
unliquidated, regardless of when they arose or were incurred, in
favor of or against either the REINSURED or the LINCOLN with
respect to this Agreement or with respect to any other claim of
one party against the other are deemed mutual debts or credits,
as the case may be, and shall be set off, and only the balance
shall be allowed or paid.
XX. PARTIES TO AGREEMENT
This is an agreement for indemnity reinsurance solely between the
REINSURED and the LINCOLN. The acceptance of reinsurance hereunder
shall not create any right or legal relation whatever between the
LINCOLN and the insured or the beneficiary under any policy reinsured
hereunder.
XXI. AGREEMENT
This Agreement represents the entire contract between the REINSURED
and the LINCOLN and supersedes, with respect to its subject, any prior
oral or written agreements.
XXII. EXECUTION AND DURATION OF AGREEMENT
The provisions of this
reinsurance agreement shall be effective with
respect to policies for which the date on which application was first
made to the REINSURED is on or after the first day of May, 1989, but
in no event shall this Agreement become effective unless and until it
has been duly executed by two officers of the LINCOLN and its Home
Office in Fort Xxxxx,
Indiana. This Agreement shall be unlimited as to
its duration but may be terminated at any time, insofar as its
pertains to the handling of new reinsurance
11
thereafter, by either party giving three months' notice of termination
in writing. The LINCOLN shall continue to accept reinsurance during
the three months aforesaid and shall remain liable on all reinsurance
granted under this Agreement until the termination or expiry of the
insurance reinsured.
IN WITNESS WHEREOF the said
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
of
Worcester, Massachusetts,
and the said
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
of
Fort Xxxxx,
Indiana,
have by their respective officers executed and delivered these presents in
duplicate on the dates shown below.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
Signed at Worcester, MA
By /s/ By /s/ Xxxxxx X. Xxxxx, XX.
--------------------------------- ---------------------------------
Title VP & Actuary Title AVP & Actuary
------------------------------ -------------------------------
Date February 27, 1991 Date February 26, 1991
------------------------------- --------------------------------
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Signed at Fort Xxxxx,
Indiana
By /s/ By /s/
------------------------------ -------------------------------
Vice President Assistant Secretary
Date 3-8-91 Date March 7,1991
------------------------------- ------------------------------
12
SUBJECT REINSURANCE SCHEDULE
Insurance Subject to Reinsurance under this Agreement
The REINSURED'S entire excess of its issues of the following plans bearing
application dates in the range shown below to insureds having surnames beginning
with the letters of the alphabet shown below.
A. Thirty-three and a third percent of the reinsurance the REINSURED cedes
automatically of the insurance specified below shall be ceded under this
agreement.
DATES LETTERS
PLAN FROM THROUGH FROM THROUGH
---- ---- ------- ---- -------
Inheiritage Last Survivor
(Form 1020-89) 05-01-89 -- A Z
Last Survivor
Exchange Option Rider 05-01-89 -- A Z
B. One hundred percent of the reinsurance the REINSURED cedes facultatively of
the insurance specified above shall be ceded under this agreement provided
the REINSURED has accepted the LINCOLN'S offer to reinsure.
13
RETENTION SCHEDULE
Retention Limits of the REINSURED
The REINSURED'S retention shall equal the lowest amount which could be retained
by the REINSURED taking into account amounts previously issued and retained on
the healthier** of the lives insured under the Last Survivor policy.
LIFE
----
STANDARD RISKS,
SPECIAL CLASSES SPECIAL CLASSES SPECIAL CLASSES
A, B, C, & D, AND E, F, & H, AND J, L, & P, AND
FLAT EXTRAS OF FLAT EXTRAS OF FLAT EXTRAS OF
AGES $10.00 OR LESS (a) $10.01-$20.00 (b) $20.01 AND OVER
---- ------------------ ----------------- ---------------
0 $ 400,000 $200,000 $100,000
1-17 800,000 600,000 200,000
18-60 1,000,000 700,000 400,000
61-70 700,000 500,000 200,000
71-75 300,000 200,000 100,000
76-80 200,000 100,000 50,000
(a) Spouse's Insurance Rider not available above Class D.
(b) Term policies and Term Riders not available above Class H.
Notes: (1) The above maximum limits are also the maximums on any one life
for all plans and riders combined.
(2) There are conditions where the retention may be limited, such as
in aviation, Armed Forces personnel, certain avocations, and
medical classifications.
(3) The minimum size reinsurance case will be $25,000.
CIVILIAN AVIATION:
PASSENGERS UNDERWRITING ACTION RETENTION
---------- ------------------- ---------
Company owned business planes
To 200 hours annually Standard $1,000,000
Over 200 hours annually Individual Consideration* 500,000
Charter Flying
To 100 hours annually Standard 500,000
Over 100 hours annually Individual Consideration* 300,000
*Require complete details of type of planes and equipment, flying terrain and
qualifications of pilots.
**If two insureds have the same underwriting class, the retention shall be the
lowest amount which could be retained by the REINSURED.
If two insureds have different underwriting classes, the retention shall be
the amount for the better underwriting class, regardless of age.
14
PASSENGERS UNDERWRITING ACTION RETENTION
---------- ------------------- ---------
Private business or pleasure
To 100 hours annually Standard 500,000
Over 100 hours annually Individual Consideration* 300,000
Pilots and Crew Members 300,000
ARMED FORCES:
Active Duty personnel, Reserves
alerted, National Guard alerted,
ROTC final college year, West Point
Cadets, Annapolis Midshipmen, Air
Force and Coast Guard Academy Cadets
AGES OFFICERS ENLISTED PERSONNEL*
---- -------- -------------------
0-24 $100,000 $ 50,000
Over 24 150,000 100,000
(Submarine Service, Hazardous Special
Services, Paratroopers and Airborne
Infantry are not eligible.)
Doctors, Dentists, Allied Specialists 200,000 --
Civilian participants in Reserve Programs
entering on active duty for up to six
months only, with remaining military service
obligation to be completed in Ready
Reserve
AGES
----
All 150,000 100,000
*Enlisted Personnel (Pay Grades E-1 through E-3 are not eligible.)
CORONARY HISTORY: When a combination Table and Flat Extra rating is necessary.
AGES RETENTION
---- ---------
0-60 $300,000
61-70 150,000
71-80 50,000
*Require complete details of type of planes and equipment, flying terrain and
qualifications of pilots.
**If two insureds have the same underwriting class, the retention shall be the
lowest amount which could be retained by the REINSURED.
If two insureds have different underwriting classes, the retention shall be
the amount for the better underwriting class, regardless of age.
15
LIMITS SCHEDULE
Maximum Amounts which the REINSURED may cede Automatically*
LIFE
To LINCOLN:
STANDARD RISKS, OVER
SPECIAL CLASSES SPECIAL CLASSES SPECIAL CLASSES SPECIAL CLASS P
A, B, C, & D, AND E, F, & H, AND J, L, & P, AND OR EQUIVALENT
FLAT EXTRAS OF FLAT EXTRAS OF FLAT EXTRAS OF TOTAL EXTRA
AGES $0-$10.00 $10.01-$20.00 $20.01 AND OVER PREMIUM
---- --------- ------------- --------------- -------
0 $ 800,000 $ 400,000 $ 200,000 None
1-17 1,600,000 1,200,000 400,000 None
18-60 2,000,000 1,400,000 800,000 None
61-70 1,400,000 1,000,000 400,000 None
71-75 600,000 400,000 200,000 None
76-80 400,000 200,000 100,000 None
Over 80 None None None None
To All Reinsurers:
STANDARD RISKS, OVER
SPECIAL CLASSES SPECIAL CLASSES SPECIAL CLASSES SPECIAL CLASS P
A, B, C, & D, AND E, F, & H, AND J, L, & P, AND OR EQUIVALENT
FLAT EXTRAS OF FLAT EXTRAS OF FLAT EXTRAS OF TOTAL EXTRA
AGES $0-$10.00 $10.01-$20.00 $20.01 AND OVER PREMIUM
---- --------- ------------- --------------- -------
0 $ 2,400,000 $ 1,200,000 $ 600,000 None
1-17 4,800,000 3,600,000 1,200,000 None
18-60 6,000,000 4,200,000 2,400,000 None
61-70 4,200,000 3,000,000 1,200,000 None
71-75 1,800,000 1,200,000 600,000 None
76-80 1,200,000 600,000 300,000 None
Over 80 None None None None
*There is no automatic reinsurance if either insured is deemed uninsurable. In
determining whether the Last Survivor policy has satisfied all the conditions
for automatic reinsurance coverage as set forth in section A of the
"REINSURANCE LIMITS" article, the REINSURED may reinsure the policy
automatically if both insureds, before age adjustments are made in accordance
with the Premium Schedule, fall within appropriate age limits and mortality
classes as specified above.
16
ADMINISTRATIVE FORMS SCHEDULE
Facultative Application
Policy Detail Report
Summary Premium Report
Policy Exhibit
Quarterly Reserve Report
17
CHECK: __ Automatic or __ Facultative TRANSACTION TYPE _____ APPLICATION TO: LINCOLN
__ MPR or __ Coinsurance (See Reverse Side) NATIONAL
__ Medical or __ Non-Medical LIFE INSURANCE
COMPANY
FORT XXXXX,
INDIANA
--------------------------------------------------------------------------------------------------------------------------------
INSURED' NAME SEX BIRTHDATE BIRTH RESIDENCE OCCUPATION ISSUE AGE AGE BASIS
---------------------------------------------------------------------------------------------------------------------------------
JOINT INSURED SEX BIRTHDATE BIRTH RESIDENCE OCCUPATION ISSUE AGE JOINT AGE
---------------------------------------------------------------------------------------------------------------------------------
ORIGINAL POLICY NO. ISSUE DATE DATE OF APP SHORT TERM FROM PLAN(S) RATE BOOKED RESERVE BASIS
---------------------------------------------------------------------------------------------------------------------------------
CEDING COMPANY Check Reins. Prem. Type: __SMOKER
__ NON-SMOKER __AGGREGATE __ OTHER PREF
---------------------------------------------------------------------------------------------------------------------------------
LIFE
BASE PLAN TERM RIDER DIS ADB WILL POLICY CONTAIN:
PREVIOUS IN FORCE $ $ $ $
---------- ---------- ---------- ---------- ___ Aviation Exclusion Provision
PREVIOUS RETAINED ___ Guaranteed Insurability Option
---------- ---------- ---------- ---------- ___ Increasing Insurance Rider
ISSUED THIS POLICY ___ Term Insurance Dividend Option
---------- ---------- ---------- ---------- (is option limited to cash value___Yes___No)
RETAINED THIS POLICY
---------- ---------- ---------- ----------
RATING, IF SUBSTANDARD
---------- ---------- ---------- ----------
REINSURED THIS CESSION
---------- ---------- ---------- ----------
FACULTATIVE UNDERWRITING DATA
Underwriting Papers: Check Appropriate Column
DATA NOT
ATTACHED OUTSTANDING OBTAINED
-------- ----------- --------
Application ________ ___________ ________
Examination ________ ___________ ________
HOS ________ ___________ ________
EKG(s) ________ ___________ ________
X-Ray ________ ___________ ________
SMA - Blood Study ________ ___________ ________
APS Dr._____________ ________ ___________ ________
Dr._____________ ________ ___________ ________
IR ________ ___________ ________
Questionnaires ________ ___________ ________
Financial Data ________ ___________ ________
Other (describe)______________ ________ ___________ ________
Reason for submitting Facultatively:
__ Over Automatic Limit __ Medical Reasons
__ Financial Reasons __ Other Non-Medical
Describe:________________________________________________________________
Has money been accepted with the Application? __ Yes __ No
Is risk being submitted to other Reinsurers? __ Yes __ No
Other companion cases also submitted: _________________________________________
REMARKS:
NOTE: Unless otherwise stated, LNL's offer to reinsure is valid for 120 days
from date of last facultative underwriting action.
SCHEDULE C
*TRANSACTION TYPE MUST BE INDICATED Underwriter__________
Date_________________
18
INSTRUCTIONS
1. SUBMIT PART 1 WHEN MAKING FACULTATIVE APPLICATION.
2. SUBMIT PART 2 WHEN MAKING FORMAL CESSION OF REINSURANCE TO
LINCOLN NATIONAL (NEW BUSINESS OR AMENDED CESSION) OR
WITHDRAWING FACULTATIVE APPLICATION.
3. RETAIN PART 3 FOR YOUR RECORDS.
4. ON RPR CASES, PLEASE FURNISH THE DISABILITY PREMIUM PER UNIT
ON PARTS 2 & 3 IN THE REMARKS AREA.
TRANSACTION TYPE CODES AND DEFINITIONS
NEW COVERAGE
CODE LITERAL DEFINITION
NB - New Business New issues on which the underwriting is within
the ceding company's requirements as per published guidelines.
SU - New Business with New issues for which the ceding company has a program to use
Special Underwriting modified underwriting requirements (e.g., a Special Replacement Program).
CONTINUATION OF COVERAGE - A "continuation" of a policy is a new policy
replacing a policy issued earlier by the client ("original policy") or a change
in an existing policy issued or made either:
(a) in compliance with the terms of the original policy (such as a
conversion of a term policy or the use of first-year rates for a
re-entry term product)
OR
(b) without the same new underwriting information the client would
obtain in the absence of the original policy, without a suicide
exclusion or contestable period as long as those contained in new
issues by the client, or without the payment of the same
first-year commissions payable in the absence of the original
policy.
EX - Exchange A policy which is replacing a policy previously
issued by the ceding company and for which the
company does not obtain Full Evidence of
Insurability requirements as per published
underwriting guidelines it would obtain the
absence of the replaced policy. (Indicate
effective date in remarks area).
CN - Conversion A newly issued policy based on a contractual
provision contained in the previous policy with
limited or no evidence of insurability. (Indicate
effective date and other pertinent data in the
remarks area).
RT - RE-Entry Term A contractual privilege which allows the insured
to present evidence of insurability to obtain a
new first year premium at his then attained age
(based on same plan of insurance originally
issued).
OR - Other Reissues All other reissues not considered to be exchanges,
conversions, or re-entries (e.g., reduction in
amount, rating reduction, return to first-year
premium, adding or terminating benefits, etc.).
(Indicate effective date and other pertinent data
in the remarks area).
OT - Other MUST explain in remarks area.
19
SCHEDULE C, PART I
POLICY DETAIL REPORT
____________, 20__
RISK PREMIUM REINSURANCE
For each policy show:
1. Full name of insured
2. Sex
3. Date of Birth
4. Joint Insured (when applicable)
- Full name
- Sex
- Date of Birth
5. Amount of Previous In-force within Client Company
6. Amount of Previous Retention
7. Amount of New Policy
8. Amount of New Retention
9. Amount of New Reinsurance Ceded to LINCOLN
10. Policy Number
11. Plan and/or Plan Code
12. Issue Date
13. Transaction Code
14. Automatic/Facultative Indicator
15. Underwriting Basis
16. Rating
17. Foreign Currency Code
18. Par/Non Par Indicator
19. Current Premiums
(a) Standard Life
(b) Substandard Table Extras
(c) Substandard Flat Extras
(d) Accidental Death Benefits
(e) Waiver of Premium
20. Total Premium Due
21. Current Net Amount at Risk
22. Current Policy Fee
23. Mode Indicator
Please provide separate reports for first year and renewal reinsurance.
20
SCHEDULE C, PART II
SUMMARY PREMIUM REPORT
____________, 19__
RISK PREMIUM REINSURANCE
Total first year basic Life Premium
----------------------
Total first year Policy Fees
----------------------
Total first year Disability Premiums
----------------------
Total first year Accidental Death Benefit Premiums
----------------------
Total first year Premiums Due
----------------------
Total renewal basic Life Premiums
----------------------
Total renewal Policy Fees
----------------------
Total renewal Disability Premiums
----------------------
Total renewal Accidental Death Benefit Premiums
----------------------
Total renewal Premiums Due
----------------------
Grand Total
----------------------
21
SCHEDULE C, PART III
POLICY EXHIBIT
____________, 20__
RISK PREMIUM REINSURANCE
----------------- CURRENT PERIOD------------------
NUMBER AMOUNT
OF POLICIES OF REINSURANCE
----------- --------------
In-force Beg. of Period
Issues-Automatic
Issues-Facultative
Cancellations (NTO's)
Reinstates from Cancels
Other Increases
(Include other reinstatements)
Total Increases
Deaths
Recaptures
Expiries & Maturities
Lapses & Surrenders
Other Decreases in Coverage
Total Decreases
In-force: End of Period
----------- YEAR-TO-DATE ------------
NUMBER AMOUNT
OF POLICIES OF REINSURANCE
----------- --------------
In-force Beg. of Period
Issues-Automatic
Issues-Facultative
Cancellations (NTO's)
Reinstates from Cancels
Other Increases
(Include other reinstatements)
Total Increases
Deaths
Recaptures
Expiries & Maturities
Lapses & Surrenders
Other Decreases in Coverage
Total Decreases
In-force: End of Period
22
SCHEDULE C, PART IV
QUARTERLY RESERVE REPORT
MEAN RESERVES AS OF END OF ____________ QUARTER, 20__
RISK PREMIUM REINSURANCE
Life _____________________
Accidental Death Benefits _____________________
Waiver of Premium _____________________
Mortality Table _____________________
Rate of Interest _____________________
23
CONDITIONAL RECEIPT SCHEDULE
Conditional Receipt
24
CONDITIONAL RECEIPT FOR
ADVANCE PAYMENT OF PREMIUM XXXXXXXXX, XXXXXXXXXXXXX 00000
NO. 51065
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA (THE "COMPANY")
SMA LIFE ASSURANCE COMPANY (THE "COMPANY")
(check one)
Advance payment of $_______________ (Life) $_______________ (Health) on
_______________ (date) with the application for insurance has been received on
the life of _______________________________, the proposed insured. This receipt
bears the same serial numbers as the application.
Received for the Company by _____________________
CONDITIONAL INSURANCE AGREEMENT
THERE IS NO INSURANCE UNDER THIS AGREEMENT UNTIL ALL THE CONDITIONS HAVE BEEN
MET.
GENERAL
DEFINITIONS
"Underwriting Date" means the date of Part I, Part II, the Conditional Receipt
or the Medical Exam, whichever date is later. if an Other Insured Rider is
applied for, the "Underwriting Date" for coverage on the Other Insured is the
later of the date of the Conditional Receipt, the Part IA or the Medical Exam if
required.
"Insurable on a standard basis" means acceptable under the Company's
underwriting rules for the plan and amount of insurance applied for without any
additional premium charge or restrictive rider.
"Insurable on a non-standard basis" means acceptable for the type of insurance
applied for under the Company's underwriting rules but not on a standard basis.
GENERAL
Any check or draft is accepted subject to collection. No agent or broker is
authorized to amend, alter, or modify the terms of this agreement. All
statements in the application are representations, not warranties. If you do not
hear from us within 60 days of the date of this agreement, please write to us
without delay, stating the facts concerning the application. Our address is 000
Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000.
CONDITIONS TO BE MET
CONDITIONS PRECEDENT
The following conditions precedent must be met before we have any liability
under this agreement other than the return of the premium received:
1. The application must be completed and signed by the proposed insured(s)
and the owner, if not the insured.
2. The proposed insured(s) must be insurable on either a standard or
non-standard basis on the underwriting date if life insurance only is
applied for. The proposed insured(s) must be insurable on a standard
basis on the underwriting date for any health insurance.
3. The proposed insured(s) must be under the age of 71 for life insurance
and under the age of 61 for health insurance.
4. The proposed insured(s) must have undergone a medical exam if required
by us.
5. If the date of the Conditional Receipt is later than the date of Part II
and Part 1A (if applicable), the proposed insured must not have
consulted or been treated by any physician or practitioner of any
healing art nor had any tests listed in the application since the
completion of Part II and Part IA.
25
If all of the above conditions have been met, some insurance will be provided
under this agreement. However, the insurance will be subject to all of the
further provisions of this agreement.
INSURANCE NOT IN FORCE. If application is made for both health and life
insurance, no health insurance will be in force on any proposed insured who is
insurable on a non-standard basis.
If a person proposed for life insurance is not insurable on either a standard or
a non-standard basis, no life or health insurance will be in force.
26
BENEFITS
AMOUNT OF INSURANCE-LIFE. If a proposed insured is insurable on a standard
basis, the death benefit provided under this agreement will be the lesser of the
amount applied for or the limit described below.
If a proposed insured is insurable on a non-standard basis which requires a
higher premium than the premium on the policy applied for, the amount of the
death benefit will be reduced. The reduced benefit will be in the same ratio to
the amount applied for as the premium paid with this receipt is to the total
premium that would be required on the plan the Company is willing to issue; but
in no event more than the maximum limit set forth below.
If the proposed insured is insurable on a non-standard basis which does not
require a higher premium, the death benefit provided under this agreement will
be the lesser of the following:
(a) the amount applied for;
(b) the maximum limit applicable to the proposed insured; and
(c) the premium paid if the proposed insured's death comes within the terms
of the restrictive rider would have been attached to the policy when
used.
MAXIMUM LIMIT-LIFE INSURANCE. The maximum limit under this agreement for life
insurance, including accidental death benefit, is an amount which when added to
any death benefit provided under any life insurance policy or conditional
insurance agreement having a date of issue or underwriting date respectively
within 90 days prior to the underwriting date of this agreement does not exceed
the following applicable amounts:
(a) If insurable on a standard basis, for issue ages 0 through 15, $50,000;
16 through 60, $500,000; 61 through 65, $250,000; 66 through 70,
$100,000; 71 and over, none.
(b) If insurable on a non-standard basis, for issue ages 0 through 15
$25,000; 16 through 60, $250,000; 61 through 65, $125,000; 66 through
70, $50,000; 71 and over, none.
The maximum limit will not be increased because payment has been made to the
Company which is larger than the premium required for such reduced insurance.
Upon due proof of the death of the proposed insured that portion of the premium
paid for any excess insurance shall be paid to the beneficiary named in this
application.
SUICIDE EXCLUSION. If the proposed insured commits suicide while this agreement
is in force, the Company's liability will be limited to the return of the
premium paid.
AMOUNT OF INSURANCE-HEALTH. If the proposed insured becomes totally disabled as
defined in the policy, the maximum monthly benefit will be the lesser of the
amount applied for and the maximum limit set forth below.
MAXIMUM LIMIT-HEALTH INSURANCE. The maximum limit under this agreement for
monthly indemnity is an amount which, when added to any monthly indemnity
provided by the Company under any health insurance policy or conditional
insurance agreement having a date of issue or underwriting date respectively
within 90 days prior to this agreement, does not exceed the lesser of:
(a) $2,000; and
(b) the published limit of the Company in effect on the underwriting date.
Such health insurance will be subject to the elimination period elected in the
application, if any. Benefits will be payable for no more than 24 months or the
benefit period applied for, if less. Any such insurance in excess of the maximum
limit shall be void and all premiums paid for such excess shall be returned.
The maximum limit under this agreement for any health insurance other than
monthly indemnity will be the lesser of the amount applied for and the
applicable published limit of the Company in effect on the underwriting date of
this agreement.
27
TERMINATION
TERMINATION. This agreement may be terminated at any time prior to incurrence of
a claim. The Company's sole liability shall be limited to the refund of the
premium paid. Such termination will occur on the earliest of the following:
1. The delivery of the insurance issued on this application.
2. The date the Company mails a termination notice with a refund of your
payment to you.
3. Ninety days after the underwriting date.
28
PREMIUM SCHEDULE, PART I
FULLY UNDERWRITTEN ISSUES
Last Survivor Policies When All Lives are Deemed Insurable
I. Reinsurance Premium Rates for Reinsurance Not in Excess of $5,000,000
For reinsurance not in excess of $5,000,000 on any one life, the reinsurance
premium shall be based on a Joint Equal Age of the insureds under the policy and
the attached Premium Rate Schedule labeled "Exhibit 5." The Joint Equal Age
shall be calculated by using the methodology set forth in Exhibit A.
II. Reinsurance Premium Rates for Reinsurance in Excess of $5,000,000
For reinsurance in excess of $5,000,000 on any one life, the reinsurance premium
shall be based on a Joint Equal Age of the insureds under the policy and the
appropriate rates charged the insured per thousand of the net amount at risk
times 108%. The appropriate rate shall be based on the attached Premium Rate
Schedule labeled "Exhibit 5."
III. Last Survivor Exchange Option Rider
The reinsurance premium shall be based on a Joint Equal Age of the insureds
under the policy and the appropriate rates labeled "Joint and Last Survivor
Split Option Premiums" as shown in the attached Premium Rates Schedule labeled
"Exhibit 7" per thousand of the yearly amount at risk.
NOTE: The amount of reinsurance not in excess of $5,000,000 shall be equal to
$5,000,000 less the highest amount of reinsurance previously inforce on
either life.
The amount of reinsurance in excess of $5,000,000 shall be equal to the
amount of reinsurance on this cession less the amount of reinsurance not
in excess of $5,000,000.
29
IV. Continuations
CONTINUATIONS TO ISSUES REINSURED HEREUNDER
There shall be no continuations to policy forms reinsured under the Agreement.
CONTINUATIONS FROM ISSUES REINSURED HEREUNDER
A. The reinsurance premiums for continuations of policies that result from
the exercise of a Joint Last Survivor Split Option reinsured under this
Agreement shall be described in the agreement which covers the new policy,
provided however, that the policies were issued in accordance with the
REINSURED'S Guidelines for Joint Last Survivor Split Option, attached
hereto; unless that agreement specifies otherwise, the policy duration
attained age of the insured, for purposes of calculating such premiums,
shall be as determined as though the continuations were issued on the same
date at the same issue age as the original policy. If no such agreement is
in effect between the LINCOLN and the REINSURED, reinsurance shall
continue hereunder.
B. For all other continuations, the reinsurance premium for continuations of
policies reinsured under this Agreement shall be as described in the
agreement which covers the new policy; unless that agreement specifies
otherwise, the policy duration and attained age of the insured, for
purposes of calculating such premiums, shall be determined as though the
continuations were issued on the same date and at the same issue age as
the original policy. If no such agreement is in effect between the LINCOLN
and the REINSURED, reinsurance shall continue hereunder.
CONTINUATION POLICY FEE
If the premium scale applicable to a continuation contains a policy fee, a
continuation shall, for purposes of determining the policy fee only and
notwithstanding the method prescribed for calculating the basic premium, be
considered a renewal if the REINSURED has paid the LINCOLN a first-year policy
fee on reinsurance of the original policy and as a new issue if the REINSURED
has not paid the LINCOLN a policy fee on reinsurance of the original policy.
30
EXHIBIT A
Calculation of Joint and Last Survivor Rates
Exhibit 1 (Age Rate-Ups for Table Ratings)
Exhibit 2 (Age Rate-Ups for Permanent Flat Extras)
Exhibit 3 (Age Rate-Ups for 5-Year Temporary Flat Extras)
Exhibit 4 (Joint Equal Age Table)
31
SUBJECT: CALCULATION OF JOINT AND LAST SURVIVOR RATES
Here are the steps necessary to look up the J&LS premium rates:
1. Apply the 5-year setback to change female ages to male ages.
2. Use Exhibits 1, 2 and 3 to rate-up male ages for table ratings and flat
extras.
3. Use Exhibits 4 to determine the joint equal age, with the age difference
based on the ages resulting from steps 1 and 2.
4. Use the joint equal age to find the proper J&LS premium rates in Exhibit
5. Separate rates are provided for nonsmoker/nonsmoker, smoker/smoker and
nonsmoker/smoker combinations.
5. Multiply the rate times the face amount and add the policy fee ($25.00) to
arrive at the correct premium.
32
EXHIBIT 1
AGE RATE-UPS FOR TABLE RATINGS
TABLE EXTRA AGE
RATING MORTALITY RATE-UP
------ --------- -------
1 25% +3
2 50 5
3 75 7
4 100 8
5 125 10
6 150 11
8 200 14
10 250 15
12 300 16
14 350 18
16 400 19
20 500 21
33
EXHIBIT 2
AGE RATE-UPS FOR PERMANENT FLAT EXTRAS
------------------------------ AGE RATE-UPS--------------------------------
NONSMOKER SMOKER
AGE GROUP* AGE GROUP* 2.50 5.00 7.50 10.00 15.00 20.00
---------- ---------- ---- ---- ---- ----- ----- -----
0-22 0-17 +20 +27 +32 +36 +42 +46
23-27 18-22 12 18 23 26 32 36
28-32 23-24 9 15 19 22 28 32
33-37 25-27 7 12 15 18 24 28
38-42 28-32 6 10 13 15 20 24
43-47 33-37 5 8 11 13 17 20
48-52 38-42 4 6 9 11 14 17
53-57 43-52 3 5 7 9 11 14
58-62 53-57 2 4 5 7 9 11
63-67 58-62 2 3 4 5 7 9
68-72 63-67 1 2 3 4 5 7
73-80 68-80 1 2 3 3 4 5
*Adjust age for 5-year setback for females before using this table.
34
EXHIBIT 3
AGE RATE-UPS FOR 5-YEAR TEMPORARY FLAT EXTRAS
------------------------------ AGE RATE-UPS--------------------------------
NONSMOKER SMOKER
AGE GROUP* AGE GROUP* 2.50 5.00 7.50 10.00 15.00 20.00
---------- ---------- ---- ---- ---- ----- ----- -----
0-22 0-17 +13 +17 +21 +24 +28 +32
23-27 18-22 6 10 13 15 19 23
28-32 23-24 4 8 10 12 16 19
33-37 25-27 3 6 8 10 13 16
38-42 28-32 3 5 6 8 10 13
43-47 33-37 2 4 5 7 8 11
48-52 38-42 2 3 4 6 7 9
53-57 43-47 2 3 4 5 6 7
58-62 48-52 1 2 3 4 5 6
63-67 53-57 1 2 3 3 4 5
68-72 58-62 1 1 2 2 3 4
73-80 63-80 1 1 2 2 3 3
*Adjust age for 5-year setback for females before using this table.
For temporary flat extras less than 5 years, pro-rate the above age rate-ups.
For 10-year temporary flat extras, use the average of the above rate-ups and
those for permanent flat extras.
35
EXHIBIT 4
JOINT EQUAL AGE TABLE
AGE ADDITION TO
DIFFERENCE YOUNGER AGE
---------- -----------
0 0
1 - 2 1
3 - 4 2
5 - 6 3
7 - 8 4
9 - 10 5
11 - 12 6
13 - 15 7
16 - 18 8
19 - 21 9
22 - 24 10
25 - 28 11
29 - 32 12
33 - 36 13
37 - 40 14
41 - 44 15
45 - 48 16
49 - 52 17
53 - 56 18
57 - 60 19
To determine the Joint Equal Age, figure the age difference, look up the
"Addition to Younger Age" in this table and add it to the younger age.
36
EXHIBIT 5
JOINT AND LAST SURVIVOR PREMIUM RATE
MALE NONSMOKER, MALE NONSMOKER
OMITTED (27 PAGES)
37
EXHIBIT 6
SINGLE LIFE MORTALITY RATES - NONSMOKER
5 YEAR AGE SETBACK FOR FEMALES
OMITTED (4 PAGES)
38
GUIDELINES FOR JLS SPLIT OPTION
1. Each insured must be rated no higher than Table 8 (300% of standard
mortality) for the split option to be reinsured. Use a conversion factor
of "1 table = $2.50/1000" to convert flat extras to table ratings to check
this restriction.
2. In the event of divorce, no more than a 6 month window must be allowed to
exercise the split option.
3. The new policies issued as a result of the split option must have a
combined premium that exceeds the JLS policy's premium.
4. The face amount of each new policy must be no more than 50% of the JLS
policy's face amount.
5. The new policies will be reinsured on a YRT basis using point-in-scale
rates measured from the issue date of the original JLS policy. The YRT
premium rates will equal the single-life mortality rates (contained in
Exhibit 6) that were used to construct the JLS premium rates.
6. A level annual premium will be paid for the split option. The split option
rates are contained in Exhibit 7.
39
EXHIBIT 7
Joint and Last Survivor Split Option Premiums
ANB, Policy Year
(Premium Rate is level for renewal years and zero first year)*
JEA NS/NS NS/SM SM/SM
--- ----- ----- -----
25 0.14 0.16 0.19
26 0.15 0.17 0.20
27 0.16 0.18 0.22
28 0.17 0.19 0.23
29 0.18 0.20 0.24
30 0.19 0.22 0.25
31 0.20 0.23 0.27
32 0.21 0.24 0.28
33 0.22 0.25 0.30
34 0.24 0.27 0.32
35 0.25 0.28 0.34
36 0.26 0.30 0.36
37 0.28 0.32 0.38
38 0.30 0.34 0.40
39 0.31 0.36 0.42
40 0.33 0.38 0.45
41 0.35 0.40 0.47
42 0.37 0.42 0.50
43 0.39 0.45 0.53
44 0.42 0.48 0.56
45 0.44 0.51 0.60
46 0.47 0.54 0.63
47 0.50 0.57 0.67
48 0.53 0.60 0.71
49 0.56 0.64 0.76
50 0.60 0.68 0.80
51 0.63 0.72 0.85
52 0.67 0.77 0.90
53 0.72 0.82 0.96
54 0.76 0.87 1.02
55 0.81 0.92 1.08
56 0.86 0.98 1.15
57 0.92 1.04 1.22
58 0.98 1.11 1.29
59 1.04 1.18 1.38
40
Joint and Last Survivor Split Option Premiums
ANB, Policy Year
(Premium Rate is level for renewal years and zero first year)*
JEA NS/NS NS/SM SM/SM
--- ----- ----- -----
60 1.11 1.26 1.46
61 1.19 1.34 1.55
62 1.27 1.43 1.65
63 1.35 1.52 1.76
64 1.44 1.62 1.87
65 1.54 1.73 1.98
66 1.65 1.84 2.11
67 1.76 1.96 2.24
68 1.89 2.10 2.38
69 2.02 2.24 2.54
70 2.16 2.39 2.70
71 2.31 2.55 2.87
72 2.48 2.73 3.06
73 2.66 2.91 3.25
74 2.85 3.11 3.46
75 3.05 3.33 3.68
76 3.27 3.55 3.91
77 3.50 3.79 4.15
78 3.76 4.04 4.40
79 4.03 4.31 4.67
80 4.32 4.61 4.96
*For example, 2 nonsmokers with a JEA-55 have a split option premium per $1,000
of $0.00 in the first year and $0.81 in all renewal years.
41
PREMIUM SCHEDULE, PART II
Reinsurance Premium Rates for reinsurance
in which one life is determined to be uninsurable
FULLY-UNDERWRITTEN ISSUES
Standard
The reinsurance premium rates to be applied to issues of the REINSURED'S
Inheiritage Last Survivor (Form 1020-89) plan when one life is deemed
uninsurable (has a table rating greater than Table P) shall be the attached
rates labeled "Exhibit 6" per thousand of the yearly net amount at risk. The
reinsurance premium shall be computed on the age and premium rates applicable to
the insurable life.
Substandard Risks
The substandard table extra premiums shall be the number of tables assessed the
risk times 25% of the attached appropriate standard rates times the above
percentage.
42
ARBITRATION SCHEDULE
To initiate arbitration, either the REINSURED or the LINCOLN shall notify the
other party in writing of its desire to arbitrate, stating the nature of its
dispute and the remedy sought. The party to which the notice is sent shall
respond to the notification in writing within ten (10) days of its receipt.
The arbitration hearing shall be before a panel of three arbitrators, each of
whom must be a present or former officer of a life insurance company. An
arbitrator may not be a present or former officer, attorney, or consultant of
the REINSURED or the LINCOLN or either's affiliates.
The REINSURED and the LINCOLN shall each name five (5) candidates to serve as an
arbitrator. The REINSURED and the LINCOLN shall each choose one candidate from
the other party's list, and these two candidates shall serve as the first two
arbitrators. If one or more candidates so chosen shall decline to serve as an
arbitrator, the party which named such candidate shall add an additional
candidate to its list, and the other party shall again choose one candidate from
the list. This process shall continue until two arbitrators have been chosen and
have accepted. The REINSURED and the LINCOLN shall each present their initial
lists of five (5) candidates by written notification to the other party within
twenty-five (25) days of the date of the mailing of the notification initiating
the arbitration. Any subsequent additions to the list which are required shall
be presented within ten (10) days of the date the naming party receives notice
that a candidate that has been chosen declines to serve.
The two arbitrators shall then select the third arbitrator. If the two
arbitrators cannot agree on the choice of a third, then a third arbitrator shall
be appointed in accordance with the
Indiana Uniform Arbitration Act, Xxxxx Ind.
Code Xxx. 34-4-2-4. Once chosen, the arbitrators are empowered to decide all
substantive and procedural issues by a majority of votes.
It is agreed that each of the three arbitrators should be impartial regarding
the dispute and should resolve the dispute on the basis described in the
"ARBITRATION" article. Therefore, at no time will either the REINSURED or the
LINCOLN contact or otherwise communicate with any person who is to be or has
been designated as a candidate to serve as an arbitrator concerning the dispute,
except upon the basis of jointly drafted communications provided by both the
REINSURED and the LINCOLN to inform those candidates actually chosen as
arbitrators of the nature and facts of the dispute. Likewise, any written or
oral arguments provided to the arbitrators concerning the dispute shall be
coordinated with the other party and shall be provided simultaneously to the
other party or shall take place in the presence of the other party. Further, at
no time shall any arbitrator be informed that the arbitrator has been named or
chosen by one party or the other.
43
The arbitration hearing shall be held on the date fixed by the arbitrators. In
no event shall this date be later than six (6) months after the appointment of
the third arbitrator. As soon as possible, the arbitrators shall establish
prearbitration procedures as warranted by the facts and issues of the particular
case. At least ten (10) days prior to the arbitration hearing, each party shall
provide the other party and the arbitrators with a detailed statement of the
facts and arguments it will present at the arbitration hearing. The arbitrators
may consider any relevant evidence; they shall give the evidence such weight as
they deem it entitled to after consideration of any objections raised concerning
it. The party initiating the arbitration shall have the burden of proving its
case by a preponderance of the evidence. Each party may examine any witnesses
who testify at the arbitration hearing. Within twenty (20) days after the end of
the arbitration hearing, the arbitrators shall issue written opinion regarding
facts and opinion. The arbitrators shall issue a written decision that sets
forth their findings and any award to be paid as a result of the arbitration,
except that the arbitrators may not award punitive or exemplary damages. In
their decision, the arbitrators shall also apportion the costs of arbitration,
which shall include, but not be limited to, their own fees and expenses.
44
AMENDMENT
to the Risk Premium
Reinsurance Agreement (the "Agreement")
effective May 1, 1989, between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA of Worcester, Massachusetts,
hereinafter referred to as the "REINSURED,"
and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY of Fort Xxxxx,
Indiana,
hereinafter referred to as the "LINCOLN."
1. It is hereby agreed that on and after the first day of May, 1989,
conversions of the following policies, issued by the REINSURED and reinsured
with the LINCOLN, to the REINSURED'S Last Survivor plan shall be reinsured under
the Agreement.
DURATION
AT AGE AT DATE OF REINSURANCE REINSURED'S CONVERSION
CONVERSION ISSUE INSURED BIRTH AMOUNT POLICY NUMBER DATE
---------- ----- ------- ----- ------ ------------- ----
6 55 Xxxxxx Xxxxxxx 09-20-28 $ 666,667 L486298-99 10-28-89
6 52 Xxxxxx Xxxxxxx 07-30-31 666,667 L486298-99 10-28-89
8 47 Xxxxx Xxxxxx 06-25-35 71,667 L489956-90 12-20-89
8 41 Xxxxx Xxxxxx 11-29-40 71,667 L489956-90 12-20-89
5 55 Xxxxxx Xxxxxxxxx 02-13-30 1,100,000 L500974-90 05-18-90
5 46 Xxxxxxxx Xxxxxxxxx 11-27-38 1,100,000 L500974-90 05-18-90
6 41 Xxxxxxx X. Xxxxxxxx 06-13-43 500,000 L489999-99 12-16-89
6 39 Xxxxxxxx X. Xxxxxxxx 02-22-45 500,000 L489999-99 12-16-89
4 66 Xxxxx X. Xxxxxxx 06-28-20 250,000 L508384-90 07-08-90
4 00 X. Xxxxxxxxx Xxxxxxx* 00-00-00 250,000 L508384-90 07-08-90
3 63 Xxxxxx Xxxxxx 09-24-24 266,667 L498796-90 07-25-90
3 63 Xxxxxx Xxxxxx 01-27-25 266,667 L498796-90 07-25-90
5 40 Xxxxxxx Xxxxxxxx 02-26-46 601,933 L505047-90 09-25-90
5 35 Xxxxx Xxxxxxxx 04-26-51 601,933 L505047-90 09-25-90
6 63 Xxxx Surrey 03-18-22 333,333 L501287-90 06-05-90
6 60 Xxxxxxx Surrey 06-07-25 333,333 L501287-90 06-05-90
*Mortality rating of 300%.
2. The REINSURED'S retention limit for the Last Survivor plan shall be
the same as under the Agreement.
3. The reinsurance premium for such conversions shall be as shown in the
Premium Schedule, Parts I and II, of the Agreement and shall be determined by
using (a) the duration calculated from the issue date of the original policy and
(b) the insured's age at the issue date of the original policy.
1
4. The reference above to a specific policy is for purposes of
description only; such reference shall not create any relationship between the
policyholder, beneficiary, or insured of that policy and the LINCOLN, and such
reference shall not create any rights in any party other than the REINSURED and
the LINCOLN.
It is expressly understood and agreed that the provisions of this
amendment shall be subject to all the terms and conditions of the Agreement of
which this amendment is a part which do not conflict with the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed in duplicate on the dates shown below.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
Signed at Worcester, MA
By /s/ By /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------- -----------------------------
Title VP & Actuary Title AVP & Actuary
------------------------- -----------------------------
Date July 27, 1991 Date July 22, 1991
-------------------------- -----------------------------
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Signed at Fort Xxxxx, Indiana
By /s/ By /s/
---------------------------- -----------------------------
Vice President Assistant Secretary
Date 8/7/91 Date August 7, 1991
-------------------------- ---------------------------
2
AMENDMENT
to the Risk Premium
Reinsurance Agreement (the "Agreement")
effective May 1, 1989, between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA of Worcester, Massachusetts,
hereinafter referred to as the "REINSURED,"
and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY of Fort Xxxxx, Indiana,
hereinafter referred to as the "LINCOLN."
1. On and after the first day of May, 1989, paragraph F shall be added to
the "REINSURANCE LIMITS" article under the Agreement and shall read as follows:
"F. Provided the requirements in subparagraphs 3 through 6 section A
of this article are met, whenever the REINSURED retains less then its
maximum retention limit for the plan, age and mortality
classification, it may cede and the LINCOLN shall accept automatically
amounts equal to 100% of the amount retained by the REINSURED on the
policy. Such business shall be referred to as "Special Automatic
Reinsurance."
2. The provisions of this amendment shall be subject to all the terms and
conditions of the Agreement which do not conflict with the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed in duplicate on the dates shown below.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
Signed at Worcester, MA
By /s/ By /s/ Xxxxxx X. Xxxxx, Xx.
------------------------------- -------------------------------
Title VP & Actuary Title AVP & Actuary
---------------------------- ----------------------------
Date 1/13/92 Date January 13, 1992
----------------------------- -----------------------------
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Signed at Fort Xxxxx, Indiana
By /s/ By /s/
------------------------------- -------------------------------
Vice President Assistant Secretary
Date 1-22-92 Date January 21, 1992
----------------------------- -----------------------------
AMENDMENT
to the Risk Premium
Reinsurance Agreement (the "Agreement")
effective May 1, 1989, between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA of Worcester, Massachusetts,
hereinafter referred to as the "REINSURED,"
and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY of Fort Xxxxx, Indiana,
hereinafter referred to as the "LINCOLN."
1. On and after the first day of May, 1992, if only one insured under a
Last Survivor policy has satisfied all the conditions for automatic reinsurance
coverage as set forth in paragraph 1 of the "REINSURANCE LIMITS" article of the
Agreement, the REINSURED may reinsure the policy automatically if the insurable
life falls within the appropriate age limits and underwriting classes as
specified in the Limits Schedule of the Agreement for one life uninsurable
submissions.
2. On and after the first day of May, 1992, the REINSURED shall reinsure
the following policies, issued prior to the first day of May, 1992,
automatically as specified in the Limits Schedule of the Agreement for one life
uninsurable submissions.
REINSURED REINSURANCE
POLICY NUMBER INSURED NAME UNINSURABLE ISSUE DATE AMOUNT
------------- ------------ ----------- ---------- -----------
L489886 Xxxxxx Xxxxxxxx Xxxxx Xxxxxxxx 02-04-90 $ 100,000
L496310 Xxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxxx 06-01-90 666,667
L50331200 Xxxxxx Xxxxxx Xxxxx Xxxxxx 07-05-90 333,333
L51488900 Xxxxxx Xxxxx Xxxx Xxxxx 09-30-90 83,333
L51099300 Xxxxxxx Xxxxx Xxxxxxxxx Xxxxx 03-01-91 125,000
L52782500 Xxxxxxx Xxxxxx Xxxxx Xxxxxx 05-01-91 1,350,000
L53213916 Xxxxxxx Xxxxx Xxxxxx Xxxxx 08-22-91 491,667
1
3. On and after the first day of May, 1992, for reinsurance ceded
automatically under the Agreement for one life uninsurable Last Survivor
policies, the sum of the amount of insurance already in force on the insurable
life and the amount applied for currently in all companies shall not exceed the
following amounts.
LIFE INSURANCE
AGES STANDARD-TABLE B TABLES C-F
---- ---------------- ----------
0-15 $ 6,500,000 $ 5,000,000
16-65 10,000,000 7,000,000
66-70 5,000,000 5,000,000
71-75 3,500,000 2,500,000
76-80 2,500,000 2,000,000
4. On and after the first day of May, 1992, for one life uninsurable Last
Survivor policies, the REINSURED may cede and the LINCOLN shall accept
automatically amounts of reinsurance not to exceed those described in the Limits
Schedule, attached hereto.
5. The provisions of this amendment shall be subject to all the terms and
conditions of the Agreement which do not conflict with the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed in duplicate on the dates shown below.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
Signed at Worcester, MA
By /s/ By /s/ Xxxxxx X. Xxxxx, Xx.
------------------------------- -----------------------------
Title VP & Actuary Title AVP & Actuary
---------------------------- ---------------------------
Date July 7, 1992 Date July 7, 1992
---------------------------- ----------------------------
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Signed at Fort Xxxxx, Indiana
By /s/ By /s/
------------------------------- --------------------------------
Vice President Assistant Secretary
Date 7/10/92 Date 7/10/92
----------------------------- -----------------------------
2
LIMITS SCHEDULE
(Effective May 1, 1992)
Maximum Amounts which the REINSURED may cede Automatically
LIFE
Last Survivor Policies Where All Lives are Deemed Insurable
To LINCOLN:
STANDARD RISKS, OVER
SPECIAL CLASSES SPECIAL CLASSES SPECIAL CLASSES SPECIAL CLASS P
A, B, C, & D, AND E, F, & H, AND J, L, & P, AND OR EQUIVALENT
FLAT EXTRAS OF FLAT EXTRAS OF FLAT EXTRAS OF TOTAL EXTRA
AGES $0-$10.00 $10.01-$20.00 $20.01 AND OVER PREMIUM
---- --------- ------------- --------------- -------
0 $ 800,000 $ 400,000 $ 200,000 None
1-17 1,600,000 1,200,000 400,000 None
18-60 2,000,000 1,400,000 800,000 None
61-70 1,400,000 1,000,000 400,000 None
71-75 600,000 400,000 200,000 None
76-80 400,000 200,000 100,000 None
Over 80 None None None None
To All Reinsurers:
STANDARD RISKS, OVER
SPECIAL CLASSES SPECIAL CLASSES SPECIAL CLASSES SPECIAL CLASS P
A, B, C, & D, AND E, F, & H, AND J, L, & P, AND OR EQUIVALENT
FLAT EXTRAS OF FLAT EXTRAS OF FLAT EXTRAS OF TOTAL EXTRA
AGES $0-$10.00 $10.01-$20.00 $20.01 AND OVER PREMIUM
---- --------- ------------- --------------- -------
0 $ 2,400,000 $ 1,200,000 $ 600,000 None
1-17 4,800,000 3,600,000 1,200,000 None
18-60 6,000,000 4,200,000 2,400,000 None
61-70 4,200,000 3,000,000 1,200,000 None
71-75 1,800,000 1,200,000 600,000 None
76-80 1,200,000 600,000 300,000 None
Over 00 Xxxx Xxxx Xxxx Xxxx
0
One Life Uninsurable Last Survivor Policies
To LINCOLN:
AGES STANDARD-TABLE D TABLES E-F
---- ---------------- ----------
0 $ 800,000 $ 400,000
1-17 1,600,000 1,200,000
18-60 2,000,000 1,400,000
61-70 1,400,000 1,000,000
71-75 600,000 400,000
76-80 400,000 200,000
To All Reinsurers:
AGES STANDARD-TABLE D TABLES E-F
---- ---------------- ----------
0 $ 2,400,000 $ 1,200,000
1-17 4,800,000 3,600,000
18-60 6,000,000 4,200,000
61-70 4,200,000 3,000,000
71-75 1,800,000 1,200,000
76-80 1,200,000 600,000
4
AMENDMENT
to the Risk Premium
Reinsurance Agreement (the "Agreement")
effective May 1, 1989, between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA of Worcester, Massachusetts,
hereinafter referred to as the "REINSURED,"
and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY of Fort Xxxxx, Indiana,
hereinafter referred to as the "LINCOLN."
1. It is hereby agreed that on and after the conversion effective dates
as specified below, conversions of the following policies, issued by the
REINSURED and reinsured with the LINCOLN, to the REINSURED'S Last Survivor plan
shall be reinsured under the Agreement.
DURATION CONVERSION
AT AGE AT DATE OF REINSURANCE REINSURED'S EFFECTIVE
CONVERSION ISSUE INSURED'S NAME BIRTH AMOUNT POLICY NUMBER DATE
---------- ----- -------------- ----- ------ ------------- ----
3 44 Xxxxxx, Xxxxxxx 04-27-44 $ 166,667 L524967-90 08-01-91
3 45 Xxxxxx, Xxxxxxxxx 09-02-43 166,667 L524967-90 08-01-91
6 48 Xxxxxxxxx, Xxxxx 12-07-37 469,482 L524324-90 06-25-91
6 00 Xxxxxxxxx, Xxxxx 10-19-36 469,482 L524324-90 06-25-91
3 60 Xxxxxxx Xxxxx D. 09-21-28 433,333 L490088-75 10-27-91
3 58 Xxxxxxx, Xxxxxx 08-18-30 433,333 L490088-75 10-27-91
4 00 Xxxxxxxxx, Xxxxxxx 07-06-48 333,333 L521582-90 02-19-91
4 39 Xxxxxxxxx, Xxxxxx X. 12-12-47 333,333 L521582-90 02-19-91
7 61 Xxxxx, Xxxxxx 09-13-23 997,767 L522433-90 07-28-91
7 57 Xxxxx, Xxxxx 11-11-27 997,767 L522433-90 07-28-91
7 60 Xxxxxxx, Xxxxxxx 11-29-23 1,500,000 L524947-90 04-25-91
7 00 Xxxxxxx, Xxxxxxx 12-22-24 1,500,000 L524947-90 04-25-91
2. The reinsurance premium for such conversions shall be as shown in the
Premium Schedule, Parts I and II, of the Agreement and shall be determined by
using (a) the duration calculated from the issue date of the original policy and
(b) the insured's age at the issue date of the original policy.
3. The reference above to a specific policy is for purposes of
description only; such reference shall not create any relationship between the
policyholder, beneficiary, or insured of that policy and the LINCOLN, and such
reference shall not create any rights in any party other than the REINSURED and
the LINCOLN.
1
4. The provisions of this amendment shall be subject to all the terms and
conditions of this Agreement which do not conflict with the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed in duplicate on the dates shown below.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
Signed at Worcester, MA
By /s/ By /s/ Xxxxxx X. Xxxxx, Xx.
------------------------------- ------------------------
Title VP & Actuary Title AVP & Actuary
---------------------------- ---------------------
Date August 5, 1992 Date August 5, 1992
---------------------------- ---------------------
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Signed at Fort Xxxxx, Indiana
By /s/ By /s/
------------------------------- ---------------------------
Vice President Assistant Secretary
Date 8/14/92 Date 8/12/92
----------------------------- ----------------------
2
AMENDMENT
to the Risk Premium
Reinsurance Agreement (the "Agreement")
effective May 1, 1989, between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA of Worcester, Massachusetts,
hereinafter referred to as the "REINSURED,"
and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY of Fort Xxxxx, Indiana,
hereinafter referred to as the "LINCOLN."
1. It is hereby agreed that on and after the conversion effective dates
as specified below, conversions of the following policies, issued by the
REINSURED and reinsured with the LINCOLN, to the REINSURED'S Last Survivor plan
shall be reinsured under the Agreement.
DURATION CONVERSION
AT AGE AT DATE OF REINSURANCE REINSURED'S EFFECTIVE
CONVERSION ISSUE INSURED'S NAME BIRTH AMOUNT POLICY NUMBER DATE
---------- ----- -------------- ----- ------ ------------- -----------
4 43 Xxxxxxxxxx, Xxxxxxxxx 00-00-00 $ 166,667 XIH00207 11-22-92
4 42 Xxxxxxxxxx, Xxxxx X. 04-24-48 166,667 XIH00207 11-22-92
2 40 Xxxxxxxx, Xxxxxxxxxx X. 09-14-50 1,166,667 XIH00203 12-29-91
2 39 Xxxxxxxx, Xxxxxxx 07-05-51 1,166,667 XIH00203 12-29-91
6 41 X'Xxxxx, Xxxxxxx X. 05-17-45 995,000 XIH00202 11-16-91
6 29 X'Xxxxx, Xxxxx 03-04-58 995,000 XIH00202 11-16-91
2. The reinsurance premium for such conversions shall be as shown in the
Premium Schedule, Parts I and II, of the Agreement and shall be determined by
using (a) the duration calculated from the issue date of the original policy and
(b) the insured's age at the issue date of the original policy.
3. The reference above to a specific policy is for purposes of
description only; such reference shall not create any relationship between the
policyholder, beneficiary, or insured of that policy and the LINCOLN, and such
reference shall not create any rights in any party other than the REINSURED and
the LINCOLN.
4. On and after the first day of January, 1993, paragraph H of the
"REINSURANCE COVERAGE" article of the Agreement shall be replaced with the
following:
"H. Life reinsurance under any one cession shall be terminated at the
end of the year preceding the first year for which the amount at
risk on the cession is less than $25,000. The amount of
reinsurance under this Agreement shall be maintained in force
without reduction so long as the amount of insurance carried by
the REINSURED on either life insured under the Last Survivor
policy remains in force without reduction, except as provided in
the "PAYMENT OF REINSURANCE PREMIUMS" and "INCREASE IN LIMIT OF
RETENTION" articles."
1
5. For reinsurance ceded automatically on and after the first day of
January, 1993, under the Agreement, the sum of the amount of insurance already
in force on the life and the amount applied for currently, in all companies,
shall not exceed the following amounts.
LAST SURVIVOR POLICIES WHERE ALL LIVES ARE DEEMED INSURABLE
AGES LIFE INSURANCE
---- --------------
0 $ 6,500,000
1-70 10,000,000
71-80 3,500,000
ONE LIFE UNINSURABLE LAST SURVIVOR POLICIES
LIFE INSURANCE
--------------
AGES STANDARD-TABLE B TABLES C-F
---- ---------------- -----------
0 $ 6,500,000 $ 5,000,000
1-70 10,000,000 7,000,000
71-80 3,500,000 2,500,000
6. On and after the first day of January, 1993, reinsurance under the
agreement of any policy issued on and after the first day of May, 1989, and for
which the net amount of risk on any one life is less than $25,001 shall
terminate. In consideration for such termination, the REINSURED shall pay to the
LINCOLN a termination charge equal to the 1993 reinsurance premium.
7. On and after the first day of January, 1993, the retention limit of
the REINSURED shall be that shown in the revised Schedule A, attached hereto.
This retention shall apply to reinsurance ceded after the effective date hereof
and to existing reinsurance ceded before the effective date hereof in accordance
with the "INCREASE IN LIMIT OF RETENTION" article of the Agreement of which this
amendment is a part.
8. On and after the first day of January, 1993, the REINSURED may cede
and the LINCOLN shall accept automatically amounts of reinsurance not to exceed
those described in the Limits Schedule, attached hereto.
9. Except as provided in the Conditional Receipt Reinsurance article, the
LINCOLN shall have no liability under facultative applications for reinsurance
unless the REINSURED has accepted the LINCOLN'S offer to reinsure.
10. ON and after the first day of January, 1993, the "AGREEMENT" article
of the Agreement shall be replaced with the "MISCELLANEOUS" article and shall
read as follows:
"XII. MISCELLANEOUS
A. This Agreement represents the entire agreement between the REINSURED
and the LINCOLN and supercedes, with respect to its subject matter,
any prior oral or written agreements between the parties.
2
B. No modification or waiver of any provision of this Agreement shall
be effective unless set forth in a written amendment to this
Agreement which is executed by both parties. A Waiver shall
constitute a waiver only with respect to the particular
circumstances for which it is given and not a waiver of any future
circumstances."
11. The provisions of this amendment shall be subject to all the terms and
conditions of the Agreement which do not conflict with the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed in duplicate on the dates shown below.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
Signed at Worcester, MA
By /s/ Xxxxxx X. Xxxxx, Xx. By /s/
------------------------------ ------------------------------
Title AVP & Actuary Title VP & Actuary
--------------------------- ---------------------------
Date May 24,1993 Date (illegible)
---------------------------- ----------------------------
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Signed at Fort Xxxxx, Indiana
By /s/ By /s/
------------------------------ ---------------------------------
Second Vice President Assistant Secretary
Date 6/2/93 Date 6/2/93
---------------------------- -------------------------------
3
RETENTION SCHEDULE
(Effective January 1, 1993)
Retention Limits of the REINSURED
The REINSURED'S retention shall equal the lowest amount which could be retained
by the REINSURED taking into account amounts previously issued and retained on
the healthier* of the lives insured under the Last Survivor policy.
LIFE
----
STANDARD RISKS,
SPECIAL CLASSES SPECIAL CLASSES
A THROUGH H, AND J, L, & P, AND
FLAT EXTRAS OF FLAT EXTRAS OF
AGES $0 - $20.00 $20.01 AND OVER
---- ----------- ---------------
0 $ 500,000 $ 250,000
1-60 2,000,000 1,000,000
61-70 1,000,000 500,000
71-80 500,000 250,000
Notes: (1) The above maximum limits are also the maximums on any one life for
all plans and riders combined.
(2) The minimum size reinsurance case shall be $50,001.
AVIATION
Any situation involving aviation shall use a $500,000 retention.
*(1) If two insureds have the same underwriting class, the retention shall
be the lowest amount which could be retained by the REINSURED.
(2) If two insureds have different underwriting classes, the retention
shall be the amount for the better underwriting class, regardless of
age.
4
LIMITS SCHEDULE
(Effective January 1, 1993)
Maximum Amounts which the REINSURED may cede Automatically
LIFE
Last Survivor Policies Where All Lives are Deemed Insurable
To LINCOLN:
STANDARD RISKS OVER
SPECIAL CLASSES SPECIAL CLASSES SPECIAL CLASS P
A-H, AND J, L, & P, AND OR EQUIVALENT
FLAT EXTRAS OF FLAT EXTRAS OF TOTAL EXTRA
AGES $0-$20.00 $20.02 AND OVER PREMIUM
---- --------- --------------- -------
0 $ 500,000 $ 250,000 None
1-60 2,000,000 1,000,000 None
61-70 1,000,000 500,000 None
71-80 500,000 250,000 None
Over 80 None None None
To All Reinsurers:
STANDARD RISKS OVER
SPECIAL CLASSES SPECIAL CLASSES SPECIAL CLASS P
A-H, AND J, L, & P, AND OR EQUIVALENT
FLAT EXTRAS OF FLAT EXTRAS OF TOTAL EXTRA
AGES $0-$20.00 $20.02 AND OVER PREMIUM
---- ----------- --------------- -------
0 $ 1,500,000 $ 750,000 None
1-60 6,000,000 3,000,000 None
61-70 3,000,000 1,500,000 None
71-80 1,500,000 750,000 None
Over 00 Xxxx Xxxx Xxxx
0
One Life Uninsurable Last Survivor Policies
To LINCOLN:
AGES STANDARD-TABLE D TABLES E-F
----- ---------------- -----------
0 $ 500,000 $ 250,000
1-60 2,000,000 1,000,000
61-70 1,000,000 500,000
71-80 500,000 250,000
Over 80 None None
To All Reinsurers:
AGES STANDARD-TABLE D TABLES E-F
----- ---------------- -----------
0 $ 1,500,000 $ 750,000
1-60 6,000,000 3,000,000
61-70 3,000,000 1,500,000
71-80 1,500,000 750,000
Over 80 None None
6
AMENDMENT
to each Reinsurance Agreement between STATE MUTUAL LIFE ASSURANCE COMPANY OF
AMERICA of Worcester, Massachusetts ("REINSURED"), and THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY of Fort Xxxxx, Indiana ("LINCOLN"), including but not limited
to those agreements listed on the attachment ("Reinsurance Agreements"), but
excluding any agreements which already include an election statement provided
for in Section 1,848-2(g)(8)(iii) of the Income Tax Regulations.
1. The LINCOLN and the REINSURED each represents and warrants that it is
subject to taxation under Subchapter "L" of the Internal Revenue Code of 1986
(the "Code").
2. With respect to each of the Reinsurance Agreements (referred to
separately as "Agreement"), the LINCOLN and the REINSURED agree to the following
pursuant to Section 1.848-2(g)(8) of the Income Tax Regulations issued December
1992, whereby:
(a) Each party shall attach a schedule to its federal income tax
return which identifies the relevant Reinsurance Agreements for
which the joint election under the Regulation has been made;
(b) The party with net positive consideration, as defined in the
Regulation promulgated under Code Section 848, for such Agreement
for each taxable year, shall capitalize specified policy
acquisition expenses with respect to such Agreement without regard
to the general deductions limitation of Section 848(c)(1);
(c) Each party agrees to exchange information pertaining to the amount
of net consideration under such Agreement each year to ensure
consistency; and
(d) If such Agreement was entered into prior to November 15, 1991,
this election shall be effective for 1992 and for all subsequent
years that such Agreement remains in effect. If such Agreement was
entered into after November 14, 1991, this election shall be
effective for the year that the Agreement was entered into and for
all subsequent years that such Agreement remains in effect.
1
3. The provisions of this amendment shall be subject to all the terms and
conditions of the Agreement which do not conflict with the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed in duplicate on the dates shown below.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
Signed at Worcester, MA
By /s/ Xxxxxx X. Xxxxx, Xx. By /s/
------------------------------ ---------------------------------
Title AVP & Actuary Title VP & Actuary
--------------------------- ------------------------------
Date July 20, 1933 Date July 20, 1993
---------------------------- -------------------------------
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Signed at Fort Xxxxx, Indiana
By /s/ By /s/
------------------------------ ----------------------------------
Vice President Assistant Secretary
Date 5/24/93 Date 5/24/93
---------------------------- --------------------------------
2
Summary of Agreements for Business Accepted from
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA - MA
Common Company Number: 00338
By
LINCOLN NATIONAL LIFE INSURANCE COMPANY
-----------------------------------------------------------------------------------
AGREEMENT EFFECTIVE AGREEMENT TYPE
NUMBER DATE STATUS DESCRIPTION
-----------------------------------------------------------------------------------
001 01/02/1942 CLOSE COX
002 01/01/1946 CLOSE COX
006 07/01/1977 CLOSE RPR
007 04/01/1978 CLOSE COX
009 01/01/1983 CLOSE RPR
011 08/01/1983 EFF RPR
014 01/01/1987 EFF RPR
015 01/01/1987 EFF RPR
017 05/01/1989 EFF RPR
-----------------------------------------------------------------------------------
STATUS DESCRIPTIONS:
EFF - REINSURNACE AGREEMENT SIGNED, RETURNED AND IN EFFECT
CLOSE - REINSURANCE AGREEMENT CLOSED, BUT WITH OUTSTANDING
BUSINESS STILL COVERED BY THAT AGREEMENT
PNDG - REINSURANCE AGREEMENT PROPOSED OR PENDING
AMENDMENT
to the Risk Premium Reinsurance Agreement (the "Agreement")
effective May 1, 1989, between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA of Worcester, Massachusetts,
hereinafter referred to as the "REINSURED,"
and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY of Fort Xxxxx, Indiana,
hereinafter referred to as the "LINCOLN."
1. On and after the first day of May, 1989, paragraph A of the
"COMPUTATION OF REINSURANCE PREMIUMS" article of the Agreement shall be replace
with the following:
"A. The premium to be paid to the LINCOLN for Life reinsurance shall be
based on the joint equal age of the insureds under the policy and
shall be the sum of:
(1) the appropriate premium rate from the schedule of premiums in the
Premium Schedule applied to the appropriate amount at risk
reinsured; plus
(2) the appropriate policy fee as shown in the Premium Schedule; plus
(3) any flat extra premium charged the insured on the face amount
initially reinsured less total allowances in the amount of 100%
of any first year permanent flat extra premium (one payable for
more than6 years), 20% of any first year temporary flat extra
premium, and 20% of any renewal flat extra premium.
The joint equal age shall be calculated by using the methodology set
forth in Exhibit A."
2. The provisions of this amendment shall be subject to all the terms and
conditions of the Agreement which do not conflict with the terms hereof.
1
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed in duplicate on the dates shown below.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
Signed at Worcester, MA
By /s/ Xxxxxx X. Xxxxx, Xx. By /s/
------------------------------ ------------------------------
Title AVP & Actuary Title VP & Actuary
--------------------------- ---------------------------
Date November 17, 1993 Date November 17, 1993
---------------------------- ----------------------------
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Signed at Fort Xxxxx, Indiana
By /s/ By /s/
------------------------------ ------------------------------
Second Vice President Assistant Secretary
Date (illegible) Date 11-24-93
---------------------------- ----------------------------
2
AMENDMENT
to the Risk Premium Reinsurance Agreement (the "Agreement")
effective May 1, 1989, between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA of Worcester, Massachusetts
hereinafter referred to as the "REINSURED,"
and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY of Fort Xxxxx, Indiana,
hereinafter referred to as the "LINCOLN."
1. For Second-to-Die policies issued on and after the first day of
January, 1994, no policy fee shall be paid to LINCOLN.
2. The provisions of this amendment shall be subject to all the terms and
conditions of the Agreement which do not conflict with the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed in duplicate on the dates shown below.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
Signed at Worcester, MA
By /s/ Xxxxxx X. Xxxxx, Xx. By /s/
------------------------------ ------------------------------
Title AVP & Actuary Title VP & Actuary
--------------------------- ---------------------------
Date January 11, 1994 Date January 11, 1994
---------------------------- ----------------------------
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Signed at Fort Xxxxx, Indiana
By /s/ By /s/
------------------------------ ------------------------------
Second Vice President Assistant Secretary
Date (Illegible) Date 1-25-94
---------------------------- ----------------------------
AMENDMENT
to the Risk Premium Reinsurance Agreement (the "Agreement")
effective May 1, 1989, between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA of Worcester, Massachusetts
hereinafter referred to as the "REINSURED,"
and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY of Fort Xxxxx, Indiana,
hereinafter referred to as the "LINCOLN."
1. It is hereby agreed that on and after the third day of December, 1993,
conversions of the following policy, issued by the REINSURED and reinsured with
the LINCOLN, to the REINSURED'S Last Survivor plan shall be reinsured under the
Agreement.
DURATION AGE REINSURED'S
AT AT DATE OF REINSURANCE POLICY
INSURED'S NAME CONVERSION ISSUE BIRTH AMOUNT NUMBER
-------------- ---------- ----- ----- ----------- -----------
VanTvyl, Xxxxxxx X. 2 61 06-04-31 $ 2,400,000 XIH50022
2. The reference above to a specific policy is for purposes of
description only; such reference shall not create any relationship between the
policyholder, beneficiary, or insured of that policy and the LINCOLN, and such
reference shall not create any rights in any party other than the REINSURED and
the LINCOLN.
3. The provisions of this amendment shall be subject to all the terms and
conditions of the Agreement which do not conflict with the terms hereof.
1
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed in duplicate on the dates shown below.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
Signed at Worcester, MA
By /s/ Xxxxxx X. Xxxxx, Xx. By /s/
------------------------------ ------------------------------
Title AVP & Actuary Title VP & Actuary
--------------------------- ---------------------------
Date March 1, 1994 Date March 1, 1994
---------------------------- ----------------------------
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Signed at Fort Xxxxx, Indiana
By /s/ By /s/
------------------------------ ------------------------------
Second Vice President Assistant Secretary
Date 3/11/94 Date 3-10-94
---------------------------- ----------------------------
2
AMENDMENT
to the Risk Premium Reinsurance Agreement (the "Agreement")
effective May 1, 1989, between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA of Worcester, Massachusetts
hereinafter referred to as the "REINSURED,"
and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY of Fort Xxxxx, Indiana,
hereinafter referred to as the "LINCOLN."
1. The plans reinsured under the Agreement on and after the first day of
March, 1994, shall be those specified in the Subject Reinsurance Schedule,
attached hereto.
2. The premium rates as described in the Premium Schedule, Parts I and
II, of the Agreement shall apply to reinsurance of the REINSURED'S Variable
Second-to-Die (Variable Inheiritage) (Form 1026-94) plan ceded under the
Agreement on and after the first day of March, 1994.
3. The annual reinsurance premium for the REINSURED'S Second-to-Die Rider
(Form 1079-94) ceded under the Agreement on and after the first day of March,
1994, shall be based on an average issue age of the insureds under the policy
and the appropriate rate charged the insured per thousand of the net amount at
risk. The premium shall be calculated using the factors below.
ANNUAL RATE
AVERAGE ISSUE AGE PER $1,000
----------------- -----------
5-7 $ .84
8-46 .96
47-54 1.08
55-59 1.20
60-63 1.32
64-85 1.44
4. The provisions of this amendment shall be subject to all the terms and
conditions of the Agreement which do not conflict with the terms hereof.
1
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed in duplicate on the dates shown below.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
Signed at Worcester, MA
By /s/ Xxxxxx X. Xxxxx, Xx. By /s/
------------------------------ ------------------------------
Title AVP & Actuary Title VP & Actuary
--------------------------- ---------------------------
Date September 12, 1994 Date 9/12/94
---------------------------- ----------------------------
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Signed at Fort Xxxxx, Indiana
By /s/ By /s/
------------------------------ ------------------------------
Second Vice President Assistant Secretary
Date 9/19/94 Date 9-16-94
---------------------------- ----------------------------
2
SUBJECT REINSURANCE SCHEDULE
Insurance Subject to Reinsurance under this Agreement
The REINSURED'S entire excess of its issues of the following plans bearing
register dates in the range shown
below to insureds having surnames beginning with the letters of the alphabet
shown below.
A. Automatic Reinsurance
Thirty-three and a third percent of the reinsurance the REINSURED cedes
automatically of the insurance specified below shall be ceded under this
agreement.
DATES LETTERS
PLAN FROM THROUGH FROM THROUGH
---- ---- ------- ---- -------
Inheiritage Last Survivor
(Form 1020-89) 05-01-89 -- A Z
(Form 1020.1-94 04-01-94 -- A Z
Last Survivor
Exchange Option Rider 05-01-89 -- A Z
Variable Second-to-Die
(Variable Inheiritage)
(Form 1026-94) 03-01-94 -- A Z
(Form 1026.1-94 04-01-94 -- A Z
Second-to-Die Rider
(Form 1079-94) 03-01-94 -- A Z
B. Facultative Reinsurance
One hundred percent of the reinsurance the REINSURED cedes facultatively of
the insurance specified above to insureds having surnames beginning with
the letters A through Z shall be cedes under this agreement provided the
REINSURED has accepted the LINCOLN'S offer to reinsure.
3
AMENDMENT
to the Risk Premium Reinsurance Agreement (the "Agreement")
effective May 1, 1989, between
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA of Worcester, Massachusetts
hereinafter referred to as the "REINSURED,"
and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY of Fort Xxxxx, Indiana,
hereinafter referred to as the "LINCOLN."
1. Effective the first day of July, 1995, for retention determination
purposes, in conjunction with any subsequent new issues and any exercise of
recapture privileges pursuant to the "INCREASE IN LIMT OF RETENTION" article
under the Agreement, all term plans issued by the REINSURED shall not be
considered.
2. The provisions of this amendment shall be subject to al the terms and
conditions of the Agreement which do not conflict with the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed in duplicate on the dates shown below.
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
Signed at Worcester, MA
By /s/ Xxxxxx X. Xxxxx, Xx. By /s/
-------------------------------- ----------------------------
Title AVP & Actuary Title VP & Actuary
----------------------------- -------------------------
Date September 25, 1995 Date 9/25/95
------------------------------ --------------------------
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Signed at Fort Xxxxx, Indiana
By /s/ By /s/
-------------------------------- ----------------------------
Second Vice President Assistant Secretary
Date October 3, 1995 Date 10-2-95
------------------------------ --------------------------
NOTICE OF CHANGE
to the Reinsurance Agreements (the "Agreement") listed in the attached Exhibit I
between STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA of Worcester,
Massachusetts, ("REINSURED" or "REINSURER"), hereinafter referred to
collectively as the REINSURED and THE LINCOLN NATIONAL LIFE INSURANCE COMPANY of
Fort Xxxxx, Indiana, ("LINCOLN" or "REINSURED"), hereinafter referred to
collectively as the LINCOLN.
WHEREAS, the REINSURED has notified LINCOLN that effective the eleventh day
of October, 1995, it changed its corporate name.
NOW THEREFORE, the parties acknowledge the following:
1. Effective the eleventh day of October, 1995, the REINSURED under the
Agreement shall refer to First Allmerica Financial Life Insurance Company of
Worcester, Massachusetts.
2. The provisions of this Notice of Change shall be subject to all the
terms and conditions of the Agreement which do not conflict with the terms
hereof.
A copy of this Notice of Change was sent to the REINSURED.
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Signed at Fort Xxxxx, Indiana
By /s/
------------------------------------
Second Vice President
Date FEBRUARY 29, 1996
----------------------------------
By /s/
------------------------------------
Assistant Secretary
Date 2/29/96
----------------------------------
1
EXHIBIT I
(Effective October 11, 1995)
AGREEMENT
AGREEMENT NUMBER/ EFFECTIVE
REVISION NUMBER TYPE OF AGREEMENT DATE
---------------- ----------------- ---------
5/14 Retrocession 03-01-77
11/26 Risk Premium Reinsurance 08-01-83
13/21 Retrocession 01-01-86
14/16 Risk Premium Reinsurance 01-01-87
15/13 Risk Premium Reinsurance 01-01-87
17/11 Risk Premium Reinsurance 05-01-89
18/9 Retrocession 01-01-91
19/3 Individual Health 04-01-94
2
AMENDMENT
to the Risk Premium Reinsurance Agreement (the "Agreement")
effective May 1, 1989, between
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
of Worcester, Massachusetts
hereinafter referred to as the "REINSURED,"
and
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
of
Fort Xxxxx, Indiana,
hereinafter referred to as the "LINCOLN."
1. The REINSURED'S plans to be reinsured under the Agreement on and after
the first day of February, 1997, shall be those specified in the Subject
Reinsurance Schedule, attached hereto.
2. On and after the first day of February, 1997, for reinsurance of the
REINSURED'S Variable Second-to-Die (Form 1030-96) plan, paragraphs C and E of
the "REINSURANCE COVERAGE" article of the Agreement shall be replaced with the
following:
"C. Life reinsurance under this Agreement shall be term insurance for the
amount at risk on the portion of the insurance of the original
insurance which is reinsured with the LINCOLN. The amount of
reinsurance shall be the death benefit provided by the portion of the
original insurance which is reinsured with the LINCOLN. The amount at
risk on such a policy shall be the death benefit of the policy less
the single premium paid by the insured. This amount at risk shall be
determined at the beginning of each policy year and shall be amended
during that year only if there is a change in the amount of
reinsurance on the life arising from a change in the specified amount
under the policy reinsured hereunder. For the second and subsequent
years, the REINSURED shall notify the LINCOLN of the amount at risk
for that policy year at least fifteen days after the beginning of that
policy year. The portion reinsured shall be the amount at risk on the
policy less the REINSURED'S retention on the policy. The basis for
determining the amount at risk may be changed for new reinsurance by
agreement between the REINSURED and the LINCOLN."
"E. Life reinsurance in amounts less than the amount at risk upon $50,001
of insurance shall not be placed in effect under this Agreement."
1
SUBJECT REINSURANCE SCHEDULE
Insurance Subject to Reinsurance under this Agreement
The REINSURED'S entire excess of its issues of the following plans bearing
register dates in the range shown below to insureds having surnames beginning
with the letters of the alphabet shown below.
A. Automatics Reinsurance
Thirty-three and a third percent of the reinsurance the REINSURED cedes
automatically of the insurance specified below shall be ceded under this
Agreement.
DATES LETTERS
PLAN FROM THROUGH FROM THROUGH
---- ---- ------- ---- -------
Inheiritage Last Survivor
(Form 1020-89) 05-01-89 -- A Z
(Form 1020.1-94 04-01-94 -- A Z
Last Survivor
Exchange Option Rider 05-01-89 -- A Z
Variable Second-to-Die
(Variable Inheiritage)
(Form 1026-94) 03-01-94 -- A Z
(Form 1026.1-94 04-01-94 -- A Z
Variable Second-to-Die
Rider (Form 1079-94) 03-01-94 -- A Z
Variable Second-to-Die
(Form 1030-96) 02-01-97 -- A Z
2
