REINSURANCE AGREEMENT
BETWEEN
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
OF HARTFORD, CONNECTICUT
(CEDING COMPANY)
AND
SWISS RE LIFE & HEALTH AMERICA INC.
OF HARTFORD, CONNECTICUT
(REINSURER)
EFFECTIVE
JULY 24, 2008
TABLE OF CONTENTS
ARTICLES
1 Definitions
2 Parties to Agreement
3 Basis of Reinsurance
4 Reinsurer's Liability
5 Reinsurance Premiums
6 Reinsurance Benefits
7 Credit for Reinsurance
8 Reporting
9 Recapture
10 DAC Tax
11 Extra-Contractual Obligations
12 Insolvency
13 Dispute Resolution
14 Arbitration
15 Technical Arbitration
16 Entire Agreement
17 Fund and Fee Changes, Internal Replacements
18 General Provisions
19 Good Faith
20 Representations and Warranties
21 Remedies
22 Commencement and Termination
23 Collateral and Trust
24 Proprietary Information/Confidentiality
25 Notices
SCHEDULES
A Business Reinsured
B Daily Reporting
C Monthly Reporting
D Fund Categories
E Calculation of Collateral Amount
F Ceding Company Data
G Eligible Security Valuation Rates
EXHIBITS
I Non-Disclosure and Confidentiality Agreement
II Trust Agreement
ARTICLE 1
DEFINITIONS
1.01 DEFINITIONS. As used herein for purposes of this Agreement, the following
terms have the following respective meanings:
"Accounting Period" shall have the meaning set forth in Section 5.01.
"Actuary" means a Member of the American Academy of Actuaries with expertise in
variable annuity modeling who is employed by a nationally recognized firm.
"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with the Person specified.
"Agreement" shall have the meaning set forth in Section 16.01.
"Applicable Period" means the number of complete calendar months between the
Collateral Calculation Date and the Effective Date.
"Business Day" means any day other than a Saturday, Sunday or other day on which
banks in Connecticut are required or permitted to be closed.
"Business Reinsured" shall have the meaning set forth in Section 3.01.
"Ceding Allowance" shall have the meaning set forth in Section 5.02.
"Ceding Company" shall have the meaning set forth in Section 2.01.
"Ceding Company Data" shall have the meaning set forth in Section 20.02.
"Code" shall have the meaning set forth in Section 10.01.
"Collateral" means all Eligible Securities held in the Trust Account at any
time.
"Collateral Amount" shall have the meaning set forth in Section 23.01.
"Collateral Calculation Date" means the Business Day on which the Required
Collateral is calculated by the Ceding Company.
"Collateral Rebalance Amount" shall have the meaning set forth in Section 23.06.
"Collateral Report" shall have the meaning set forth in Section 23.05.
"Contract Form" means any one of the Variable Annuity Contract forms or Rider
forms specified in Schedule A.
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Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
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"Control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Contract Value" shall have the meaning set forth in the Variable Annuity
Contract.
"Controllable Reserve Credit Event" shall have the meaning set forth in Section
7.02.
"Credit" shall have the meaning set forth in Section 7.01.
"Effective Date" shall have the meaning set forth in Section 22.01.
"Eligible Securities" shall mean any of the following:
Money market funds (as defined for purposes of Section 2a-7 of the
Investment Company Act of 1940);
- U.S. Treasury Bills;
- U.S. Treasury Notes;
- U.S. Treasury Bonds; and
- U.S. Treasury Inflation Protection Securities.
"Error" shall have the meaning set forth in Section18.05.
"Excess Required Collateral Withdrawal Notice" shall have the meaning set forth
in the Trust Agreement.
"Fair Market Value" shall have the meaning set forth in the Trust Agreement.
"Fixed Payout Option" shall have the meaning set forth in the Rider.
"Force Maleure" shall have the meaning set forth in Section 18.09.
"Fund" means any Investment Fund Option available under a Contract Form.
"Fund Categories" means any of the eleven (11) fund types listed in Schedule D.
"General Deductions Limitation" shall have the meaning set forth in Section
10.01.
"Grantor" means the grantor of the Trust Account, being either the Reinsurer or
an Affiliate of the Reinsurer.
"Initial Collateral Amount" shall have the meaning set forth in Section 23.03.
"Initial Reinsurance Premium" shall have the meaning set forth in Section 5.02.
"Internal Replacement" means a formal program initiated by the Ceding Company
under which a contract owner or one or more annuitant(s) is offered the
opportunity to replace a Variable Annuity Contract with another variable, fixed
or immediate annuity contract or to
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Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
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replace a Rider with another rider. Internal Replacement shall not include any
retail exceptions made by the Ceding Company at the request of a contract owner
or one or more annuitant(s)
"LIBOR" means the London interbank offered interest rate (expressed as a
percentage per annum) for U.S. dollar deposits having a three (3) month maturity
that appears on Reuters LIBOR01 as of 11:00 a.m. (New York time) on the
specified date. For purposes of this definition, "Reuters LIBOR01" means the
display designated as "LIBOR01" on the Reuters Service or such other page as may
replace LIBOR01 on that service or such other service or services as may be
nominated by the British Bankers' Association as the information vendor for the
purpose of displaying London interbank offered rates for U.S. dollars deposits.
"Material Communications" shall have the meaning set forth in Section 25.01.
[REDACTED]
"Net Cash Settlement" means Reinsurance Premium due the Reinsurer less
Reinsurance Benefits due the Ceding Company. Where Net Cash Settlement is
positive, such amount shall be due the Reinsurer. Where Net Cash Settlement is
negative, the absolute value of such amount shall be due the Ceding Company.
"Net Positive Consideration" shall have the meaning set forth in Section 10.01.
"Nonpayment Termination Notice" shall have the meaning set forth in Section
21.02.
"Owner" shall have the meaning set forth in Section 24.01.
"Party" and "Parties" shall have the meaning set forth in Section 2.01.
"Past Due Premium" shall have the meaning set forth in Section 21.02.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, unincorporated
organization, governmental authority or other entity.
"Procedures" shall have the meaning set forth in Section 14.02.
"Proprietary Information" shall have the meaning set forth in Section 24.01.
"Recipient" shall have the meaning set forth in Section 24.01.
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Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
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"Reinsurance Benefits" shall have the meaning set forth in Section 6.01 and
Section 6.02.
"Reinsurance Premium" shall have the meaning set forth in Section 5.03.
"Reinsurer" shall have the meaning set forth in Section 2.01.
"Reinsurer's Quota Share Percentage" shall have the meaning set forth in Section
4.03.
"Replacement Reinsurance" shall have the meaning set forth in Section 17.03.
"Representatives" means a Party's officers, directors, employees, agents or
professional advisors including accountants, actuaries and attorneys.
"Required Collateral" shall have the meaning set forth in Section 23.01.
"Reserve Credit Event" shall have the meaning set forth in Section 7.03.
"Rider" means those Guaranteed Income Benefit (GIB) rider forms listed on
Schedule A issued by the Ceding Company with a Variable Annuity Contract.
"Rider Fee" means the fee being assessed the contract owner for coverage under a
Rider as defined in the "Benefit Summary Page" attached to and made a part of
the Variable Annuity Contract.
"Routine Communications" shall have the meaning set forth in Section 16.03.
"SAP" means the statutory accounting principles, consistently applied, as
prescribed or permitted by the insurance regulatory authorities in the Ceding
Company's state of domicile.
"Securities Firm" means a leading market maker of over the counter equity and
multi-asset derivatives with expertise in variable annuity modeling.
"Specified Policy Acquisition Expenses" shall have the meaning set forth in
Section 10.01.
"Statutory Reserve" means the reserves required to be held by the Ceding Company
with respect to the Business Reinsured hereunder, calculated by the Ceding
Company in accordance with SAP and applicable valuation laws, regulations and
actuarial guidelines to which the Ceding Company is subject in its state of
domicile.
"Step-Up" shall have the meaning set forth in the Rider.
"Tax Treatment" shall have the meaning set forth in Section 24.04.
"Technical Arbitrator" shall have the meaning set forth in Section 15.03.
"Terminal Cash Settlement" shall have the meaning set forth in Section 9.04 and
Section 9.07.
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Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
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"Trust Account" shall have the meaning set forth in Section 23.02.
"Trust Agreement" shall have the meaning set forth in Section 23.02.
"Trustee" shall have the meaning set forth in the Trust Agreement.
"Uncontrollable Reserve Credit Event" shall have the meaning set forth in
Section 7.02.
"U.S. Treasury Securities" shall mean U.S. Treasury Bills, U.S. Treasury Notes,
U.S. Treasury Bonds and U.S. Treasury Inflation Protection Securities.
"Valuation Rate" shall be the applicable percentage, as defined in Schedule G,
to be applied to the Fair Market Value of each Eligible Security.
"Value" shall have the meaning set forth in Section 23.04.
"Value of Business Reinsured" shall have the meaning set forth in Section 9.05.
"Variable Annuity Contract" means any of the variable annuity contract forms
listed on Schedule A issued by the Ceding Company to a contract owner under
which the Ceding Company agrees to provide specified benefits in accordance with
specified terms and conditions.
"Withdrawal Notice" shall have the meaning set forth in the Trust Agreement.
1.02 OTHER DEFINITIONAL PROVISIONS.
a. For purposes of this Agreement, the words "hereof," "herein,"
"hereby" and other words of similar import refer to this Agreement
as a whole (including all Articles, Sections, Paragraphs, Exhibits
and Schedules of this Agreement) unless otherwise indicated.
b. The term "including" means "including but not limited to."
c. Whenever used in this Agreement, the masculine gender shall include
the feminine and neutral genders.
d. All references herein to Articles, Sections, Paragraphs, Exhibits and
Schedules shall be deemed references to Articles, Sections and
Paragraphs of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require.
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Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
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ARTICLE 2
PARTIES TO AGREEMENT
2.01 This is a coinsurance agreement for indemnity reinsurance solely between
Hartford Life and Annuity Insurance Company, a Connecticut insurance company
(the "Ceding Company"), and Swiss Re Life & Health America Inc., a Connecticut
insurance company, (the "Reinsurer"). The Ceding Company and Reinsurer may be
referred to individually as a "Party," and collectively as the "Parties".
2.02 This Agreement is solely between the Reinsurer and the Ceding Company. In
no instance will any Person other than the Reinsurer and the Ceding Company have
any rights under this Agreement. The Reinsurer will have no obligation to any
insured, owner, or beneficiary under the Business Reinsured.
2.03 This Agreement will be binding upon the Ceding Company and the Reinsurer
and their respective successors and permitted assigns.
2.04 This Agreement is between sophisticated parties, each of which has
reviewed this Agreement and is fully aware and informed about its terms and
conditions and the implications thereof. The Parties therefore agree that this
Agreement shall be construed without regard to the authorship of the language
and without any presumption or rule of construction in favor of either Party.
ARTICLE 3
BASIS OF REINSURANCE
3.01 BUSINESS REINSURED. This Agreement shall cover those Riders listed on the
seriatim data file as of June 30,2008 provided by the Ceding Company on July
2,2008 which contains 24,094 records with an aggregate Contract Value of
$2,542,343,384 (the "Business Reinsured").
3.02 CEDING COMPANY'S RETENTION. The Ceding Company or an Affiliate shall
retain a [REDACTED] of the Business Reinsured net for its own account. The
Ceding Company or an Affiliate shall continue to be responsible for and provide
all claim management and administration services with respect to the Business
Reinsured in accordance with the terms of this Agreement. With the exception of
Affiliate reinsurance transactions, the Ceding Company shall not reinsure its
retained amounts without the prior written consent of the Reinsurer, such
consent shall not be unreasonably or arbitrarily withheld. Notwithstanding the
foregoing, the Reinsurer's consent shall not be required in the event of a sale
of a Controlling interest in the Ceding Company to any Person.
Principal First Reinsurance Agreement
Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
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3.03 AUTOMATIC REINSURANCE. Subject to the terms and conditions of this
Agreement, the Ceding Company hereby cedes on an indemnity reinsurance basis to
the Reinsurer, and the Reinsurer hereby accepts and agrees to reinsure on an
indemnity reinsurance basis, the Reinsurer's Quota Share Percentage of the
Business Reinsured.
ARTICLE 4
REINSURER'S LIABILITY
4.01 The Reinsurer's liability for reinsurance shall begin simultaneously with
the Ceding Company's liability, but not prior to the Effective Date.
4.02 The Reinsurer's liability for reinsurance shall terminate on the earliest
of:
a. the date on which the Ceding Company's liability for Business
Reinsured terminates;
b. the termination effective date as described in Section 21.02; or
c. the recapture effective date as described in Article 9.
4.03 The Reinsurer's Quota Share Percentage shall be eighty percent (80%).
4.04 The Reinsurer's liability shall be limited to the Reinsurer's Quota Share
Percentage of the Ceding Company's contractual liabilities and obligations
resulting under the terms and conditions of the Riders including any and all
contractual liabilities and obligations resulting under the terms and conditions
of an amendment, modification or enhancement to the Riders which are (a)
required by applicable regulation or law; (b) made in response to a documented
regulatory requirement; or (c) mutually agreed to in writing between the
Parties. The Ceding Company shall pass the cost of such required changes to the
contract owners to the full extent permitted by law, regulation or regulatory
requirement and to the extent permitted under the terms of the Riders or
Variable Annuity Contracts. The Reinsurer shall not be liable for any
liabilities or obligations arising out of the Variable Annuity Contract or any
other rider unless and only to the extent that such liabilities and obligations
arise under the terms and conditions of the Riders. The Reinsurer shall be
liable for the Reinsurer's Quota Share Percentage of any Rider benefits payable
by the Ceding Company to contract owners age 90 or older where the Ceding
Company has made the Rider election absent any communication from the contract
owner.
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Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
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ARTICLE 5
REINSURANCE PREMIUMS
5.01 ACCOUNTING PERIOD. Accounting Period means one calendar month, with the
first day of each Accounting Period being the first day of each calendar month.
Notwithstanding the foregoing, the first Accounting Period shall begin on the
Effective Date and shall end on August 31, 2008.
5.02 [REDACTED]
5.03 [REDACTED]
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Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
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5.04 TIMING OF PREMIUM PAYMENT. Reinsurance Premium will be payable each
Accounting Period in arrears in accordance with Article 8.
ARTICLE 6
REINSURANCE BENEFITS
6.01 REINSURANCE BENEFITS. Except as provided in Section 6.02, the Reinsurer
shall be liable for the Reinsurer's Quota Share Percentage of any contractual
liabilities payable by the Ceding Company (and any Rider benefits payable by the
Ceding Company to contract owners age 90 or older where the Ceding Company has
made the Rider election absent any communication from the contract owner) on
Business Reinsured hereunder in accordance with the terms and conditions of this
Agreement (the "Reinsurance Benefits").
6.02 REINSURANCE BENEFITS UNDER FIXED PAYOUT OPTION. Notwithstanding Section
6.01, if the contract owner elects the Fixed Payout Option as provided for in
the Rider or if the Ceding Company elects such Fixed Payout Option for contract
owners age 90 or older, the Reinsurance Benefit will be determined as follows:
a. The Ceding Company shall calculate the present value of the payments
under the Fixed Payout Option using discount factors reflecting the
frequency of payment and interest rates derived from the prevailing
U.S. Dollar swap curve as of the last Business Day of the Accounting
Period during which the contract owner annuitizes.
b. If the Contract Value equals or exceeds such present value, there is
no Reinsurance Benefit.
c. If the Contract Value is less than such present value, the
Reinsurance Benefit will be the Reinsurer's Quota Share Percentage
of the excess of the present value, as determined in Paragraph a,
over the Contract Value.
6.03 TAXES AND ASSESSMENTS. Neither Party shall reimburse the other Party for
taxes or assessments paid by the other Party.
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Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
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ARTICLE 7
CREDIT FOR REINSURANCE
7.01 The Parties intend that the Ceding Company will be entitled to take full
statutory credit for reinsurance provided under this Agreement in all
jurisdictions where the Ceding Company is licensed to transact insurance
business as of the Effective Date ("Credit"). The Reinsurer represents to the
Ceding Company that the Reinsurer is properly licensed or accredited so that the
Ceding Company may claim such Credit, and subject to the provisions of this
Article 7, the Parties agree to use best efforts to ensure that such Credit will
remain available to the Ceding Company during the duration of this Agreement.
7.02 If the Ceding Company believes in good faith it may not be entitled to
claim Credit, as described above, in total or in part, due to a change in law or
regulation, or due to a change in the interpretation or application of existing
law or regulation by a regulator (hereinafter an "Uncontrollable Reserve Credit
Event"), or due to a failure by the Reinsurer to maintain in effect a required
license or accreditation in any of the jurisdictions in which the Ceding Company
is licensed to transact insurance business (hereinafter a "Controllable Reserve
Credit Event"), then, subject to the Reinsurer's rights to cure as defined in
this Article, the Parties will take the steps specified below in this Article.
7.03 The Party who first becomes aware of such event will provide prompt notice
to the other Party of the occurrence of either an Uncontrollable Reserve Credit
Event or a Controllable Reserve Credit Event (hereinafter collectively "Reserve
Credit Event").
7.04 Within fifteen (15) days of delivery of (if the delivering Party) or
receipt of (if the receiving Party) such notice, the Reinsurer shall propose to
the Ceding Company a cure to the Reserve Credit Event In a manner that
eliminates the need for or enables the Ceding Company to continue to receive
Credit. The Ceding Company will not deny any of the cure proposals put forth in
Paragraphs a or b below as long as such cure does not require the payment of any
United States tax:
a. Reinsurer establishing collateral, the form of which may be a letter
of credit, funds withheld, assets in trust or some combination of
the three provided such collateral meets all applicable laws and
regulations regarding the Ceding Company's ability to take Credit,
amending this Agreement accordingly and entering into additional
agreements as necessary; or
b. Transferring the reinsurance provided under this Agreement to another
reinsurer by novation of this Agreement, provided that the
alternative reinsurer meets the Ceding Company's established
reinsurer credit criteria in place at the time of the transfer and
that the alternative reinsurer accepts transfer by novation of this
Agreement (and all amendments thereto) without any material
modification to the substantive terms of the Agreement.
Notwithstanding Article 10, if the Reinsurer novates this Agreement
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Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
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to an entity that is not subject to United States taxation, the joint
DAC election under Article 10 shall be invalid for consideration
received after the date of novation.
Notwithstanding the foregoing, the Reinsurer may propose an alternative cure,
including amending this Agreement, under which Credit shall be allowed the
Ceding Company. The Ceding Company shall approve or deny the Reinsurer's
alternative cure at its sole discretion provided any such approval is not
unreasonably withheld.
7.05 If the Reinsurer cannot cure an Uncontrollable Reserve Credit Event, as
set forth above, but such Uncontrollable Reserve Credit Event can be cured by
the posting of collateral, within fifteen (15) days the Reinsurer shall
establish and maintain collateral, either a trust or a letter of credit, in a
form which meets all applicable standards of law and regulation to enable the
Ceding Company to claim Credit during the pendency of the Reserve Credit Event.
The Parties agree that in such an event, the cost of establishing and
maintaining the collateral will be shared equally by the Ceding Company and the
Reinsurer. Collateral established pursuant to this Section shall reduce, dollar
for dollar, the collateral required pursuant to Article 23.
7.06 If the Reinsurer cannot cure a Controllable Reserve Credit Event, as set
forth above, but such Controllable Reserve Credit Event can be cured by the
posting of collateral, within fifteen (15) days the Reinsurer shall establish
and maintain collateral, either a trust or a letter of credit, in a form which
meets all applicable standards of law and regulation to enable the Ceding
Company to claim Credit during the pendency of the Reserve Credit Event. The
Parties agree that in such an event, the cost of establishing and maintaining
the collateral will be borne entirely by the Reinsurer. Collateral established
pursuant to this Section shall reduce, dollar for dollar, the collateral
required pursuant to Article 23.
7.07 If a Reserve Credit Event is not cured or the Reinsurer fails to establish
or maintain collateral as set forth above, then the Ceding Company may recapture
the Business Reinsured under this Agreement in accordance with the terms of
Article 9 hereof.
ARTICLE 8
REPORTING
8.01 The Ceding Company will provide the Reinsurer with information necessary
to properly account for, report, validate and manage the risk of the Business
Reinsured. Information required as specified in this Article shall be provided
in an electronic format and shall be in the format detailed in Schedules B and C
of this Agreement or as mutually agreed upon by the Ceding Company and the
Reinsurer.
8.02 For the first ninety (90) days after the Effective Date, the Ceding
Company will provide the Reinsurer with data in a format and frequency and with
a delivery method mutually agreed between the Parties. In no event will the
Ceding Company provide such data less frequently than weekly.
Principal First Reinsurance Agreement
Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
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Thereafter, the Ceding Company will use reasonable best efforts to submit daily
reports and data to the Reinsurer in accordance with Schedule B within one
Business Day after each Business Day, provided that such reports shall be
submitted in any event, not later than five (5) Business Days after each such
Business Day.
8.03 Within fifteen (15) days after the close of each Accounting Period, the
Ceding Company will submit monthly reports and data in accordance with Schedule
C. The Ceding Company agrees to provide or make available to the Reinsurer
reasonable additional documentation as may be necessary to support the items
reported and manage the risk of the Business Reinsured.
8.04 Amounts due between the Parties for each Accounting Period in respect of
Reinsurance Premiums and Reinsurance Benefits shall be determined on a net basis
as reported by the Ceding Company on the Accounting Report prepared by the
Ceding Company as described in Schedule C. If the balance is payable to the
Reinsurer the Ceding Company shall remit payment within thirty (30) days after
the close of each Accounting Period. If the balance is payable to the Ceding
Company, the Reinsurer shall remit payment to the Ceding Company within
twenty-five (25) days after receiving the report.
8.05 Any payment not made within the above specified time periods will be
considered delinquent, unless the payment period is extended as agreed upon by
both Parties in writing. Delinquent payments will accrue interest at LIBOR as of
the close of the Business Day on or immediately following the payment due date.
Such interest shall become immediately due and payable by the applicable Party.
ARTICLE 9
RECAPTURE
9.01 Business Reinsured under this Agreement will be eligible for recapture if:
a. the Reinsurer is deemed insolvent, in accordance with Section 12.04;
b. the Reinsurer is delinquent on an undisputed amount due to the Ceding
Company as described in Section 8.04, the Ceding Company has given
the Reinsurer sixty (60) days written notice of its intent to
recapture under the provisions of this Section, and the Reinsurer has
failed to pay the undisputed amount due together with applicable
interest, by the end of the notice period;
c. the Reinsurer fails to provide a cure or to establish or maintain
collateral which allows the Ceding Company to take Credit in
accordance with Article 7; or
d. the Reinsurer or its Affiliate fails to furnish the Required
Collateral in accordance with Article 23, the Ceding Company has
given the Reinsurer written notice of its intent to recapture under
the provisions of this Section, and the Reinsurer has failed to
furnish
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Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
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the Required Collateral in accordance with Article 23 within two (2)
Business Days of receiving notice.
9.02 In the event Business Reinsured under this Agreement becomes eligible for
recapture in accordance with Section 9.01, and the Ceding Company so elects to
recapture, it shall notify the Reinsurer in writing not less than thirty (30)
days prior to the effective date of such recapture. If the Ceding Company elects
to recapture in accordance with Section 9.01, it shall recapture all of the
Business Reinsured under this Agreement.
9.03 Notwithstanding the above, recapture shall not be construed as the sole
remedy available to the Ceding Company under this Agreement.
9.04 [REDACTED]
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Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
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9.05 [REDACTED]
9.06 [REDACTED]
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Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
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9.07 If the Business Reinsured is recaptured for reasons other than those set
forth in Section 9.05, the Terminal Cash Settlement shall be mutually determined
by the Parties using assumptions mutually agreed upon, and in such event the
Terminal Cash Settlement shall be payable in accordance with Section 9.06 with
the exception that such payment shall be due ten (10) Business Days following
the mutual determination of the Terminal Cash Settlement. In the event the
Parties cannot come to mutual agreement on such Terminal Cash Settlement, the
dispute shall be resolved by Technical Arbitration in accordance with Article
15.
9.08 Upon recapture and subject to the payment of the Terminal Cash Settlement,
each Party's obligations under this Agreement will terminate as of the effective
date of recapture.
ARTICLE 10
DAC TAX
10.01 JOINT DAC TAX ELECTION. The Parties to this Agreement agree to the
following provisions pursuant to Section 1.848-2(g)(8) of the Income Tax
Regulations issued under Section 848 of the Internal Revenue Code of 1986, as
amended (the "Code").
a. The terms "Party"' and "Parties" refer to the Ceding Company and/or
the Reinsurer, as appropriate.
b. The terms "Net Positive Consideration," "Specified Policy Acquisition
Expenses" and "General Deductions Limitation" used in this Article
are defined by reference to Regulation Section 1.848-2 and Code
Section 848.
c. The Party with the Net Positive Consideration for this Agreement for
each taxable year will capitalize Specified Policy Acquisition
Expenses with respect to this Agreement without regard to the
General Deductions Limitation of Code Section 848(c)(1).
d. Both Parties agree to exchange information pertaining to the amount
of net consideration under this Agreement each year, or as otherwise
required by the Internal Revenue Service, to ensure consistency.
10.02 TAX STATUS. Both the Ceding Company and the Reinsurer represent and
warrant that they are subject to United States taxation under either Subchapter
L of Chapter 1 of the Code or Subpart F of Part III of Subchapter N of Chapter 1
of the Code.
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Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
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ARTICLE 11
OFFSET
11.01 OFFSET. To the extent permitted by law, each Party shall have, and may
exercise at any time and from time to time, the right to offset or recoup any
balance or balances, whether on account of premiums or on account of losses or
otherwise, due from one Party to the other Party under this Agreement, and may
offset or recoup the same against any balance or balances due to the former from
the latter under this Agreement; and the Party asserting the right of offset or
recoupment shall have and may exercise such right whether the balance or
balances due to such Party from the other are on account of premiums or on
account of losses or otherwise, which shall be deemed mutual debts or credits,
as the case may be. This Article 11 shall not be modified or reconstrued due to
the insolvency, liquidation, rehabilitation, conservatorship or receivership of
either Party.
ARTICLE 12
INSOLVENCY
12.01 In the event of the insolvency of the Ceding Company, as determined by
the regulatory agency responsible for such determination, all reinsurance will
be payable by the Reinsurer on the basis of the liability of the Ceding Company
under the Business Reinsured hereunder directly to the liquidator, receiver or
statutory successor of the Ceding Company, without diminution because of the
insolvency of the Ceding Company.
12.02 In the event of the insolvency of the Ceding Company, the liquidator,
receiver or statutory successor will give written notice to the Reinsurer of all
pending claims against the Ceding Company on any policies reinsured within a
reasonable time after such claim is filed in the insolvency proceeding. While a
claim is pending, the Reinsurer may investigate and interpose, at its own
expense, in the proceeding where such claim is to be adjudicated, any defense or
defenses which it may deem available to the Ceding Company or its liquidator,
receiver or statutory successor.
12.03 The expenses incurred by the Reinsurer will be chargeable, subject to
court approval, against the Ceding Company as part of the expense of the
insolvent Ceding Company to the extent of a proportionate share of the benefit
which may accrue to the Ceding 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 or defenses
to any such claim, the expense will be apportioned in accordance with the terms
of this Agreement as though such expense had been incurred by the Ceding
Company.
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America Inc.
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12.04 INSOLVENCY OF THE REINSURER. For purposes of this Section 12.04, the
Reinsurer shall be deemed insolvent when the Reinsurer:
a. applies for or consents to the appointment of a receiver,
rehabilitator, conservator, liquidator or statutory successor of its
properties or assets;
b. is adjudicated as bankrupt or insolvent;
c. files or consents to the filing of a petition in bankruptcy, seeks
reorganization to avoid insolvency or makes formal application for
any bankruptcy, dissolution, liquidation 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
Reinsurer's domicile and such order remains undismissed and unstayed
for a period of fifteen (15) consecutive days.
The effective date of the insolvency shall be the date on which the above
described event occurred.
In the event of the Reinsurer's insolvency, the Ceding Company may recapture all
of the inforce Business Reinsured under this Agreement by giving written notice
to the Reinsurer in accordance with Section 9.02; provided that effective date
of recapture will be no earlier than the effective date of the Reinsurer's
insolvency. In the event the Ceding Company exercises this recapture option,
Article 9 will apply.
ARTICLE 13
DISPUTE RESOLUTION
13.01 Except for disputes that are subject to Article 15, in the event that any
dispute between the Parties under this Agreement cannot be resolved to mutual
satisfaction, the dispute will first be subject to good faith negotiation, as
described below, in an attempt to resolve the dispute without the need to
institute formal arbitration proceedings.
13.02 Within ten (10) Business Days after one of the Parties has given the
other the first written notification of the specific dispute, each of the
Parties will appoint a designated officer to attempt to resolve the dispute. The
designated officers will meet at a mutually agreeable location as early as
possible and as often as necessary, in order to discuss the dispute and to
negotiate in good faith without the necessity of any formal arbitration
proceedings. During the negotiation process, all reasonable requests made by one
officer to the other for information will be honored. The designated officers
will decide the specific format for such discussions.
13.03 If the designated officers cannot resolve the dispute within thirty (30)
days of their first meeting, both Parties agree that they will submit the
dispute to formal arbitration in
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Effective July 24, 2008
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accordance with Article 14. However, the Parties may agree in writing to extend
the negotiation period for an additional thirty (30) days.
13.04 No later than fifteen (15) days after the final negotiation meeting, the
designated officers taking part in the negotiation will give both Parties
written confirmation that they are unable to resolve the dispute, and that they
recommend establishment of formal arbitration in accordance with Article 14.
ARTICLE 14
ARBITRATION
14.01 It is the intention of the Parties that the customs and practices of the
variable annuity insurance industry and variable annuity reinsurance industry
will be given full effect in the operation and interpretation of this Agreement
where not contrary to the express terms of this Agreement. The Parties agree to
act in all matters with the utmost good faith. However, if the Parties cannot
mutually resolve a dispute that arises out of or relates to this Agreement, and
the dispute cannot be resolved through the dispute resolution process described
in Article 13, the dispute will be decided through arbitration.
14.02 An arbitration panel consisting of three past or present officers of life
insurance or life reinsurance companies not affiliated with either of the
Parties in any way will settle the dispute. Each Party will appoint one
arbitrator within thirty (30) days of the recommendation for formal arbitration
and the two so appointed shall then appoint the umpire. If either Party refuses
or neglects to appoint an arbitrator within the thirty (30) days, the other
Party may appoint the second arbitrator. If the two arbitrators cannot agree on
the umpire within thirty (30) days after both arbitrators have been appointed,
the two arbitrators shall select an umpire in accordance with paragraph 6.7 of
the Procedures for Resolution of U.S. Insurance and Reinsurance Disputes, dated
September 1999 ("the Procedures") using candidates from the XXXXX-US Certified
Arbitrators List in effect at the time of the commencement of the arbitration.
14.03 Within thirty (30) days after the appointment of the umpire, the panel
shall meet and determine timely periods for briefs, discovery procedures, and
schedules for hearings. Unless the panel agrees otherwise, the arbitration shall
take place in Hartford, Connecticut and, insofar as the panel looks to the
substantive law, it shall consider the laws of the State of Connecticut. The
panel shall have the power to set all procedural rules for the arbitration,
including the discretion to make any order with respect to pleadings, discovery,
depositions, scheduling, the hearing, reception of evidence and any other matter
whatsoever relating to the conduct of the arbitration.
14.04 Within sixty (60) days after the beginning of the arbitration
proceedings, the panel will issue a written, reasoned, decision on the dispute
and a statement of any award to be paid as a result. The decision will be based
on the terms and conditions of this Agreement as well as the usual customs and
practices of the life insurance and life reinsurance industry, rather than on
strict interpretation of the law. The decision will be
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final and binding on both the Reinsurer and the Ceding Company and there will be
no further appeal. Judgment upon the award may be entered in any court having
jurisdiction thereof.
14.05 Under no circumstances shall the Parties seek, nor shall the arbitration
panel award any remedy or remedies except as provided for in Article 21.
14.06 In the absence of a decision to the contrary by the arbitration panel,
the Reinsurer and the Ceding Company shall bear the expense of its own
arbitration activities, including, but not limited to, its appointed
arbitrator's fees, outside attorney fees, witness fees, expenses incurred in the
taking or preservation of testimony, and other related expenses.
14.07 The Parties shall jointly and equally bear the expense of the third
arbitrator and other costs directly attended to the arbitration proceeding,
provided that neither Party's liability for such costs shall ever exceed 50% of
the total of such costs, regardless of the other Party's failure to pay.
14.08 The Parties may mutually agree to extend any of the negotiation or
arbitration periods shown in this Article.
ARTICLE 15
TECHNICAL ARBITRATION
15.01 This Article shall apply only to those disputes which specifically
provide for resolution using Technical Arbitration. All other disputes shall be
resolved through the Dispute Resolution process in Accordance with Article 13 or
Arbitration in accordance with Article 14 unless mutually agreed otherwise by
the Parties.
15.02 The Party with the dispute shall provide the other Party with notice in
accordance with Article 25.
15.03 Within fifteen (15) days of the notification of the dispute, the Parties
shall select a Technical Arbitrator to resolve the dispute. The Technical
Arbitrator may be either an Actuary or a Securities Firm that is unaffiliated
with the Parties and is disinterested in the outcome of the dispute.
15.04 If the Parties cannot agree on the appointment of a Technical Arbitrator
within fifteen (15) days following notification of the dispute, each Party shall
nominate three qualified candidates. Within ten (10) Business Days thereafter,
each Party shall decline two of the candidates from the other Party's
nominations, and the Technical Arbitrator shall be chosen from the remaining two
candidates by drawing lots.
15.05 Within thirty (30) days of the appointment of the Technical Arbitrator,
each Party shall submit to the Technical Arbitrator its proposed remedy for the
dispute, together with any supporting materials.
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15.06 Within thirty (30) days of the submission of the proposed remedies, the
Technical Arbitrator shall issue a written decision on which of the proposed
remedies he/ she/it determines best represents the Agreement and the intent of
the Parties thereto. The Technical Arbitrator shall be limited to selecting one
or the other remedy so submitted. The decision will be final and binding on both
the Reinsurer and the Ceding Company and there will be no further appeal.
Judgment upon the award may be entered in any court having jurisdiction thereof.
15.07 Each Party shall bear its own costs and expenses incurred by it in the
preparation and presentation of its proposed remedy. The Party whose remedy is
not selected shall bear the cost of the Technical Arbitrator.
ARTICLE 16
ENTIRE AGREEMENT
16.01 ENTIRE AGREEMENT. This agreement, all Schedules, Exhibits and Appendices
attached hereto along with any amendments entered into hereinafter
("Agreement"), the Trust Agreement and the Non-Disclosure and Confidentiality
Agreement effective June 1, 2007 attached hereto as Exhibit I, constitutes the
entire agreement of the Parties pertaining to the transaction contemplated by
this Agreement. This Agreement supersedes and replaces all oral or written
agreements previously made or existing by and between the Parties or their
Representatives with regard to the transaction contemplated by this Agreement.
16.02 AMENDMENTS. This Agreement, shall not be amended or modified except by
written agreement, signed by duly authorized officers of both Parties.
16.03 ROUTINE COMMUNICATIONS. Routine Communications are those communications
contemplated by this Agreement that are not intended to change any of its risk
transfer characteristics. Such communications may include, but are not limited
to, reinsurance reporting and premium administration, claim submission,
participation in claim litigation and settlements, audit reviews, and the
resolution of disputes by arbitration or court proceedings. These communications
serve to clarify the obligations of the Parties under this Agreement and should
not be construed as modifications of this Agreement. Any and all modifications
of this Agreement shall follow Section 16.02 of this Article.
ARTICLE 17
FUND AND FEE CHANGES, INTERNAL REPLACEMENTS
17.01 FUND CHANGES. The Ceding Company may amend, substitute, add, or delete
Funds to the Variable Annuity Contracts on Business Reinsured under this
Agreement at its sole discretion, subject to the following conditions:
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a. the Ceding Company providing the Reinsurer with thirty (30) days
advance written notice of such amendments, substitutions, additions or
deletions; and
b. following such amendment, substitution, addition or deletion, the Ceding
Company continues to offer, in its Variable Annuity Contracts, at least
one Fund in any seven (7) of the eleven (11) Fund Categories listed in
Schedule D.
17.02 FEE CHANGES. Except as provided in the Rider, which allows the Ceding
Company to increase the Rider Fee when Step-Up is elected by the contract owner,
the Ceding Company shall not increase the fees or change the fee structure for
Contract Forms associated with Business Reinsured under this Agreement without
the prior written consent of the Reinsurer. Such consent shall not be
unreasonably withheld.
For the avoidance of doubt, increases in Fund expenses, including, but not
limited to management fees, operating fees and 12b-1 fees, shall not require the
consent of the Reinsurer.
17.03 INTERNAL REPLACEMENTS. The Ceding Company may, at its sole discretion,
offer an Internal Replacement on Business Reinsured under this Agreement,
subject to the following conditions:
a. the Ceding Company providing the Reinsurer with thirty (30) days
advance written notice of such Internal Replacement; and
b. the Reinsurer shall have the right to reinsure any rider that provides
guaranteed living benefits similar to the Rider being replaced
("Replacement Reinsurance") at the rider fee charged by the Ceding
Company. For the avoidance of doubt, the Replacement Reinsurance shall
be limited to only those riders replacing Business Reinsured under this
Agreement.
The Parties must come to mutual agreement on the terms of such Replacement
Reinsurance by the end of such thirty (30) day notice period or the Parties may
agree to extend the term of such negotiation. Such reinsurance terms shall be no
less favorable than the terms stated in this Agreement.
For the avoidance of doubt, the Parties inability to reach mutually agreeable
terms and conditions for the Replacement Reinsurance shall, in no event, prevent
the Ceding Company from offering a program of Internal Replacement.
17.04 All notices pursuant to this Article 17 shall be in accordance with
Section 25.03 and shall be delivered to a person designated by the Reinsurer in
writing.
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ARTICLE 18
GENERAL PROVISIONS
18.01 INSPECTION OF RECORDS. Either Party or its duly authorized
Representative may, upon reasonable notice and at a time and place mutually
convenient to both Parties, inspect and audit the books and records of the other
Party that relate to the terms and conditions of this Agreement and the business
that is the subject matter of this Agreement. Such inspection rights shall not
include any information related to: (i) either Party's pricing or Reinsurer's
offer to reinsure; (ii) other transactions entered into by either Party; (iii)
analysis of the Agreement developed by either Party for internal purposes; (iv)
either Party's investment strategy or hedging programs; or (v) privileged
information of either Party. However, if either Party deems any of the
information to be reviewed to be Proprietary Information, such information may
be reviewed by the requesting Party provided (a) such information or data is
material to the review; (b) a Representative of the Party providing said
information is present at all times during such review; (c) no copies are made
of such information; and (d) no notes are made using or based on such
information.
The above notwithstanding, if the inspection/audit is in response to a
regulatory inquiry which requires access to Proprietary Information, the Owner
of the Proprietary Information will provide such response directly to the
regulator, within the timeframe set forth in the inquiry, with a copy of the
response to the other Party. However, if the inquiry and/or response requires
that copies of the actual Proprietary Information be provided, the Owner of the
Proprietary Information will provide such copies directly to the requesting
regulator without copies to the other Party.
18.02 ASSIGNMENT. The rights, duties and obligations of the Parties under this
Agreement shall not be assigned, in whole or in part, except as otherwise
provided herein, by either Party without the prior written consent of the other
Party. Such consent shall not be unreasonably or arbitrarily withheld. This
provision is not intended to preclude the Reinsurer from retroceding the
reinsurance on an indemnity basis, nor to prevent successors in interest from
having rights and obligations under this Agreement.
18.03 SEVERABILITY. If any provision of this Agreement shall be declared or
found to be illegal, invalid, unenforceable, or void, the Parties shall be
relieved of their obligations under such provision. The validity of the
remaining provisions shall not be affected. To the extent possible, the Parties
shall work in good faith to amend this Agreement to address such provision.
18.04 GOVERNING LAW. This Agreement shall be governed as to performance,
administration and interpretation by the laws of the State of Connecticut,
exclusive of the rules with respect to conflicts of law.
18.05 ERRORS AND OMISSIONS. Unintentional errors, omissions, oversights, delays
or misunderstandings (collectively "Error") in the administration of this
Agreement by either Party, shall not invalidate the reinsurance hereunder. As
soon as reasonably possible
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after discovery, notice shall be provided, the Error shall be rectified and both
Parties shall be restored, to the extent possible, to the position they would
have occupied had the Error not occurred.
However, if it is not reasonably possible to restore each Party to the position
it would have occupied if not for the Error, the Parties will endeavor in good
faith to promptly resolve the situation in a manner that is fair and reasonable,
and most closely approximates the intent of the Parties as evidenced by this
Agreement. Nothing set forth in this Section 18.05 shall be construed as a
waiver by either Party of its right to enforce strictly the terms of this
Agreement.
18.06 HEADERS. Headers are provided for reference purposes only and are not
made a part of this Agreement.
18.07 NON WAIVER. No act, delay, omission, course of dealing or prior
transaction by or between the Parties to this Agreement shall constitute a
waiver of any right or remedy under this Agreement. No waiver of any right or
remedy under this Agreement shall be construed to be a waiver of any other or
subsequent right or remedy under this Agreement.
18.08 COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same Agreement.
18.09 FORCE MAJEURE. Neither Party shall be liable for any delay or
non-performance of any obligation contained herein nor shall any such delay or
non-performance constitute a default hereunder, or give rise to any liability
for damages if such delay or non-performance is caused by an event of Force
Majeure. The existence of any event of Force Majeure shall extend the term of
performance on the part of such Party to complete performance in the exercise of
reasonable diligence after the event of Force Majeure has been removed. "Force
Majeure" as used in this Agreement shall mean an event, explosion, action of the
elements, strike or other labor relations problem, restriction or restraint
imposed by law, rule or regulation of any public authority, whether federal,
state or local, and whether civil or military, act of any military authority,
interruption of transportation facilities or any other cause which is beyond the
reasonable control of such Party and which by the exercise of reasonable
diligence such Party is unable to prevent.
18.10 SURVIVAL. All provisions of this Agreement shall survive its termination
to the extent necessary to carry out the purpose of this Agreement or to
ascertain and enforce the Parties' rights or obligations hereunder existing at
the time of termination.
18.11 CURRENCY. The Reinsurance Premiums and Reinsurance Benefits and all other
amounts payable under this Agreement will be payable in United States Dollars.
18.12 SUBCONTRACTING. The Ceding Company may subcontract for the performance of
any contract owner or claims servicing service or services with respect to the
Business Reinsured or any services the Ceding Company is to provide in the
administration of the separate accounts underlying the Variable annuity
Contracts to (i) an Affiliate or (ii) any
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other Person with the prior written consent of the Reinsurer, such consent shall
not be unreasonably or arbitrarily withheld; provided, that no such
subcontracting shall relieve the Ceding Company from any of its obligations or
liabilities hereunder, and the Ceding Company shall remain responsible for all
obligations or liabilities of such subcontractor with regards to the providing
of such service or services as if provided by the Ceding Company.
18.13 INDEMNIFICATION. In addition to any other right or remedy of the Parties
set forth in this Agreement:
a. The Ceding Company shall indemnify and hold harmless the Reinsurer,
its Affiliates and their respective directors, shareholders,
officers, trustees, employees, agents, successors and assigns
against any losses, damages or costs of any type (including, without
limitation, punitive, exemplary or other extra contractual
obligations and reasonable attorney fees) resulting from or arising
out of any claims or legal action for injunctive relief or damages
by a third party where such claims or legal action arise as a result
of acts or omissions of the Ceding Company, its Affiliates or their
respective directors, shareholders, officers, trustees, employees,
agents, successors and assigns under the terms and conditions of
this Agreement to the extent they are not attributable to the acts
or omissions of the Reinsurer.
b. The Reinsurer shall indemnify and hold harmless the Ceding Company,
its Affiliates and their respective directors, shareholders,
officers, trustees, employees, agents, successors and assigns against
any losses, damages or costs of any type (including, without
limitation, punitive, exemplary or other extra contractual
obligations and reasonable attorney fees) resulting from or arising
out of any claims or legal action for injunctive relief or damages by
a third party where such claims or legal action arise as a result of
acts or omissions of the Reinsurer, its Affiliates or their
respective directors, shareholders, officers, trustees, employees,
agents, successors and assigns under the terms and conditions of this
Agreement to the extent they are not attributable to the acts or
omissions of the Ceding Company.
ARTICLE 19
GOOD FAITH
19.01 GOOD FAITH. The Parties agree that all matters with respect to this
Agreement require their good faith.
ARTICLE 20
REPRESENTATIONS AND WARRANTIES
20.01 Each Party represents and warrants to the other Party that, at the time
of execution of this Agreement:
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Effective July 24, 2008
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a. it is solvent on a statutory basis in all jurisdictions in which it
does business or is licensed;
b. it has all requisite corporate power and authority to enter into this
Agreement, and to perform its obligations hereunder; the execution and
delivery of this Agreement, and the performance of the obligations
hereunder have been duly authorized and are valid and binding
obligations, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting creditors' rights generally or by the
principles governing the availability of equitable remedies;
c. the execution, delivery and performance of this Agreement will not (i)
violate any provision of the Articles of Incorporation, By-laws or
other charter or organizational document; (ii) violate, conflict with
or result in the breach of any of the terms of, result in any
modification of, give any counterparty the right to terminate, or
constitute a default under, any material contract or other material
agreement to which it is a party; (iii) violate any order, judgment or
decree to which it is a party; or (iv) violate any statute, law or
regulation of any applicable jurisdiction; and
d. to the best of its knowledge, it is, in all material respects, in
compliance with all state and federal laws material to the Variable
Annuity Contracts, the Riders and the transactions contemplated by this
Agreement.
20.02 The Parties acknowledge that the Ceding Company has provided and the
Reinsurer has reviewed the data listed in Schedule F (the "Ceding Company Data")
prior to the execution of this Agreement. The Ceding Company represents that, to
the best of its knowledge, all factual information contained in the Ceding
Company Data is complete and accurate as of the date the document containing the
information was prepared.
ARTICLE 21
REMEDIES
21.01 Except as set forth in Section 21.02, the Reinsurer shall have no right
to rescind or terminate this Agreement or to alter, modify or change any of its
existing obligations under this Agreement for any reason or combination of
reasons whatsoever, unless the Ceding Company has breached one or more of the
representations and warranties enumerated in Section 20.02 of this Agreement and
said breach is the cause of damages suffered by the Reinsurer.
21.02 TERMINATION DUE TO NON-PAYMENT OF REINSURANCE PREMIUM. When undisputed
Reinsurance Premiums, determined in accordance with Section 8.04, due the
Reinsurer are not paid within sixty (60) days following the date specified in
Section 8.04, the Reinsurer shall have the right to issue a notice of
termination of this Agreement ("Nonpayment Termination Notice") for the
nonpayment of undisputed premiums in
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accordance with Section 25.01, which shall include the amount of the Reinsurance
Premium past due ("Past Due Premium"). If, within thirty (30) days of the Ceding
Company's receipt of the Nonpayment Termination Notice, the Ceding Company
remits the undisputed Past Due Premium together with interest on such amount
calculated in accordance with Section 8.05, the Reinsurer's notice of
termination shall be withdrawn, otherwise reinsurance under this Agreement will
terminate effective as of the end of the Accounting Period provided for in
Section 8.04. For the avoidance of doubt, the Reinsurer shall have no liability
for Reinsured Benefits that would otherwise have been paid after the termination
effective date, as provided for above.
If, for any reason, the Parties disagree as to the amount of Past Due Premium,
the matter shall be submitted to arbitration in accordance with Article 14.
While the matter is being arbitrated, this Agreement will remain in full force
and effect provided the Ceding Company pays what it reasonably believes to be
the Past Due Premium. Any award or order by the arbitration panel will be paid
in accordance with the terms and conditions of such award or order.
The Ceding Company shall not force termination of this Agreement through the
non-payment of Reinsurance Premiums.
21.03 Except as provided in Sections 9.02, 21.01, 21.02, Article 24 and in
Section 12 of the Trust Agreement, the sole, absolute and exclusive remedy
available to the Parties resulting from or relating to any breach or dispute
arising out of this Agreement shall be an award of money damages. Neither Party
shall seek or request any relief in arbitration or in any other dispute
resolution forum which is inconsistent with its rights under this Agreement and
the limitations set forth in this Article 21, and neither Party shall be bound
by any award, order or ruling from an arbitration panel or other tribunal which
is inconsistent with this Article.
ARTICLE 22
COMMENCEMENT AND TERMINATION
22.01 This Agreement shall be effective as of July 24, 2008 (the "Effective
Date"), and shall remain in force until the earlier of (a) the effective date of
termination of this Agreement; (b) the date on which the Ceding Company's
liability for all Business Reinsured terminates; or (c) the effective date of
recapture of all of the Business Reinsured under this Agreement.
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ARTICLE 23
COLLATERAL AND TRUST
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ARTICLE 24
PROPRIETARY INFORMATION/CONFIDENTIALITY
24.01 During the course of performance under this Agreement, a Party (the
"Owner") or its agent may make available to the other Party ("Recipient") or its
agent certain technical materials such as manuals, contract owner lists, data
files and the data contained therein, systems, forms, methods, processes, and
procedures and other information or data (collectively "Proprietary
Information") which is proprietary or trade secret in nature, except that
information which was previously known to Recipient, or which is or was publicly
disclosed to Recipient by any Party not under a duty to retain such information
as confidential, shall not constitute Proprietary Information. In addition,
Proprietary Information shall be deemed to include the terms of this Agreement
and the Trust Agreement for which each Party shall have all enforcement and
other rights and remedies of the "Owner" under this Article 24.
24.02 Each Party acknowledges that all such Proprietary Information is offered
for the sole purpose of performing its obligations under this Agreement.
Further, and except as set forth in section 24.01, each Party agrees that the
Owner is deemed to be the sole owner of Proprietary Information and that any
use, furnishing, disclosure, dissemination, publication, or revealing in any way
by Recipient of Proprietary Information to any Person, organization, firm or
government agency contrary to law or to the provisions and terms of this
Agreement shall obligate Recipient and the Party failing to hold said
Proprietary Information on a confidential basis to indemnify and hold the Owner
harmless from any damages, litigation, liability, claimed liability, claims, and
any expenses, including reasonable attorneys' fees, and incidental expenses
resulting from any such improper use, furnishing, disclosure or revealing of
Owner's Proprietary Information, whether occurring during the term of this
Agreement or thereafter, except to the extent any such loss or damage was caused
or contributed to by the Owner.
24.03 The Parties shall hold all such Proprietary Information in trust and
confidence and shall use such Proprietary Information only for purposes of this
Agreement and shall disclose Proprietary Information only to (i) those
Representatives who need to know such Proprietary Information in connection with
the transactions contemplated by this Agreement, (ii) any rating agency in
connection with their rating of the Recipient, (iii) regulatory authorities
having applicable jurisdiction over the Recipient or its Affiliates, but only as
may be requested by or required to be disclosed to such regulatory authorities,
and (iv) as may be necessary or appropriate in connection with any potential or
actual retrocession by the Reinsurer; provided, that (a) in the case of
disclosure pursuant to (i) through (iv) above, the Recipient will inform such
Representatives or other Persons set forth in this Section 24.03 that the
Proprietary Information is confidential and direct them to keep it confidential
and (b) the Recipient will be responsible for any breach by any of its
Representatives or other Persons set forth in this Section 24.03, except
regulatory authorities, of any of the provisions hereof. In addition, the Ceding
Company shall request that any regulatory filing made in connection with
entering into this Agreement be exempted from disclosure under any public
records law if not maintained on a confidential basis pursuant to statute.
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24.04 In the event a Party breaches this obligation, the Owner shall have all
rights and remedies available under law and equity, including the right to
protect its Proprietary Information by injunction, without proving economic
loss, which the Parties acknowledge and concede is appropriate and necessary to
protect the value of Owner's Proprietary Information.
Notwithstanding anything herein to the contrary, except as reasonably necessary
to comply with applicable securities laws, each Party to this Agreement (and
each Representative of such Party) may consult any tax advisor regarding the
U.S. federal income tax treatment or tax structure of the transaction (the "Tax
Treatment"), and disclose to any and all Persons, without limitation of any
kind, the Tax Treatment and all materials of any kind (including opinions or
other tax analyses) that are provided to such Party relating to the Tax
Treatment. The permission to disclose the Tax Treatment is limited to any facts
relevant to the U.S. federal income Tax Treatment and does not include
information relating to the identity of the Parties.
24.05 In the event any Party is served with a subpoena, request for production
of documents or other legal process, such Party shall immediately notify and
send a copy of such subpoena or legal process to the other Party so that the
other Party may determine whether any of its Proprietary Information may be
included in the data required to be produced. Such other Party may, at its own
expense, take such legal action as it deems necessary to preserve the
confidentiality of its Proprietary Information or may waive its rights to do so.
24.06 To the extent possible, Proprietary Information shall be promptly
returned to the Owner upon the termination of this Agreement or, with respect to
any particular data files and data, on such earlier date that the same are no
longer required by Recipient in order to render perform its obligations
hereunder.
24.07 The Parties agree to notify each other immediately and in writing of all
circumstances surrounding any access to or possession of Proprietary Information
by any Person other than Persons authorized by this Agreement. Such notice shall
include, but not be limited to, the name and address of each such unauthorized
Person.
24.08 This Article shall survive the termination of this Agreement.
ARTICLE 25
NOTICES
25.01 MATERIAL COMMUNICATIONS. For the purpose of this Agreement, Material
Communications shall be defined as those communications associated with material
breach of this Agreement, termination of this Agreement, demand for arbitration
or dispute resolution under this Agreement, changes in licensing of the
Reinsurer, and confidentiality provisions set forth in this Agreement.
All Material Communications will be addressed as follows:
Principal First Reinsurance Agreement
Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
31
If to the Ceding Company: If to the Reinsurer:
Chief Financial Officer Chief Financial Officer
Investment Products Division Swiss Re Life & Health America Inc.
Hartford Life and Annuity Insurance Company 000 Xxxx Xxxxxx
000 Xxxxxxxxx Xxxxxx Xxxxxx, Xxx Xxxx 00000
Xxxxxxxx, XX 00000
With copies (which shall not constitute With copies (which shall not
notice) to: constitute notice) to:
Corporate Reinsurance Risk Management General Counsel
Hartford Life and Annuity Insurance Company Swiss Re Life & Health America Inc.
000 Xxxxxxxxx Xxxxxx 000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000 Xxxxxx, Xxx Xxxx 00000
Facsimile # (000) 000-0000
Reinsurance Counsel Chief Financial Officer
Hartford Life and Annuity Insurance Company Swiss Re Financial Products
000 Xxxxxxxxx Xxxxxx Xxxxxxxxxxx
Xxxxxxxx, XX 00000 00 Xxxx 00xxXxxxxx
Xxxxxxxxx # (000) 000-0000 Xxx Xxxx, Xxx Xxxx 00000
Or such other address or fax number as either Party may request by notice given
under this Section. The foregoing shall not preclude the effectiveness of actual
written notice given to a Party at any address or by any means.
25.02 NOTICES. All notices with regard to this Agreement shall be in writing
and shall be deemed to have been duly given (a) on the date when delivered
personally; or (b) on the earlier of the date received or three (3) Business
Days after any such notice was sent via nationally recognized courier or via
first class mail, postage prepaid, return receipt requested.
25.03 OTHER COMMUNICATIONS. All other communications will be sent to the
contact either (a) provided by the receiving Party or (b) identified in the
course of the routine administration of this Agreement.
Principal First Reinsurance Agreement
Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
32
Executed in duplicate by Executed in duplicate by
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY SWISS RE LIFE & HEALTH
AMERICA INC.
on July 24, 2008. on July 24, 2008.
BY: /s/ Xxxxxx X. Xxxxxxxx BY:
-------------------------------------- --------------------
NAME: Xxxxxx X. Xxxxxxxx NAME:
TITLE: Senior Vice President & Chief Risk TITLE:
Officer
BY: /s/ Xxxxx X. Xxxxxx BY:
-------------------------------------- --------------------
NAME: Xxxxx X. Xxxxxx NAME:
TITLE: Assistant Vice President & Actuary TITLE:
Principal First Reinsurance Agreement
Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
33
SCHEDULE A
BUSINESS REINSURED
FORM NUMBERS
Guaranteed Income Benefit (GIB) rider forms:
HL-VA02GLBR LA-VA02GLBR
HL-VA04PF LA-VA04PF
(and state variations thereto)
Issued with Variable Annuity Contracts on the following contract forms:
HL-VA99 LA-VA99
HL-VA00 LA-VA00
XX-XXXXXX00 XX-XXXXXX00
XX-XXXXXX00XX XX-XXXXXX00XX
HL-NCDSC98 LA-NCDSC98
HL-NCDSC99PS LA-NCDSC99PS
HL-NCDSC98DW LA-NCDSC98DW
HL-VAXC99 LA-VAXC99
HL-ASHARE03 LA-ASHARE03
HL-NCDSC03 LA-NCDSC03
HL-VA03 LA-VA03
HL-VAXC03 LA-VAXC03
(and state variations thereto)
Principal First Reinsurance Agreement
Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
34
SCHEDULE B
DAILY REPORTING
DATA REQUIREMENTS
1. FUND FILE. A separate report providing the following daily information on a
contract basis:
Policy number
Fund type code
Fund value
DST Fund code
2. CONTRACT FILE. A separate report providing the following daily information
on a contract basis:
Policy number
DST product code
Qualified plan type code
Policy issue date
Annual maintenance fee waiver indicator
Contract Value
Rider effective date
Last reset date
Contract Value at last reset date
Guaranteed Remaining Balance/Benefit Amount
Guaranteed Annual Withdrawal Benefit/Benefit Payment
Optional GMDB fee
Mortality, expense and admin fee
Cumulative policy premiums since policy issue
Cumulative policy premiums as of Rider effective date (if
contract already in force)
Cumulative policy premiums as of last reset date
Cumulative policy withdrawals since policy issue date
Cumulative policy withdrawals since Rider effective date (if
contract already in force)
Cumulative policy withdrawals since last reset date
Death Benefit type
Automatic income program indicator
Contract writing company code
Principal First Fee
Primary owner, joint owner and annuitant dates of birth and
genders
Principal First Reinsurance Agreement
Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
35
SCHEDULE C
MONTHLY REPORTING
DATA REQUIREMENTS
1. INFORCE REPORT. A separate report providing the following month-end
information on a contract basis:
Annuitant's name, sex, date of birth, issue age and social
security number
Policyowner's name, sex, date of birth, issue age and social
security number
Policy number
Policy issue date
Rider effective date
Last reset date
Product code
Cumulative policy premiums since policy issue
Cumulative policy premiums as of Rider effective date (if
contract already in force)
Contract Value on Rider effective date (if contract already in
force)
Current Contract Value in total and by Fund
Guaranteed Annual Withdrawal Benefit/Benefit Payment
Guaranteed Annual Withdrawal Benefit/Benefit Payment paid
Guaranteed Remaining Balance/Benefit Amount
GIB benefit paid
Cumulative policy withdrawals since policy issue date
Cumulative policy withdrawals since Rider effective date (if
contract already in force)
2. TERMINATION REPORT. A separate termination report indicating the following
month-end information on a contract basis by termination date, separated by
termination type (death, surrender, annuitization):
Annuitant's name, sex, date of birth, issue age and social
security number
Policyowner's name, sex, date of birth, issue age and social
security number
Policy number
Policy issue date
Rider effective date
Last reset date
Product code
Cumulative policy premiums since policy issue
Cumulative policy premiums as of Rider effective date (if
contract already in force)
Contract Value on Rider effective date (if contract already in
force)
Current Contract Value in total
Guaranteed Annual Withdrawal Benefit/Benefit Payment
Guaranteed Annual Withdrawal Benefit/Benefit Payment paid
Guaranteed Remaining Balance/Benefit Amount
GIB benefit paid
Principal First Reinsurance Agreement
Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
36
Cumulative policy withdrawals since policy issue
Cumulative policy withdrawals since Rider effective date (if
contract already in force)
3. ACCOUNTING REPORT. A separate report providing the following month-end
information on a summary basis:
Reinsurance Premium due the Reinsurer
Reinsurance Benefits due the Ceding Company (indicating when
Fixed Payout Option has been elected)
Net Cash Settlement
Total number of inforce Riders reinsured
Total cumulative policy premiums
Total current Guaranteed Remaining Balance/Benefit Amount
Total number of reinsurance claims
Current Contract Value in total and by Fund
Principal First Reinsurance Agreement
Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
37
SCHEDULE D
FUND CATEGORIES
The Fund Categories are based on Morningstar Prospectus Objective
classifications. The following is a mapping of Morningstar Prospectus Objective
classifications into Fund Categories.
FUND CATEGORY MORNINGSTAR PROSPECTUS OBJECTIVE
------------------------------------------------------------------------
Aggressive Growth Aggressive Growth, Small Company
Balanced Asset Allocation, Balanced
Corporate Bond Convertible Bond,
Corporate Bond-High Quality,
Corporate Bond-General, Multisector Bond
Government Bond Government Bond -- Adj-Rate Mortgage,
Government Bond -- Mortgage,
Government Bond -- General,
Government Bond -- Treasury,
Municipal Bond -- California,
Municipal Bond -- National,
Municipal Bond -- New York,
Municipal Bond -- Single State
Growth Growth
Growth and Income Equity -- Income, Growth and Income,
High Yield Bond Corporate Bond -- High Yield
International Bond World Bond
International Stock Europe Stock, Foreign Stock,
Pacific Stock, World Stock
Money Market Money Market
Specialty Diversified Emerging Markets,
Multi-asset -- Global, Specialty --
Communications,
Specialty -- Financial, Specialty --
Health,
Specialty -- Natural Resources,
Specialty -- Precious Metals,
Specialty -- Real Estate, Specialty --
Technology,
Specialty -- Utilities, Specialty --
Unaligned
Principal First Reinsurance Agreement
Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
38
SCHEDULE E
CALCULATION OF COLLATERAL AMOUNT
[REDACTED]
Principal First Reinsurance Agreement
Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
39
[REDACTED]
Principal First Reinsurance Agreement
Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
40
[REDACTED]
Principal First Reinsurance Agreement
Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
41
SCHEDULE F
CEDING COMPANY DATA
As provided for in Section 20.02, Ceding Company Data shall mean:
1. The CD overnighted to Swiss Re on July 24, 2008 containing the following
files:
VA Lapserate_2007 Q1_ERM.xls
The Director M (HL & HLA).pdf
The Director M Access (HL & HLA).pdf
The Director M Edge (HL & HLA).pdf
The Director M Outlook (HL & HLA).pdf
The Director M Plus (HL & HLA).pdf
HLBestEstF.tbl
HLBestEstM.tbl
Improvement_Female.tbl
Improvement_Male.tbl
WD Rates by product to SR.tbl
VA Lapse Summary_3312008
200709_PF_PW to Swiss.xls
YTD_Trend_200804 to Swiss.pdf
YTD_InMoney(AV)_200804 to Swiss.pdf
YTD_InMoney_Abbr_200804 to Swiss.pdf
Fund Index to Swiss 20080611.xls
FUND_CODE to SwissRe 20080611.xls
2005 Mortality Study Final.pdf
Principal First Reinsurance Agreement
Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
42
AMVI calc to Swiss 20080611.xls
Correlation and LT Vol Calcs to Swiss.xls
PWTYPE Tables to Swiss Re 20080722.xls
2. Binder sent to Swiss Re on February 25, 2008 containing Variable Annuity
Contract policy forms and Guaranteed Income Benefit (GIB) rider policy forms
3. "PF DD Response to Swiss 7.2.08 (00168346).doc" e-mailed by Xxxxxxx Xxxxxxx
on July 2, 2008, which includes the following attached and sent files:
HLIC 1Q08 10-Q.pdf (attached)
HLIC 2007 10-K.pdf (attached)
VA Complaint Log.xls (attached)
and the following files overnighted to Swiss Re on July 2, 2008:
XXX April2007 PA (sent)
HLIC Mar2005 AZ (sent)
XXX Mar2005 AZ (sent)
XXX Mar2007 NC (sent)
XXX Nov20037 NC (sent)
Principal First Reinsurance Agreement
Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
43
SCHEDULE G
ELIGIBLE SECURITY VALUATION RATES
ELIGIBLE SECURITY TYPE VALUATION RATE
----------------------------------------------------------------------------------------------------------------
Money Market funds and U.S. Treasury Securities having [REDACTED]
a remaining maturity as of the relevant date of
valuation of not more than one (1) year.
U.S. Treasury Securities having a remaining maturity as [REDACTED]
of the relevant date of valuation of more than one (1)
year but not more than five (5) years.
U.S. Treasury Securities having a remaining maturity as [REDACTED]
of the relevant date of valuation of more than five (5)
years but not more than ten (10) years.
U.S. Treasury Securities having a remaining maturity as [REDACTED]
of the relevant valuation date of more than ten (10)
years
Principal First Reinsurance Agreement
Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 20
44
EXHIBIT I
NON-DISCLOSURE AND CONFIDENTIALITY AGREEMENT
Principal First Reinsurance Agreement
Between Hartford Life and Annuity Insurance Company and Swiss Re Life & Health
America Inc.
Effective July 24, 2008
NON-DISCLOSURE AND CONFIDENTIALITY AGREEMENT
THIS AGREEMENT is made and entered into as of the 1st day of June, 2007, by and
between Swiss [ILLEGIBLE] Life & Health America Inc. ("SRLHA"), a
Connecticut
corporation having its principle place of business [ILLEGIBLE]cated at 000 Xxxx
Xxxxxx, Xxxxxx, Xxx Xxxx and Hartford Life Insurance Com[ILLEGIBLE] Hartford
[ILLEGIBLE] Annuity Insurance Company (collectively "HL").,
Connecticut
corporations having their principal places of business [ILLEGIBLE] 000 Xxxxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx.
WHEREAS, SRLHA and HL will be engaging in discussion and [ILLEGIBLE] regarding a
possible business relationship between SRLHA and/or its Affiliates, on the one
hand, and HL or Affiliates of HL, on the other hand [ILLEGIBLE] reinsurance of
annuity business and/or longevity risks ([ILLEGIBLE] Business); [ILLEGIBLE]
WHEREAS, the parties desire to keep the subject matter of these discussions and
negotiations, as well as [ILLEGIBLE] information furnished by them during the
course of [ILLEGIBLE] discussions and [ILLEGIBLE];
NOW, THEREFORE [ILLEGIBLE] consideration of the mutual premises contained
herein, the parties referred to above [ILLEGIBLE]:
1. RECITALS. The above written recitals ore tree and accurate.
2. NON-DISCLOSURE. SRLHA, Affiliates of SRLHA, HL and Affiliates of HL possess
valuable business Information and data of a confidential, proprietary and/or
trade secret nature, developed at great expense, which constitute assets of
considerable value. The parties agree that all information and documentation
[ILLEGIBLE] or hereinafter furnished in connection with the discussions and
[ILLEGIBLE] recitals hereto, including, but not limited to, proprietary computer
software, business and marketing plans, customer [ILLEGIBLE], product
[ILLEGIBLE], pricing information, sales [ILLEGIBLE], vendor [ILLEGIBLE], agent
[ILLEGIBLE], and broker information, financial, legal, investigative, audit and
other [ILLEGIBLE] affaire of the parties, including confidential information
provided at the direction of a party [ILLEGIBLE] parties, shall constitute
[ILLEGIBLE] information." Each party shall take all necessary [ILLEGIBLE] to
protect [ILLEGIBLE] Confidential Information from unauthorized or Inadvertent
disclosure, including all steps [ILLEGIBLE] protect its own proprietary or
confidential Information. For the purpose of the [ILLEGIBLE] party shall mean
any corporation controlled by or under common control with [ILLEGIBLE] party.
The receiving party may use Confidential Information received by it solely to
assist it in exploring a business relationship with the disclosing party. No
party may use the Confidential Information in any way which may be [ILLEGIBLE]
to the other party or any of its Affiliates, including, [ILLEGIBLE], using the
Confidential [ILLEGIBLE] to solicit any subscriber, insurance [ILLEGIBLE] or
agent, policyholder, Insured, self-insured, or employee of either party or any
of its Affiliates for employment, consultation, transaction of insurance
business or other business purpose. Further, no party may use the Confidential
Information as a basis [ILLEGIBLE] trading in the securities of any other party
hereto. Unless required by party, [ILLEGIBLE] Representativee (as such term is
defined herein), without the express [ILLEGIBLE] party hereto, [ILLEGIBLE] any
Confidential Information or other information [ILLEGIBLE] business relationship,
including the fact that discussions are taking place with respect [ILLEGIBLE]
Confidential Information has been made available to both [ILLEGIBLE] the
foregoing, each party may disclose the Confidential Information, or portions
thereof, to its Representatives who need to know such information for purposes
of evaluating the proposed business [ILLEGIBLE] the party disclosing [ILLEGIBLE]
Confidential Information shall inform its Representa[ILLEGIBLE] of the
Confidential Information, shall cause those persons to observe the term of this
Agreement and shall be liable for any [ILLEGIBLE] by any of its
Representatives), The term "Representatives" as used in this Agreement shall
mean a party's Affiliates (including, without limitation, all parents,
[ILLEGIBLE], direct or indirect), directors, officers, employees, partners,
professional advisors, Including attorneys, accountants, [ILLEGIBLE] and
brokers.
In the event that any party, or any Representative thereof, becomes legally
compelled (by deposition,
1
Interrogatory, request for documents, subpoena, investigative demand of other
legal process) to disclose any of the Confidential Information, that party is
required to provide the other with prompt prior written [ILLEGIBLE] of such
requirement so that the other party may seek an appropriate remedy and/or waive
compliance. In the event that such protective order or other remedy is not
obtained, or that a party waives compliance with the [ILLEGIBLE] hereof, I party
which has been legally compelled to disclose Confidential Information agrees to
furnish only that portion of the Confidential [ILLEGIBLE] which is legally
required and to exercise reasonable efforts to obtain assurance that
confidential treatment will be accorded such Confidential Information.
3. EXCEPTIONS. The term "Confidential Information" does not include any
information which (i) at the time of disclosure or thereafter [ILLEGIBLE]
generally available to and known by the public [ILLEGIBLE] than by way of a
wrongful disclosure by a party hereto or by any Representative of a party
hereto; (ii) [ILLEGIBLE] becomes available on a non-confidential basis from a
[ILLEGIBLE] other than the parties hereto [ILLEGIBLE] provided that such source
is not and was not [ILLEGIBLE] by a confidentiality agreement with a party
hereto; or (iii) independently was developed without violating any obligations
under this Agreement and without the use of any Confidential Information. The
parties hereto acknowledge that each party independently [ILLEGIBLE] products
similar to or identical with products of the other party hereto and that
[ILLEGIBLE] shall be construed to preclude such independent development so long
as no Confidential [ILLEGIBLE] development.
Notwithstanding anything herein to the contrary, except as reasonably necessary
to comply with applicable [ILLEGIBLE], each party to this Agreement (and each
[ILLEGIBLE] such party) may consult any tax advisor regarding the U.S. federal
income tax treatment or tax structure of the transaction (the "Tax Treatment"),
and disclose to any and all persons, without limitation of any kind, the Tax
Treatment all materials of any kind (Including opinions of [ILLEGIBLE] such
party [ILLEGIBLE] to the Tax Treatment. The permission to disclose the Tax
Treatment [ILLEGIBLE] to any facts relevant to the U.S. federal Income Tax
Treatment not include information relating to the identity of [ILLEGIBLE].
4. TERM OF AGREEMENT AND SURVIVAL OF OBLIGATIONS. In the event that SRLHA or
one of its Affiliates and HL or one of its Affiliates enter into a business
relationship at the conclusion of the [ILLEGIBLE] Agreement will not be
superseded by the provisions of the agreements that may be entered into by the
parties except as expressly stated in such agreements. If either [ILLEGIBLE]
that it does not desire to proceed with further discussion of the business
relationship, such party [ILLEGIBLE] advise the other party of that decision.
Both parties further acknowledge and agree that each party [ILLEGIBLE] absolute
discretion, to reject any of proposals and to terminate discussions and
[ILLEGIBLE]. In either case, or in the event that a business relationship is not
consummated by SRLHA, [ILLEGIBLE] for any reason: (i) this Agreement shall
remain in effect; and (ii) except to the [ILLEGIBLE] by law or regulation to
retain a copy, each party agrees to return or destroy all Confidential
Information furnished by the other, and to destroy all copies, notes, summaries,
tapes, records, [ILLEGIBLE] thereof, or other documentation created by the
parties in reviewing or analyzing the [ILLEGIBLE]; provided that Confidential
Information held in back-up computer, word processing or [ILLEGIBLE] systems
[ILLEGIBLE] be destroyed only to the extent commercially feasible to do so. In
the event that [ILLEGIBLE] Confidential Information has instructed the receiving
party to destroy the Confidential Information, the receiving party shall certify
to [ILLEGIBLE] that such Confidential Information has been destroyed. Should
[ILLEGIBLE] be required by law or regulation [ILLEGIBLE] retain a copy of the
Confidential Information, such party shall do so only [ILLEGIBLE] time as may be
[ILLEGIBLE] in the meantime, shall continue to [ILLEGIBLE] by the terms of this
Agreement.
Notwithstanding the foregoing, this Agreement and the obligations hereunder
shall terminate (a) two (2) years after the termination of any business
relationship between the parties [ILLEGIBLE] (b) five (5) years after the date
of this Agreement; whichever date is later.
5. REMEDIES FOR UNAUTHORIZED DISCLOSURE. The parties agree that any
unauthorized disclosure of the [ILLEGIBLE] to any person other than as specified
herein [ILLEGIBLE] constitute a breach of this Agreement, and the non-breaching
party shall be [ILLEGIBLE] and costs incurred as a result of the disclosure of
the Confidential [ILLEGIBLE]
2
the case of a threatened or continuing breach, temporary and permanent
injunctive. [ILLEGIBLE] without [ILLEGIBLE] or proving any actual damage
sustained. In addition to a party being a breaching parties or its own
unauthorized disclosure of Confidential information, a Party shall be deemed to
be a breaching party If any of its Representatives makes an unauthorized
disclosure of Confidential Information. In the event of [ILLEGIBLE] between the
parties concerning the Confidential Information, the prevailing party shall be
[ILLEGIBLE] to [ILLEGIBLE] reimbursement of its reasonable costs therein,
including but not limited to, attorneys' feees, in addition to such other legal
or equitable relief as the court may deem appropriate.
6. NON-RELIANCE. Each of the parties understands and acknowledges that
[ILLEGIBLE] party nor any of its Representatives has made or hereby makes any
representation or [ILLEGIBLE], [ILLEGIBLE] as to the accuracy or completeness of
the Confidential Information, and neither [ILLEGIBLE] nor any [ILLEGIBLE]
officers, directors, employee, stockholders, owners, agents or Representatives
will have any liability to the other party or any other person resulting from
such other party's use or the use by such other [ILLEGIBLE] Representatives of
the Confidential Information.
7. GOVERNING LAW AND JURISDICTION. The rights and [ILLEGIBLE] of the parties
under the Agreement shall be governed by the laws of the State of New York and
all questions relating to [ILLEGIBLE] and construction such rights and
obligations shall be determined in accordance with Connecticut [ILLEGIBLE],
without regard to its conflict of law provisions. The undersigned hereby consent
to the non-exclusive jurisdiction of any federal or [ILLEGIBLE] located in the
City of New York,
8. ASSIGNMENT. This Agreement and the parties' rights, duties and obligations
under this Agreement are not transferable or assignable by either without the
express prior written consent of the other party [ILLEGIBLE]. Any attempt by a
party to transfer or assign the Agreement or any of its rights, duties or
obligations under this Agreement [ILLEGIBLE] such [ILLEGIBLE] is void.
9. BINDING EFFECT. This Agreement [ILLEGIBLE] be binding upon and [ILLEGIBLE]
to the benefit of [ILLEGIBLE] parties hereto and [ILLEGIBLE] of their successors
and permitted assigns.
10. NON-WAIVER. A non-breaching party's waiver or acquiescence in any breaching
party, or the failure of a non-breaching party to insist upon strict performance
by a [ILLEGIBLE] or any obligations contained in this Agreement, shall not
constitutes a waiver of any [ILLEGIBLE] of other breach or failure.
11. SEVERABILITY. The provisions of this Agreement are severable. Should any
[ILLEGIBLE] hereof be held [ILLEGIBLE] or invalid by any component authority,
the remainder of this Agreement should remain in full force and [ILLEGIBLE].
12. HEADINGS. The headings contained in this Agreement for reference purposes
only and shall not affect, in [ILLEGIBLE] them [ILLEGIBLE] or interpretation of
this Agreement
13. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an [ILLEGIBLE], but all of which, together, shall
constitute one and the same instrument.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement the
parties, and all amendments, [ILLEGIBLE] or waivers hereto must be in writing
and signed by a duly authorized person on behalf of the [ILLEGIBLE] whom
enforcement is sought.
3
IN WITNESS WHEREOF, the parties have Executed this Agreement as of the date
first above written.
SWISS RE LIFE & HEALTH AMERICA INC. HARTFORD LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------ ------------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director Title: Vice President
Date: 5-31-07 Date: 5-31-07
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
Date: 5-31-07
4
EXHIBIT II
TRUST AGREEMENT
[REDACTED]
