Exhibit (g)(7)
[LOGO]
ADDENDUM NO. 2 to the Reinsurance Agreement referred to as NO. 7783-1 effective
August 18, 2003 made between IDS LIFE INSURANCE COMPANY OF NEW YORK (hereinafter
referred to as "the Ceding Company") and [NAME OF REINSURANCE COMPANY]
(hereinafter referred to as "the Reinsurer").
1. It is hereby declared and agreed that Article 6.5 of the above Agreement
will be replaced by the following Article 6.5, with respect to any New
Policy and any Existing Policy (as defined below):
6.5 PREMIUM RATE GUARANTEE
The Ceding Company agrees to provide Reinsurer with sixty (60)
days advance notice of its intent to increase cost of
insurance rates charged for new or existing business. Nothing
herein shall be construed to limit the Ceding Company's
ability to change cost of insurance rates in its own
discretion.
For reinsurance of new business, Reinsurer reserves the right
to change reinsurance premium rates after ninety (90) days
written notice is provided to the Ceding Company.
For reinsurance on existing business, Reinsurer agrees that
its right to increase reinsurance premium rates as shown in
Exhibit D, or any amendment thereto, is subject to the
following conditions.
Reinsurer represents that the reinsurance premium rates
charged for existing business under this treaty are intended
to remain in force for an indefinite period and that Reinsurer
has no current plans to raise such rates. Reinsurer will use
commercially reasonable efforts to maintain the existing
reinsurance premium rates but reserves the right to change
rates if necessary to maintain the financial stability of the
company or the block of reinsured business.
Reinsurer may raise reinsurance premium rates for existing
business only if the rate action is part of and consistent
with a general re-pricing of the Reinsurer's portfolio of
reinsurance plans for all Comparable Reinsurance Commitments.
In this regard, Reinsurer warrants that any increase in
reinsurance premium rates for existing business shall be no
greater in percentage than the increase in rates for other
policies reinsured by Reinsurer pursuant to contracts or
treaties with other insurance companies subject to the
Comparable Reinsurance Commitment.
Comparable Reinsurance Commitment means any other YRT
reinsurance contract or treaty under which Reinsurer provides
reinsurance for permanent insurance policies that are
generally subject to medical underwriting. Reinsurer agrees it
will not raise reinsurance premium rates pursuant to the
immediately foregoing paragraph in the event the total
Reinsured Net Amount at Risk ceded under this Agreement
constitutes more than [percentage] of total net amounts at
risk ceded to the Reinsurer for all Comparable Reinsurance
Commitments.
2
[terms of rate guarantee redacted]
In any event, the maximum reinsurance premium rates which may
be charged by the Reinsurer shall be the statutory valuation
premiums for yearly renewable term insurance at the maximum
interest rates and minimum mortality rates applicable to the
reinsured policies for each year of issue as prescribed by
law.
2. It is further agreed that Exhibit B and Exhibit D of the above Agreement
will be replaced by the attached Exhibit B and Exhibit D (both Revised
January 1, 2005) in order to revise the Reinsurer's share, provision B.8
(International Clients) and allowances, with respect to any New Policy (as
defined below). The original Exhibit B and Exhibit D remain applicable to
any Existing Policy (as defined below).
With respect to any insurance policy identified in Exhibit B of the
Agreement issued by the Ceding Company on or after January 1, 2005, or any
covered rider on such policy (hereinafter referred to as a "New Policy"),
the Reinsurer's share is [percentage] of the total automatic pool. For
purposes of this Agreement, a New Policy will be deemed to include any
insurance policy identified in Exhibit B that either (i) has an issue date
or is applied for on or after January 1, 2005, or (ii) goes into effect on
or after January 1, 2005 even if backdated to reflect an issue date prior
to January 1, 2005, including any covered rider on such policy. Any policy
issued by the Ceding Company and originally covered by the Agreement prior
to January 1, 2005 is considered an Existing Policy, including any covered
rider on such policy issued prior to January 1, 2005 (any covered rider
added on or after
3
January 1, 2005 shall be treated in the same manner as a New Policy).
Existing Policy also includes any conditional receipt or temporary
insurance provision if the policy is applied for prior to January 1, 2005
until such time as the policy is issued or declined, but only to the
extent coverage for such risks is provided for under the terms of the
Agreement.
3. It is further agreed that any change, reinstatement, increase, replacement
or conversion of an Existing Policy following January 1, 2005 will be
treated and covered in the manner provided for in the Agreement without
regard to the change in Reinsurer's share or allowances as noted above.
Single life policies resulting from the exercise of the Split Option Rider
on an Existing Policy will be considered Existing Policies.
Except as expressly amended above, all other terms of the Agreement, together
with all exhibits and attachments thereto, remain in full force and effect. This
Addendum No. 2 takes effect January 1, 2005 and supersedes both the notice of
termination sent by the Reinsurer to the Ceding Company dated September 22, 2004
and Addendum No. 1 previously executed by the parties.
Made in duplicate and executed by both parties.
Signed for and on behalf of IDS LIFE INSURANCE COMPANY OF NEW YORK
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ [ILLEGIBLE]
------------------------------------ -------------------------------
Title: President Title:Reinsurance Officer
Date: 7/21/05 Date: 7/21/05
Signed for and on behalf of [NAME OF REINSURANCE COMPANY]
By: [signature] By: [signature]
Title: [title] Title:[title]
Date: April 8, 2005 Date: 4-13-05
EXHIBIT B
(Revised January 1, 2005)
PLANS COVERED AND BINDING LIMITS
The business reinsured under this Agreement is defined as follows:
B.1 PLANS, RIDERS AND BENEFITS
Policies issued on plans with effective dates within the applicable period
shown below may qualify for reinsurance under the terms of this Agreement.
It is understood that policies may be backdated by up to six months from
the date shown below.
COMMENCEMENT TERMINATION
PLAN IDENTIFICATION DATE DATE
--------------------------------------------------- ------------------ ---------------
Succession Select (Variable JLLS UL) Form 39090 August 18, 2003
BENEFIT & RIDERS:
-Survivor Term Rider August 18, 2003
-Policy Split Option Rider August 18, 2003
-Four-Year Term Rider August 18, 2003
B.2 BASIS
The Ceding Company will reinsure [percentage] of the excess over its
retention stated in Exhibit A. Only mortality risk will be reinsured.
Cessions may be automatic, capacity facultative or non-capacity
facultative.
B.3 AUTOMATIC BINDING LIMITS
Life
--------------------------------------------
Oldest Issue
Age Maximum Pool Autobind
--------------------------------------------
[ages] [dollar amount]
--------------------------------------------
[ages] [dollar amount]
--------------------------------------------
[ages] [dollar amount]
--------------------------------------------
[ages] [dollar amount]
--------------------------------------------
EXHIBIT B
Page 2
(Revised January 1, 2005)
The Ceding Company may not cede reinsurance automatically if the sum of
all amounts in force and applied for on the joint lives with the Ceding
Company, excluding amounts being internally replaced, exceed the above
Automatic Binding Limits.
The above automatic binding limits are also subject to the Ceding
Company's age and insurability procedures for the Succession Select
product, as outlined in subsection B.7 of this Exhibit.
B.4 JUMBO LIMITS
The Ceding Company will not cede any risk automatically if, according to
information available to the Ceding Company, the total amount in force and
applied for on the joint lives with all insurance companies, including any
amount to be replaced, exceeds the applicable amounts shown below.
Life
----------------------------------------
Oldest Issue
Age Jumbo Limit
----------------------------------------
[ages] [dollar amount]
----------------------------------------
[ages] [dollar amount]
----------------------------------------
[ages] [dollar amount]
----------------------------------------
[ages] [dollar amount]
----------------------------------------
B.5 CONDITIONAL RECEIPT OR TEMPORARY INSURANCE AGREEMENT
The Reinsurer's liability will not exceed its proportionate share of
a) [dollar amount] or
b) [dollar amount] collection amount if the Ceding Company is ordered
to pay such higher amount by a court of competent jurisdiction.
B.6 CESSION LIMITS
Minimum Initial Cession: None. The Ceding Company will retain up to an
additional [percentage] over its maximum retention in order to avoid
trivial amounts of reinsurance.
EXHIBIT B
Page 2
(Revised January 1, 2005)
B.7 AUTOMATIC CESSIONS
a) Issue age and rating restrictions are shown in the following table.
The youngest insured must be between the ages of 15 - 85. The
minimum life expectancy for each of the two lives is one year.
----------------------------------------------------------------------
MAXIMUM TABLE RATING AVAILABLE TO THE
YOUNGEST APPLICANT IF
THE OLDEST APPLICANT'S CLASSIFICATION IS:
----------------------------------------------------------------------
YOUNGEST APPLICANT'S
AGE GROUP* STANDARD SUBSTANDARD UNINSURABLE
----------------------------------------------------------------------
Ages 15 - 45
----------------------------------------------------------------------
Ages 46 - 55
----------------------------------------------------------------------
Ages 56 - 75
----------------------------------------------------------------------
Ages 76 - 80
----------------------------------------------------------------------
Ages 81 - 85
----------------------------------------------------------------------
*If both applicants are in the same age group, use the lower rated
applicant as the youngest applicant. For example, if both applicants
are ages 81 - 85, the Ceding Company can issue up to D/D or
Standard/Uninsurable.
b) Definition of substandard (as opposed to uninsurable):
---------------------------------------------------------------------
Ages 20 - 75 Through Table P
---------------------------------------------------------------------
Ages 76 - 80 Through Table H
---------------------------------------------------------------------
Ages 81 - 85 Through Table D
---------------------------------------------------------------------
Ages 86 - 90 Always considered uninsurable even if standard
---------------------------------------------------------------------
c) Definition of (acceptable) uninsurable:
For the purposes of this Agreement, a risk will be classed as
uninsurable if it is assessed at a table rating higher than the
substandard limits above and if the life expectancy is at least one
year.
d) The Reinsurer's share of the total automatic pool will be
[percentage].
B.8 INTERNATIONAL CLIENTS
The Ceding Company may cede reinsurance automatically on international
clients who meet the financial and medical criteria listed in the Ceding
Company's "Guidelines for Underwriting International Clients and Foreign
Travel ('International Risk Guidelines')," if their country of origin and
citizenship has been agreed for automatic reinsurance and is shown in the
International Risk Guidelines as an 'A' or 'B' location.
EXHIBIT B
Page 4
(Revised January 1, 2005)
If an international client does not meet the Ceding Company's financial or
medical criteria, requires a flat extra or individual consideration under the
Ceding Company's International Risk Guidelines, or if the country of origin or
citizenship is not an agreed 'A' or 'B' location, then reinsurance will not be
ceded automatically.
The Ceding Company will promptly notify the Reinsurer of any proposed material
changes in its international client guidelines. This Agreement will not extend
to policies issued pursuant to such changes unless the Reinsurer has consented
in writing to accept policies subject to such changes.
EXHIBIT D
(Revised January 1, 2005)
REINSURANCE PREMIUMS
D.1 LIFE
a) Plans covered under this Agreement will be reinsured on a YRT basis.
YRT reinsurance premiums for the Base Plan, Survivor Term Rider, and
Four-Year Term Rider will be frasierized joint premiums based on the
individual ALB Annual Cost of Insurance (COI) rates, attached to
this Exhibit D, less allowances. After allowances are applied, YRT
reinsurance premiums are subject to a minimum rate of [dollar
amount] per [dollar amount] of reinsured risk amount in years 2 + .
SUCCESSION SELECT REINSURANCE ALLOWANCES FOR BASE PLAN AND SURVIVOR TERM RIDER
(YEAR 1 ALLOWANCE IS ALWAYS 100%)
----------------------------------------------------------------------------
YEARS 2 - 15 YEARS 16 +
----------------------------------------------------------------------------
2 Preferred [percentage] [percentage]
----------------------------------------------------------------------------
Preferred, Standard Non-Tobacco [percentage] [percentage]
----------------------------------------------------------------------------
Preferred, Tobacco [percentage] [percentage]
----------------------------------------------------------------------------
2 Standard Non-Tobacco [percentage] [percentage]
----------------------------------------------------------------------------
Standard Non-Tobacco, Tobacco [percentage] [percentage]
----------------------------------------------------------------------------
2 Tobacco [percentage] [percentage]
----------------------------------------------------------------------------
SUCCESSION REINSURANCE ALLOWANCES FOR FOUR-YEAR TERM RIDER
(YEAR 1 ALLOWANCE IS ALWAYS 100%)
YEAR 2
----------------------------------------------------
2 Preferred [percentage]
----------------------------------------------------
Preferred, Standard Non-Tobacco [percentage]
----------------------------------------------------
Preferred, Tobacco [percentage]
----------------------------------------------------
2 Standard Non-Tobacco [percentage]
----------------------------------------------------
Standard Non-Tobacco, Tobacco [percentage]
----------------------------------------------------
2 Tobacco [percentage]
----------------------------------------------------
D.2 AGE BASIS
Age Last Birthday
D.3 POLICY FEES
The Reinsurer will not participate in any policy fees.
EXHIBIT D
Page 2
(Revised January 1, 2005)
D.4 SUBSTANDARD PREMIUMS
Where a substandard table rating is applied, or on an uninsurable life,
the underlying COI rates will be multiplied by the amount shown in the
following table, and then reinsurance allowances applied after
frasierizing.
------------------------------------------------------------------
RATING MULTIPLIER RATING MULTIPLIER
------------------------------------------------------------------
A [percentage] N [percentage]
------------------------------------------------------------------
B [percentage] O [percentage]
------------------------------------------------------------------
C [percentage] P [percentage]
------------------------------------------------------------------
D [percentage] Q [percentage]
------------------------------------------------------------------
E [percentage] R [percentage]
------------------------------------------------------------------
F [percentage] T [percentage]
------------------------------------------------------------------
G [percentage] U [percentage]
------------------------------------------------------------------
H [percentage] V [percentage]
------------------------------------------------------------------
I [percentage] W [percentage]
------------------------------------------------------------------
J [percentage] X [percentage]
------------------------------------------------------------------
K [percentage] Y [percentage]
------------------------------------------------------------------
L [percentage] Z [percentage]
------------------------------------------------------------------
M [percentage]
------------------------------------------------------------------
Premium rates for facultative cessions will be the same as for automatic
cessions.
D.5 FLAT EXTRAS
Temporary and permanent flat extras are not used directly for joint
coverages; rather, they are converted using an internal table to a
substandard table rating.
D.6 RIDERS AND BENEFITS
Premium for the Policy Split Option Rider is [dollar amount] per [dollar
amount] of the sum of the ceded specified amount of the Base Plan and
Survivor Term Rider. Allowances for the Policy Split Option Rider are
[percentage] in the first year and [percentage] in subsequent years.
SUCCESSION SELECT CURRENT INDIVIDUAL COI--FOR FRASIERIZED JOINT COI CALCULATION
Male Male Male Female Female Female
Attained Preferred Standard Standard Preferred Standard Standard
age Nonsmoker Nonsmoker Smoker Nonsmoker Nonsmoker Smoker
--------------- ------------- ----------- ----------- ------------- ------------- ----------
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
IDS Succession Select Treaty
SUCCESSION SELECT CURRENT INDIVIDUAL COI--FOR FRASIERIZED JOINT COI CALCULATION
Male Male Male Female Female Female
Attained Preferred Standard Standard Preferred Standard Standard
age Nonsmoker Nonsmoker Smoker Nonsmoker Nonsmoker Smoker
--------------- ------------- ----------- ----------- ------------- ------------- ----------
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
IDS Succession Select Treaty
SUCCESSION SELECT CURRENT INDIVIDUAL COI--FOR FRASIERIZED JOINT COI CALCULATION
Male Male Male Female Female Female
Attained Preferred Standard Standard Preferred Standard Standard
age Nonsmoker Nonsmoker Smoker Nonsmoker Nonsmoker Smoker
--------------- ------------- ----------- ----------- ------------- ------------- ----------
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
