REINSURANCE AGREEMENT
THIS AUTOMATIC REINSURANCE AGREEMENT
Effective July 1, 2007
(hereinafter referred to as the "Agreement")
is made between
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
an Indiana company
(hereinafter referred to as the "Company")
and
SWISS RE LIFE & HEALTH AMERICA INC.
a Connecticut insurance company
(hereinafter referred to as the "Reinsurer")
Table of Contents
ARTICLE 1
1.1 Definitions
1.2 General
1.3 Scope of Coverage
1.4 Other Reinsurance
ARTICLE 2
2.1 Automatic Reinsurance
ARTICLE 3
3.1 Automatic Submissions
ARTICLE 4
4.1 Commencement of Automatic Reinsurance Liability
ARTICLE 5
5.1 Premium Accounting
5.2 Currency
5.3 Non-Payment of Premiums
ARTICLE 6
6.1 Right of Offset
ARTICLE 7
7.1 Exchanges and Replacements
ARTICLE 8
8.1 Recapture
ARTICLE 9
9.1 Claims Notice and Consultation
9.2 Claims Payment
9.3 Extra Contractual Obligations
9.4 Misstatement of Age or Sex
ARTICLE 10
10.1 Errors and Omissions in Administration of Reinsurance
10.2 Dispute Resolution
10.3 Arbitration
ARTICLE 11
11.1 Insolvency
ARTICLE 12
12.1 DAC Tax Election
12.2 Tax Character of Riders
12.3 Taxes and Expenses
ARTICLE 13
13.1 Entire Agreement
13.2 Inspection of Records
13.3 Utmost Good Faith
13.4 Confidentiality
ARTICLE 14
14.1 Representations and Warranties
ARTICLE 15
15.1 Business Continuity
15.2 Terminal Cash Settlement
15.3 Indemnification
ARTICLE 16
16.1 Duration of Agreement
16.2 Severability
16.3 Construction
16.4 Credit for Reinsurance
16.5 Non-Waiver; Retrocession
16.6 Survival; Governing Law
16.7 Counterparts
EXECUTION
EXHIBITS
A Business Covered
A-1 Business Guidelines
A-2 Investment Funds
C General Terms
C-1 Rates and Terms for Specific Plans
F Reinsurance Reports
Article 1
1.1 DEFINITIONS
"ACCOUNTING PERIOD" means each calendar month commencing on the 1st day of
each month.
"AFFILIATE" means any person or entity directly or indirectly controlling,
controlled by or under common control with, such party.
"EFFECTIVE DATE" means the effective date of this Agreement as specified in
Exhibit A.
"EXTRA CONTRACTUAL OBLIGATIONS" means any obligations or expenses other
than the express contractual Rider obligations incurred by the Company,
including but not limited to, punitive damages, bad faith damages,
exemplary damages, compensatory damages, other damages, fines, penalties or
attorney's fees, which may arise from the acts, errors or omissions of the
Company or its affiliates, directors, officers, employees, agents or other
representatives.
"MATERIAL"/"MATERIALLY" means facts that a prudent reinsurer or insurer
would consider as reasonably likely to affect the affected party's
profitability under this treaty by more than an insignificant amount.
"RIDER"/"RIDERS" means the directly issued variable annuity contract riders
listed in Exhibit A. Exhibit A may be amended from time-to-time by the
parties to add new riders. The Company will give the Reinsurer ninety (90)
calendar days advance written notice of new riders, which it would like to
have reinsured. Upon receiving all reasonably necessary information
required by the Reinsurer, the Reinsurer will notify the Company in writing
of its confirmation to cover the new riders under this Agreement within
thirty (30) calendar days. The specific terms of such coverage will be
documented in an amendment to this Agreement.
"PROSPECTUS"/"PROSPECTUSES" means the variable annuity prospectuses
specified in Exhibit A-1.
1.2 GENERAL
This Agreement is an indemnity reinsurance agreement solely between the
Company and the Reinsurer. The acceptance of risks under this Agreement by
the Reinsurer will create no right or legal relation between the Reinsurer
and the insured, owner, beneficiary, or assignee of any Rider of the
Company. This Agreement will be binding upon the parties hereto and their
respective successors and assigns including any rehabilitator, conservator,
liquidator or statutory successor of either party.
1.3 SCOPE OF COVERAGE
On and after the Effective Date, the Company will cede and the Reinsurer
will accept its share of the Riders on a coinsurance basis in accordance
with the terms of this Agreement. The Reinsurer will not be liable unless
the Rider is issued and delivered in a jurisdiction in which the Company is
properly licensed.
The Company will retain Rider benefits for its own account as specified in
Exhibit A to align the interests of the parties to this Agreement.
1.4 OTHER REINSURANCE
Company represents and warrants that there are no other existing
reinsurance arrangements, other than as specified below, affecting the
Riders as of the Effective Date. This Agreement has entered into without
consideration of other reinsurance on the Riders or any base coverage to
which the Rider may be attached. The Reinsurer shall have no responsibility
or obligation with respect to other reinsurance: (i) whether or not
collected or collectible by the Company; or (ii) whether or not maintained
in force or continued by the Company. The Company will notify the Reinsurer
in writing of any other reinsurance arrangements prior to their
implementation.
The Company currently reinsures a 100% first dollar quota share of the
Riders with its affiliate Lincoln National Reinsurance Company (Barbados)
Limited ("Lincoln Barbados"). As a material inducement to this Agreement,
the Company will:
1) recapture 50% first dollar quota share for the Riders with base
contracts issued on or after January 1, 2007 through the Effective
Date from Lincoln Barbados, and
2) change the quota share percentage from 100% first dollar quota share
to 50% first dollar quota share for the Riders with base contracts
issued on or after the Effective Date and cede the recaptured portion
to the Reinsurer pursuant to the terms of this Agreement. The
recapture and cession to the Reinsurer will be completed by September
30, 2007. Failing such, a Terminal Cash Settlement will be made
according to the terms specified in Article 15.2 with respect to the
Riders that were to be recaptured from Lincoln Barbados as if they had
been reinsured under this Agreement. The Company and Reinsurer will
make the payments required under the terms of the Agreement as if such
Riders were reinsured as of the Effective Date at the next Accounting
Period.
Article 2
2.1 AUTOMATIC REINSURANCE
This Agreement covers Riders that:
a) Are specified in Exhibit A.
b) Are in compliance with all of the other terms and provisions of this
Agreement.
c) Are on the Rider forms, applications and subject to the Prospectuses
specified in Exhibit A-1. The Company may not Materially modify the Rider
forms, or provisions in either the applications or Prospectuses that
specifically affect the Riders without the Reinsurer's written consent. The
Company may make changes to the application or Prospectuses that are not
Material provided that the Reinsurer is notified of such changes within
ninety (90) days.
d) Are invested in the Investment Portfolios and Asset Allocation Models as
more specifically defined in Exhibit A-2. The Company may not add, modify
or substitute the Investment Portfolios, the investment strategy of such
funds, the portfolio managers, the advisory fees, or the Asset Model
Allocations without the Reinsurer's written consent; provided, however,
that the Reinsurer may not unreasonably withhold its consent, and if the
Reinsurer has neither consented nor objected in writing within thirty (30)
calendar days, then the addition, substitution, or modification will be
deemed approved by the Reinsurer. Any modifications made without the
Reinsurer's consent, will be treated as a Material change for purposes of
Article 15.1 of this Agreement. The Company will ensure that investment
performance is measured relative to the investment strategy specified in
Exhibit A-2. The Company shall notify the Reinsurer as soon as possible if
the investment objective or benchmarks are changed for any of the
Investment Portfolios. At the Reinsurer's request, if a fund is deviating
significantly from its investment strategy, the Company agrees to use its
best efforts to cause the fund manager to adhere to the investment
strategy.
e) Are within the "per life" dollar limit specified in the Rider and
Prospectus.
Article 3
3.1 AUTOMATIC SUBMISSIONS
The Company will report Riders ceded to the Reinsurer according to the
terms specified in Exhibit F.
Article 4
4.1 COMMENCEMENT OF AUTOMATIC REINSURANCE LIABILITY
The Reinsurer's liability for any Rider accepted automatically will begin
simultaneously with the Company's contractual liability for that Rider or
the Effective Date of this Agreement, if later.
Article 5
5.1 PREMIUM ACCOUNTING
The Company is responsible for reinsurance administration. The Company will
pay the Reinsurer premiums in accordance with the terms specified in
Exhibit C-1.
The method and requirements for reporting and remitting premiums are
specified in Exhibit F. It is understood and agreed that the accuracy of
the information and strict adherence to the provisions of this Article is
required in order for the Reinsurer to perform its risk management duties
adequately and to publish accurate financial results.
Interest on overdue premium will be calculated according to the terms
specified in Exhibit C.
5.2 CURRENCY
All payments due under this Agreement will be made in U.S. Dollars.
5.3 NON-PAYMENT OF PREMIUMS
The payment of reinsurance premiums is a condition to the liability of the
Reinsurer for reinsurance provided by this Agreement. If reinsurance
premiums are not paid by the first business day following 45 calendar days
of the due date, the Reinsurer may terminate reinsurance under this
Agreement. For purposes of this Agreement the premium due date shall be the
15th calendar day following the Accounting Period. If the Reinsurer elects
to terminate reinsurance after such 45 calendar day period, it will then
give the Company at least 30 calendar days' prior written notice of its
intention to terminate such reinsurance. If all reinsurance premiums in
arrears and interest, which may become in arrears during such 30 calendar
day notice period, are not paid before the end of the notice period, the
Reinsurer's obligations for those Riders will be limited to those
obligations relating to events arising on or before the last date for which
reinsurance premiums have been paid in full.
If reinsurance is terminated according to this Article, a Terminal Cash
Settlement will be made according to the terms specified in Article 15.2.
The Reinsurer's right to terminate reinsurance will not prejudice its right
to collect premiums and interest for the period reinsurance was in force,
through and including the 30 calendar day notice period. The Company may
not force termination through the non-payment of reinsurance premiums to
avoid the Agreement's requirements or to transfer the Riders to another
party.
Article 6
6.1 RIGHT OF OFFSET
The Company and the Reinsurer will have the right to offset any balances,
whether on account of premiums, allowances, credits, claims or otherwise
due from one party to the other under this Agreement or under any other
reinsurance agreement between the Company and the Reinsurer.
The rights provided under this Article are in addition to any rights of
offset that may exist at common law. The parties' offset rights may be
enforced notwithstanding any other provision of this Agreement including,
without limitation, the provisions of Article 11.
Article 7
7.1 EXCHANGES AND REPLACEMENTS
Riders that are exchanged to another rider pursuant to a contractual right
to exchange, an upgrade offering by the Company, or other replacement,
whether listed on Exhibit A or not, shall not be reinsured under this
Agreement. The Company, its affiliates, successors or permitted assigns,
however, shall not initiate a program of exchanges that would include any
of the Riders, without the expressed written consent of the Reinsurer.
The Reinsurer acknowledges that the Company currently allows contract owner
exchanges from LINCOLN SMARTSECURITY(R) Advantage as described herein, and
that such exchanges shall be considered lapses for purposes of this
Agreement and not subject to a Terminal Cash Settlement payment to the
extent that the contract value of such annual exchanges does not exceed one
percent (1%) of the total remaining reinsured contract value, measured as
the average of the beginning and end of year reinsured contract value. The
annual period used to measure the one percent (1%) limit shall be measured
on a calendar basis ending on each June 30. Exchanges in excess of the
above stated limits will be subject to a Terminal Cash Settlement according
to the terms specified in Article 15.2 and will not be reinsured under this
Agreement.
Contract owners with an active LINCOLN SMARTSECURITY(R) Advantage who
decide to drop LINCOLN SMARTSECURITY(R) Advantage and purchase I4LIFE(R)
Advantage can use any remaining Guaranteed Amount to establish the
Guaranteed Income Benefit under the I4LIFE(R) Advantage terms and charge in
effect at the time of the I4LIFE(R) Advantage election. The Guaranteed
Income Benefit under the I4LIFE(R) Advantage is initially equal to 75% of
the regular income payment in effect at the time the Guaranteed Income
Benefit is elected. Contract owners who purchased the LINCOLN
SMARTSECURITY(R) Advantage can use the remaining Guaranteed Amount (if
greater than the contract value) at the time the Guaranteed Income Benefit
is determined, to increase the Guaranteed Income Benefit. The Guaranteed
Income Benefit will be increased by the ratio of the remaining Guaranteed
Amount to the contract value at the time the initial I4LIFE(R) Advantage
payment is calculated. In other words, the Guaranteed Income Benefit will
equal 75% of the initial regular income payment times the remaining
Guaranteed Amount divided by the contract value, if the Guaranteed Amount
is greater than the contract value.
Any exchanged or replaced Riders, other than as specified above, will be
subject to a Terminal Cash Settlement payment according to the terms
specified in Article 15.2. Internal replacements will mean a systematic
effort by the Company to encourage or provide incentives to purchase
another Rider not covered under this Agreement.
Article 8
8.1 RECAPTURE
The Riders are not eligible for recapture. The parties intend the Agreement
to be permanent, and any recapture would be pursuant to terms mutually
agreed upon by the Reinsurer and the Company. Termination of this Agreement
by the Company pursuant to Article 9.2 or 16.4 shall not be deemed to be a
recapture, for purposes of this Article 8.1.
Article 9
9.1 CLAIMS
The Company is responsible for the settlement of claims in accordance with
applicable law, Rider and Prospectus terms. The Company will provide the
Reinsurer with the claims information specified in Exhibit F. The Company
acknowledges that it maintains procedures to verify that Rider benefits
payments remain payable by the Company.
9.2 CLAIMS PAYMENT
The Reinsurer will be liable to the Company for its share of the benefits
owed under the express contractual terms of the Riders and as specified
under the terms of this Agreement. The Reinsurer will not participate in
any ex gratia payments made by the Company (i.e., payments the Company is
not required to make under the Rider terms). The timing of payments by the
Reinsurer will be made according to the contractual benefit terms of the
Rider. The Reinsurer's share of any interest payable under the terms of a
Rider or applicable law which is based on the benefits paid by the Company
and covered under this Agreement will be payable provided that the
Reinsurer will not be liable for interest accruing on or after the date of
the Company's payment of benefits. The Company will net claim amounts
against premiums. This method of claims payment does not relieve the
Company of the requirements specified in Article 9.1.
If the Reinsurer does not pay it share of benefits owed under the
contractual terms of one or more Riders and the terms of this Agreement by
the first business day following 45 calendar days of the due date, the
Company may terminate reinsurance under this Agreement. If the Company
elects to terminate reinsurance after such 45 calendar day period, it will
then give the Reinsurer at least 30 calendar days' prior written notice of
its intention to terminate such reinsurance. The Agreement will not be
terminated if all benefits in arrears and interest, including benefits and
interest which may become in arrears during such 30 calendar day notice
period, are paid before the end of the notice period.
If reinsurance is terminated according to this Article, a Terminal Cash
Settlement will be made according to the terms specified in Article 15.2.
The Company's right to terminate reinsurance will not prejudice its right
to collect benefits owed under the express contractual terms of the Riders
for the period reinsurance was in force, through and including the 30
calendar day notice period. The Reinsurer may not force termination through
the non-payment of amounts owed under this Agreement to avoid the
Agreement's requirements.
9.3 EXTRA-CONTRACTUAL OBLIGATIONS
The Reinsurer is not liable for any Extra-contractual Obligations.
9.4 MISSTATEMENT OF AGE
In the event of a change in the amount payable under a Rider due to a
misstatement in age, the Reinsurer's liability will change proportionately.
Article 10
10.1 ERRORS AND OMISSIONS IN ADMINISTRATION OF REINSURANCE
Any unintentional or accidental failure to comply with the terms of this
Agreement which can be shown to be the result of an oversight or clerical
error relating to the administration of reinsurance by either party will
not constitute a breach of this Agreement. For sake of clarity, errors in
administration of reinsurance do not include administrative errors related
to the Company's administration of the Riders or breakage (operational
errors) that cause the payment of amounts under the Riders that would not
have been payable, but for the breakage or error. Upon discovery, the error
will be promptly corrected so that both parties are restored to the
position they would have occupied had the oversight or clerical error not
occurred. In the event a payment is corrected, the party receiving the
payment may charge interest calculated according to the terms specified in
Exhibit C. Should it not be possible to restore both parties to this
position, the party responsible for the oversight or clerical error will be
responsible for any resulting liabilities and expenses.
If the Company has failed to cede reinsurance as provided under this
Agreement or has failed to comply with reporting requirements with respect
to business ceded hereunder, the Reinsurer may require the Company to audit
its records for similar errors and take reasonable actions necessary to
correct errors and avoid similar errors. Failing prompt correction, the
Reinsurer may limit its liability to the correctly reported Riders.
10.2 DISPUTE RESOLUTION
As a condition to the parties' agreement to arbitrate all disputes arising
under or relating to this Agreement, either the Company or the Reinsurer
will give written notification to the other party of any dispute relating
to or arising under this Agreement. Within 15 calendar days of
notification, both parties must designate an officer of their respective
companies to attempt to resolve the dispute. The officers will meet at a
mutually agreeable location as soon as possible and as often as necessary
to attempt to negotiate a resolution of the dispute. During the negotiation
process, all reasonable requests made for information concerning the
dispute will be promptly honored. The format for discussions will be
determined mutually by the officers.
If these officers are unable to resolve the dispute within 30 calendar days
of their first meeting, the parties may agree in writing to extend the
negotiation period for an additional 30 calendar days. If the matter is not
resolved within 30 calendar days of the first meeting or the additional 30
day period, if any, then either party may demand arbitration pursuant to
Article 10.3. The discussions and all information exchanged for the
purposes of such discussions will be confidential and without prejudice.
10.3 ARBITRATION
If the Company and Reinsurer are unable to mutually resolve a dispute or
controversy relating to policies covered under this Agreement or the breach
thereof, the matter will be referred to arbitration.
To initiate arbitration, either the Company or the Reinsurer will notify
the other party in writing of its desire to arbitrate, stating the nature
of its dispute and the remedy sought. There will be three arbitrators
selected who will be officers of Life Insurance Companies or Life
Reinsurance Companies excluding officers of the parties to this Agreement,
their affiliates or subsidiaries or past employees of any of these
entities.
Each party will appoint one arbitrator and these two arbitrators will
select a third arbitrator within 2 weeks of the appointment of the second.
If either party refuses or neglects to appoint an arbitrator within 60
calendar days after receipt of the written request for arbitration, the
other party may appoint a second arbitrator. Should the two arbitrators not
agree on the choice of the third within 30 calendar days after the
appointment of the second arbitrator, then each party will name four
candidates to serve as the arbitrator. Beginning with the party who did not
initiate arbitration, each party will eliminate one candidate from the
eight listed until one candidate remains. If this candidate declines to
serve as the arbitrator, the candidate last eliminated will be approached
to serve. This process will be repeated until a candidate has agreed to
serve as the third arbitrator.
The place of meeting of the arbitrators will be decided by a majority vote
of the arbitrators.
The customs and practices of the life insurance and reinsurance industries
may be considered by the Panel to resolve any ambiguities in the Agreement
but only insofar as such customs and practices are consistent with a strict
construction of the terms of this Agreement. The Panel will not have the
authority to award punitive or exemplary damages.
The Panel shall issue an order, appropriate for confirmation in a court of
competent jurisdiction, to resolve all matters in dispute. In addition, the
Panel shall issue a written opinion setting forth the reasons for the
award, with citations to the record of the hearing that support the
reasoning.
The written decision of a majority of the arbitrators will be final and
binding on both parties and their respective successors and assigns.
The arbitrators will render a decision within 4 months of the appointment
of the third arbitrator, unless both parties agree otherwise. In the event
no decision is rendered within 4 months, new arbitrators will be selected
as above. There will be no appeal from the decision. Either party to the
arbitration may petition any court having jurisdiction over the parties to
reduce the decision to judgment. Alternatively, if both parties consent,
any controversy may be settled by arbitration in accordance with the rules
of the American Arbitration Association.
Unless the Arbitrators decide otherwise, each party will bear the expense
of its own arbitration, including its appointed arbitrator and any outside
attorney and witness fees. The parties will jointly and equally bear the
expense of the third arbitrator and other costs of the arbitration.
It is specifically the intent of both parties that these arbitration
provisions will replace and be in lieu of any statutory arbitration
provision, if the law so permits.
Article 11
11.1 INSOLVENCY
A party to this Agreement will be deemed "insolvent" when it:
a) Applies for or consents to the appointment of a receiver,
rehabilitator, conservator, liquidator or statutory successor
(hereinafter referred to as the Authorized Representative) of its
properties or assets; or
b) Is adjudicated as bankrupt or insolvent; or
c) Files or consents to the filing of a petition in bankruptcy, seeks
reorganization or an arrangement with creditors or takes advantage of
any bankruptcy, dissolution, liquidation, rehabilitation, conservation
or similar law or statute; or
d) Becomes the subject of an order to rehabilitate or an order to
liquidate as defined by the insurance code of the jurisdiction of the
party's domicile.
In the event of the insolvency of the Company, all reinsurance ceded,
renewed or otherwise becoming effective under this Agreement will be
payable by the Reinsurer directly to the Company or to its Authorized
Representative on the basis of the liability of the Company for benefits
under the Riders without diminution because of the insolvency of the
Company.
The Reinsurer will be liable only for benefits reinsured as benefits become
due under the terms of the Riders and will not be liable for any amounts or
reserves to be held by the Company for the Riders or for any damages or
other payments resulting from insolvency and attributable to the
termination or restructure of the Riders. The Company or its Authorized
Representative will give written notice to the Reinsurer of all pending
claims against the Company on any Riders within a reasonable time after
filing in the insolvency proceedings. While a claim is pending, the
Reinsurer may investigate such claim and interpose, at its own expense, in
the proceedings where the claim is to be adjudicated, any defense or
defenses which it may deem available to the Company or its Authorized
Representative.
The expense incurred by the Reinsurer will be chargeable, subject to court
approval, against the Company as part of the expense of its insolvency
proceedings to the extent of a proportionate share of the benefit which may
accrue to the Company solely as a result of the defense undertaken by the
Reinsurer. Where two or more reinsurers are involved in the same claim and
a majority in interest elect to interpose a defense to such claim, the
expense will be apportioned in accordance with the terms of the Agreement
as though such expense had been incurred by the Company.
In the event of the insolvency of the Reinsurer, the Company may cancel
this Agreement for new business by promptly providing the Reinsurer or its
Authorized Representative with written notice of cancellation, to be
effective as of the date on which the Reinsurer's insolvency is established
by the authority responsible for such determination. Any requirement for a
notification period prior to the cancellation of the Agreement would not
apply under such circumstances. The Reinsurer remains liable for benefits
reinsured under this Agreement as those benefits become due under the terms
of the Riders, notwithstanding its insolvency status, and the amount
recoverable by the Company of its receiver may not be reduced as a result
of delinquency proceedings involving the Reinsurer.
In addition, in the event of the insolvency of the Reinsurer, the Company
may provide the Reinsurer or its Authorized Representative with written
notice of its intent to recapture all reinsurance in force under this
Agreement regardless of the duration the reinsurance has been
in force or the amount retained by the Company on the Riders. The effective
date of a recapture due to insolvency will be the date mutually agreed by
the parties, but may not be earlier than the date of the recapture notice.
If the Company elects to terminate reinsurance under this Article, a
Terminal Cash Settlement will be made according to the terms specified in
Article 15.2. The Company's right to recapture as set forth above will not
be available if the Reinsurer ceases to be insolvent. In the event of the
insolvency of either party, the rights or remedies of this Agreement will
remain in full force and effect.
Article 12
12.1 DAC TAX ELECTION
The Company and the Reinsurer agree to the election pursuant to Section
1.848-2(g)(8) of the Income Tax Regulations effective December 29, 1992,
under Section 848 of the Internal Revenue Code of 1986, as amended (such
election being referred to as the "DAC Tax Election"), whereby:
a) The party with the net positive consideration for this Agreement for
each taxable year will capitalize specified Rider acquisition expenses
with respect to this Agreement without regard to the general
deductions limitation of Section 848(c)(1) of the Internal Revenue
Code of 1986, as amended (the "Code");
b) The parties agree to exchange information pertaining to the amount of
net consideration under this Agreement each year to ensure
consistency. If requested, the Company will provide supporting
information reasonably requested by the Reinsurer. (The term "net
consideration" means "net consideration" as defined in Regulation
Section 1.848-2(f));
c) This DAC Tax Election will be effective for the first taxable year in
which this Agreement is effective and for all years for which this
Agreement remains in effect.
The Company and the Reinsurer will each attach a schedule to their
respective federal income tax returns filed for the first taxable year for
which this DAC Tax Election is effective. Such schedule will identify the
Agreement as a reinsurance agreement for which the DAC Tax Election under
Regulation Section 1.848.2(g)(8) has been made.
The Company and the Reinsurer represent and warrant that each is
respectively subject to U.S. taxation under either the provisions of
subchapter L of Chapter 1 or the provisions of subpart F of subchapter N of
Chapter 1 of the Code.
12.2 TAX CHARACTER OF RIDERS
The Company shall indemnify and hold Reinsurer harmless from any
incremental loss, liability, cost, tax or expense incurred thereby by
virtue of any failure of the federal income tax treatment of any Rider to
be in all material respects the same or more favorable to the purchaser,
policyholder or intended beneficiaries thereof at the time of the Rider's
issuance and during the time of the Rider's administration.
12.3 TAXES AND EXPENSES
Apart from any taxes, allowances, refunds, and expenses specifically
referred to in Exhibit C of this Agreement, no assessments by guaranty
associations or comparable organizations, taxes, allowances, or expense
will be paid by the Reinsurer to the Company for any Rider.
Article 13
13.1 ENTIRE AGREEMENT
This Agreement and the Exhibits hereto constitute the entire agreement
between the parties with respect to the business reinsured hereunder and
supersede any and all prior representations, warranties, agreements or
understandings between the parties pertaining to the subject matter of this
Agreement. There are no understandings between the parties other than as
expressed in this Agreement and the Exhibits hereto. In the event of any
express conflict between the terms of the Agreement and the Exhibits, the
Exhibits will control.
Any change or modification to this Agreement and the Exhibits hereto will
be null and void unless made by written amendment and signed by both
parties.
13.2 INSPECTION OF RECORDS
The Reinsurer or its duly appointed representatives will have access to
records of the Company, whether written or electronic, and including system
view access, concerning the business reinsured hereunder for the purpose of
inspecting, auditing and photocopying those records. Such access will be
provided at the office of the Company and will be during reasonable
business hours. Assuming the Reinsurer has continued to perform the
substantial majority of its Material obligations under this Agreement, the
Company may not withhold access to information and records on the grounds
that the Reinsurer is in breach.
The Reinsurer's right of access as specified above will survive until all
of the Reinsurer's obligations under this Agreement have terminated or been
fully discharged.
13.3 UTMOST GOOD FAITH
All matters with respect to this Agreement require the utmost good faith of
each of the parties.
13.4 CONFIDENTIALITY
The parties will keep confidential and not disclose or make competitive use
of any shared Proprietary Information, as defined below, unless:
a) The information becomes publicly available other than through
unauthorized disclosure by the party seeking to disclose or use such
information;
b) The information is independently developed by the recipient;
c) The disclosure is required for the purpose of the Reinsurer's
reinsurance or retrocession;
d) The disclosure is required by external auditors; or
e) The disclosure is required by law.
Provided that either party may disclose such Proprietary Information to its
officers, employees, attorneys and accountants who agree to hold such
Proprietary Information in accordance with the terms of this Agreement.
"Proprietary Information" includes, but is not limited to, business
procedures, applications, contract forms and applications, investment and
hedging strategies of the Reinsurer and the Company, including the terms of
this Agreement, but shall not include the
existence of this Agreement and the identity of the parties. The terms of
this Agreement will not be disclosed to any third parties other than as
specified above.
If either party wishes to disclose Proprietary Information for the purpose
of any securitization, or structured, asset backed or asset based financing
that party must request the written consent of the other party.
In addition, the Reinsurer will protect the confidentiality of Non-Public
Personal Information, as defined below, by:
f) Holding all Non-Public Personal Information in strict confidence;
g) Maintaining appropriate measures that are designed to protect the
security, integrity and confidentiality of Non-Public Personal
Information;
h) Using Non-Public Personal Information only to carry out the
Reinsurer's obligations under this Agreement; and
i) Disclosing Non-Public Personal Information to third parties only as
necessary to perform services under this Agreement, for purposes of
reinsurance, retrocession, or as may be required or permitted by law.
"Non-Public Personal Information" is personally identifiable medical,
financial, and other personal information about proposed, current and
former applicants, Rider owners, contract holders, insureds, annuitants,
claimants, and beneficiaries of Riders or contracts issued by the Company,
and their representatives, that is not publicly available. Non-Public
Personal Information does not include de-identified personal data, i.e.,
information that does not identify, or could not reasonably be associated
with, an individual.
The Company will obtain, if required by any law, appropriate consent to the
collection, use and disclosure of Non-Public Personal Information, from
each insured to enable the parties to fully exercise their rights and
perform their obligations under this Agreement.
Article 14
14.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company acknowledges that, at the Reinsurer's request, it has provided
the Reinsurer with the information specified in Exhibit A-1 (hereinafter
the "Business Guidelines") prior to the execution of this Agreement by the
Reinsurer. The Company represents that all factual information contained in
the Business Guidelines are complete and accurate as of the date the
document containing the information was prepared. The Company further
represents that any assumptions made in preparing the Company data were
based upon informed judgment and are consistent with sound actuarial
principles. The Company further represents that it is not aware of any
omissions, errors, changes or discrepancies that would materially affect
the Business Guidelines. The Reinsurer has relied on the Business
Guidelines and the foregoing representations in entering into this
Agreement. This Article will not terminate or expire until all Riders have
been discharged or terminated in full.
14.2 REPRESENTATIONS AND WARRANTIES OF THE REINSURER
The Reinsurer represents and warrants that it is a licensed insurer
pursuant to applicable Indiana law as of the Effective Date of this
Agreement. The Company has relied upon this representation and warranty in
entering into this Agreement.
Article 15
15.1 BUSINESS CONTINUITY
The Company will notify the Reinsurer of any change that Materially affects
the reinsured business, including changes to the Business Guidelines or
Rider provisions. Changes made pursuant to the express terms of the Polices
as exercised by policyholders will not be considered Material changes for
purposes of this Article. Whenever possible, such notice shall be at least
ninety calendar days in advance in order to allow enough time for the
Reinsurer to confirm the applicable reinsurance terms. In any case, the
date of effect of the revised reinsurance terms shall coincide with the
effective date of any change agreed by the Reinsurer. This Agreement will
exclude Riders affected by such Material changes unless the Reinsurer has
agreed in writing and in advance to accept the affected Riders. The Company
will notify the Reinsurer in advance of any proposed outsourcing of
administrative functions or claims administration with respect to the
Riders. In no event shall changes in the market conditions constitute a
Material change for purposes of this Article. If the Reinsurer agrees to
accept Riders affected by the outsourcing, the Company will secure the
Reinsurer's right to audit and inspect the party performing such outsourced
services.
In the event the Company makes a change that Materially affects the
reinsured business, or a Material change has occurred, including but not
limited to changes to the Business Guidelines, without the Reinsurer's
consent to accept the affected Riders:
a) The parties will attempt to negotiate revised terms as necessary under
which the affected Riders may continue to be reinsured; and
b) If the parties are unable to agree on revised terms within 120
calendar days, any Riders Materially and adversely affected by the
change will be excluded from coverage under this Agreement.
Any Riders excluded as a result of a Material change will be subject to a
Terminal Cash Settlement payment according to the terms specified in
Article 15.2.
The parties agree to share with each other internal and third party reports
that contain information that could affect the reinsured Riders. Examples
of such reports include experience studies and reports of industry trends.
15.2 TERMINAL CASH SETTLEMENT
"Terminal Cash Settlement" means, an amount that the Reinsurer reasonably
determines in good faith by reference to the Reinsurer's risk-neutral
variable annuity pricing model, to be the: i) value of the reinsured
business (future reinsurance premiums less future claims); plus, ii)
settlement of any outstanding balances under this Agreement, plus, if the
Company is the breaching party, or minus, if the Reinsurer is the breaching
party iii) direct costs of the non-breaching party resulting from the
breach without regard to consequential, incidental or punitive damages. If
the Reinsurer is insolvent, has failed to pay claims as set forth in
Article 9.2 or if the Agreement is terminated per Article 16.4 due to a
failure by the Reinsurer to maintain in effect a required license or
accreditation, then the Terminal Cash Settlement will be determined by the
Company as set forth in this Article. If the Agreement is terminated per
Article 16.4 due to a change in law or regulation then the Reinsurer and
the Company will mutually determine the Terminal Cash Settlement as set
forth in this Article. The Terminal Cash Settlement will be determined as
of the relevant termination date, or, if that is not possible, as of the
earliest date thereafter as is reasonably determined by the party
calculating the Terminal Cash Settlement.
Payment of the Terminal Cash Settlement shall be governed by the following:
1. If the Terminal Cash Settlement is greater than zero, and
a. the Company is the breaching party, the Company will pay the
amount to the Reinsurer in cash.
b. the Reinsurer is the breaching party, no payment of the Terminal
Cash Settlement shall be due from the Company.
2. If the Terminal Cash Settlement is less than zero, and
a. the Reinsurer is the breaching party, the Reinsurer will pay the
absolute value of the amount to the Company in cash.
b. the Company is the breaching party, no payment of the Terminal
Cash Settlement shall be due from the Reinsurer.
3. If the Agreement is terminated for reasons other than breach by either
party, such as due to changes in law or regulation, and the Terminal
Cash Settlement is greater than zero, the Company will pay the amount
to the Reinsurer in cash.
4. If the Agreement is terminated for reasons other than breach by either
party, such as due to changes in law or regulation, and the Terminal
Cash Settlement is less than zero, the Reinsurer will pay the absolute
value of the amount to the Company in cash.
Payment of the Terminal Cash Settlement will be due and payable not later
than ten business days following the date the notice of amount payable has
been received by the Company.
The Reinsurer will remain liable in respect of the affected cessions up to
the effective date of recapture but will not be liable thereafter. All
payments between the Company and the Reinsurer for such cessions in respect
of the period after the effective date of recapture shall be refunded at
the interest rate specified in the Exhibit C. The Terminal Cash Settlement
will accumulate interest at the specified rate from the effective date of
recapture until the date on which the amount due is determined.
15.3 INDEMNIFICATION
Each party hereto shall indemnify, defend and hold the other party harmless
from and against all loss, cost, liability and expense arising out of any
failure of the indemnifying party to perform its obligations in accordance
with this Agreement. The indemnity shall be such as to put the other party
in the same financial position as it would have been if such failure had
not occurred.
Notwithstanding any action that may be taken in accordance with the terms
of this Agreement, if one party materially fails to fulfill a main
obligation as specified in this Agreement, the other party shall have the
right to be indemnified and held harmless by the other party in respect of
all cessions under the affected policies. This right shall apply with full
retrospective effect for any claim, cost or deterioration in expected or
reported profitability which it may have incurred or experienced as a
result of the said failure.
The indemnity shall be such as to put the other party in the same financial
position as it would have been if such failure had not occurred. As an
example, the level of the indemnity may be determined by taking into
consideration the reinsurance terms which would reasonably and properly
have applied with full retrospective effect if the failure had not
occurred. Notwithstanding any indemnification, any Material breach must be
corrected to comply with the terms of this Agreement as a condition of
Agreement continuation. If a Material breach is not corrected within thirty
calendar days or cannot be corrected, the non-breaching party will have the
right to terminate the Agreement as of the date of such breach. If such
indemnity is required in conjunction with a termination of the Agreement,
the indemnification and termination settlement will be the Terminal Cash
Settlement.
Disagreements over the level of the indemnity or the course of action shall
be submitted to arbitration as per Article 10.3.
This clause does not prejudice any other rights or remedies which may be
available to either party under the terms of this Agreement. Provided that
all costs related to an unintentional and non-material breach by the
Company can be fully remedied through such indemnification, the Reinsurer
for these reasons alone will not be able to terminate the treaty.
Furthermore, if the Company has intentionally withheld or misrepresented
relevant information or data and it can be demonstrated that a prudent and
professional reinsurer, in possession of the true facts, would have
declined to provide reinsurance for the affected cessions, then the
Reinsurer shall have the right to cancel such cessions from commencement.
In this case, all payments between the Company and the Reinsurer for the
affected cessions shall be refunded at the interest rate specified in
Exhibit C and no liability shall remain with the Reinsurer in respect of
such cessions.
Article 16
16.1 DURATION OF AGREEMENT
This Agreement is unlimited as to its duration.
This Agreement shall terminate for new Riders on the Coverage Effective End
Date, as hereinafter defined. The Coverage Effective End Date shall be the
earliest to occur of the following:
1) the date on which the reinsured share of the accumulated deposits
on the annuities specified in Exhibit A-1 is equal to or greater
than $3,750,000,000;
2) the date on which the reinsured share of the accumulated deposits
on the annuities specified in Exhibit A-1 is equal to or greater
than $2,250,000,000, if the Reinsurer has given notice prior to
reaching that $2,250,000,000 reinsurance level of its intention
to terminate for new Riders after reaching that level of
reinsurance; and
3) December 31, 2008, if the reinsurance level has not reached
$2,250,000,000 by that date and the Reinsurer has given notice of
its intention to terminate for new Riders after December 31,
2008.
The Reinsurer remains liable for all Riders in force as of the Coverage
Effective End Date, until their natural expiration or the date of
annuitization, unless the parties mutually decide otherwise or as specified
otherwise in this Agreement.
16.2 SEVERABILITY
Determination that any provision of this Agreement is invalid or
unenforceable will not affect or impair the validity or the enforceability
of the remaining provisions of this Agreement.
16.3 CONSTRUCTION
This Agreement will be construed and administered without regard to
authorship and without any presumption or rule of construction in favor of
either party. This Agreement is between sophisticated parties, each of
which has reviewed the Agreement and is fully knowledgeable about its terms
and conditions.
16.4 CREDIT FOR REINSURANCE
The parties intend that the Company will receive statutory reserve credit
in all U.S. jurisdictions for reinsurance provided under this Agreement. If
the Company lose statutory reserve credit in part or in total due to a
change in law or regulation or failure by the Reinsurer to maintain in
effect a required license or accreditation in a state where the Company is
licensed, then the parties will take the steps specified below. The parties
will provide prompt notice of the occurrence of any loss of reserve credit
Upon notification of loss of statutory reserve credit, the Reinsurer will
have the right to cure the loss in a manner that eliminates the need for or
enables the Company to continue to receive statutory reserve credit in all
U.S. jurisdictions where the Company is licensed for the reinsurance ceded
under this Agreement. The Company will not unreasonably deny any cure
proposal presented by the Reinsurer.
If the statutory reserve credit is lost due to a failure by the Reinsurer
to maintain in effect a required license or accreditation and is not cured
as set forth above within 45 days of notice of the loss of statutory
reserve credit, then Reinsurer will establish and maintain collateral
permitting the Company to receive statutory reserve credit in all U.S.
jurisdictions where the Company is licensed for reinsurance provided under
this Agreement during the pendency of the statutory reserve credit loss.
The cost of establishing and maintaining that collateral will be borne
solely by the Reinsurer.
If statutory reserve credit is lost due to a failure by the Reinsurer to
maintain in effect a required license or accreditation, which is not cured
and Reinsurer fails to establish or maintain collateral, then the Company
may terminate the Agreement. In this case the Company will determine the
Terminal Cash Settlement per Article 15.2.
The Statutory Reserve Credit Percentage is defined as 1 - (a) / (b), where:
(a) is the Company's net reserves associated with the Business
Covered as defined in Exhibit A on a standalone basis for Indiana
insurance regulatory purposes after reflecting reinsurance under
this Agreement divided, and
(b) is the Company's reserves associated with the Business Covered as
defined in Exhibit A on a standalone basis for Indiana insurance
regulatory purposes before reflecting reinsurance under this
Agreement.
If the Company's net reserves associated with the Business Covered as
defined in Exhibit A on a standalone basis for Indiana insurance regulatory
purposes after reflecting reinsurance under this Agreement is modified due
to a change in law or regulation such that the resulting Statutory Reserve
Credit Percentage after the change is less than eighty percent of the
Statutory Reserve Credit Percentage as would have been calculated without
reflecting the new change in law or regulation, which is not cured, then
the Company may terminate this Agreement by providing written notice of its
intent to terminate within sixty (60) calendar days of the adoption date of
the change in law or regulation. In this case the Reinsurer and the Company
will mutually determine the Terminal Cash Settlement per Article 15.2.
16.5 NON-WAIVER; RETROCESSION
A waiver by either party of any violation, or the default by the other
party in its adherence to any term of this Agreement, will not constitute a
waiver of any other or subsequent violation or default. No prior
transaction or dealing between the parties will establish any custom or
usage waiving or modifying any provision of the Agreement. The failure of
either party to enforce any part of this Agreement will not constitute a
waiver of any right to do so.
The Reinsurer may reinsure or retrocede any risks or business assumed
hereunder. Neither party may effect a novation of this Agreement without
the other party's prior written consent.
16.6 SURVIVAL; GOVERNING LAW
All provisions of this Agreement will survive its termination to the extent
necessary to carry out the purpose of this Agreement. This Agreement shall
be governed by the laws of the State of Indiana.
16.7 COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Company and
the Reinsurer.
Execution
This Agreement has been made in duplicate and hereby executed by both parties.
Signed for and on behalf of THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Title: Assistant Vice President
Date: January, 0000 Xxxxx: Xxxx Xxxxx, Xxxxxxx
Signed for and on behalf of SWISS RE LIFE & HEALTH AMERICA INC.
By: /s/ Xxxxx X. Xxxx
---------------------------------
Title: Chief Financial Officer
Date: January, 0000 Xxxxx: Xxxx Xxxxx, Xxxxxxx
EXHIBIT A
BUSINESS COVERED
AGREEMENT EFFECTIVE DATE:
July 1, 2007.
COVERAGE:
The Riders on the plans shown below which have base contract and Rider issue
dates falling in the period that begins with the January 1, 2007 and ends with
the Coverage Effective End Date are covered according to the Basis specified
below, provided that the Riders are sold to residents of the United States or
which have US tax payer identification numbers at the time of sale.
Notwithstanding the above, Riders on base contracts sold as A or C shares will
be limited to no more than twenty (20%) of the base contract sales measured on
aggregated premium deposits in each calendar year. Riders in excess of this
limit are not reinsured under this Agreement. The process to determine any A or
C share contracts not covered under this Agreement will be:
(1) Calculate the total aggregate premium deposits for a calendar year
(2) Multiply (1) by 20%
(3) Determine the first date on which the total aggregate premium deposits
for A and C shares exceeded (2)
(4) Any A or C share policies issued after and including this date through
the end of the calendar year will not be reinsured under this
Agreement
The Reinsurer will perform the above calculation by the last day of the first
Accounting Period in each calendar year. The Reinsurer will provide the Company
with a list any A and C share contracts that were issued in the prior calendar
year that will not be covered under this Agreement by the last day of the first
Accounting Period in each calendar year.
BASIS:
The Reinsurer's Quota Share will be as detailed below.
Fifty (50%) first dollar quota share as of the Effective Date for all Riders
with base contracts issued from January 1, 2007 to the Coverage Effective End
Date.
The Company or an Affiliate will retain a minimum percentage as detailed below
without the benefit of retrocession or other reinsurance. The Company will cause
its Affiliates to comply with the retention requirements specified below.
Fifty (50%) first dollar quota share as of the Effective Date for all Riders
with base contracts issued from January 1, 2007 to the Coverage Effective End
Date.
COMPANY'S STATE OF DOMICILE: Indiana
RIDERS:
RIDER NAME OR CODE
LINCOLN SMARTSECURITY(R) Advantage - 1 Year Automatic Reset, Single and Joint
Life, with Lifetime Withdrawals
(form number: 32793 7/06 (plus state variations))
EXHIBIT A-1
BUSINESS GUIDELINES
The Company affirms that the following have been supplied to the Reinsurer and
are in use as of the Effective Date:
Rider and Application Form(s) for the following:
LINCOLN SMARTSECURITY(R) Advantage - 1 Year Automatic Reset, Single and Joint
Life, with Lifetime Withdrawals
(form number: 32793 7/06 (plus state variations))
Prospectuses for the following:
AMERICAN LEGACY(R) III
AMERICAN LEGACY(R) III C SHARE
AMERICAN LEGACY(R) III PLUS
AMERICAN LEGACY(R) III VIEW
AMERICAN LEGACY(R) SHAREHOLDERS ADVANTAGE
AMERICAN LEGACY(R) DESIGN
LINCOLN CHOICEPLUS ASSURANCE B SHARE
LINCOLN CHOICEPLUS ASSURANCE BONUS
LINCOLN CHOICEPLUS ASSURANCE C SHARE
LINCOLN CHOICEPLUS ASSURANCE L SHARE
LINCOLN CHOICEPLUS DESIGN
EXHIBIT A-2
AMERICAN LEGACY
INVESTMENT PORTFOLIOS
AMERICAN FUNDS INSURANCE SERIES(SM), advised by Capital Research and Management
Company
- Asset Allocation Fund (Class 2): Current income.
- Blue Chip Income and Growth Fund (Class 2): Income and growth.
- Bond Fund (Class 2): Current income.
- Cash Management Fund (Class 2): Preservation of capital.
- Global Bond Fund (Class 2): Total return.
- Global Discovery Fund (Class 2): Long-term growth.
- Global Growth Fund (Class 2): Long-term growth.
- Global Growth and Income Fund (Class 2): Growth and income.
- Global Small Capitalization Fund (Class 2): Long-term growth.
- Growth Fund (Class 2): Long-term growth.
- Growth-Income Fund (Class 2): Growth and income.
- High-Income Bond Fund (Class 2): High current income.
- International Fund (Class 2): Long-term growth.
- New World Fund (Class 2): Long-term growth.
- U.S. Government/AAA Rated Securities Fund (Class 2): High current income.
ASSET ALLOCATION INVESTMENT MODELS
AMERICAN LEGACY FUNDAMENTAL GROWTH MODEL
INVESTMENT OBJECTIVE: Long-term growth of capital.
INVESTMENT STRATEGY: The model invests approximately 90% of its assets in
underlying subaccounts that invest primarily in equity securities, and
approximately 10% of its assets in underlying subaccounts that invest
primarily in fixed income securities.
AMERICAN LEGACY FUNDAMENTAL GROWTH AND INCOME MODEL
INVESTMENT OBJECTIVE: A balance between a high level of current income and
growth of capital, with a greater emphasis on growth of capital.
INVESTMENT STRATEGY: The model invests approximately 20% of its assets in
underlying subaccounts that invest primarily in fixed income securities,
and approximately 80% in underlying subaccounts that invest primarily in
equity securities.
AMERICAN LEGACY FUNDAMENTAL BALANCED MODEL
INVESTMENT OBJECTIVE: A balance between a high level of current income and
growth of capital, with an emphasis on growth of capital.
INVESTMENT STRATEGY: The model invests approximately 40% of its assets in
underlying subaccounts that invest primarily in fixed income securities,
and approximately 60% in underlying subaccounts that invest primarily in
equity securities.
AMERICAN LEGACY FUNDAMENTAL INCOME MODEL
INVESTMENT OBJECTIVE: A high level of current income with some
consideration given to growth of capital.
INVESTMENT STRATEGY: The model invests approximately 60% of its assets in
underlying subaccounts that invest primarily in fixed income securities,
and approximately 40% in underlying subaccounts that invest primarily in
equity securities.
Owners participating in these models must have 100% of their account value
allocated to a single model and must participate in the quarterly rebalancing
program. These asset allocation models invest in the underlying investment
portfolios of the American Legacy contract. The asset allocation is set at
contract issue and can not be changed by Lincoln, however the contract owner may
cancel the program and re-allocate their account value among any of the
investment options under the contract.
INVESTMENT REQUIREMENTS
Contractowners who have elected 4LATER(R) Advantage, the LINCOLN
SMARTSECURITY(R) Advantage, or I4LIFE(R) Advantage with the Guaranteed Income
Benefit will be subject to the following requirements on variable subaccount
investments. If any of these benefits are not elected, the Investment
Requirements will not apply to the contract.
Investment Requirements have not been enforced at this time. A 30 day advanced
written notice is required before the Investment Requirements will be enforced.
These requirements will be based on a review of the subaccount investments of
the contractowners who have these riders and market conditions.
No more than 35% of the contract value (includes Account Value if I4LIFE(R)
Advantage is in effect) can be invested in the following subaccounts ("Limited
Subaccounts"):
- Global Growth
- Global Growth and Income
- Global Small Capitalization
- International
- New World
All other variable subaccounts will be referred to as "Non-Limited Subaccounts".
The contractowner can select the percentages of contract value, if any,
allocated to the Limited Subaccounts, but the cumulative total investment in all
the Limited Subaccounts cannot exceed 35% of the total contract value. On each
quarterly anniversary of the effective date of any of these benefits, if the
contract value in the Limited Subaccounts exceeds 35%, the Company will
rebalance the contract value so that the contract value in the Limited
Subaccounts is 30%.
If rebalancing is required, the contract value in excess of 30% will be removed
from the Limited Subaccounts on a pro rata basis and invested in the remaining
Non-Limited Subaccounts on a pro rata basis according to the contract value
percentages in the Non-Limited Subaccounts at the time of the reallocation. If
there is no contract value in the Non-Limited Subaccounts at that time, all
contract value removed from the Limited Subaccounts will be placed in the
American Funds Cash Management subaccount.
Subaccounts may move on or off the Limited Subaccount list, the percentages of
contract value allowed in the Limited Subaccounts may change or the frequency of
the contract value rebalancing may change, at the Company's sole discretion, but
changes are limited to no more than once per calendar year. The contractowner
will be notified at least 30 days prior to the date of any change. Such
modifications may be made at any time when the Company believes the
modifications are necessary to protect its ability to provide the guarantees
under these Riders. The decision to make modifications will be based on several
factors including the general market conditions and the style and investment
objectives of the subaccount investments.
When the contractowner is notified of a change or when the Company intends to
enforce the Investment Requirements, the contractowner may:
1. drop the applicable rider immediately, without waiting for a
termination event if the contractowner does not wish to be subject to
these Investment Requirements;
2. submit his/her own reallocation instructions for the contract value in
excess of 35% in the Limited Subaccounts; or
3. take no action and be subject to the quarterly rebalancing as
described above.
CHOICEPLUS ASSURANCE
AVAILABLE INVESTMENT PORTFOLIOS
AIM VARIABLE INSURANCE FUNDS, ADVISED BY AIM ADVISORS, INC.
- Capital Appreciation Fund (Series II): Capital appreciation.
THIS FUND IS NOT OFFERED IN CONTRACTS ISSUED ON OR AFTER MAY 24, 2004.
- Core Equity Fund (Series II): Long-term growth.
THIS FUND IS NOT OFFERED IN CONTRACTS ISSUED ON OR AFTER MAY 24, 2004.
- International Growth Fund (Series II): Long-term growth.
THIS FUND IS NOT OFFERED IN CONTRACTS ISSUED ON OR AFTER MAY 24, 2004.
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, advised by AllianceBernstein,
L.P.
- AllianceBernstein Global Technology Portfolio (Class B): Maximum capital
appreciation.
- AllianceBernstein Growth and Income Portfolio (Class B): Growth and income.
- AllianceBernstein International Value Portfolio (Class B): Long-term
growth.
- AllianceBernstein Large Cap Growth Portfolio (Class B): Maximum capital
appreciation.
THIS FUND IS NOT OFFERED IN CONTRACTS ISSUED ON OR AFTER JUNE 6, 2005.
- AllianceBernstein Small/Mid Cap Value Portfolio (Class B): Long-term
growth.
AMERICAN CENTURY INVESTMENTS VARIABLE PRODUCTS, advised by American Century
- Inflation Protection Fund (Class II): Long-term total return.
AMERICAN FUNDS INSURANCE SERIESSM, advised by Capital Research and Management
Company
- Global Growth Fund (Class 2): Long-term growth.
- Global Small Capitalization Fund (Class 2): Long-term growth.
- Growth Fund (Class 2): Long-term growth.
- Growth-Income Fund (Class 2): Growth and income.
- International Fund (Class 2): Long-term growth.
BARON CAPITAL FUNDS TRUST, advised by BAMCO, Inc.
- Baron Capital Asset Fund (Insurance Shares): Maximum capital appreciation.
The Board of Trustees of the Baron Capital Asset Fund has approved a
reorganization pursuant to which the assets of the Capital Asset Fund would be
acquired and certain liabilities of the Fund would be assumed by the LVIP Baron
Growth Opportunities Fund. This reorganization is subject to the satisfaction of
certain conditions, including approval by the Baron Capital Asset Fund's
shareholders. This reorganization is scheduled to occur in June 2007.
DELAWARE VIP TRUST, advised by Delaware Management Company
- Capital Reserves Series (Service Class): Current income.
- Diversified Income Series (Service Class): Total return.
- Emerging Markets Series (Service Class): Capital appreciation.
(Sub-advised by Mondrian Investment Partners Limited)
- High Yield Series (Service Class): Capital appreciation.
- REIT Series (Service Class): Total return.
THIS FUND WILL NOT BE OFFERED IN CONTRACTS ISSUED ON OR AFTER JUNE 4, 2007.
- Small Cap Value Series (Service Class): Capital appreciation.
- Trend Series (Service Class): Capital appreciation.
- U.S. Growth Series (Service Class): Capital appreciation.
- Value Series (Service Class): Long-term capital appreciation.
DWS INVESTMENTS VIT FUNDS, advised by Deutsche Asset Management Inc. and
subadvised by Northern Trust Investments, Inc.
- DWS Equity 500 Index VIP (Class B): Capital appreciation.
THIS FUND WILL NOT BE OFFERED IN CONTRACTS ISSUED ON OR AFTER JUNE 4, 2007.
- DWS Small Cap Index VIP (Class B): Capital appreciation.
THIS FUND WILL NOT BE OFFERED IN CONTRACTS ISSUED ON OR AFTER JUNE 4, 2007.
FIDELITY(R) VARIABLE INSURANCE PRODUCTS, advised by Fidelity Management and
Research Company
- Contrafund(R) Portfolio (Service Class 2): Long-term capital appreciation.
- Equity-Income Portfolio (Service Class 2): Reasonable income.
THIS FUND IS NOT OFFERED IN CONTRACTS ISSUED ON OR AFTER JUNE 6, 2005.
- Growth Portfolio (Service Class 2): Capital appreciation.
- Mid Cap Portfolio (Service Class 2): Long-term growth.
- VIP Overseas Portfolio (Service Class 2): Long-term growth.
FRANKLIN XXXXXXXXX VARIABLE INSURANCE PRODUCTS TRUST, advised by Franklin
Advisers, Inc. for the Franklin Income Securities Fund and the Franklin
Small-Mid Cap Growth Securities Fund, by Xxxxxxxxx Global Advisors Limited for
the Templeton Global Income Securities Fund and the Templeton Growth Securities
Fund, and by Franklin Mutual Advisors, LLC for the Mutual Shares Securities
Fund.
- Franklin Income Securities Fund (Class 2): Current income.
- Franklin Small-Mid Cap Growth Securities Fund (Class 2): Long-term growth.
- Mutual Shares Securities Fund (Class 2): Capital appreciation.
- Templeton Global Income Securities Fund (Class 2): Total return.
- Templeton Growth Securities Fund (Class 2): Long-term growth.
(Subadvised by Xxxxxxxxx Asset Management Ltd.)
THIS FUND WILL NOT BE OFFERED IN CONTRACTS ISSUED ON OR AFTER JUNE 4, 2007.
JANUS ASPEN SERIES, advised by Janus Capital Management LLC
- Balanced Portfolio (Service Class): Long-term growth and current income.
THIS FUND IS NOT OFFERED IN CONTRACTS ISSUED ON OR AFTER JUNE 6, 2005.
- Mid Cap Growth Portfolio (Service Class): Long-term growth.
THIS FUND IS NOT OFFERED IN CONTRACTS ISSUED ON OR AFTER JUNE 6, 2005.
- Worldwide Growth Portfolio (Service Class): Long-term growth.
THIS FUND IS NOT OFFERED IN CONTRACTS ISSUED ON OR AFTER MAY 24, 2004.
LINCOLN VARIABLE INSURANCE PRODUCTS TRUST, advised by Lincoln Investment
Advisors Corporation.
- LVIP Capital Growth Fund (Service Class): Capital appreciation.
(Subadvised by Wellington Management)
THIS FUND WILL BE AVAILABLE AS OF JUNE 4, 2007.
- LVIP Xxxxx & Steers Global Real Estate Fund (Service Class): Total Return.
(Subadvised by Xxxxx & Steers Capital Management)
THIS FUND WILL BE AVAILABLE AS OF JUNE 4, 2007..
- LVIP Delaware Bond Fund (Service Class): Current income.
(Subadvised by Delaware Management Company)
(formerly Bond Fund)
- LVIP Delaware Growth and Income Fund (Service Class): Capital appreciation.
(Subadvised by Delaware Management Company)
(formerly Growth and Income Fund)
- LVIP Delaware Social Awareness Fund (Service Class): Capital appreciation.
(Subadvised by Delaware Management Company)
(formerly Social Awareness Fund)
- LVIP Delaware Special Opportunities Fund (Service Class): Capital
appreciation.
(Subadvised by Delaware Management Company)
THIS FUND WILL BE AVAILABLE AS OF JUNE 4, 2007.
- LVIP FI Equity-Income Fund (Service Class): Income.
(Subadvised by Pyramis Global Advisors LLC)
(formerly Equity-Income Fund)
THIS FUND IS NOT OFFERED IN CONTRACTS ISSUED BEFORE JUNE 6, 2005.
- LVIP Growth Opportunities Fund (Service Class): Long-term growth.
(Subadvised by BAMCO, Inc.)
The Board of Trustees of the Growth Opportunities Fund, a series of the Lincoln
Variable Insurance Products Trust, has approved a reorganization pursuant to
which the assets of the Growth Opportunities Fund would be acquired and the
liabilities of the Fund would be assumed by the LVIP Baron Growth Opportunities
Fund. This reorganization is subject to the satisfaction of certain conditions,
including (i) completion of the reorganization of the Baron Capital Asset Fund
with the LVIP Baron Growth Opportunities Fund, a series of the Lincoln Variable
Insurance Products Trust, and (ii) approval by the Growth Opportunities Fund's
shareholders. This reorganization is scheduled to occur in June 2007.
- LVIP Janus Capital Appreciation Fund (Service Class): Long-term growth.
(Subadvised by Janus Capital Management LLC) (formerly Capital Appreciation Fund
and Growth Fund)
- LVIP Xxxxxxx International Growth Fund (Service Class): Long-term capital
appreciation.
(Subadvised by Xxxxxxx Capital Management, LLC)
THIS FUND WILL BE AVAILABLE AS OF JUNE 4, 2007.
- LVIP MFS(R) Value Fund (Service Class): Long-term growth of capital.
(Subadvised by Massachusetts Financial Services Company)
THIS FUND WILL BE AVAILABLE AS OF JUNE 4, 2007.
- LVIP Mid-Cap Growth Fund (Service Class): Capital appreciation.
(Subadvised by Xxxxxx Investment Partners)
THIS FUND WILL BE AVAILABLE AS OF JUNE 4, 2007.
- LVIP Mid-Cap Value Fund (Service Class): Long-term capital appreciation.
(Subadvised by Wellington Management)
THIS FUND WILL BE AVAILABLE AS OF JUNE 4, 2007.
- LVIP Mondrian International Value Fund (Service Class): Long-term capital
appreciation.
(Subadvised by Mondrian Investment Partners Limited) (formerly International
Fund)
- LVIP Money Market Fund (Service Class): Preservation of capital.
(Subadvised by Delaware Management Company)
- LVIP S&P 500 Index Fund (Service Class): Capital appreciation.
(Subadvised by Mellon Capital Management Corporation) (formerly Core Fund)
- LVIP Small-Cap Index Fund (Service Class): Capital appreciation.
(Subadvised by Mellon Capital Management Corporation)
THIS FUND WILL BE AVAILABLE AS OF JUNE 4, 2007.
- LVIP X. Xxxx Price Growth Stock Fund (Service Class): Long-term growth of
capital.
(Subadvised by X. Xxxx Price Associates, Inc.)
THIS FUND WILL BE AVAILABLE AS OF JUNE 4, 2007.
- LVIP X. Xxxx Price Structured Mid-Cap Growth Fund (Service Class): Maximum
capital appreciation.
(Subadvised by X. Xxxx Price Associates, Inc.) (formerly Aggressive Growth Fund)
- LVIP Templeton Growth Fund (Service Class): Long-term growth of capital.
(Subadvised by Xxxxxxxxx Investment Counsel, LLC)
THIS FUND WILL BE AVAILABLE AS OF JUNE 4, 2007.
- LVIP UBS Global Asset Allocation Fund (Service Class): Total return.
(Subadvised by UBS Global Asset Management (Americas) Inc. (UBS Global AM)
(formerly Global Asset Allocation Fund)
- LVIP Value Opportunities Fund (Service Class): Long-term capital
appreciation.
(Subadvised by Xxxxxx, Greinger, Xxxxxxx, Xxxxx & Co.)
THIS FUND WILL BE AVAILABLE AS OF JUNE 4, 2007.
- LVIP Wilshire 2010 Profile Fund (Service Class): Total return; a fund of
funds.
(Subadvised by Wilshire Associates Incorporated)
THIS FUND WILL BE AVAILABLE AS OF JUNE 4, 2007.
- LVIP Wilshire 2020 Profile Fund (Service Class): Total return; a fund of
funds.
(Subadvised by Wilshire Associates Incorporated)
THIS FUND WILL BE AVAILABLE AS OF JUNE 4, 2007.
- LVIP Wilshire 2030 Profile Fund (Service Class): Total return; a fund of
funds.
(Subadvised by Wilshire Associates Incorporated)
THIS FUND WILL BE AVAILABLE AS OF JUNE 4, 2007.
- LVIP Wilshire 2040 Profile Fund (Service Class): Total return; a fund of
funds.
(Subadvised by Wilshire Associates Incorporated)
THIS FUND WILL BE AVAILABLE AS OF JUNE 4, 2007.
- LVIP Wilshire Aggressive Profile Fund (Service Class): Capital
appreciation; a fund of funds.
(Subadvised by Wilshire Associates Incorporated) (formerly Aggressive Profile
Fund)
- LVIP Wilshire Conservative Profile Fund (Service Class): Current income; a
fund of funds.
(Subadvised by Wilshire Associates Incorporated) (formerly Conservative Profile
Fund)
- LVIP Wilshire Moderate Profile Fund (Service Class): Total return; a fund
of funds.
(Subadvised by Wilshire Associates Incorporated) (formerly Moderate Profile
Fund)
- LVIP Wilshire Moderately Aggressive Profile Fund (Service Class): Growth
and income; a fund of funds.
(Subadvised by Wilshire Associates Incorporated) (formerly Moderately Aggressive
Profile Fund)
MFS(R) VARIABLE INSURANCE TRUSTSM, advised by Massachusetts Financial Services
Company
- Core Equity Series (Service Class): Capital appreciation.(formerly Capital
Opportunities Series)
THIS FUND IS NOT OFFERED IN CONTRACTS ISSUED ON OR AFTER JUNE 6, 2005.
- Emerging Growth Series (Service Class): Long-term growth.
THIS FUND IS NOT OFFERED IN CONTRACTS ISSUED ON OR AFTER JUNE 6, 2005.
- Total Return Series (Service Class): Income and growth.
- Utilities Series (Service Class): Growth and income.
XXXXXXXXX XXXXXX ADVISERS MANAGEMENT TRUST, advised by Xxxxxxxxx Xxxxxx
Management, Inc.
- Mid-Cap Growth Portfolio (I Class): Capital appreciation.
THIS FUND WILL NOT BE OFFERED IN CONTRACTS ISSUED ON OR AFTER JUNE 4, 2007.
- Regency Portfolio (I Class): Long-term growth.
THIS FUND WILL NOT BE OFFERED IN CONTRACTS ISSUED ON OR AFTER JUNE 4, 2007.
XXXXXX VARIABLE TRUST, advised by Xxxxxx Investment Management, LLC
- Growth & Income Fund (Class IB): Capital growth and current income.
THIS FUND IS NOT OFFERED IN CONTRACTS ISSUED ON OR AFTER MAY 24, 2004.
- Health Sciences Fund (Class IB): Capital appreciation.
THIS FUND IS NOT OFFERED IN CONTRACTS ISSUED ON OR AFTER MAY 24, 2004.
INVESTMENT REQUIREMENTS
Contractowners who have elected 4LATER(R) Advantage, the LINCOLN
SMARTSECURITY(R) Advantage, or I4LIFE(R) Advantage with the Guaranteed Income
Benefit will be subject to the following requirements on variable subaccount
investments. If the contractowner does not elect any of these benefits, the
Investment Requirements will not apply to the contract.
Investment Requirements have not been enforced at this time. A 30 day advanced
written notice is required before the Investment Requirements will be enforced.
These requirements will be based on a review of the subaccount investments of
the contractowners who have these riders and market conditions.
No more than 35% of the contract value (includes Account Value if I4LIFE(R)
Advantage is in effect) can be invested in the following subaccounts ("Limited
Subaccounts"):
- AIM V.I. International Growth Fund
- AllianceBernstein Global Technology Portfolio
- AllianceBernstein International Value Portfolio
- AllianceBernstein Small/Mid Cap Value Portfolio
- American Funds Global Growth Fund
- American Funds Global Small Capitalization Fund
- American Funds International Fund
- Baron Capital Asset Fund
- Delaware VIP Emerging Markets Series
- Delaware VIP REIT Series
- Delaware VIP Small Cap Value Series
- Delaware VIP Trend Series
- DWS Small Cap Index VIP
- Fidelity(R) VIP Overseas Portfolio
- FTVIPT Franklin Small-Mid Cap Growth Securities Fund
- FTVIPT Templeton Growth Securities Fund
- Janus Aspen Mid Cap Growth Portfolio
- Janus Aspen Worldwide Growth Portfolio
- LVIP Xxxxx & Steers Global Real Estate Fund
- LVIP Growth Opportunities Fund
- LVIP Xxxxxxx International Growth Fund
- LVIP Mid-Cap Growth Fund
- LVIP Mondrian International Value Fund
- LVIP Small-Cap Index Fund
- LVIP X. Xxxx Price Structured Mid-Cap Growth Fund
- LVIP Templeton Growth Fund
- Xxxxxxxxx Xxxxxx AMT Mid-Cap Growth Portfolio
All other variable subaccounts will be referred to as "Non-Limited Subaccounts".
The contractowner can select the percentages of contract value, if any,
allocated to the Limited Subaccounts, but the cumulative total investment in all
the Limited Subaccounts cannot exceed 35% of the total contract value. On each
quarterly anniversary of the effective date of any of these benefits, if the
contract value in the Limited Subaccounts exceeds 35%, the Company will
rebalance the contract value so that the contract value in the Limited
Subaccounts is 30%.
If rebalancing is required, the contract value in excess of 30% will be removed
from the Limited Subaccounts on a pro rata basis and invested in the remaining
Non-Limited Subaccounts on a pro rata basis according to the contract value
percentages in the Non-Limited Subaccounts at the time of the reallocation. If
there is no contract value in the Non-Limited Subaccounts at that time, all
contract value removed from the Limited Subaccounts will be placed in the
Company's VIP Money Market subaccount.
Subaccounts may move on or off the Limited Subaccount list, the percentages of
contract value allowed in the Limited Subaccounts may change, or the frequency
of the contract value rebalancing may change, at the Company's sole discretion,
but changes are limited to no more than once per calendar year. The
contractowner will be notified at least 30 days prior to the date of any change.
Such modifications may be made at any time when the Company believes the
modifications are necessary to protect its ability to provide the guarantees
under these Riders. The decision to make modifications will be based on several
factors including the general market conditions and the style and investment
objectives of the subaccount investments.
When the contractowner is notified of a change or when the Company intends to
enforce the Investment Requirements, the contractowner may:
1. drop the applicable rider immediately, without waiting for a termination
event if the contractowner does not wish to be subject to these Investment
Requirements;
2. submit his/her own reallocation instructions for the contract value in
excess of 35% in the Limited Subaccounts; or
3. take no action and be subject to the quarterly rebalancing as described
above.
EXHIBIT C
GENERAL TERMS
1. PREMIUM TAX:
The Reinsurer will not reimburse the Company for premium taxes.
2. DIVIDEND PAYMENTS:
The Reinsurer will not reimburse the Company for dividends paid pursuant to
the Riders.
3. LOANS: The Reinsurer will not participate in loans or other forms of
indebtedness as respects the Riders.
4. INTEREST CALCULATION ON LATE PAYMENTS:
Premiums remaining unpaid for more than 30 calendar days from the due date
as specified in Exhibit F or otherwise required will accrue interest from
the due date at a rate equal to the Three Month London Interbank Offering
Rate (LIBOR) as published in the Wall Street Journal (or if not available,
a comparable publication) on the due date or, if the due date is not a
business day, on the next business day after the due date, plus 50 basis
points per annum to be compounded and adjusted every three months after
such due date. Exhibit C-1.
RATES AND TERMS FOR
1. REINSURANCE STRUCTURE: coinsurance
2. BILLING FREQUENCY: Monthly.
3. PREMIUMS: Reinsurance premium means the Reinsurer's quota share of 100% of
the Rider fees collected for the Riders. Such reinsurance premiums will be
paid, net of any balances due between the parties under the Agreement.
4. BENEFITS: The Company will determine benefit claims within 15 calendar days
of each Accounting Period. Reinsurer will pay to the Company the
Reinsurer's proportionate share of each payout made by the Ceding Company
once the rider benefits are in effect and the account value is zero and
until the Rider is terminated.
For the sake of clarity, the Reinsurer will have no benefit payment
obligations after annuitization, except in the case of annuitizations that
occur as a result of either state legal requirements or broker dealer
imposed rules only when the maximum annual withdrawal amount as defined in
the Prospectus or Rider exceeds the Company's then current annualized
annuitization amount otherwise payable under a lifetime with applicable
period certain annuity option. In the case of the exceptions noted above,
the Company will pay the Reinsurer cash equal to the Reinsurer's quota
share of the contract owners account value on annuitization at the next
accounting period and the Reinsurer will continue to pay its quota share of
the annuity payments due thereafter.
EXHIBIT F
REINSURANCE REPORTS
REMITTANCE REPORTING:
The Company will self-administer reinsurance and report all Riders ceded
pursuant to this Agreement by means of the reports specified in this Exhibit and
any other reports reasonably requested by the Reinsurer.
1. Inforce weekly and monthly policy data
The Company will submit an electronic report within three (3) business days
following each Wednesday and within 3 (three) business days following the end of
each Accounting Period the following information.
- POLICY
- Issue Date
- TYPE
- ISS_AGE
- SEX
- JTISSAGE
- SEX_JT
- PROD
- SHRCLASS
- ACCT_VAL
- TOT_DEPS
- TOT_WD
- GMWB_INT
- GMWB_CUR
- M&E
- Max Wd
- Rem Max Wd
- AWS
- AWS Amount x AWS Mode
- Asset Allocation Investment Model Indicator
- Qualified/Non Qualified Indicator
- Broker Dealer Indicator
2. Transaction Data
The Company will submit an electronic data report within fifteen (15) calendar
days following the end of each Accounting Period in substantial accord with the
following and as mutually agreed upon by the parties.
- Policy Number
- Jt-Sing
- Issue Date
- Post Date
- New Business
- Transaction
- Transaction Amount
3. Monthly Reinsurance Report
The Company wiFll submit an electronic report within fifteen (15) calendar days
following the end of each Accounting Period.
Total (a) Quota Share % (b) (a) * (b)
(1) Premium - Rider Fees Collected
(2) GMWB Claims Paid _______________________________________________
(3) Account Value (per Appendix C.4) _______________________________________________
(4) Annuity Payments (per Appendix C.4) _______________________________________________
(5) Cash Settlement to Reinsurer / _______________________________________________
(Ceding Company) (1) - (2) + (3) - (4)
Any amounts shown in such reports as due from the Company shall be paid by the
Company when submitting the reports to the Reinsurer. If a report shows an
amount due from the Reinsurer, the amount shall be paid by the Reinsurer within
thirty (30) days of its receipt of such report. Any adjustments made necessary
by changes in reinsurance effective during a previous Accounting Period will
also be reported. For clarity, the first Monthly Reinsurance Report will be for
the July, 2007 Accounting Period with the electronic report submitted by the
Company by August 15, 2007.
4. Annual Statutory Report
Within thirty (30) days after the end of each calendar year, the Company shall
furnish the Reinsurer with a summary report that includes claims, Gross
Statutory Reserves, Net Statutory Reserves and tax reserves. Gross Statutory
Reserve means the Company's reserves associated with the Business Covered as
defined in Exhibit A on a standalone basis for
Indiana insurance regulatory
purposes before reflecting reinsurance under this Agreement. Net Statutory
Reserves means the Company's net reserves associated with the Business Covered
as defined in Exhibit A on a standalone basis for
Indiana insurance regulatory
purposes after reflecting reinsurance under this Agreement. For purposes of this
Agreement, Statutory Reserves shall be computed on a basis consistent with the
Company's
Indiana insurance regulatory reporting valuation practices as of July
1, 2007.
5. The Company will make the daily fund portfolio unit price available to the
Reinsurer.
6. The Company will provide a report which indicates when a Rider is changed,
continued upon owners death, terminated, or converted to I4LIFE(R)
Advantage no later than a month after the Effective Date. Thereafter the
Company will submit an electronic data report with this information within
fifteen (15) calendar days following the end of each Accounting Period.
7. The Company will submit a Tax Reserve Certification annually by June 1st,
(See Exhibit F-2 for Sample).
EXHIBIT F-2
TAX RESERVE CERTIFICATION FOR SELF ADMINISTERED BUSINESS CEDED TO SWISS RE LIFE
& HEALTH AMERICA INC. FROM (NAME OF COMPANY)
In force and Reserves at December 31, 200x:
Plan: Type: SM/NSM/AGGR/TOTAL
In force Reinsured Amount: _____________
In force Number of Riders:_____________
Tax Reserve as at December 31, 200x:
RESERVE BASIS
RESERVE (TABLE, INTEREST
TYPE AMOUNT ($) RATE AND METHOD)
Other** (specify)
Total
**If credit for deficiency reserves is being taken, please specify under
"other".
As the valuation actuary of the above named company I certify that the
information above is correct as shown.
Name:
Signature:
Actuarial Designation:
Title:
Date:
