Common use of Actuarial Reports Clause in Contracts

Actuarial Reports. (a) With respect to the year ending in which the Valuation Transition Date occurs and each year thereafter, the Reinsurer’s appointed actuary shall provide to the Ceding Company’s appointed actuary (x) an actuarial memorandum setting forth the liability experience, liability assumptions (other than assumptions with respect to interest rate and discount rate) and liability cash flows with respect to the Reinsured Policies, including projected liability cash flows on a seriatim level and routine sensitivities to be agreed by the parties and (y) a certificate of reliance stating that, in his or her opinion, the SAP Reserves and related actuarial values concerning the Reinsured Policies: (i) are computed in accordance with presently accepted actuarial standards consistently applied and are fairly stated, in accordance with sound actuarial principles; (ii) are based on actuarial assumptions which produce SAP Reserves at least as great as those called for in any contract provision as to SAP Reserve basis and method, and are in accordance with all other policy or contract provisions; (iii) meet the requirements of the insurance laws and regulations of the Reinsurer’s state of domicile and the Ceding Company’s state of domicile and are at least as great as the minimum aggregate amount required by any state with the exception of any states listed in the certificate, with, to the extent applicable regulations of the Reinsurer’s state of domicile vary materially from the parallel requirements of the Ceding Company’s state of domicile, a good faith estimate of the effects of any such differences and a summary description of the Reinsurer’s methodologies used in developing such estimates; (iv) are computed on the basis of liability assumptions (other than assumptions with respect to interest rate and discount rate) consistent with those used in computing the corresponding items in the Reinsurer’s annual statement of the preceding year-end (with any exceptions noted); and (v) include provision for all actuarial SAP Reserves and related statement items which ought to be established. (b) With respect to any year ending prior to the year in which the Valuation Transition Date occurs the Ceding Company’s appointed actuary shall provide to the Reinsurer’s appointed actuary a certificate of reliance stating that, in his or her opinion, the SAP Reserves and related actuarial values concerning the Reinsured Policies: (i) are computed in accordance with presently accepted actuarial standards consistently applied and are fairly stated, in accordance with sound actuarial principles; (ii) are based on actuarial assumptions which produce SAP Reserves at least as great as those called for in any contract provision as to SAP Reserve basis and method, and are in accordance with all other policy or contract provisions; (iii) meet the requirements of the insurance laws and regulations of the Reinsurer’s state of domicile and the Ceding Company’s state of domicile and are at least as great as the minimum aggregate amount required by any state with the exception of any states listed in the certificate, with, to the extent applicable regulations of the Ceding Company’s state of domicile vary materially from the parallel requirements of the Reinsurer’s state of domicile, a good faith estimate of the effects of any such differences and a summary description of the Reinsurer’s methodologies used in developing such estimates; (iv) are computed on the basis of liability assumptions (other than assumptions with respect to interest rate and discount rate) consistent with those used in computing the corresponding items in the Ceding Company’s annual statement of the preceding year-end (with any exceptions noted); and (v) include provision for all actuarial SAP Reserves and related statement items which ought to be established. Any actuarial memorandum or certification provided pursuant to this Section 7.06 or information provided pursuant to Section 7.07 is not, and shall not be deemed to constitute, any representation as to the ultimate adequacy or sufficiency of the SAP Reserves or reserves held by the Reinsurer or the Ceding Company, as applicable, in respect of the Reinsured Policies. Such memoranda and certifications are intended solely for the receiving party’s actuary to perform his or her own annual actuarial analysis on behalf of such receiving party consistent with such receiving party’s actuary’s qualifications and professional standards. It is agreed and acknowledged by each party hereto that neither party is assuming any financial reporting obligations of the other party hereto, any of their respective Affiliates or any other third party.