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ANNEX C
ASSUMPTION REINSURANCE AGREEMENT
between
▇▇▇▇ ▇▇▇▇▇▇▇ MUTUAL LIFE INSURANCE COMPANY
and
UNICARE LIFE & HEALTH INSURANCE COMPANY
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.................................................. 2
ARTICLE II BUSINESS ASSUMED............................................. 8
2.1 Coverage..................................................... 8
2.2 Transfer of Reserves......................................... 8
2.3 Third Party Reinsurance...................................... 8
ARTICLE III ASSUMPTION CERTIFICATES...................................... 9
3.1 Policyholder Notices......................................... 9
3.2 Right to Object.............................................. 9
3.3 Novated Policies............................................. 9
3.4 Direct Obligations........................................... 10
3.5 Release of Company; Indemnity................................ 10
ARTICLE IV GBO EXCLUDED BUSINESS........................................ 11
4.1 Assumption Agreement Inapplicable
__to Excluded Business....................................... 11
4.2 Company's Indemnification for GBO
__Excluded Business.......................................... 11
ARTICLE V GENERAL PROVISIONS........................................... 11
5.1 Policy Administration........................................ 11
5.2 Misunderstanding and Oversights.............................. 11
ARTICLE VI CONSIDERATION FOR ASSUMPTION
REINSURANCE ............................................................. 12
ARTICLE VII DUTY OF COOPERATION.......................................... 12
ARTICLE VIII ARBITRATION.................................................. 12
8.1 General...................................................... 12
ARTICLE IX INDEMNIFICATION......................... 13
9.1 The Company.................................................. 13
9.2 The Reinsurer................................................ 13
9.3 Indemnification Procedurs.................................... 13
ARTICLE X MISCELLANEOUS PROVISIONS..................................... 14
10.1 No Third Party Beneficiaries................................. 14
10.2 Headings and Exhibit......................................... 14
10.3 Notices...................................................... 14
10.4 Severability................................................. 16
10.5 Assignment................................................... 16
10.6 Successors and Assigns....................................... 16
10.7 Execution in Counterparts.................................... 16
10.8 Amendments................................................... 16
10.9 Waiver....................................................... 16
10.10 Interpretation............................................... 16
10.11 Entire Agreement............................................. 17
10.12 Governing Law................................................ 17
10.13 Severability and Governing Law............................... 17
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EXHIBITS
A Policyholder Notice
B Certificate of Assumption
C Notice of Objection to Assumption
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ASSUMPTION REINSURANCE AGREEMENT
This Assumption Reinsurance Agreement (the "Assumption Agreement"), is
made and entered into as of the Effective Time (as hereinafter defined), by and
between ▇▇▇▇ ▇▇▇▇▇▇▇ MUTUAL LIFE INSURANCE COMPANY, a mutual life insurance
company organized under the laws of Massachusetts ("the Company"), and UNICARE
LIFE & HEALTH INSURANCE COMPANY, a stock life insurance company organized under
the laws of Delaware ("the Reinsurer").
WHEREAS, the Company and WellPoint Health Networks Inc., a California
corporation ("WellPoint") and the indirect parent of the Reinsurer, have entered
into a Purchase and Sale Agreement, dated as of October 10, 1996 (the "Purchase
Agreement"), which provides for the sale by the Company to WellPoint of the "GBO
Included Business" (as hereinafter defined);
WHEREAS, to effect such sale of the GBO Included Business, the Purchase
Agreement provides for, among other things, the sale and transfer by the Company
to the Reinsurer of the GBO Division Assets (as hereinafter defined) and the
assignment by the Company, and assumption by Reinsurer, of the GBO Division
Liabilities (as hereinafter defined), as well as the sale by ▇▇▇▇ ▇▇▇▇▇▇▇
Subsidiaries, Inc., a wholly-owned subsidiary of the Company, of the GBO
Subsidiary Shares (as hereinafter defined) to WellPoint;
WHEREAS, the Company and the Reinsurer have entered into a Coinsurance
Agreement, as of the date hereof, pursuant to which the Company has agreed to
cede to the Reinsurer, and the Reinsurer has agreed to accept and indemnity
reinsure, on a 100% coinsurance basis, all of the Reserves and Liabilities (as
hereinafter defined) arising under or with respect to the Coinsured Policies (as
hereinafter defined) as contemplated by the Purchase Agreement (the "Coinsurance
Agreement");
WHEREAS, certain of the GBO Division Assets are to be sold and
transferred by the Company to the Reinsurer, and certain of the GBO Division
Liabilities are to be assigned by the Company and assumed by the Reinsurer,
under the Coinsurance Agreement; and
WHEREAS, the Reinsurer has agreed to perform administrative services
with respect to the Coinsured Policies pursuant to an administration agreement
(the "Administration Agreement") entered into between the Company and the
Reinsurer as of the Effective Time (as hereinafter defined); and
WHEREAS, the Purchase Agreement provides that the Reinsurer shall have
the right, in its sole discretion, to elect
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to assumption reinsure the Coinsured Policies, with a concurrent novation and
complete release of the Company from any liability under such Coinsured
Policies, on a state by state basis after the Effective Time upon the receipt of
any and all applicable regulatory approvals and notice to relevant Policyholders
followed by expiration of the applicable period with no opt out by such
Policyholders or the obtaining of required consents from such Policyholders, as
the case may be, under the terms and conditions set forth herein;
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, the Company and the Reinsurer mutually agree as
follows:
ARTICLE I
DEFINITIONS
As used in this Assumption Agreement, the following capitalized terms
shall have the following meanings (definitions are applicable to both the
singular and the plural forms of each term defined in this Article_I):
"Administration Agreement" shall have the meaning set forth in the
third recital hereof.
"Affiliate" of a specified Person means a Person that (at the time when
the determination is to be made) directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the specified Person. As used in the foregoing sentence, the terms "control"
(including, with correlative meaning, the terms "controlling," "controlled by"
and "under common control with") means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise.
"Business Day" means any day (other than a Saturday or Sunday) on which
banks are permitted to be open and transact business in Boston, Massachusetts
and Los Angeles, California.
"Certificate of Assumption" shall have the meaning set forth in Section
3.1.
"Coinsurance Agreement" shall have the meaning set forth in the fourth
recital hereof.
"Coinsurance Closing Date" shall have the meaning set forth in
Section_2.1 of the Coinsurance Agreement.
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"Coinsured Policies" means the Existing GBO Policies and the Transition
GBO Policies.
"Effective Time" means 12:01 A.M. Eastern Time on the Reinsurance
Closing Date.
"Existing GBO Policies" means all GBO Business Policies other than GBO
Excluded Business Policies issued by the Company before the Effective Time which
are in effect on the Effective Time and such GBO Business Policies not in effect
on the Effective Time, for which Reserves have been established on the Closing
GAAP Balance Sheet, which will be coinsured by Reinsurer at the Effective Time
(but excluding all coverages other than life, accidental death and
dismemberment, survivor income benefits, long-term disability and short-term
disability coverages which expired more than three (3) years prior to the
Effective Time and which are part of the GBO Included Business) pursuant to the
Coinsurance Agreement.
"GBO Business" means the United States, Puerto Rico and Guam group
benefit operations of the Company, including the ASO Contracts business, the
group health, group dental, group vision, group long-term disability, group
short-term disability, group accident and sickness, and group pharmacy business,
the business conducted by the GBO Subsidiaries, network arrangements, group life
businesses, group accidental death and dismemberment business, individual
accident and health converted business and individual life converted business,
but excluding the business conducted by HealthPlan Management Services, Inc.,
long-term care insurance, group creditor insurance and all insurance business
written, placed or serviced outside of the United States by the International
Group Program business unit of the Company either directly by the Company or
through ▇▇▇▇ ▇▇▇▇▇▇▇ Services Internacionais S/C Limitada, ▇▇▇▇ ▇▇▇▇▇▇▇
International Services, S.A. and ▇▇▇▇ ▇▇▇▇▇▇▇ International Services Pte, Ltd.,
by the Maritime Life Assurance Company, by P.T. Asuransi Jiwa Bumiputera ▇▇▇▇
▇▇▇▇▇▇▇, by P.T. Indras Insan Jaya Utama, by ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance
(Malaysia) Berhad, by ▇▇▇▇ ▇▇▇▇▇▇▇ Life Assurance Company, Ltd., and by The
Interlife Assurance Public Company Ltd. or otherwise by the Company or any of
its Affiliates.
"GBO Business Policies" means all Insurance Policies issued in the
United States, Puerto Rico or Guam by the Company as part of the GBO Business.
"GBO Division Assets" means the GBO Included Assets held directly by
the Company.
"GBO Division Liabilities" means the GBO Included Liabilities which are
direct obligations of the Company.
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"GBO Excluded Business" means (i)_all group life insurance business
and/or group accidental death and dismemberment business constituting part of
the GBO Business engaged in directly by the Company ("Life or ADD") but issued
to clients of the GBO Business who are not also clients of the GBO Business with
respect to ASO Contracts business, group health, group dental, group vision,
group long-term disability, group short-term disability, group accident and
sickness, group pharmacy or network arrangements business engaged in directly by
the Company ("Accident and Health") provided, however, that notwithstanding the
foregoing, the following shall constitute GBO Excluded Business:
(w) any Life or ADD policy which after June 30, 1996 and prior to the
date of the Purchase Agreement is sold to or committed to a
client (and disclosed to WellPoint) which was an Accident and
Health client of the GBO Business as of June 30, 1996, regardless
as to when such Life or ADD policy is actually effective,
executed or delivered;
(x) any Life or ADD policy which became effective prior to July 1,
1996 with respect to a client which subsequent to June 30, 1996
and prior to the Effective Time becomes an Accident and Health
client of the GBO Business;
(y) all guaranteed access accounts constituting part of the GBO
Business, other than such accounts affiliated with the Company,
Ford Motor Company and Digital Equipment Corporation; and
(z) all supplementary contracts without life contingencies
constituting part of the GBO Business, other than such contracts
with Ford Motor Company; and
(ii) all individual life converted insurance policies issued
prior to the Effective Time relating to or arising from the GBO Business.
"GBO Excluded Business Policies" means all Insurance Policies
constituting part of the GBO Excluded Business.
"GBO Included Assets" means all right, title and interest in and to
(i)_every species of property other than Investment Assets, real, personal and
mixed, tangible and
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intangible, used primarily or exclusively in the conduct of the GBO Included
Business as of the Effective Time with such modifications and adjustments as are
set forth in Section 1.1(a) of the Purchase Agreement, and the rights under all
GBO Included Contracts as of the Effective Time, and (ii)_such amount of cash
and Investment Assets as are required to be transferred from the Company to
WellPoint and/or the Reinsurer under Section 8.1 of the Coinsurance Agreement
and Section 1.5 of the Purchase Agreement.
"GBO Included Business" means the GBO Business other than the GBO
Excluded Business.
"GBO Included Contract" means a Contract relating primarily or
exclusively to the GBO Included Business and to which the Company or one of the
GBO Subsidiaries is a party and which is in effect as of the Effective Time.
"GBO Included Liabilities" means those liabilities and
obligations of the Company and the GBO Subsidiaries under the GBO Included
Contracts and those liabilities and obligations as of the Effective Time of
the GBO Included Business for which, in accordance with the Company's past
accounting practices and procedures, amounts would be included within the
categories of liabilities identified on the Form of Closing GAAP Balance
Sheet, with such modification and adjustments as are set forth in Section
1.1(a) of the Purchase Agreement. All of the GBO Included Liabilities shall
have been incurred by Company or the GBO Subsidiaries, as the case may be,
in the ordinary course of business and shall be within the categories
reflected in the Closing GAAP Balance Sheet.
"GBO Subsidiaries" means Cost Care, Inc., TriState, Inc. and
▇▇▇▇▇▇▇ Association Services Group, Inc.
"GBO Subsidiary Shares" means all of the capital stock of Cost Care,
Inc. and ▇▇▇▇▇▇▇ Association Services Group, Inc., and the 60% of the capital
stock of TriState, Inc. owned by ▇▇▇▇ ▇▇▇▇▇▇▇ Subsidiaries, Inc.
"Insurance Policies" means all insurance policies, contracts, binders
or certificates of insurance (including certificates issued with respect to
group insurance policies), and all riders, endorsements and amendments thereto,
whether written or oral.
"Investment Assets" means cash, United States Treasury securities or
publicly traded bonds of United States corporations rated NAIC_Category 1 or 2
by the Securities Valuation Office of the National Association of Insurance
Commissioners.
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"Novated Policies" means the Coinsured Policies with respect to which
no rejection of assumption has been filed by a Policyholder pursuant to the
terms of Section 3.2 of this Assumption Agreement (or with respect to which
other applicable regulatory requirements have been met), and with respect to
which the terms of Section 3.4 apply.
"Permitted Jurisdictions" means the fifty states of the United States,
the District of Columbia, Puerto Rico and Guam.
"Person" means any corporation, individual, joint stock company, joint
venture, partnership, unincorporated association, governmental regulatory
entity, country, state or political subdivision thereof, trust or other entity.
"Policyholder" means a holder of a Coinsured Policy (or a
certificateholder under a Coinsured Policy to the extent that applicable law
grants such certificateholder the right to notification of, and to opt out or
consent to, assumption reinsurance of a Coinsured Policy).
"Purchase Agreement" shall have the meaning set forth in the first
recital hereof.
"Reserves" means the Company's reserves computed as of a specified date
and relating to the Company's business with respect to the Coinsured Policies
for all amounts of (i)_unearned premiums and (ii)_all losses and all loss
adjustment expenses, net of Third Party Reinsurance, calculated under SAP and as
would be described in the Company's Statutory Annual Statement on exhibits 8, 9,
10 or 11 (or any other exhibit then applicable) to such Statutory Annual
Statement of "Liabilities, Surplus and Other Funds" as if such Annual Statement
were being filed as of such specified date.
"Reserves and Liabilities" means all of the Reserves and other
liabilities and associated rights and obligations arising under the Coinsured
Policies including, but not limited to, liabilities for Benefits, surrenders,
returns and premium refunds, but excluding liabilities for guaranty fund
assessments and taxes that arise from or relate to the Existing GBO Policies and
are incurred during the period ending with the Effective Time.
"Third Party Reinsurance" shall mean all contracts of reinsurance with
The Maritime Life Assurance Company and independent parties unaffiliated with
the Company or any of its
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Affiliates under which the Company's Reserves and Liabilities with respect to
the Coinsured Policies or some portion thereof are transferred, whether or not
such contracts of reinsurance are also applicable to business other than the
Coinsured Policies.
"Transition GBO Policies" means all GBO Business Policies that are
issued or renewed by the Company after the Effective Time and coinsured by the
Reinsurer pursuant to Article VI of the Coinsurance Agreement.
"Transition Termination Date" means, with respect to Coinsured Policies
in each Permitted Jurisdiction, the earliest of (i)_ninety (90) days after the
date that Reinsurer has obtained all licenses and form and rate approvals
necessary to write all of the GBO Business Policies other than group term life
insurance policies and group accidental death and dismemberment insurance
policies in such jurisdiction, (ii)_the date of consummation of assumption
reinsurance of, and novation by the Company with respect to, all Coinsured
Policies in such jurisdiction, and (iii)_twenty-four (24) months from the
Reinsurance Closing Date with respect to group term life, group accidental death
and dismemberment, long-term disability and survivor income Coinsured Policies,
and thirty (30) months from the date of the Reinsurance Closing Date with
respect to all other Coinsured Policies.
ARTICLE II
BUSINESS ASSUMED
2.1. Coverage. From time to time after the Effective Time and upon the
terms and subject to the conditions and other provisions of this Assumption
Agreement and any required governmental and regulatory consents and approvals,
the Company, if requested to do so by the Reinsurer, hereby agrees to cede to
the Reinsurer and the Reinsurer hereby agrees to accept and reinsure, on an
assumption basis, any Coinsured Policy. Reinsurance pursuant to this Section_2.1
shall occur no less frequently than on a monthly basis; provided, however, that
reinsurance may occur more frequently if the parties hereto agree.
2.2 Transfer of Reserves. Notwithstanding the provisions of Section 2.1
hereof, the Reinsurer will not be deemed to have accepted and reinsured, on an
assumption basis, any Coinsured Policy unless the Reserves underlying such
Coinsured Policy shall have been ceded by the Company to the Reinsurer, and
accepted by the Reinsurer, pursuant to Article V of the Coinsurance Agreement,
effective as of the Effective Time.
2.3. Third Party Reinsurance. If any of the Coinsured
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Policies ceded to the Reinsurer pursuant to Section 2.1 hereof are reinsured
under Third Party Reinsurance at the time of assumption by the Reinsurer, then,
at the request of the Reinsurer, the Company will make commercially reasonable
efforts to obtain the consent of the Third Party Reinsurer to the transfer and
assignment to the Reinsurer of such Third Party Reinsurance. If such consent is
granted by the Third Party Reinsurer, then the Company will transfer and assign
to the Reinsurer, for no additional consideration, all of its rights, interests
and obligations under any such Third Party Reinsurance.
ARTICLE III
ASSUMPTION CERTIFICATES
3.1. Policyholder Notices. Upon the request of the Reinsurer to
reinsure, on an assumption basis, a Coinsured Policy pursuant to Section_2.1
hereof, and to the extent that the reinsurance of such Coinsured Policy is
permitted under applicable laws, rules or regulations or stated positions of
regulatory authorities, the Reinsurer shall prepare, with the cooperation of the
Company, a Policyholder notice, Certificate of Assumption and objection form,
and mail them to the Policyholder of such Coinsured Policy. Subject to
regulatory requirements of the various states, the Policyholder notices,
Certificates of Assumption and objection forms to be delivered to Policyholders
pursuant to this Section 3.1 shall be substantially in the forms attached hereto
as Exhibits A, B and C, respectively.
3.2. Right to Object. Subject to regulatory requirements of the various
states, the Company and the Reinsurer agree that a Policyholder will be allowed
to remain a Policyholder of the Company if such Policyholder refuses to effect
the assumption of its Coinsured Policy in accordance with this Article III
during the applicable period set forth in the Policyholder notice, and all of
the rights and obligations of the Company and the Policyholder under such
Coinsured Policy and of the Company and the Reinsurer under the Coinsurance
Agreement with respect to such Coinsured Policy, shall remain the same.
3.3. Novated Policies. In the event that a Coinsured Policy defined
herein as a Novated Policy is determined by applicable regulatory authorities or
by judicial decision (in either case, following the exhaustion of all rights of
appeal) not to have been novated, such Coinsured Policy shall, for all
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purposes of this Assumption Agreement, be deemed never to have been a Novated
Policy. Notwithstanding the foregoing, the fact that a Coinsurance Policy has
not been or cannot be assumed and novated by the Reinsurer pursuant to the terms
and conditions of this Assumption Agreement, for whatever reason, shall in no
event cause it not to be a Coinsured Policy under the Coinsurance Agreement.
3.4. Direct Obligations. The Reinsurer shall be the successor to the
Company under the Novated Policies as if the Novated Policies were direct
obligations originally issued by the Reinsurer. The Reinsurer shall be
substituted in the place and stead of the Company, and each Policyholder,
insured or beneficiary under a Novated Policy shall disregard the Company as a
party thereto and treat the Reinsurer as if it had been originally obligated
thereunder. Such persons shall have the right to file claims or take other
actions under the Novated Policies on or after the effective date of such
novation directly with the Reinsurer, and shall have a direct right of action
for insurance liabilities reinsured thereunder against the Reinsurer, and the
Reinsurer hereby consents to be subject to direct action taken by any such
persons under a Novated Policy. The Reinsurer accepts and assumes the Novated
Policies subject to any and all defenses, setoffs and counterclaims to which the
Company would be entitled with respect to such insurance liabilities, it being
expressly understood and agreed by the parties hereto that no such defenses,
setoffs or counterclaims are waived by the execution of this Assumption
Agreement or the consummation of the transactions contemplated hereby and that
the Reinsurer shall be fully subrogated to all such defenses, setoffs and
counterclaims.
3.5 Release of Company; Indemnity. Upon the consummation of the
assumption reinsurance of a Coinsured Policy from the Company to the Reinsurer
under this Assumption Agreement, the Company shall be released from any and all
liability with respect to such Coinsured Policy, except as may otherwise be
expressly set forth in the Transaction Documents. From and after the
consummation of the assumption reinsurance of a Coinsured Policy pursuant to
this Assumption Agreement, the Reinsurer shall assume and indemnify fully the
Company for any and all damages, costs and expenses, including reasonable
attorneys' fees and disbursements, arising out of, based upon or relating to
such Novated Policy, including, without limitation, liabilities for Extra
Contractual Obligations; provided, however, that the Reinsurer shall have no
obligation to indemnify the Company for any such damages, costs and expenses
arising out of,
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based on or relating to any bad faith claims practices, willful misconduct,
fraud or gross negligence of the Company or its Affiliates (without attributing
to the Company or its Affiliates the actions of the Reinsurer or its
Affiliates).
ARTICLE IV
GBO EXCLUDED BUSINESS
4.1 Assumption Agreement Inapplicable to Excluded Business This
Assumption Agreement does not apply to and specifically excludes the GBO
Excluded Business. The Company shall retain any and all liabilities and risks
with respect to the GBO Excluded Business Policies, and all profit, loss or
expense from the GBO Excluded Business shall be for the account of the Company.
4.2 Company's Indemnification for GBO Excluded Business. The Company
hereby agrees on demand to indemnify and hold harmless the Reinsurer and its
Affiliates, and their respective officers, directors and employees from and
against any and all damages, costs and expenses, including reasonable attorneys'
fees and disbursements, arising out of, based upon or relating to the GBO
Excluded Business.
ARTICLE V
GENERAL PROVISIONS
5.1. Policy Administration. To the extent that such transfers have not
already taken place pursuant to the terms and conditions of the Administration
Agreement, the Company agrees to cooperate fully with the Reinsurer in the
transfer of all books, records, papers or any other documents relating to such
Novated Policies.
5.2. Misunderstandings and Oversights. If any delay, omission, error or
failure to pay amounts due or to perform any other act required by this
Assumption Agreement is unintentional and caused by misunderstanding or
oversight, the Company and the Reinsurer will adjust the situation to what it
would have been had the misunderstanding or oversight not occurred. The party
first discovering such misunderstanding or oversight, or act resulting from the
misunderstanding or oversight, will notify the other party in writing promptly
upon discovery thereof, and the parties shall act to correct such
misunderstanding or oversight within thirty (30) Business Days of receipt of
such notice. However, this Section shall not be construed as a waiver by
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either party of its right to enforce strictly the terms of this Assumption
Agreement.
ARTICLE VI
CONSIDERATION FOR ASSUMPTION REINSURANCE
The consideration provided for in Article VIII of the Coinsurance
Agreement shall be the consideration for the assumption of the Novated Policies
(as direct obligations) by the Reinsurer, and there shall be no additional
consideration or premium due or payable under this Assumption Agreement.
ARTICLE VII
DUTY OF COOPERATION
Each party hereto shall cooperate fully with the other in all
reasonable respects in order to accomplish the objectives of this Assumption
Agreement. This duty to cooperate shall include obtaining the governmental and
regulatory consents and approvals and taking the other steps necessary for the
assumption of the Coinsured Policies, as described in Article III hereof. In
addition, this duty to cooperate shall include making available any Coinsured
Policy records which either party subsequently may require to resolve issues
related to claims or liabilities. The Company and the Reinsurer agree to perform
such additional acts and execute such additional documents and agreements as may
be necessary or desirable to carry out the purposes and objectives of this
Assumption Agreement; provided however, that the Reinsurer shall reimburse the
Company for reasonable out-of-pocket expenses incurred by the Company as a
result thereof.
ARTICLE VIII
ARBITRATION
8.1. General. Any dispute or difference between the parties with
respect to the operation or interpretation of, or arising from or relating to,
this Assumption Agreement on which an amicable understanding cannot be reached
shall be decided by binding arbitration. Arbitration hereunder shall be pursuant
to and in accordance with the terms, conditions and procedures set forth in
Article XV of the Purchase Agreement.
ARTICLE IX
INDEMNIFICATION
9.1. The Company. The Company hereby agrees on demand to indemnify and
hold harmless the Reinsurer and its Affiliates, and their respective officers,
directors and employees from and against any and all demands, actions,
proceedings, suits (by any person, entity or group, including, without
limitation, any governmental entity) and liabilities,
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paid or incurred (including reasonable attorneys' fees), resulting from or
arising out of the breach of or failure to perform any of the duties,
obligations, covenants or agreements of the Company contained in this Assumption
Agreement.
9.2. The Reinsurer. The Reinsurer hereby agrees on demand to indemnify
and hold harmless the Company and its Affiliates, and their respective officers,
directors and employees from and against any and all demands, actions,
proceedings, suits (by any person, entity or group, including, without
limitation, any governmental entity) and liabilities, paid or incurred
(including reasonable attorneys' fees), resulting from or arising out of the
breach of or failure to perform any of the duties, obligations, covenants or
agreements of the Reinsurer contained in this Assumption Agreement.
9.3 Indemnification Procedures. Indemnification under Section 9.1 and
9.2 hereof shall be made using the procedures, terms and conditions contained in
Section 14.2 and 14.3 of the Purchase Agreement as if fully set forth herein,
with (i)_references in Section 14.2(a) to "indemnification under Section 14.1 of
this Agreement" changed to refer to "indemnification under Section 9.1 or 9.2
hereof, as the case may be, of this Assumption Agreement", (ii)_the phrase
"except as provided in Section 14.1(g) and" deleted in Section 14.2(c),
(iii)_references in Section 14.3 to "this Article XIV" shall be changed to refer
to "this Section 9.1" or "this Section 9.2", as the case may be, and (iv)_the
phrases "and, in any event, within the time period referred to in Section
14.1(g)" and "So long as Indemnitee provides the Indemnity Notice within the
time period referred to in Section 14.1(g)," deleted from the text of Section
14.3.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1. No Third Party Beneficiaries. This Assumption Agreement is
between the Company and the Reinsurer, and the performance of the obligations of
each party under this Assumption Agreement shall be rendered solely to the other
party. In no instance shall anyone other than the Company or the Reinsurer, or
their successors or permitted assigns, have any rights, benefits or remedies
under this Assumption Agreement. Until the Reinsurer has reinsured a Coinsured
Policy on an
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assumption reinsurance basis pursuant to this Assumption Agreement, the
Reinsurer shall not be liable to any insured, contract owner, or beneficiary
under any Coinsured Policy.
10.2. Headings and Exhibit. Headings used herein are inserted solely
for the convenience of reference and are not a part of this Assumption Agreement
and shall not affect the terms hereof. The attached Exhibits are part of this
Assumption Agreement; provided, however, that in the event of a conflict or
difference in the terms and conditions of this Assumption Agreement (other than
the Exhibits) and the Exhibits, the terms and conditions of the Assumption
Agreement (other than the Exhibits) shall control.
10.3. Notices. All notices hereunder shall be in writing, addressed as
follows, or to such other address as may, from time to time, be given in
accordance with this Assumption Agreement:
If to the Company:
▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life Insurance Company
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life Insurance Company
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
17
If to the Reinsurer:
UniCARE Life & Health Insurance Company
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Chairman
and Chief Executive Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
UniCARE Life & Health Insurance Company
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.,
General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Notices shall be sent by United States mail, by registered or certified mail,
and shall be deemed to have been received three (3) Business Days after deposit
in the mail. Notices may also be sent by hand, by telefax, or by overnight
delivery service, and if so given, shall be deemed received when delivered if a
receipt of delivery is obtained.
10.4. Severability. If any term or provision of this Assumption
Agreement shall be held void, illegal, or unenforceable, the validity of the
remaining portions or provisions of this Assumption Agreement shall not be
affected thereby.
10.5. Assignment. This Assumption Agreement may not be assigned by
either party without the prior written consent of the other and any attempted
assignment without such consent shall be void.
15
18
10.6. Successors and Assigns. The provisions of this Assumption
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors and permitted assigns.
10.7. Execution in Counterparts. This Assumption Agreement may be
executed by the parties hereto in any number of counterparts, and by each of the
parties hereto in separate counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
10.8. Amendments. This Assumption Agreement may be amended only by
written amendment hereto executed by the parties.
10.9. Waiver. The failure of the Company or Reinsurer to insist on
strict compliance with this Assumption Agreement, or to exercise any right or
remedy under this Assumption Agreement, shall not constitute a waiver of any
rights provided under this Assumption Agreement, nor estop the parties from
thereafter demanding full and complete compliance nor prevent the parties from
exercising such a right or remedy in the future.
10.10. Interpretation. No provision of this Assumption Agreement shall
be construed against any party on the ground that such party drafted the
provision or caused it to be drafted.
10.11. Entire Agreement. This Assumption Agreement constitutes the
entire agreement and understanding between the parties hereto, and supersedes
all prior agreements, whether oral or written, between the parties, with respect
to the subject matter hereof.
10.12. Governing Law.This Assumption Agreement shall be governed by the
laws of the Commonwealth of Massachusetts, without giving effect to principles
of conflicts of law thereof.
10.13. Severability and Governing Law. If any term or provision of this
Assumption Agreement shall be held void, illegal, or unenforceable, the validity
of the remaining portions or provisions shall not be affected thereby. This
Assumption Agreement shall be governed by the laws of the Commonwealth of
Massachusetts, without giving effect to principles of conflicts of law thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Assumption
Agreement to be executed by their respective officers thereunto duly authorized,
on this __ day of January, 1997.
19
▇▇▇▇ ▇▇▇▇▇▇▇ MUTUAL LIFE
INSURANCE COMPANY
By: ____________________________________
Name:
Title:
UNICARE LIFE & HEALTH
INSURANCE COMPANY
By: ____________________________________
Name:
Title:
1
20
Exhibit A
▇▇▇▇ ▇▇▇▇▇▇▇ MUTUAL LIFE INSURANCE COMPANY
UNICARE LIFE & HEALTH INSURANCE COMPANY
________________,199__
Dear Policyholder:
We are pleased to notify you that through an agreement reached between
▇▇▇▇ ▇▇▇▇▇▇▇ MUTUAL LIFE INSURANCE COMPANY (the "Company") and UNICARE LIFE &
HEALTH INSURANCE COMPANY ("the Reinsurer"), the Reinsurer will become your
insurer and assume all liabilities, rights and duties of the insurer under your
policy.
Your rights as a policyholder will not be affected by this change in
insurance companies. All terms, obligations and values will remain the same. The
Reinsurer will perform all duties previously performed by the Company.
Your policy is identified in the enclosed Certificate of Assumption,
which should be attached to your policy.
While no action is required on your part to effect the transfer, you do
have the right to object by completing the enclosed form and returning it
together with the Certificate of Assumption in the accompanying postage-paid
envelope within thirty (30) days of the date of this notice.
If the objection notice is not received by the deadline, you will be
deemed to have accepted the transfer of your policy and will have no future
claims against the Company.
The Reinsurer is licensed to write this coverage in your state, and the
assumption agreement between the Company and the Reinsurer has been approved by
the Department of Insurance in Delaware, the domicile state of the Company [and
the Department of Insurance of your state].
If you have any questions about the assumption agreement or the
Reinsurer, please call us toll-free at [1-800-___-____]. Written inquiries can
be mailed to:
UniCARE Life & Health Insurance Company
. . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . .
It is our privilege to serve you.
Sincerely,
UNICARE LIFE & HEALTH INSURANCE COMPANY
By: __________________________________
21
▇▇▇▇ ▇▇▇▇▇▇▇ MUTUAL LIFE INSURANCE COMPANY
By: __________________________________
1
22
Exhibit B
UNICARE LIFE & HEALTH INSURANCE COMPANY
[ , Massachusetts]
CERTIFICATE OF ASSUMPTION
[Policy Number]
You are hereby notified that UniCARE Life & Health Insurance Company
("the Reinsurer") has, effective as of _________, 199_ (the "Effective Date"),
assumed liability for your policy of insurance with ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life
Insurance Company (the "Company").
From and after _________, 199_, all references in the policy to the
Company are hereby changed to the Reinsurer. The Reinsurer has assumed all
liabilities, rights and duties under your policy. You have no future claims
against the Company.
Your rights as a policyholder will not be affected by the changes in
insurance companies.
All correspondence and inquiries, including notices of claims, should
be submitted to:
UniCARE Life & Health Insurance Company
[ , Massachusetts]
This Certificate of Assumption forms a part of and should be attached
to your insurance policy issued to you by the Company.
IN WITNESS WHEREOF, UniCARE Life & Health Insurance Company has caused
this Certificate of Assumption to be duly signed and issued.
------------------------- ---------------------------
Secretary President
23
Exhibit C
NOTICE OF OBJECTION TO ASSUMPTION
Complete and return this form only if you object
to the assumption of your policy by
UniCARE Life & Health Insurance Company
To: UniCARE Life & Health Insurance Company
[ , Massachusetts]
Dear UniCARE Life & Health Insurance Company:
I hereby notify you that I object to the assumption by UniCARE Life &
Health Insurance Company of the [ ] policy which was issued by ▇▇▇▇ ▇▇▇▇▇▇▇
Mutual Life Insurance Company. I would like ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life Insurance
Company to remain as my insurer. Enclosed is the Assumption Certificate which
you sent to me.
POLICY NUMBER:
--------------
DATE: POLICYHOLDER SIGNATURE
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PRINT OR TYPE NAME
