Common use of Liability and Payment Clause in Contracts

Liability and Payment. The Reinsurer will accept the decision of the Ceding Company with respect to payment of Claims owed under the contractual terms of the Annuities and as specified under the terms of this Agreement. The Reinsurer will pay its proportionate share of Claims to the Ceding Company as follows: a. The Reinsurer will pay a lump sum to the Ceding Company of its proportionate share of death benefit proceeds regardless of the method of death claim settlement (including the Base Annuity death benefit, settlements by spousal continuation or 5 year deferral, as well as the guaranteed minimum death benefit ("GMDB") Riders described in Schedule A). b. For Claims under the guaranteed withdrawal benefit ("GMWB") Riders, the Reinsurer will pay its proportionate share of any Income Payments or lump sum amount payable under the terms of the Reduction in Contract Value provisions in the Rider reinsured hereunder. Any Income Payments will equal a fixed amount for the life of the annuitant or, if there are joint annuitants, the last surviving annuitant. The Applicable Present Value Rate at the end of each Accounting Period will be equal to (i) plus (ii), where: (i) equals 15 basis points; (ii) equals the USD zero-coupon interest rate for the period from the date of which the calculation is being made to the payment date of the cash flow being discounted. The USD zero-coupon interest rate shall be calculated by the Reinsurer from prevailing USD LIBOR and swap market rates as quoted on Bloomberg at the end of business for the current Accounting Period and converted to an annual effective basis.