Exhibit (g)(ix)
FACULTATIVE YEARLY RENEWABLE TERM AGREEMENT
between
SECURITY EQUITY LIFE INSURANCE COMPANY
(hereinafter called the CEDING COMPANY)
Armonk, New York
and
WESTBRIDGE INSURANCE LTD.
(hereinafter called THE REINSURER)
XXXXXXXX, BERMUDA
THIS AGREEMENT IS EFFECTIVE JUNE 1, 1997
ARTICLE TABLE OF CONTENTS PAGE
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I. Facultative Coverage 1
II. Facultative Provisions 2
III. Premiums 3
IV. Administration 4
V. Reserves 6
VI. Dac Tax Regulation 7
VII. Errors and Omissions 8
VIII. Expense of Original Contract 9
IX. Changes in Retention and Recapture Privileges 10
X. Terminations and Reductions 11
XI. Reinstatement, Exchanges, Extended Term and Reduced Paid-Up
Insurance, Conversions 12
XII. Liability 14
XIII. Claims 15
XIV. Arbitration 16
XV. Insolvency 17
XVI. Right to Inspection 18
XVII. Duration of Agreement 19
XVIII. Execution of Agreement 20
EXHIBIT
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A. Retention Schedule
B. Policy Plans Reinsured
C. Premiums and Allowances
D. Statement Specifications
E. Sample Policy Exhibit
Reinsurance required by the CEDING COMPANY will be assumed by THE REINSURER as
described in the terms of this Agreement.
This reinsurance agreement constitutes the entire agreement between the parties
with respect to the business being reinsured hereunder and there are no
understandings between the parties other than as expressed in this agreement.
Any change or modification to this agreement is null and void unless made by
amendment to this agreement and signed by both parties.
ARTICLE I
FACULTATIVE COVERAGE
A. Reinsurance required by the CEDING COMPANY will be assumed by THE
REINSURER on a facultative basis as described in the terms of this
Agreement. THE REINSURER will have the option of accepting, rejecting,
or rating any application for reinsurance.
B. THE REINSURER will promptly notify the CEDING COMPANY of its
underwriting action after all evidence of insurability has been
examined.
C. For each risk on which reinsurance is ceded, the CEDING COMPANY will
retain its retention as indicated in Exhibit A, at the time of issue,
taking into account both currently issued and previously issued
policies.
1
ARTICLE II
FACULTATIVE PROVISIONS
A. The CEDING COMPANY will have the option to submit any case
facultatively.
B. The CEDING COMPANY will send, when requested, copies of the original
applications, all medical reports, inspection reports, attending
physician's statement and any additional information pertinent to the
insurability of the risk.
C. The CEDING COMPANY will also notify THE REINSURER of any underwriting
information requested or received after the initial request for
reinsurance is made. For policies which contain automatic increase
provisions, the CEDING COMPANY will inform THE REINSURER of the initial
and ultimate risk amounts for which reinsurance is being requested.
D. On a timely basis, THE REINSURER will submit a written decision. In no
case will THE REINSURER'S offer on facultative submissions be open
after 120 days have elapsed from the date of THE REINSURER'S offer to
participate in the risk. Acceptance of the offer and delivery of the
policy according to the rules of the CEDING COMPANY must occur within
120 days of the final reinsurance offer. Unless THE REINSURER
explicitly states in writing that the final offer is extended, the
offer will be automatically withdrawn at the end of day 120.
E. THE REINSURER will not be liable for proceeds paid under the CEDING
COMPANY'S conditional receipt or temporary insurance agreement for
risks submitted on a facultative basis.
2
ARTICLE III
YEARLY RENEWABLE TERM PREMIUMS
A. Plans of insurance listed in Exhibit B will be reinsured on the yearly
renewable term basis with THE REINSURER participating only in mortality
risks (not cash values, loans, dividends or other features specific to
permanent policies). The mortality risk shall be the net amount at risk
on that portion of the policy which is reinsured with THE REINSURER.
B. Premiums for Life Reinsurance and reinsurance of Supplemental Benefits
will be based on the rates and allowances described in Exhibit C.
C. Premiums will be increased by any flat extra premium charged the
insured on the face amount initially reinsured.
D. There will be no premium tax reimbursement.
E. The Life Reinsurance rates contained in this Agreement are guaranteed
for one year, and THE REINSURER anticipates continuing to accept
premiums on the basis of these rates indefinitely. If THE REINSURER
deems it necessary to increase rates, such increased rates cannot be
higher than the valuation net premiums for annually renewable term
insurance calculated using the minimum statutory mortality rates and
maximum statutory interest rate for each year of issue.
3
ARTICLE IV
SELF ADMINISTRATION
A. The CEDING COMPANY will administer the records for the reinsurance
ceded to THE REINSURER under this agreement. The CEDING COMPANY will
furnish quarterly statements to THE REINSURER which contain the
following information:
1. A list of all premiums due for the current quarter,
identifying each policy and explaining the reasons for each
premium payment.
2. Premium subtotals adequate for THE REINSURER to use for its
premium accounting.
3. A list of new business, terminations and changes for the
current quarter. For new business and changes, the CEDING
COMPANY must identify the reinsurance agreement and provide
information adequate for THE REINSURER to establish reserves,
check retention limits and check premium calculations.
4. Totals for inforce, new business, changes and each type of
termination, as of the end of the quarter. "Totals" refer to
the number of policies reinsured and the net amount at risk
reinsured.
In addition, the CEDING COMPANY must provide THE REINSURER
with an inforce listing of reinsured business at least once a
year. This inforce listing must contain information adequate
for THE REINSURER to audit its inforce records. (See Exhibit
D.)
B. If the CEDING COMPANY chooses to report its reinsurance transactions
via electronic media, the CEDING COMPANY shall consult with THE
REINSURER to determine the appropriate reporting format. Should the
CEDING COMPANY subsequently desire to make changes in the data format
or the code structure, the CEDING COMPANY shall communicate such
changes to THE REINSURER prior to the use of such changes in reports to
THE REINSURER.
C. The quarterly statements shall be furnished to THE REINSURER within
thirty days following the close of each quarter and will be accompanied
by payment of any net amount due THE REINSURER. All premiums not paid
within thirty (30) days of the due date, defined as each policy's
12-month anniversary, will be in default.
D. Premiums are payable annually in advance.
E. THE REINSURER reserves the right to charge interest at an annual rate
of 8% when:
1. Renewal premiums are not paid within sixty (60) days of the
due date.
2. Premiums for new business are not paid within one hundred
twenty (120) days of the date the policy is issued.
4
ARTICLE IV
SELF ADMINISTRATION (CONTINUED)
F. THE REINSURER will have the right to terminate this Agreement when
premiums are in default by giving ninety (90) days written notice of
termination to the CEDING COMPANY. As of the close of the last day of
this ninety (90) day notice period, THE REINSURER'S liability for all
risks reinsured under this agreement will terminate. The first day of
the ninety (90) day notice of termination, resulting from default as
described in Section C of this Article, will be the day the notice is
received in the mail by the CEDING COMPANY or if the mail is not used,
the day it is delivered to the CEDING COMPANY. If all premiums in
default are received within the ninety (90) day time period, the
Agreement will remain in effect.
G. Payments between the CEDING COMPANY and THE REINSURER may be paid net
of any amount due and unpaid under all reinsurance agreements between
both parties.
5
ARTICLE V
RESERVES
THIS ARTICLE IS NOT APPLICABLE.
6
ARTICLE VI
DAC TAX REGULATIONS
The CEDING COMPANY and THE REINSURER hereby agree to the following pursuant to
Section 1.848-2(g)(8) of the Income Tax Regulations issued December 29, 1992,
under Section 848 of the Internal Revenue Code of 1986, as amended.
1. The term "party" will refer to either the CEDING COMPANY or THE
REINSURER as appropriate.
2. The terms used in this Article are defined by reference to Treasury
Regulation Section 1.848-2 in effect as of December 29, 1992. The term
"net consideration" will refer to net consideration as defined in
Treasury Regulation Section 1.848-2(f).
3. 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 IRS Section 848(c)(1).
4. The CEDING COMPANY and THE REINSURER agree to exchange information
pertaining to the amount of net consideration under this Agreement each
year to ensure consistency. The CEDING COMPANY and THE REINSURER also
agree to exchange information which may be otherwise required by the
IRS.
5. The CEDING COMPANY will submit a schedule to THE REINSURER by June 1 of
each year of its calculation of the net consideration for the preceding
calendar year. This schedule of calculations will be accompanied by a
statement signed by an officer of the CEDING COMPANY stating that the
CEDING COMPANY will report such net consideration in its tax return for
the preceding calendar year.
6. THE REINSURER may contest such calculation by providing an alternative
calculation to the CEDING COMPANY in writing within 30 days of THE
REINSURER'S receipt of the CEDING COMPANY'S calculation. If THE
REINSURER does not so notify the CEDING COMPANY, THE REINSURER will
report the net consideration as determined by the CEDING COMPANY in THE
REINSURER'S tax return for the previous calendar year.
7. If THE REINSURER contests the CEDING COMPANY'S calculation of the net
consideration, the parties will act in good faith to reach an agreement
as to the correct amount within thirty (30) days of the date THE
REINSURER submits its alternative calculation. If the CEDING COMPANY
and THE REINSURER reach agreement on an amount of net consideration,
each party shall report such amount in their respective tax returns for
the previous calendar year.
7
ARTICLE VII
ERRORS AND OMISSIONS
It is expressly understood and agreed that if failure to comply with any terms
of this Agreement is hereby shown to be unintentional or the result of
misunderstanding or oversight on the part of either the CEDING COMPANY or THE
REINSURER, both the CEDING COMPANY and THE REINSURER shall be restored to the
position they would have occupied had no such error or oversight occurred,
subject always to the correction of the error or oversight,
8
ARTICLE VIII
EXPENSE OF ORIGINAL POLICY
The CEDING COMPANY will bear the expense of all medical examinations, inspection
fees and other charges incurred in connection with the original policy.
9
ARTICLE IX
CHANGES IN RETENTION AND RECAPTURE PRIVILEGES
A. If, at any time, the CEDING COMPANY changes its existing retention
limits, as shown in Exhibit A, written notice of the change will
promptly be given to THE REINSURER.
B. The CEDING COMPANY may apply the new limits of retention to existing
reinsurance and reduce and recapture reinsurance in force in accordance
with the following rules:
1. The CEDING COMPANY will notify THE REINSURER of its intent to
recapture at least thirty (30) days prior to any recapture.
2. No recapture will be made unless reinsurance has been in force
ten (10) years.
3. Recapture will become effective on the policy anniversary date
following notification of the company's intent to recapture.
4. No recapture will be made unless the CEDING COMPANY retained
its maximum limit of retention for the plan, age and mortality
rating at the time the policy was issued. No recapture will be
allowed in any class of fully reinsured business or in any
classes of risks for which the CEDING COMPANY established
special retention limits less than the CEDING COMPANY'S
maximum retention limits for the plan, age and mortality
rating at the time the policy was issued.
5. If any reinsurance is recaptured all reinsurance eligible for
recapture under the provisions of this Article must be
recaptured.
6. If there is reinsurance in other companies on risks eligible
for recapture, the necessary reduction is to be applied to
each company in proportion to the total outstanding
reinsurance.
10
ARTICLE X
TERMINATIONS AND REDUCTIONS
Terminations or reductions will take place in accordance with the following
rules, in order of priority:
1. The CEDING COMPANY must keep its initial or recaptured retention on the
policy.
2. Termination or reduction of a wholly reinsured policy will not affect
other reinsurance in force.
3. A termination or reduction on a wholly retained case will cause an
equal reduction in existing automatic reinsurance with the oldest
policy being reduced first.
4. A termination or reduction will be made first to reinsurance of
partially reinsured policies with the oldest policy being reduced
first.
5. If the policies are reinsured with multiple reinsurers, the reinsurance
will be reduced by the ratio of the amount of reinsurance in each
company to the total outstanding reinsurance on the risk involved.
11
ARTICLE XI
REINSTATEMENT, EXCHANGE, EXTENDED TERM
AND REDUCED PAID-UP INSURANCE, CONVERSIONS
A. Reinstatement
Any policy originally reinsured in accordance with the terms and
conditions of this Agreement by the CEDING COMPANY may be automatically
reinstated with THE REINSURER as long as the policy is reinstated in
accordance with the terms and rules of the CEDING COMPANY. Any policy
originally reinsured with THE REINSURER on a facultative basis which
has been in a lapsed status for more than ninety (90) days must be
submitted with underwriting requirements and approved by THE REINSURER
before it is reinstated. The CEDING COMPANY will pay THE REINSURER its
share of amounts collected or charged for the reinstatement of such
policies.
B. Exchanges
Exchanges will be reinsured under this Agreement only if the original
policy was reinsured with THE REINSURER; the amount of reinsurance
under this Agreement will not exceed the amount of the reinsurance on
the original policy with THE REINSURER immediately prior to the
exchange. Premiums will be determined as follows:
1. If any business covered under this Agreement is subsequently
exchanged to any other plan reinsured by THE REINSURER, then
such business shall be reinsured at the rates as shown in the
Agreement covering the new plan. Rates and allowances or pay
percentages applicable to the new plan will be determined at
point in scale based on the original policy that is being
exchanged. If the Agreement including the new rates requires
policy fees, then they shall also apply to the new plan.
2. If any business covered under this Agreement is subsequently
exchanged to a plan that is not reinsured with THE REINSURER
under a specific document, then such business shall be
reinsured with THE REINSURER at rates as will be determined at
the time of the exchange. Rates will be determined at point in
scale based on the original policy that is being exchanged.
C. Extended Term and Reduced Paid-Up Insurance
Changes as a result of extended term or reduced paid-up insurance will
be handled like reductions.
12
ARTICLE XI
REINSTATEMENT, EXCHANGES, EXTENDED TERM
AND REDUCED PAID-UP INSURANCE, CONVERSIONS (CONTINUED)
D. Conversions
Conversions will be reinsured under this Agreement only if the original
policy was reinsured with THE REINSURER; the amount of reinsurance
under this Agreement will not exceed the amount of the reinsurance on
the original policy with THE REINSURER immediately prior to the
conversion. Premiums will be determined as follows:
1. If any business covered under this Agreement is subsequently
converted to any other plan reinsured by THE REINSURER, then
such business shall be reinsured at the rates as shown in the
Agreement covering the new plan. Rates and allowances or pay
percentages applicable to the new plan will be determined at
point in scale based on the original policy that is being
converted. If the Agreement including the new rates requires
policy fees, then they shall also apply to the new plan.
2. If any business covered under this Agreement is subsequently
converted to a plan that is not reinsured with THE REINSURER
under a specific document, then such business shall be
reinsured with THE REINSURER at rates as will be determined at
the time of the conversion. Rates will be determined at point
in scale based on the original policy that is being converted.
NOTE: An original date policy Reissue will not be treated as a continuation
of the original policy. It will be treated as a new policy and the
original policy will be treated as Not Taken. All premiums previously
paid to THE REINSURER for the original policy will be refunded to the
CEDING COMPANY. All premiums will be due on the new policy from the
original issue date of the old policy.
NOTE: Re-entry, e.g., wholesale replacement and similar programs are not
covered under this Article. If Re-entry is applicable to this treaty,
then it will be covered under the Premiums and Allowances Exhibit.
13
ARTICLE X11
LIABILITY
A. This is an Agreement solely between THE REINSURER and the CEDING
COMPANY. In no instance will anyone other than THE REINSURER or the
CEDING COMPANY have any rights under this agreement, and the CEDING
COMPANY will be and remain solely liable to any insured, policyowner,
or beneficiary under any policy reinsured hereunder.
B. THE REINSURER will not be liable for proceeds paid under the CEDING
COMPANY'S conditional receipt or temporary insurance agreement.
C. Liability for all reinsurance submitted facultatively to THE REINSURER
will commence when all of the following conditions have been met:
1. THE REINSURER'S offer has been accepted and the CEDING COMPANY
has properly documented its records to reflect this
acceptance, and
2. The policy has been delivered and paid for in accordance with
the CEDING COMPANY'S procedures, and
3. No more than one-hundred twenty (120) days have elapsed from
the date of THE REINSURER'S final offer unless THE REINSURER
explicitly states in writing that the final offer is extended
for some further period of time.
D. The liability of THE REINSURER for all reinsurance under this Agreement
will cease simultaneously with the liability of the CEDING COMPANY and
will not exceed the CEDING COMPANY'S contractual liability under the
terms of its policies.
14
ARTICLE XIII
CLAIMS
A. Prompt notice of a claim must be given to THE REINSURER. In every case
of loss, copies of the proofs obtained by the CEDING COMPANY will be
taken by THE REINSURER as sufficient. Copies thereof, together with
proof of the amount paid on such claim by the CEDING COMPANY will be
furnished to THE REINSURER when requesting its share of the claim.
However, if the amount reinsured with THE REINSURER is more than the
amount retained by the CEDING COMPANY and the claim is contestable, all
papers in connection with such claim, including all underwriting and
investigation papers, must be submitted to THE REINSURER for its
recommendation before admission of any liability on the part of the
CEDING COMPANY. However, the CEDING COMPANY retains the ultimate
authority to settle claims and its decision shall be binding on THE
REINSURER.
B. The CEDING COMPANY will notify THE REINSURER of its intention to
contest, compromise, or litigate a claim. Unless it declines to be a
party to such action, THE REINSURER will pay its share of any
settlement up to the maximum that would have been payable under the
specific policy had there been no controversy plus its share of
specific expenses, except as specified below.
If THE REINSURER declines to be a party to the contest, compromise, or
litigation of a claim, it will pay its full share of the amount
reinsured, as if there had been no contest, compromise, or litigation,
and its proportionate share of covered expenses incurred to the date it
notifies the CEDING COMPANY it declines to be a party.
In no event will the following categories of expenses or liabilities be
reimbursed:
1. Routine investigative or administrative expenses;
2. Salaries of employees or other internal expenses of the CEDING
COMPANY or the original issuing company.
3. Extra contractual damages, including punitive and exemplary
damages;
4. Expenses incurred in connection with a dispute or contest
arising out of conflicting or any other claims of entitlement
to policy proceeds or benefits.
C. If the amount of insurance changes because of a misstatement of rate
classification, THE REINSURER'S share of reinsurance liability will
change proportionately.
D. For approved Waiver of Premium benefit claims, THE REINSURER will pay
the CEDING COMPANY its portion of the amount of gross premiums waived
by the CEDING COMPANY.
15
ARTICLE XIV
ARBITRATION
A. It is the intention of THE REINSURER and the CEDING COMPANY that the
customs and practices of the insurance and reinsurance industry will be
given full effect in the operation and interpretation of this
Agreement. The parties agree to act in all things with the highest good
faith. If THE REINSURER or the CEDING COMPANY cannot mutually resolve a
dispute which arises out of or relates to this Agreement, however, the
dispute will be decided through arbitration. The arbitrators will base
their decision on the terms and conditions of this Agreement plus, as
necessary, on the customs and practices of the insurance and
reinsurance industry rather than solely on a strict interpretation of
the applicable law; there will be no appeal from their decision, and
any court having jurisdiction of the subject matter and the parties may
reduce that decision to judgment.
B. To initiate arbitration, either the CEDING COMPANY or THE REINSURER
will notify the other party by Certified Mail of its desire to
arbitrate, stating the nature of its dispute and the remedy sought. The
party to which the notice is sent will respond to the notification in
writing within ten (10) days of its receipt.
C. There will be arbitrators who will be current or former officers of
life insurance companies other than the contracting companies or their
affiliates. Each of the contracting companies will appoint one of the
arbitrators and these two arbitrators will select the third. If either
party refuses or neglects to appoint an arbitrator within sixty days,
the other party may appoint the second arbitrator. If the two
arbitrators do not agree on a third arbitrator within sixty days of
their appointment, each of the arbitrators will nominate three
individuals. Each arbitrator will then decline two of the nominations
presented by the other arbitrator. The third arbitrator will then be
chosen from the remaining two nominations by drawing lots.
D. It is agreed that each of the three arbitrators should be impartial
regarding the dispute and should resolve the dispute on the basis
described in Section A of this Article. Therefore, at no time will
either the CEDING COMPANY or THE REINSURER contact or otherwise
communicate with any person who is to be or has been designated as a
candidate to serve as an arbitrator concerning the dispute, except upon
the basis of jointly drafted communications provided by both the CEDING
COMPANY and THE REINSURER to inform the arbitrators of the nature and
facts of the dispute. Likewise, any written or oral arguments provided
to the arbitrators concerning the dispute will be coordinated with the
other party and will be provided simultaneously to the other party or
will take place in the presence of the other party. Further, at no time
will any arbitrator be informed that the arbitrator has been named or
chosen by one party or the other.
E. The arbitration hearing will be held in New York State on the date
fixed by the arbitrators. In no event will this date be later than six
(6) months after the appointment of the third arbitrator. As soon as
possible, the arbitrators will establish prearbitration procedures as
warranted by the facts and issues of the particular case. At least ten
(l0) days prior to the arbitration hearing, each party will provide the
other party and the arbitrators with a detailed statement of the facts
and arguments it will present at the arbitration hearing. The
arbitrators may consider any relevant evidence; they will give the
evidence such weight as they deem it entitled to after consideration of
any objections raised concerning it. The party initiating the
arbitration will have the burden of proving its case by a preponderance
of the evidence. Each party may examine any witnesses who testify at
the arbitration hearing.
E. The cost of arbitration will be borne by the losing party unless the
arbitrators decide otherwise.
16
ARTICLE XV
INSOLVENCY
A. In the event of the insolvency of the CEDING COMPANY, all reinsurance
made, ceded, renewed or otherwise becoming effective under this
agreement shall be payable by THE REINSURER directly to the CEDING
COMPANY or to its liquidator, receiver, or statutory successor on the
basis of the liability of the CEDING COMPANY under the contract or
contracts reinsured without diminution because of the insolvency of the
CEDING COMPANY.
B. In the event of insolvency of the CEDING COMPANY, the liquidator,
receiver or statutory successor will immediately give written notice to
THE REINSURER of all pending claims against the CEDING COMPANY on any
policies reinsured. While a claim is pending, THE REINSURER may
investigate and interpose, at its own expense, in the proceedings where
the claim is adjudicated, any defense or defenses which it may deem
available to the CEDING COMPANY or its liquidator, receiver or
statutory successor. The expense incurred by THE REINSURER will be
chargeable, subject to court approval, against the CEDING COMPANY as
part of the expense of liquidation 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 participating 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 the
reinsurance agreement as though such expense had been incurred by the
CEDING COMPANY.
C. Any debts or credits, matured or unmatured, liquidated or unliquidated,
in favor of or against either THE REINSURER or the CEDING COMPANY with
respect to this Agreement are deemed mutual debts or credits, as the
case may be, and will be offset, and only the balance will be allowed
or paid.
17
ARTICLE XVI
RIGHT TO INSPECT
THE REINSURER may at all reasonable times inspect the CEDING COMPANY'S original
papers, records, books, files, etc., relating to the business under this
Agreement.
18
ARTICLE XVII
DURATION OF AGREEMENT
A. This Agreement may be terminated as to new reinsurance at any time by
either party giving ninety (90) days written notice of termination. The
day the notice is mailed to the other party's Home Office, or, if the
mail is not used, the day it is delivered to the other party's Home
Office or to an Officer of the other party will be the first day of the
ninety (90) day period.
B. During the ninety (90) day period, this Agreement will continue to
operate in accordance with its terms.
C. THE REINSURER and the CEDING COMPANY will remain liable after
termination, in accordance with the terms and conditions of this
Agreement, with respect to all reinsurance effective prior to
termination of this Agreement.
19
ARTICLE XVIII
EXECUTION OF AGREEMENT
In Witness of the above,
SECURITY EQUITY LIFE INSURANCE COMPANY
of
Armonk, New York
and
WESTBRIDGE INSURANCE LTD.
of
Xxxxxxxx, Bermuda
Have by their respective officers executed and delivered this Agreement in
duplicate on the dates indicated below, with an effective date of June l, 1997.
SECURITY EQUITY LIFE INSURANCE COMPANY
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx X. Xxxxx
-------------------------------- ------------------------------
Title: VP & CFO Title: 2nd VP
Date: 5/28/97 Date: 5/29/97
WESTBRIDGE INSURANCE LTD.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Title: President
Date: May 30, 1997
20
EXHIBIT A
RETENTION SCHEDULE
The CEDING COMPANY'S Retention is $125,000 per life.
EXHIBIT B
POLICY PLANS REINSURED
Effective June 1, 1997
VARIABLE UNIVERSAL LIFE
FOR
THE UNION CARBIDE CORPORATION
EXHIBIT C
PREMIUMS
Life
The consideration payable to THE REINSURER for this coverage shall be
based on the applicable rate from the attached Rate Table C-1,
multiplied by the applicable pay percentage shown below:
Policy Years
----------------
1-10 11+
---- -----
Full Underwriting
Nonsmoker 85% 100
Smoker 90% 100%
SIMPLIFIED UNDERWRITING
Nonsmoker 98% 115%
Smoker 104% 115%
GUARANTEED ISSUE
Nonsmoker 145% 145%
Smoker 145% 145%
All policy fees will be retained by the CEDING COMPANY.
For substandard table ratings, premiums will be increased by 25% per
table.
The premium will be increased by any flat extra premium charged the
insured on the face amount initially reinsured, less total allowances
in the amount of 100% of any first year permanent (payable 6 years or
more) extra or 20% of any first year temporary flat extra premium, and
20% of any renewal flat extra premium.
SECURITY EQUITY
VARIABLE UNIVERSAL LIFE
MALE - NON-SMOKER
Issue Age 20-85
SECURITY EQUITY
VARIABLE UNIVERSAL LIFE
MALE - SMOKER
Issue Age 20-85
SECURITY EQUITY
VARIABLE UNIVERSAL LIFE
FEMALE -SMOKER
Issue Age 20-85
SECURITY EQUITY
VARIABLE UNIVERSAL LIFE
FEMALE - NON-SMOKER
Issue Age 20-85
EXHIBIT E
SAMPLE POLICY EXHIBIT
POLICY SUMMARY NUMBER OF REINSURANCE
CLASSIFICATION POLICIES AMOUNT
-------------- --------- -----------
Inforce as of Last Report
New Issues
Reinstatements
Increases
Decreases - Still Inforce
Rollover - In
Deduct By:
Death
Surrender
Lapse
Conversion - Out
Decreases - Cancellation
Inactive - Pending
Not Taken
INFORCE AS OF CURRENT REPORT
AMENDMENT
to the
FACULTATIVE YEARLY RENEWABLE TERM AGREEMENT DATED JUNE 1, 1997
between
SECURITY EQUITY LIFE INSURANCE COMPANY, ARMONK, NEW YORK
and
WESTBRIDGE INSURANCE LTD., XXXXXXXX, BERMUDA
THIS AMENDMENT IS EFFECTIVE JUNE 1, 1997
I. INCREASED RETENTION CORRIDOR
Effective June 1, 1997, the CEDING COMPANY'S retention corridor shall
be increased. The CEDING COMPANY will over retain up to $25,000 to
avoid the necessity of reinsuring modest amounts of insurance.
II. All provisions of the Facultative Yearly Renewable Term Agreement not
Specifically modified herein remain the same.
IN WITNESS WHEREOF, both parties have executed this Amendment in duplicate as
follows:
SECURITY EQUITY LIFE INSURANCE COMPANY
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx X. Xxxxx
-------------------------------- -------------------------------
Title: VP & CFO Title: 2nd VP
Date: 5/28/97 Date: 5/29/97
WESTBRIDGE INSURANCE LTD.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Title: President
Date: May 30, 1997
EXHIBIT D
STATEMENT SPECIFICATIONS
The following information should appear on each Self-Administered statement and
In-Force listing sent to THE REINSURER.
> Name of the insured(s)
> Date of birth of the insured(s)
> The issue age of each insured(s)
> The sex of the insured(s)
> The insured's state/country of residence
> Underwriting Classification
> Smoking Class
> Indication if business is Facultative or Automatic
> Indication if business is YRT or Coinsurance
> Policy number(s)
> Plan Code (Kind Code)
> Face Amount of the policy(s)
> Amount(s) ceded to THE REINSURER
> Amount of premium being paid; separated for Life, WP, ADB, etc.
> The amount of any reinsurance premium allowances
> Extra premiums concerned - Example: $5 / 1000 / 5 YRS
> Effective date and duration of any policy(s) change, reissue, or termination
