REINSURANCE AGREEMENT
referred to as the "Agreement"
BETWEEN
STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA
OF
WORCESTER, MASSACHUSETTS
#6092-1
referred to in this Agreement as the "Company"
AND
LIFE REASSURANCE CORPORATION OF AMERICA
OF
STAMFORD, CONNECTICUT
referred to in this Agreement as "Life Re"
EFFECTIVE:
JANUARY 1, 1995
The Company and Life Re mutually agree to reinsure on the terms and
conditions set forth in this Agreement. This Agreement is solely between the
Company and Life Re, and performance of the obligations of each party under this
Agreement shall be rendered solely to the other party. In no instance shall any
one other than the Company or Life Re have any rights under this Agreement
ARTICLE I
DESCRIPTION OF REINSURANCE
1. DESCRIPTION
The Company will cede and Life Re will accept reinsurance of policies
resulting from term conversions of life insurance policies, net of preexisting
reinsurance, written by the Company and its affiliates that were coinsured by
Protective Life Insurance Company and its affiliates under the terms of
coinsurance agreements between Protective Life and its affiliates and the
Company. The Company will retain the amount of risk set forth on Schedule A and
Life Re will reinsure the remaining amount.
2. COVERAGE
Life Insurance is exclusively the coverage reinsured automatically under
paragraph 1. The life insurance includes only basic policies and not term riders
providing life insurance protection.
ARTICLE II
REINSURANCE LIABILITY
The liability of Life Re on the reinsurance under this Agreement begins
and ends at the same time the liability of the Company begins and ends regarding
policies reinsured, but not before the execution of the policy conversion or
exchange.
ARTICLE III
AMOUNT OF REINSURANCE
1. AMOUNTS
Life reinsurance under this Agreement shall be on a yearly renewable
term plan for 100% of the amount of risk under the policy reinsured. For the
purposes of this Agreement, the amount at risk for a life insurance policy shall
be:
(a) the face amount of the policy; less
(b) the reserve of the policy as determined by the Company in
accordance with Statutory Accounting Principles; less
(c) amounts due, whether or not recoverable, from any other
reinsurance agreement pertaining to the life insurance policy.
The net amount at risk will be determined in a manner consistent with
similar reinsurance under other agreements between the Company and Life Re.
Amounts at risk may be determined by other methods, subject to prior written
agreement between the Company and Life Re.
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The net amount at risk will be determined in a manner consistent with
similar reinsurance under other agreements between the Company and Life Re.
Amounts at risk may be determined by other methods, subject to prior written
agreement between the Company and Life Re.
2. MINIMUM AMOUNTS
Amounts of reinsurance less than $50,001 will not be ceded under this
Agreement. The minimum in-force net amount at risk is $25,001. Amounts less than
$25,001 will be recaptured.
ARTICLE IV
PROCEDURES FOR REPORTING
1. GENERAL INFORMATION
Life Re will accept reinsurance on a self administered basis.
2. MONTHLY STATEMENTS
On the last business day of each calendar month, the Company will
forward to Life Re a statement of premiums due, reserves, and policy data as
shown in Part I of Schedule B. The statements will show the premium due on
reinsurance for all policies renewing during the past month, accompanied by the
annual premiums for such policies and the pro-rata adjustments for changes in
reinsurance. The Company will remit a check for the balance indicated to Life Re
along with the statement. If a balance is due the Company, it will be remitted
by Life Re promptly.
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3. ANNUAL REPORTS
Within thirty days of the end of each calendar year, the Company will
forward to Life Re a reinsurance report in substantial conformity with the
report contained in Schedule B. In addition to the report, the Company will
forward to Life Re a seriatim listing of reinsured cessions to support the
reserve and inforce portions of the self-administered report.
ARTICLE V
PREMIUMS
1. LIFE INSURANCE
Premiums per $1,000 for life insurance rated standard and substandard
are given in Part I of Schedule C. The premiums per $1,000 are applied to the
amount of life reinsurance set forth in Article III. The rates shown shall be
applied on a point-in-scale basis (using the original issue age and duration
from the original issue). Substandard premiums are to be calculated utilizing
the rates shown in Part I of Schedule C increased by 25% for each table rating.
A policy fee, when applicable, is charged in each year in addition to the
premium based on the amount of life insurance. Life Re anticipates that these
premiums will be continued indefinitely for all business ceded under this
Agreement. For the purpose of satisfying requirements for deficiency reserves
imposed by various state insurance departments, Life Re will guaranty for
renewal the greater of the premiums provided in this Agreement or premiums based
on the 1980 CSO Table at 2.5% interest. When the Company charges a flat extra
premium, whether alone or in addition to a premium based on a multiple table,
the Company will pay this premium less the discounts detailed in Part II of
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Schedule C, on the reinsurance amount in addition to the standard or multiple
table premium for the rating and plan of reinsurance. Life Re will not
contribute to dividends paid by the Company unless noted in Part II of Schedule
C. If Life Re contributes to dividends, it will not participate in an increase
in the dividend scale unless agreed to in writing prior to the effective date of
the improved dividend scale.
2. PREMIUM TAXES
Life Re will not reimburse the Company for state premium taxes on
reinsurance premiums received from the Company.
3. PAYMENTS
Premiums are payable annually in advance. If reinsurance is reduced,
terminated, increased or reinstated during the year, pro-rata adjustments will
be made by Life Re and the Company on all premium items except policy fees.
4. NONPAYMENT OF REINSURANCE PREMIUMS
Except as provided in Article XII. 4., the payment of reinsurance
premiums shall be a condition precedent to the liability of Life Re under
reinsurance covered by this Agreement. In the event of nonpayment of reinsurance
premiums as provided in this Article, Life Re shall have the right to terminate
the reinsurance under all policies having reinsurance premiums in arrears.
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5. MISSTATEMENTS
If the insured's age or sex was misstated and the amount of insurance
on the policy is adjusted, the Company and Life Re will share the adjustments in
proportion to the amount of liability of each party that would occur if the
current agreements would have been in effect at the time of issuance of the
misstated policy. Reinsurance premiums will be recalculated for the correct age
or sex and amounts according to the proportion as above and adjusted without
interest. If the insured is still alive, the method above will be used for past
years and the amount of reinsurance and premium adjusted for the future to the
amount that would have been correct at issued.
ARTICLE VI
CLAIMS
1. NOTICE
The Company shall notify Life Re promptly after receipt of any
information on a claim where reinsurance is involved, and it shall furnish to
Life Re as soon as possible the completed reinsurance claim form and copies of
all claim papers and proofs.
2. AUTHORIZATION FOR PAYMENT
Life Re shall follow the decision of the Company on payment of a claim
arising from a policy ceded to Life Re.
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3. PAYMENT
For life, additional indemnity, and accelerated death benefit claims
and any other riders on the business coinsured by the Company that is reinsured
by Life Re hereunder, Life Re shall pay its proportionate share of the reinsured
amount at risk in a lump sum to the Company, without regard to the form of claim
settlement of the Company. For a waiver of premium disability claim, the Company
shall continue to pay premiums for reinsurance. Life Re shall pay its
proportionate share of the disability benefits on the policy, including its
share of the premiums for benefits that remain in effect during disability.
4. EXPENSES
Life Re shall share in the claim expense of any contest or compromise
of a claim in the same proportion that the net amount at risk reinsured
hereunder bears to the total net risk of the Company on all policies being
contested by the Company, and it shall share in the total amount of any
reduction in liability in the same proportion. Claim expense shall include, but
not be limited to, cost of investigation, legal fees, court costs, and interest
charges. Compensation of salaried officers and employees damages shall not be
considered covered expenses.
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5. MISSTATEMENTS
In the event of an increase or reduction in the amount of insurance on
any policy reinsured hereunder because of an overstatement or understatement of
age or misstatement of sex, established after the death of the insured, the
Company and Life Re shall share in such increase or reduction in proportion to
their respective net amounts at risk under that policy.
6. CONTESTED CLAIMS
(a) The Company shall give Life Re prompt notice of any claim
submitted on a policy reinsured hereunder and prompt notice of the instigation
of any legal proceedings in connection therewith. Copies of proofs or other
documents bearing on such claim or proceeding shall be furnished to Life Re when
requested.
(b) With respect to the administration, negotiation, payment,
denial, or settlement of any claim or legal proceeding, the Company shall act
with good faith and in accord with its standard practices applicable to all
claims, whether reinsured or not. Life Re shall pay, at its Home Office, its
share of net reinsurance liability upon receiving proper evidence of the
Company's having settled with the claimant. Payment of net reinsurance liability
on account of death or dismemberment shall be made in one lump sum. Net
reinsurance liability is the reinsurance amount at risk (the death benefit
reinsured less the cash value under the policy) plus any unusual expenses under
the settlement of claims provisions.
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(c) If the Company should contest or compromise any claim or
proceeding and the amount of net liability thereby be reduced, or if at any time
the Company should recover monies from any third party in connection with or
arising out of any claim reinsured by Life Re, Life Re's reinsurance liability
shall be reduced or Life Re shall share in the recovery, as the case may be, in
the proportion that the net liability of Life Re bore to the total net liability
existing as of the occurrence of the claim. As used in this section, "recovery"
shall include, but not be limited to, settlements, judgements, awards and
insurance payments of any kind.
(d) Any unusual expenses incurred by the Company in defending or
investigating a claim for policy liability or in taking up or rescinding a
policy reinsured hereunder shall be participated in by Life Re in the same
proportion as described in section (c), above.
(e) In no event shall the following categories of expenses or
liabilities be considered, for purposes of this Agreement, as "unusual expenses"
or items of "net reinsurance liability:"
1. routine investigative or administrative expenses;
2. expenses incurred in connection with a dispute or
contest arising out of conflicting claims of
entitlement to policy proceeds or benefits which the
Company admits are payable; or
(f) Life Re shall be liable for any and all compensatory charges
in the proportion net reinsurance liability bears to the total net amount at
risk.
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(g) In the event that the amount of insurance provided by a policy
or policies reinsured hereunder is increased or reduced because of a
misstatement of age or sex established after the death of the insured, the net
reinsurance liability of Life Re shall increase or reduce in the proportion that
the net reinsurance liability of Life Re bore to the sum of the net retained
liability of the Company and the net liability of other reinsurers immediately
prior to the discovery of such misstatement of age or sex. Reinsurance policies
in force with Life Re shall be reformed on the basis of the adjusted amounts,
using premiums and reserves applicable to the correct age and sex. Any
adjustment in reinsurance premiums shall be made without interest. Life Re shall
refund to the Company any reinsurance premiums, without interest, unearned as of
the date of death of the life reinsured hereunder.
(h) If the Company pays interest from a specific date, such as the
date of death of the insured, on the contractual benefit of a policy reinsured
under this Agreement, Life Re shall indemnify the Company for Life Re's share
of such interest. Interest paid by Life Re under this section shall be computed
at the same rate and commencing as of the same date as that paid by the
Company. The computation of interest paid by Life Re under this section shall
cease as of the earlier of (1) the date of payment of Life Re's share of
reinsurance liability and (2) the date of termination of the period for which
the reinsured has paid such interest.
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7. ASSISTANCE AND ADVICE
At the request of the Company, Life Re shall advise on any claim
concerning business reinsured hereunder and, when such a claim appears to be of
doubtful validity, it shall assist the Company in its determination of liability
and in the best procedure to follow with respect to the claim.
8. UNUSUAL EXPENSES
Notwithstanding anything in this Agreement to the contrary, the term
"unusual expenses" as used in this Agreement shall include, but not be limited
to:
(a) any extracontractual award (including, but limited to, punitive or
exemplary damages) imposed against the Company by a court or
regulatory body, except to the extent that the award is based on
conduct of the Company which Life Re did not have knowledge of
nor acquiesced in and which was in bad faith. For purposes of
this provision, in determining whether the Company's conduct was
in bad faith, the decision of the court or regulatory body will
not be binding. Rather, the conduct will only be considered to
have been in bad faith to the extent it deviates from accepted
standards of conduct among those familiar with the operation of
the insurance and reinsurance business; and
(b) any legal fees and costs incurred by the Company in defending or
investigating a claim for policy liability or in taking up or
rescinding a policy reinsured under this Agreement.
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For purposes of this Agreement, any penalties, attorney's fees, and
interest imposed automatically by statute against the Company and arising solely
out of judgement being rendered against the Company in a suit for policy
benefits reinsured under this Agreement shall, in any event, be considered
"unusual expenses."
ARTICLE VII
DAC TAX
Life Re and the Company are both subject to taxation in the United
States and hereby agree to the following pursuant to Section 1.848-2(g)(8) of
the Income Tax Regulation under Section 848 of the Internal Revenue Code of
1986, as amended.
(a) The term "party" will refer to either Life Re or the Company
as appropriate.
(b) The terms used in this Article are defined by reference to
Regulation 1.848-2. The term "net consideration" will refer to
either net consideration as defined in Regulation Section
1.848-2(f) or gross amount of premiums and other consideration
as defined in Regulation Section 1.848-3(b) as appropriate.
(c) Each party shall attach a schedule to its federal income tax
return which identifies the relevant reinsurance agreements
for which the joint election under the Regulation has been
made.
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(d) The party with net positive consideration, as defined in the
Regulation promulgated under Code Section 848, for such
agreement for each taxable year, shall capitalize specified
policy acquisition expenses with respect to such agreement
without regard to the general deductions limitation of Section
848(c)(1).
(e) Each party agrees to exchange information pertaining to the
amount of net consideration under such agreement each year to
ensure consistency.
ARTICLE VIII
RECAPTURE
The business ceded hereunder may not be recaptured by the Company.
ARTICLE IX
REDUCTIONS, REINSTATEMENTS AND CHANGES
1. REDUCTIONS AND TERMINATIONS
Reinsurance amounts are calculated in terms of coverages on the life of
a person. If any of the Company's policies or riders on the person are reduced
or terminated, the reinsurance in force will be reduced by the corresponding
amount. The reduction will not be applied to force the Company to reassume more
than its regular retention limit at the time of the reduction for the age at
issue, mortality rating and form of the policy or policies for which reinsurance
is being terminated. The reduction first shall be applied to reinsurance, if
any, on the particular policy reduced. If the reduction exceeds the amount of
reinsurance on that policy, the reduction shall then be applied to reinsurance
on other policies on that life in
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the order in which the policies were effected, the first effected shall be the
first terminated or reduced. If reinsurance has been ceded to more than one
reinsurer, the reduction in Life Re's reinsurance will be in proportion to the
reduction in the total. After the proportion has been determined, the rules
above will be used.
2. REINSTATEMENTS
Risks under policies issued upon conversion and ceded to Life Re that
were reduced, terminated or lapsed, if reinstated by the Company in the normal
course of business, will be reinstated to the amount that would have been in
force had the policy not been reduced, terminated or lapsed.
In connection with all such reinstatements, the Company shall pay Life
Re all reinsurance premiums and interest in like manner as the Company has
received under its policy.
3. NONFORFEITURE BENEFITS
Life Re will participate in the mortality risks associated with
nonforfeiture benefits under whole life policies at the rates set forth in
Schedule C.
4. POLICY LOANS
Life Re will not participate in policy loans on policies reinsured
under this Agreement.
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5. CONTRACTUAL CONVERSIONS AND EXCHANGES
In the event of a contractual conversion or exchange, understood to be
one which requires no evidence of insurability, any risk resulting from such
conversion or exchange (other than conversions to First to Die or Second to Die
products), shall continue to be reinsured by Life Re (conversions to First to
Die and Second to Die products will remain with the Company). The reinsured net
amount at risk on the policy resulting from such conversion or exchange shall
not exceed the current reinsured net amount at risk on the policy or policies
being converted or exchanged. If, however, the conversion or exchange results in
an increase in the risk to be reinsured, the amount of the increase shall be
subject to evidence of insurability.
6. RIGHT TO REINSURE CONVERSIONS AND EXCHANGES
In addition, if the Company takes any steps to convert or exchange any of
the reinsured policies, then Life Re shall be entitled to reinsure such
converted or exchanged policies as well.
ARTICLE X
INSOLVENCY
All reinsurance under this Agreement will be paid on demand by Life Re
directly to the Company, its liquidator, receiver, or statutory successor, on
the basis of the liability of the Company under the policy or policies reinsured
without diminution because of the insolvency of the Company. In the event of the
insolvency of the Company, the liquidator, receiver, or statutory successor of
the Company will give written notice to Life Re of a pending claim against Life
Re or the Company on any policy reinsured within a reasonable
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time after the claim is filed in the conversation, liquidation, or insolvency
proceedings. While the claim is pending, Life Re may investigate and interpose,
at its own expense, in the proceedings where the claim is to be adjudicated, any
defenses which it may deem available to the Company or its liquidator, receiver,
or statutory successor. The expense incurred by life Re will be charged, subject
to court approval, against the Company as an expense of the conversation,
liquidation, or insolvency to the extent of a proportionate share of the benefit
that accrues to the Company as a result of the defenses by Life Re. Where two or
more reinsurers are involved and a majority in interest elect to defend a claim,
the expense will be apportioned in accordance with the terms of the Agreement as
if the expense had been incurred by the Company.
ARTICLE XI
ARBITRATION
Life Re and the Company intend that any dispute between them under or
with respect to this Agreement be resolved without resort to any litigation.
Accordingly, Life Re and the Company agree that they will negotiate diligently
and in good faith to agree on a mutually satisfactory resolution of any such
dispute; PROVIDED, HOWEVER, that if any such dispute cannot be so resolved by
them within sixty calendar days (or such longer period as the parties may agree)
after commencing such negotiations, Life Re and the Company agree that they will
submit such dispute to arbitration in the manner specified in, and such
arbitration proceeding will be conducted in accordance with, the rules of the
American Arbitration Association.
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The arbitration hearing will be before a panel of three arbitrators,
each of whom much be a present or former officer of a life insurance or life
reinsurance company. Life Re and the Company will each appoint one arbitrator by
written notification to the other party within thirty calendar days after the
date of the mailing of the notification initiating the arbitration. These two
arbitrators will then select the third arbitrator within sixty calendar days
after the date of the mailing of the notification initiating arbitration.
If either Life Re or the Company fail to appoint an arbitrator, or
should the two arbitrators be unable to agree upon the choice of a third
arbitrator, the president of the American Arbitration Association or of its
successor organization or (if necessary) the president of any similar
organization designated by lot of Life Re and the Company within thirty calendar
days after the request will appoint the necessary arbitrators.
The vote or approval of a majority of the arbitrators will decide any
question considered by the arbitrators; PROVIDED, HOWEVER, that if no two
arbitrators reach the same decision, then the average of the two closest
mathematical determinations will constitute the decision of all three
arbitrators. The place of arbitration will be Stamford, Connecticut. Each
decision (including without limitation each award) of the arbitrators will be
final and binding on all parties and will be nonappealable, and (at the request
of either Life Re or the Company) any award of the arbitrators may be confirmed
by a judgement entered by any court of competent jurisdiction. Any award or
judgement will bear interest at an appropriate interest rate. Each party will be
responsible for paying (a) all fees and expenses charged by its respective
counsel, accountants, actuaries, and other representatives in conjunction with
such arbitration and (b) one-half of the fees and expenses charged by each
arbitrator.
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ARTICLE XII
GENERAL PROVISIONS
1. POLICY FORMS AND RATES
Upon request by Life Re, the Company will make available to Life Re
specimen copies of the application forms, policy and rider forms, premium and
non-forfeiture value manuals, reserve tables and any other forms or tables
needed for proper handling of its reinsurance under this Agreement. It will
advise Life Re promptly of any changes it may adopt from time to time.
2. REINSURANCE CONDITIONS
The reinsurance is subject to the same limitations and conditions as the
insurance under the policy or policies written by the Company on which the
reinsurance is based.
3. EXPENSES
Life Re will not bear the expense of any medical examinations,
inspections fees, or other charges in connection with the policy.
4. ERRORS AND OMISSIONS
If either the Company or Life Re fails to perform an obligation under
this Agreement, and such failure is the result of an Error on the part of the
Company or Life Re, such Error shall be corrected by restoring both the Company
and Life Re to the positions they would have occupied had no such Error
occurred. For this purpose, "Error" means an administrative mistake made
inadvertently. For business reported but not covered under the provisions of
this Agreement, Life Re shall be obligated only for the return of premium paid.
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5. OFFSET
Any amount under this Agreement which either the Company or Life Re is
contractually obligated to pay to the other party may be paid out of any amount
which is due and unpaid under this Agreement. The application of this offset
provision will not be deemed to constitute diminution in the event of
insolvency.
6. INSPECTION
At any reasonable time, Life Re may inspect the original papers and any
and all books or documents at the Home Office of the Company relating to or
affecting reinsurance under this Agreement.
7. ENTIRE AGREEMENT PROVISION
This Agreement and the Schedules attached hereto supersede all prior
discussions and written and oral agreements between the parties with respect to
the subject matter of this Agreement. This Agreement and the Schedules attached
hereto contain the sole and entire agreement between the parties hereto with
respect to the subject matter hereof and may only be amended in a writing signed
by the parties.
8. NOTICES
Any notice, request, instruction, or other document to be given hereunder
by any party hereto to the other party hereto will be in writing and (i)
delivered personally, (ii) sent by facsimile, (iii) delivered by overnight
express, or (iv) sent by registered or certified mail, postage prepaid, as
follows:
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If to the Company, to:
State Mutual Life Assurance Company of America
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx., Assistant Vice President
and Actuary
Facsimile: 508/853-6332
Telephone: 508/000-0000
If to Life Re, to:
Life Reassurance Corporation of America
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Vice President
Facsimile: 203/321-3200
Telephone: 203/000-0000
or at such other address for a party as will be specified by like notice. Each
notice or other communication required or permitted under this Agreement that is
addressed as provided in this Article XII will, if delivered personally or by
overnight express, be deemed given upon delivery; will, if delivered by
facsimile or similar facsimile transmission, be deemed delivered when
electronically confirmed; and will, if delivered by mail in the manner described
above, be deemed given on the third business day after the day it is deposited
in a regular depository of the United States mail.
ARTICLE XIII
DURATION OF AGREEMENT
This Agreement will be effective on and after the effective date stated
in Article XIV. It is unlimited in duration but may be amended by mutual consent
of the Company and Life Re.
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ARTICLE XIV
EXECUTION
In witness of the above, this Agreement is signed in duplicate in one
or more counterparts at the dates and places indicated with an effective date of
January 1, 1995.
STATE MUTUAL LIFE ASSURANCE
COMPANY OF AMERICA
Date: April 24, 1997 By: /s/ Xxxxxx X. Xxxxx, Xx.
------------------------- ----------------------------
Place: Worcester, MA Title: AVP & Actuary
------------------------- ----------------------------
Witness: /s/
-------------------------
LIFE REASSURANCE CORPORATION
OF AMERICA
Date: September 26, 1996 By: /s/
------------------------- ----------------------------
Place: Stamford, CT Title: Executive Vice President
------------------------- ----------------------------
Witness: /s/
-------------------------
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SCHEDULE A
RETENTION LIMITS OF THE COMPANY
The Company shall not retain any portion of risk on the policies issued
upon continuation or conversion reinsured by Life Re hereunder. Increases after
conversion or at the same time as conversion will not be covered by this
Agreement.
Schedule B, Part 1
Omitted 1 Page
Life Re Agreement #6092-1
SCHEDULE B, PART II
SELF-ADMINISTERED REINSURANCE
POLICY TRANSACTION DETAIL REPORT
A. The policy detail report should be broken down into the following
categories:
1 - First Year
2 - Renewals
3 - Terminations - (First year/Renewal split optional, subtotals by
termination type optional).
4 - Changes - (First year/Renewal split optional, subtotals by change
type optional).
*If premium mode other than annual.
Subtotal should be provided by plan code for each of the above
categories. Where smokers and non-smokers are not assigned separate plan
codes, subtotals for the above should be further broken down to provide
totals by smoking habit.
Automatic and facultative business should be shown separately for each of
the five categories above.
If more than one currency is involved per treaty, provide separate
reports by currency.
If there is any qualified pension business ceded, please provide separate
reporting.
B. FIELD DESCRIPTIONS
1. Insured Information
Name - Full name (Last, first, middle) for insured
DOB - Full date of birth (MM/DD/YY) for insured
Sex - M/F
Schedule B, Part II, Page 2
S/N - Smoker habit. Up to three spaces should be allotted for this
field to accommodate codes relevant to the treaty reported.
Suggested codes are:
S - Smoker
N - Nonsmoker
A - Aggregate (or composite)
PN - Preferred nonsmoker
PS - Preferred smoker
Age - Actual age at issue
ST - State of residence
2. Policy Information
Policy No. - Ceding company's policy number.
- Policies should be listed in numerical order.
Plan - Ceding company's plan code.
DOI - Full policy date (MM/DD/YY). This is the date from
which renewal processing will be driven.
DRN - Duration from original policy date (i.e., where
attained scale rates apply to policy conversions or
replacements).
A/F - Automatic/Facultative indicator. Business ceded on a
fac/ob basis can be indicated by an "0" in this
field.
Rating - Indicate table if substandard. 100% for standard
issues.
Flat - Flat extra amount per thousand.
Yrs - Duration of flat extra (number of years).
Schedule B, Part II, Page 3
OPT - For Universal Life plans only, indicate death benefit
Option 1 or 2. Under Option 1, the level death
benefit option, the amount at risk decreases as the
cash value accumulates. Option 2 produces an
increasing death benefit, equivalent to the specified
amount plus the accumulated cash value. The Reinsured
Net Amount at Risk remains level under this option.
COV - L - Basic Coverage
WP - Waiver of Premium
ADB - Accidental Death Benefit
DIRECT - Full face amount of the coverage at issue.
FACE
REINS. - Initial amount ceded.
FACE
REINS. - Current reinsured amount at risk.
AAR
Chg. Amt. - ANY change to the reinsurance amount at risk since
previous report should be illustrated here.
Chg. Dt. - Effective date of policy changes. Applies to
termination and change reports, may be blank for new
business and renewals.
TR. - Transaction type (see list in Part C below).
Base Prem. - Gross premium due for each coverage (excluding
substandard premium amounts).
SStd. Prem. - Gross substandard premium, i.e., multiple and/or flat
extra premiums, if applicable.
Base Allow. - Allowance (commission) due on base premium amount.
SStd. Allow. - Allowance (commission) due on substandard premium
amount.
Net - Net amount due per coverage.
Schedule B, Part II, Page 4
C. TRANSACTION TYPES
Suggested alpha codes for each of the various transaction types are:
1. FO - First year other than New Business
2. RL - Renewal
3. Terminations
LP - Lapse
NT - Not Taken
SR - Surrender
EX - Expiry
DH - Death
RC - Recapture
4. Changes
RS - Reinstatement
IC - Increase
DC - Decrease
CA - Conversions on
CO - Conversions off
RA - Internal Replacements on
RO - Internal Replacements off
ET - ET1
RP - Reduced Paid Up
MS - Misc. (e.g. name changes, benefit additions)
SCHEDULE C
SCHEDULE OF PREMIUMS
Note: The attached premiums were derived by multiplying the 1975-80 Basic Table,
Select and Ultimate, Male and Female, Age Nearest Birthday, found in volume
XXXVIII of the Transactions of the Society of Actuaries by 1.16 and then
applying the following factors:
ATTAINED AGE NON-SMOKER SMOKER
------------ ---------- ------
0 - 17 95% 95%
18 - 29 65% 125%
30 - 39 65% 145%
40 - 69 70% 170%
70 - 79 75% 150%
80 - 89 80% 130%
90+ 90% 105%
LIFE REASSURANCE CORPORATION OF AMERICA
MALE, NONSMOKER
YEARLY RENEWABLE TERM PREMIUM PER $1,000 AT RISK
Omitted 8 Pages
SCHEDULE C
PART II - DISCOUNTS
Agreement Number 6092-1
The allowance for commissions granted for reinsurance amounts expressed as a
percentage of the premium rate charged by the Company are shown below for the
applicable benefit.
BENEFIT FIRST YEAR RENEWAL YEAR
------- ---------- ------------
Life Insurance - Flat Extra Premiums
Aviation Hazard 10% 10%
Temporary Extras (5 yrs. or less) 10% 10%
Permanent Extras 100% 10%
Amendment I to
Reinsurance Agreement 6092-1 (Automatic YRT Bulk) between STATE
MUTUAL LIFE ASSURANCE COMPANY OF AMERICA of Worcester, Massachusetts (the
"Company") and LIFE REASSURANCE CORPORATION OF AMERICA of Stamford, Connecticut
("Life Re").
AMENDMENT I.
Effective October 11, 1995, the party referred to in this Agreement as the
"Company" shall hereafter be the FIRST ALLMERICA FINANCIAL LIFE INSURANCE
COMPANY of Worcester, Massachusetts.
All provisions of the
Reinsurance Agreement not in conflict with the provisions
of this Amendment will continue unchanged.
This Amendment is signed in duplicate at the dates and places indicated with an
effective date of October 11, 1995.
FIRST ALLMERICA FINANCIAL
LIFE INSURANCE COMPANY
Date: April 24, 1997 By: /s/ Xxxxxx X. Xxxxx, Xx.
--------------------- ----------------------------
Place: Worcester, MA Title: AVP & Actuary
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Witness: /s/
---------------------
LIFE REASSURANCE
CORPORATION OF AMERICA
Date: September 26, 1996 By: /s/
--------------------- ----------------------------
Place: Stamford, CT Title: Vice President
--------------------- ----------------------------
Witness: /s/
---------------------
Amendment II to
Reinsurance Agreement 6092-1 (Automatic YRT Bulk-Conversions)
between FIRST ALMLERICA FINANCIAL LIFE INSURANCE COMPANY of Worcester,
Massachusetts (the "Company") and LIFE REASSURANCE CORPORATION OF AMERICA of
Stamford, Connecticut ("Life Re").
AMENDMENT II.
Effective November 1, 1996, the following #3, TERM CONVERSIONS - AMERICAN
MAYFLOWER is hereby added to Article I of this Agreement:
3. TERM CONVERSIONS - AMERICAN MAYFLOWER
Life Re agrees to reinsure on a point-in-scale basis the VEL policies
issued as a continuation of term policies originally issued by American
Mayflower through the Allmerica Product Network. These continuations shall be
administered as conversions of such term insurance to First Allmerica Financial
Life Insurance Company's VEL policy except they will be processed as
replacements. The VEL policies will not be re-underwritten to the extent that
the death benefit does not change. Increases will not be covered under this
amendment or this
reinsurance agreement.
All other provisions of the
Reinsurance Agreement will continue unchanged.
This Amendment is signed in duplicate at the dates and places indicated with an
effective date of November 1, 1996.
FIRST ALLMERICA FINANCIAL
LIFE INSURANCE COMPANY
Date: October 17, 1997 By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------- ----------------------------
Place: Worcester, MA Title: AVP & Actuary
---------------------- ----------------------------
Witness: /s/
----------------------
LIFE REASSURANCE
CORPORATION OF AMERICA
Date: 10/14/97 By: /s/
---------------------- ----------------------------
Place: Stamford, CT Title: Vice President
---------------------- ----------------------------
Witness: /s/
----------------------
LIFE RE AMENDMENT I, AGREEMENT #6092-1
10/09/1997
