Common use of Non-Guaranteed Elements Clause in Contracts

Non-Guaranteed Elements. (a) The Reinsurer acknowledges that the Ceding Company shall have the ultimate authority to establish and control the non-guaranteed elements of the Covered Insurance Policies, including (A) the initial and renewal crediting rates, (B) Premiums following the expiration of the period during which Premium amounts for the applicable Covered Insurance Policies are fixed and constant (i.e., rate guarantee periods), (C) insurance charges, (D) loads and expense charges, (E) mortality and expense charges, (F) administrative expense risk charges, (G) policyholder dividends, (H) Policy Loan rates, (I) index cap and (J) participation rates (each of such items, a “Non-Guaranteed Element”); provided, however, that the Ceding Company shall manage all Non-Guaranteed Elements in a manner consistent with the practices and procedures applied by the Ceding Company for its similar businesses and in accordance with Applicable Law. The Ceding Company agrees that, from and after the Amendment Date, it shall take into account the recommendations of the Reinsurer regarding the Non-Guaranteed Elements (whether in response to a change proposed by the Ceding Company or at the initiative of the Reinsurer), and, to the extent such recommendations comply with Applicable Law, the terms of this Agreement, the applicable Covered Insurance Policies and generally accepted actuarial standards of practice, the Ceding Company shall not unreasonably reject such recommendations. Each time the Ceding Company elects to change any Non- Guaranteed Elements, other than (1) any change in initial or renewal crediting rates, Policy Loan rates or index cap or any other similar change or any change required by any Applicable Law or Governmental Authority or (2) any change in term Premiums charged in respect of term Covered Insurance Policies that have reached the end of the level-term period (each of the items listed (1) or (2), a an “Excluded NGE Change”), the Ceding Company shall notify the Reinsurer in writing of such change to any Non-Guaranteed Elements as soon as practicable but in no case later than forty-five (45) calendar days after the effective date of such change; provided, however, that, in the case of any such change that affects more than five percent (5%) of the Covered Insurance Policies in any Reinsured Portfolio, the Ceding Company will use its reasonable best efforts to notify the Reinsurer thirty (30) calendar days before such change takes place (each form of notice described in this sentence, an “ NGE Change Notice”).

Non-Guaranteed Elements. (a) The Reinsurer acknowledges that the Ceding Company shall have the ultimate authority to establish and control the non-guaranteed elements of the Covered Insurance Policies, including (A) the initial and renewal crediting rates, (B) Premiums following the expiration of the period during which Premium amounts for the applicable Covered Insurance Policies are fixed and constant (i.e., rate guarantee periods), (C) insurance charges, (D) loads and expense charges, (E) mortality and expense charges, (F) administrative expense risk charges, (G) policyholder dividends, Policy Loan rates and (H) Policy Loan rates, (I) index cap and (J) participation rates (each of such items, a “Non-Guaranteed Element”); provided, however, that the Ceding Company shall manage all Non-Guaranteed Elements in a manner consistent with the practices and procedures applied by the Ceding Company for its similar businesses and in accordance with Applicable Law. The Ceding Company agrees that, from and after the Amendment Date, it shall take into account the recommendations of the Reinsurer regarding the Non-Guaranteed Elements (whether in response to a change proposed by the Ceding Company or at the initiative of the Reinsurer), and, to the extent such recommendations comply with Applicable Law, the terms of this Agreement, the applicable Covered Insurance Policies and generally accepted actuarial standards of practice, the Ceding Company shall not unreasonably reject such recommendations. Each time the Ceding Company elects to change any Non- Non-Guaranteed Elements, other than (1) any change in initial or renewal crediting rates, Policy Loan rates or index cap or any other similar change or any change required by any Applicable Law or Governmental Authority or (2) any change in term Premiums charged in respect of term Covered Insurance Policies that have reached the end of the level-term period (each of the items listed (1) or (2), a an “Excluded NGE Change”), the Ceding Company shall notify the Reinsurer in writing of such change to any Non-Guaranteed Elements as soon as practicable but in no case later than forty-five (45) calendar days after the effective date of such change; provided, however, that, in the case of any such change that affects more than five percent (5%) of the Covered Insurance Policies in any Reinsured Portfolio, the Ceding Company will use its reasonable best efforts to notify the Reinsurer thirty (30) calendar days before such change takes place (each form of notice described in this sentence, an “ “NGE Change Notice”). (b) If the Reinsurer reasonably determines that any such change, or the unreasonable rejection of any recommendations by the Reinsurer, to the Non-Guaranteed Elements, other than Excluded NGE Changes, would reasonably be expected to have a material adverse impact on the Reinsurer’s liability hereunder (an “NGE MAE”), the Reinsurer may so notify the Ceding Company in writing of such determination within twenty-five (25) calendar days following the Reinsurer’s receipt of notice from the Ceding Company of the change, including an NGE Change Notice. Within thirty (30) calendar days of receipt of such a notice from the Reinsurer, the Ceding Company shall engage an Independent Actuary, with the selection of the Independent Actuary subject to the Reinsurer’s prior written consent, not to be unreasonably withheld, to (i) determine whether the change to the Non-Guaranteed Elements will have an NGE MAE (if the existence of an NGE MAE is disputed) and (ii) if so, estimate the present value of the NGE MAE impact (if any). If the Independent Actuary determines that there will be an NGE MAE, the Ceding Company will work together in good faith with the Reinsurer to put the Reinsurer in substantially the same economic position as it would have been in if such change had not occurred. Both Parties will promptly supply the Independent Actuary with the necessary data to perform its analysis, subject to such Independent Actuary’s entry into a customary non-disclosure agreement. The Independent Actuary’s written decision as to the existence and amount of any NGE MAE will be binding on the Parties. The fees and expenses of the Independent Actuary will be borne equally by the Ceding Company and the Reinsurer; provided, that if the Independent Actuary determines there will not be any NGE MAE, the Reinsurer will pay or promptly reimburse the Ceding Company for all fees and expenses of the Independent Actuary. The Reinsurer hereby agrees that any change to a Non-Guaranteed Element that is initiated, recommended, approved or ratified by the Reinsurer, any Affiliate of the Reinsurer or a Reinsurer Appointed Administrator shall be deemed not to have a material adverse effect on the Reinsurer’s liability hereunder. (c) Within a reasonable period of time prior to effecting any Excluded NGE Change required by Applicable Law or a Governmental Authority, the Ceding Company shall provide reasonably detailed notice to the Reinsurer describing the nature of such change and the reasons for making such change. Within five (5) Business Days following the Reinsurer’s receipt of notice of any such Excluded NGE Change, the Reinsurer shall provide written notice to the Ceding Company of any disagreement that such change is an Excluded NGE Change. If the Reinsurer fails to provide such notice to the Ceding Company within such time period, the Reinsurer shall be deemed to have accepted such change. Should the Reinsurer provide timely notice of disagreement, during the five (5) Business Days immediately following the delivery of such notice, the Ceding Company and the Reinsurer will seek in good faith to resolve any disputes as to the change. In the event the Parties cannot resolve such dispute within such period, either Party may elect to refer the dispute for arbitration pursuant to Section 10.3(b). In the event of any such proceeding, the arbitration panel shall only be authorized to determine whether the disputed change is an Excluded NGE Change. If the resolution of the dispute results in a determination that the change was not an Excluded NGE Change, the Parties will use the mechanism set forth in Section 2.5(b) to value the impact of the change.

Non-Guaranteed Elements. (a) The Reinsurer acknowledges that From and after the Effective Time, the Ceding Company shall have retain the ultimate authority to set and establish and control the nonNon-guaranteed elements Guaranteed Elements with respect to the Covered Insurance Policies in accordance with the Non-Guaranteed Elements Policy, the terms of the Covered Insurance Policies, including (A) the initial and renewal crediting rates, (B) Premiums following the expiration of the period during which Premium amounts for the applicable Covered Insurance Policies are fixed and constant (i.e., rate guarantee periods), (C) insurance charges, (D) loads and expense charges, (E) mortality and expense charges, (F) administrative expense risk charges, (G) policyholder dividends, (H) Policy Loan rates, (I) index cap and (J) participation rates (each of such items, a “Non-Guaranteed Element”); provided, however, that the Ceding Company shall manage all Non-Guaranteed Elements in a manner consistent with the practices and procedures applied by the Ceding Company for its similar businesses and in accordance with Applicable Law. The Ceding Company agrees that, from and after the Amendment Date, it shall take into account the recommendations of the Reinsurer regarding the Non-Guaranteed Elements (whether in response to a change proposed by the Ceding Company or at the initiative of the Reinsurer), and, to the extent such recommendations comply with Applicable Law, the terms of this Agreement, the applicable Covered Insurance Policies Law and generally accepted actuarial standards of practice; provided that, the Ceding Company shall not unreasonably reject such recommendationsgive the Reinsurer ten (10) Business Days prior written notice before a change to a Non-Guaranteed Element, which shall specify the planned change. Each The Reinsurer may, from time to time (including during the notice period specified above), make recommendations to the Ceding Company elects with respect to change any Non- Non-Guaranteed Elements, other than including revisions to the planned change, so long as the recommendations comply and are consistent with the Non-Guaranteed Elements Policy (1) including any change exceptions thereto mutually agreed in initial or renewal crediting rateswriting), Policy Loan rates or index cap or any other similar change or any change required by any the terms of the Covered Insurance Policies, Applicable Law and generally accepted actuarial standards of practice (the “NGE Standards”). The Ceding Company shall fully consider all such recommendations and act reasonably and in good faith in determining whether any such recommendations should be accepted; provided, that the Reinsurer shall indemnify and hold harmless the Ceding Company for Losses arising out of or Governmental Authority or (2) any change in term Premiums charged in respect of term Covered Insurance Policies that have reached resulting from the end Ceding Company’s acceptance and implementation of the level-term period (each of the items listed (1) or (2), a an “Excluded NGE Change”)Reinsurer’s recommendations in accordance with Article IX. The Ceding Company agrees that in considering such recommendations in good faith, the Ceding Company shall notify take into account, among other factors, the relative economic interests of the Ceding Company and the Reinsurer in writing the acceptance and implementation of such change recommendation together with the written report of the appointed actuary (including as required under Section 464.1 of the Insurance Companies Act (Canada)). (b) From time to any time, either Party may propose changes or exceptions to the Non-Guaranteed Elements Policy and will consult in good faith with the other Party as soon as practicable but in no case later than forty-five (45) calendar days after the effective date of to such change; provided, however, that, in the case of any such change that affects more than five percent (5%) of the Covered Insurance Policies in any Reinsured Portfolio, the Ceding Company will use its reasonable best efforts to notify the Reinsurer thirty (30) calendar days before such change takes place (each form of notice described in this sentence, an “ NGE Change Notice”)proposed changes or exceptions.

Non-Guaranteed Elements. (a) The Ceding Company has provided to the Reinsurer acknowledges that as an additional element of the Risk Evaluation Materials full and complete copies of the following information and analyses related to the Third Amendment Additional Policies, as applicable: (i) current and projected cost of insurance charges and other costs and charges for mortality and administration of the Third Amendment Additional Policies; (ii) current and projected interest credited rates; (iii) current and projected dividend scales; and (iv) a description of the actuarial, financial and other policies, guidelines and methodologies used by the Ceding Company in determining over time the amounts in items (i), (ii) and (iii) above as well as any other of the Non-Guaranteed Elements, including, without limitation, financial or actuarial models used in determining the Non-Guaranteed Elements and a full description of all regulatory or other commitments made by or applicable to the Ceding Company in respect of the Non-Guaranteed Elements. (b) Consistent with the policies, guidelines and methodologies with respect to the Non-Guaranteed Elements provided to the Reinsurer described in clause (a) of this Section 8 in connection with production of the additional Risk Evaluation Materials (the “Company Guidelines”), the Ceding Company shall have at the ultimate authority Reinsurer’s request, but at least annually, re-evaluate experience with respect to establish the Third Amendment Additional Policies and, as warranted and control subject to the non-guaranteed elements other terms and provisions of this Amendment No. 3, shall adjust the Covered Insurance Policies, including (A) the initial and renewal crediting rates, (B) Premiums following the expiration of the period during which Premium amounts for the applicable Covered Insurance Policies are fixed and constant (i.e., rate guarantee periods), (C) insurance charges, (D) loads and expense charges, (E) mortality and expense charges, (F) administrative expense risk charges, (G) policyholder dividends, (H) Policy Loan rates, (I) index cap and (J) participation rates (each of such items, a “Non-Guaranteed Element”); providedElements to reasonably reflect the results of such evaluation. If, howeverfrom and after the Signing Date, that the Ceding Company shall manage all sets Non-Guaranteed Elements in a manner that is not consistent with the practices and procedures applied by the Ceding Company for its similar businesses and Guidelines, solely in accordance with Applicable Law. The Ceding Company agrees that, from and after the Amendment Date, it shall take into account the recommendations respect of the Reinsurer regarding determination of reinsurance premiums to be paid by, or the Non-Guaranteed Elements (whether in response reinsurance benefits to a change proposed by the Ceding Company or at the initiative of the Reinsurer), and, to the extent such recommendations comply with Applicable Law, the terms of this Agreement, the applicable Covered Insurance Policies and generally accepted actuarial standards of practicebe paid to, the Ceding Company with respect to this reinsurance, the Reinsurer shall not unreasonably reject such recommendations. Each time be entitled to adjust cost of insurance, credited rate, policyholder dividends or other amounts payable by or to the Ceding Company elects under this Amendment No. 3 to change any Non- Guaranteed Elements, other than (1) any change in initial or renewal crediting rates, Policy Loan rates or index cap or any other similar change or any change required by any Applicable Law or Governmental Authority or (2) any change in term Premiums charged in respect of term Covered Insurance Policies that have reached the end reflect and conform to a reasonable prospective application of the level-term period Company Guidelines. (each c) For purposes of the items listed (1) or (2), a an “Excluded NGE Change”)this Amendment No. 3, the Ceding Company shall notify the Reinsurer in writing of such change to any term “Non-Guaranteed Elements Elements” means cost of insurance charges, loads and expense charges, credited interest rates, mortality and expense charges, administrative expense risk charges, variable premium rates and variable paid-up amounts and any other unspecified feature or charge, each as soon as practicable but in no case later than forty-five (45) calendar days after applicable under or with respect to the effective date of such change; provided, however, that, in the case of any such change that affects more than five percent (5%) of the Covered Insurance Policies in any Reinsured Portfolio, the Ceding Company will use its reasonable best efforts to notify the Reinsurer thirty (30) calendar days before such change takes place (each form of notice described in this sentence, an “ NGE Change Notice”)Third Amendment Additional Policies.

Non-Guaranteed Elements. (a) The Reinsurer acknowledges that the Ceding Company shall have the ultimate authority to establish and control (i) the non-guaranteed elements of the Covered Insurance Policies, including (A) the initial and renewal crediting rates, (B) Premiums following the expiration of the period during which Premium amounts for the applicable Covered Insurance Policies are fixed and constant (i.e., rate guarantee periods), (C) insurance charges, (D) loads and expense charges, (E) mortality and expense charges, (F) administrative expense risk charges, (G) policyholder dividends, (H) Policy Loan rates, (I) index cap and (J) participation rates and (ii) in respect of the Surplus Participation Payments, (A) the average payout timing of such payments and (B) the surplus tally calculation of such payments (each of such items, a “Non-Guaranteed Element”); provided, however, that the Ceding Company shall manage all Non-Guaranteed Elements in a manner consistent with the practices and procedures applied by the Ceding Company for its similar businesses and in accordance with Applicable Law. The Ceding Company agrees that, from and after the Amendment Date, it shall take into account the recommendations of the Reinsurer regarding the Non-Guaranteed Elements (whether in response to a change proposed by the Ceding Company or at the initiative of the Reinsurer), and, to the extent such recommendations comply with Applicable Law, the terms of this Agreement, the applicable Covered Insurance Policies and generally accepted actuarial standards of practice, the Ceding Company shall not unreasonably reject such recommendations. Each time the Ceding Company elects to change any Non- Non-Guaranteed Elements, other than (1) any change in initial or renewal crediting rates, Policy Loan rates or rates, index cap or participation rates, any other similar change or any change required by any Applicable Law or Governmental Authority or (2) any change in term Premiums charged in respect of term Covered Insurance Policies that have reached the end of the level-term period (each of the items listed (1) or (2), a an “Excluded NGE Change”), the Ceding Company shall notify the Reinsurer in writing of such change to any Non-Guaranteed Elements as soon as practicable but in no case later than forty-five (45) calendar days after the effective date of such change; provided, however, that, in the case of any such change to a Non-Guaranteed Element specified in clauses (i) or (ii)(A) of the definition thereof that affects more than five percent (5%) of the Covered Insurance Policies in any Reinsured Portfolio, the Ceding Company will use its reasonable best efforts to notify the Reinsurer thirty (30) calendar days before such change takes place (each form of notice described in this sentence, an “ “NGE Change Notice”). (b) If the Reinsurer reasonably determines that any such change, or the unreasonable rejection of any recommendations by the Reinsurer, to the Non-Guaranteed Elements, other than Excluded NGE Changes, would reasonably be expected to have a material adverse impact on the Reinsurer’s liability hereunder (an “NGE MAE”), the Reinsurer may so notify the Ceding Company in writing of such determination within twenty-five (25) calendar days following the Reinsurer’s receipt of notice from the Ceding Company of the change, including an NGE Change Notice. Within thirty (30) calendar days of receipt of such a notice from the Reinsurer, the Ceding Company shall engage an Independent Actuary, with the selection of the Independent Actuary subject to the Reinsurer’s prior written consent, not to be unreasonably withheld, to (i) determine whether the change to the Non-Guaranteed Elements will have an NGE MAE (if the existence of an NGE MAE is disputed) and (ii) if so, estimate the present value of the NGE MAE impact (if any). If the Independent Actuary determines that there will be an NGE MAE, the Ceding Company will work together in good faith with the Reinsurer to put the Reinsurer in substantially the same economic position as it would have been in if such change had not occurred. Both Parties will promptly supply the Independent Actuary with the necessary data to perform its analysis, subject to such Independent Actuary’s entry into a customary non-disclosure agreement. The Independent Actuary’s written decision as to the existence and amount of any NGE MAE will be binding on the Parties. The fees and expenses of the Independent Actuary will be borne equally by the Ceding Company and the Reinsurer; provided, that if the Independent Actuary determines there will not be any NGE MAE, the Reinsurer will pay or promptly reimburse the Ceding Company for all fees and expenses of the Independent Actuary. The Reinsurer hereby agrees that any change to a Non-Guaranteed Element that is initiated, recommended, approved or ratified by the Reinsurer, any Affiliate of the Reinsurer or a Reinsurer Appointed Administrator shall be deemed not to have a material adverse effect on the Reinsurer’s liability hereunder. (c) Within a reasonable period of time prior to effecting any Excluded NGE Change required by Applicable Law or a Governmental Authority, the Ceding Company shall provide reasonably detailed notice to the Reinsurer describing the nature of such change and the reasons for making such change. Within five (5) Business Days following the Reinsurer’s receipt of notice of any such Excluded NGE Change, the Reinsurer shall provide written notice to the Ceding Company of any disagreement that such change is an Excluded NGE Change. If the Reinsurer fails to provide such notice to the Ceding Company within such time period, the Reinsurer shall be deemed to have accepted such change. Should the Reinsurer provide timely notice of disagreement, during the five (5) Business Days immediately following the delivery of such notice, the Ceding Company and the Reinsurer will seek in good faith to resolve any disputes as to the change. In the event the Parties cannot resolve such dispute within such period, either Party may elect to refer the dispute for arbitration pursuant to Section 10.3(b). In the event of any such proceeding, the arbitration panel shall only be authorized to determine whether the disputed change is an Excluded NGE Change. If the resolution of the dispute results in a determination that the change was not an Excluded NGE Change, the Parties will use the mechanism set forth in Section 2.5(b) to value the impact of the change.

Non-Guaranteed Elements. (a) The Reinsurer acknowledges that may, from time to time, make recommendations to the Ceding Company shall have the ultimate authority with respect to establish and control the non-guaranteed elements of the Covered Insurance Policies, including (A) the initial and renewal crediting rates, (B) Premiums following the expiration of the period during which Premium amounts for the applicable Covered Insurance Policies are fixed and constant (i.e., rate guarantee periods), (C) insurance charges, (D) loads and expense charges, (E) mortality and expense charges, (F) administrative expense risk charges, (G) policyholder dividends, (H) Policy Loan rates, (I) index cap and (J) participation rates (each of such items, a “Non-Guaranteed Element”); provided, however, that the Ceding Company shall manage all Non-Guaranteed Elements in a manner consistent so long as the recommendations comply with the practices written terms of the LBL Contracts, Applicable Law and procedures applied Actuarial Standards of Practice promulgated by the Ceding Actuarial Standard Board governing redetermination of non-guaranteed charges. The Company for its similar businesses shall fully consider any such recommendations and act reasonably and in accordance with good faith in determining whether any such recommendations should be accepted and shall not unreasonably delay implementation of any accepted recommendations after such recommendations are provided in writing, except to the extent that an applicable Governmental Entity finally determines that Applicable LawLaw would require the implementation of such recommendations to apply to any policy or contract that constitutes Company Business. The Ceding Company agrees thatNotwithstanding anything to the contrary contained herein, from and after in the Amendment Date, it shall take into account event that an applicable Governmental Entity finally determines that Applicable Law would require the recommendations implementation of the Reinsurer regarding Reinsurer’s recommendations with respect to one or more LBL Contracts to apply to any policy or contract that constitutes Company Business (a) the Parties shall cooperate in good faith to develop a mutually agreeable plan to set Non-Guaranteed Elements with respect to such LBL Contracts and such Company Business, and the Parties shall implement any such plan so agreed and (whether in response to a change proposed by b) the Ceding Company or at the initiative of the Reinsurer), and, to the extent such recommendations comply with Applicable Law, the terms of this Agreement, the applicable Covered Insurance Policies and generally accepted actuarial standards of practice, the Ceding Company shall not unreasonably reject such be liable for any Indemnified Losses incurred by the Reinsurer as a result of the Company’s failure to implement the Reinsurer’s recommendations. Each time In the Ceding event that the Company elects to change any Non- Guaranteed Elements, other than (1) any change in initial or renewal crediting rates, Policy Loan rates or index cap or any other similar change or any change required is notified by any an applicable Governmental Entity that it proposes making a determination that Applicable Law would require the implementation of such recommendations to apply to any policy or Governmental Authority or contract that constitute Company Business, the Company shall promptly (but in any event within two (2) any change in term Premiums charged in respect of term Covered Insurance Policies that have reached the end of the level-term period (each of the items listed (1Business Days) or (2), a an “Excluded NGE Change”), the Ceding Company shall notify the Reinsurer in writing of such change to any Non-Guaranteed Elements as soon as practicable but notification. The parties will thereafter cooperate in no case later than forty-five (45) calendar days after the effective date of such change; provided, however, that, in the case of any such change that affects more than five percent (5%) of the Covered Insurance Policies in any Reinsured Portfolio, the Ceding Company will good faith and use its their reasonable best efforts to notify the Reinsurer thirty (30) calendar days before reach agreements with such change takes place (each form of notice described in this sentence, an “ NGE Change Notice”)Governmental Entity that will avoid a final determination to such effect.

Non-Guaranteed Elements. (a) The Reinsurer acknowledges that With respect to the Ceding Company shall have LBL Contracts, in accordance with the ultimate authority to establish and control the non-guaranteed elements terms of the Covered Insurance PoliciesReinsurance Agreement, including (A) the initial and renewal crediting rates, (B) Premiums following Administrator may provide recommendations to the expiration Company as to the setting of the period during which Premium amounts for the applicable Covered Insurance Policies are fixed and constant (i.e., rate guarantee periods), (C) insurance charges, (D) loads and expense charges, (E) mortality and expense charges, (F) administrative expense risk charges, (G) policyholder dividends, (H) Policy Loan rates, (I) index cap and (J) participation rates (each of such items, a “Non-Guaranteed Element”); provided, however, that the Ceding Company shall manage all Non-Guaranteed Elements Elements. (b) With respect to the Vermont Captive Contracts, the Administrator, in a manner consistent consultation with the practices Vermont Captive, may, from time to time, make recommendations to the Company with respect to Non-Guaranteed Elements so long as the recommendations comply with the written terms of the Vermont Captive Contracts, Applicable Law and procedures applied Actuarial Standards of Practice promulgated by the Ceding Company for its similar businesses and in accordance with Applicable LawActuarial Standard Board governing redetermination of non-guaranteed charges. The Ceding Company agrees thatshall establish Non-Guaranteed Elements, from and after the Amendment Date, it shall take taking into account the recommendations of the Reinsurer regarding Administrator (in consultation with the Vermont Captive) with respect thereto. The Company shall fully consider any such recommendations and act reasonably and in good faith in determining whether any such recommendations should be accepted and shall not unreasonably delay implementation of any accepted recommendations after such recommendations are provided in writing, except to the extent that an applicable Governmental Entity finally determines that Applicable Law would require the implementation of such recommendations to apply to any policy or contract that constitutes Company Business. (c) Notwithstanding anything to the contrary contained herein, in the event that an applicable Governmental Entity finally determines that Applicable Law would require the implementation of Administrator’s recommendations with respect to one or more LBL Contracts or Vermont Captive Contracts to apply to any policy or contract that constitutes Company Business (a) the Parties shall cooperate in good faith to develop a mutually agreeable plan to set Non-Guaranteed Elements with respect to such LBL Contracts or Vermont Captive Contracts and such Company Business, and the Parties shall implement any such plan so agreed and (whether in response to a change proposed by b) the Ceding Company or at the initiative of the Reinsurer), and, to the extent such recommendations comply with Applicable Law, the terms of this Agreement, the applicable Covered Insurance Policies and generally accepted actuarial standards of practice, the Ceding Company shall not unreasonably reject such be liable for any Indemnified Losses incurred by the Administrator as a result of the Company’s failure to implement Administrator’s recommendations. Each time In the Ceding event that the Company elects to change any Non- Guaranteed Elements, other than (1) any change in initial or renewal crediting rates, Policy Loan rates or index cap or any other similar change or any change required is notified by any an applicable Governmental Entity that it proposes making a determination that Applicable Law would require the implementation of such recommendations to apply to any policy or Governmental Authority or (2) any change in term Premiums charged in respect of term Covered Insurance Policies contract that have reached the end of the level-term period (each of the items listed (1) or (2), a an “Excluded NGE Change”)constitute Company Business, the Ceding Company shall promptly notify the Reinsurer in writing Administrator of such change to any Non-Guaranteed Elements as soon as practicable but notification. The Parties will thereafter cooperate in no case later than forty-five (45) calendar days after the effective date of such change; provided, however, that, in the case of any such change that affects more than five percent (5%) of the Covered Insurance Policies in any Reinsured Portfolio, the Ceding Company will good faith and use its their reasonable best efforts to notify reach agreements with such Governmental Entity that will avoid a final determination to such effect. The Administrator acknowledges that the Reinsurer thirty (30) calendar days before such change takes place (each form Company has certain indemnification rights under the Reinsurance Agreement for Indemnifiable Losses resulting from the Company’s acceptance and implementation of notice described the Administrator’s recommendations in accordance with this sentence, an “ NGE Change Notice”)Section 9.4.

Non-Guaranteed Elements. (a) The Reinsurer acknowledges that the Ceding Company Cedant shall have the ultimate authority to establish and control the non-guaranteed elements of the Covered Insurance Policies, including (A) the initial and renewal crediting rates, (B) Premiums following the expiration of the period during which Premium amounts for the applicable Covered Insurance Policies are fixed and constant (i.e., rate guarantee periods), (C) insurance charges, (D) loads and expense charges, (E) mortality and expense charges, (F) administrative expense risk charges, (G) policyholder dividends, (H) Policy Loan rates, (I) index cap and (J) participation rates (each of such items, a “Non-Guaranteed Element”); provided, however, that the Ceding Company shall manage all Non-Guaranteed Elements in a manner consistent with respect of the practices and procedures applied by the Ceding Company for its similar businesses and Reinsured Policies in accordance with Applicable Law. The Ceding Company agrees that, from and after the Amendment Date, it shall take into account the recommendations written terms of the Reinsurer regarding Reinsured Policies, applicable Law, the requirements of any applicable Governmental Authority, Actuarial Standards of Practice promulgated by the Actuarial Standard Board governing redetermination of such non-guaranteed charges (“Actuarial Standards”) and, solely for Non-Guaranteed Elements (whether in response to a change proposed by the Ceding Company or at the initiative of the Reinsurer), and, to the extent such recommendations comply with Applicable Law, the terms of this Agreement, the applicable Covered Insurance Policies and generally accepted actuarial standards of practice, the Ceding Company shall not unreasonably reject such recommendations. Each time the Ceding Company elects to change any Non- that are also COI Non-Guaranteed Elements, other than the guidelines set forth on Schedule 2.05 (1) any change in initial or renewal crediting rates, Policy Loan rates or index cap or any other similar change or any change required by any Applicable Law or Governmental Authority or (2) any change in term Premiums charged in respect of term Covered Insurance Policies that have reached the end of the level-term period (each of the items listed (1) or (2), a an “Excluded NGE ChangeCriteria”). From and after the date hereof, Reinsurer may, from time to time, make recommendations to Cedant with respect to the Ceding Company shall notify the Reinsurer in writing establishment of such change to any Non-Guaranteed Elements in respect of the Reinsured Policies so long as soon the recommendations are made by Reinsurer in good faith, comply with the NGE Criteria, if applicable, and are no less favorable to Policyholders of the Reinsured Policies than treatment of Reinsurer’s similar business (including reinsured business). A recommendation by Reinsurer to the Cedant to modify a COI Non-Guaranteed Element must be accompanied by a report from a partner at a nationally recognized independent actuarial firm which provides a rationale for the recommendation and an independent conclusion that the NGE Criteria with respect to the recommendation have been met. Cedant shall accept and promptly implement all recommendations of Reinsurer with respect to Non-Guaranteed Elements that comply with written terms of the Reinsured Policies, applicable Law, and the requirements of any applicable Governmental Authority and, if applicable, the NGE Criteria and delivery of the report contemplated by the prior sentence, and a decision by ▇▇▇▇▇▇ not to implement a Reinsurer Non-Guaranteed Element recommendation shall be subject to the dispute resolution procedures set forth in Section 5.03. For the avoidance of doubt, nothing in this Section 2.05 shall confer to Reinsurer the ability to make recommendations to Cedant other than specifically with respect to the setting of Non-Guaranteed Elements in respect of the Reinsured Policies. Any recommendation by Reinsurer issued pursuant to this Section 2.05 (i) shall be expressly limited to Reinsurer’s recommendation as practicable but to such setting of Non-Guaranteed Elements and (ii) shall not include any recommendation as to the regulatory approval, litigation management or policyholder communications in no case later than fortyrespect of Non-five Guaranteed Elements, or any other matter involving or relating to Non-Guaranteed Elements. If any such recommendation of Reinsurer is implemented without modification by Cedant (45or implemented with such modifications as determined pursuant to the dispute resolution procedures set forth in Section 5.03) calendar days after and results in an Extra-Contractual Obligation, such Extra-Contractual Obligation shall constitute a Reinsurer Extra-Contractual Obligation. Without limitation of the effective date of such change; providedforegoing, however, that, in the case Reinsurer shall indemnify the Company from and against all Losses and any other costs and expenses to the extent arising from the implementation and communication of any such change that affects more than five percent (5%) recommendation of the Covered Insurance Policies in any Reinsured Portfolio, the Ceding Company will use its reasonable best efforts Reinsurer related to notify the Reinsurer thirty (30) calendar days before such change takes place (each form of notice described in this sentence, an “ NGE Change Notice”)COI Non-Guaranteed Elements.

Non-Guaranteed Elements. (a) The Reinsurer acknowledges that From and after the Effective Time, the Ceding Company shall have retain the ultimate authority to set and establish and control the nonNon-guaranteed elements Guaranteed Elements with respect to the Covered Insurance Policies in accordance with the Non-Guaranteed Elements Policy, the terms of the Covered Insurance Policies, including (A) the initial and renewal crediting rates, (B) Premiums following the expiration of the period during which Premium amounts for the applicable Covered Insurance Policies are fixed and constant (i.e., rate guarantee periods), (C) insurance charges, (D) loads and expense charges, (E) mortality and expense charges, (F) administrative expense risk charges, (G) policyholder dividends, (H) Policy Loan rates, (I) index cap and (J) participation rates (each of such items, a “Non-Guaranteed Element”); provided, however, that the Ceding Company shall manage all Non-Guaranteed Elements in a manner consistent with the practices and procedures applied by the Ceding Company for its similar businesses and in accordance with Applicable Law. The Ceding Company agrees that, from and after the Amendment Date, it shall take into account the recommendations of the Reinsurer regarding the Non-Guaranteed Elements (whether in response to a change proposed by the Ceding Company or at the initiative of the Reinsurer), and, to the extent such recommendations comply with Applicable Law, the terms of this Agreement, the applicable Covered Insurance Policies Law and generally accepted actuarial standards of practice; provided that, the Ceding Company shall not unreasonably reject such recommendationsgive the Reinsurer ten (10) Business Days prior written notice before a change to a Non-Guaranteed Element, which shall specify the planned change. Each The Reinsurer may, from time to time (including during the notice period specified above), make recommendations to the Ceding Company elects with respect to change any Non- Non-Guaranteed Elements, other than including revisions to the planned change, so long as the recommendations comply and are consistent with the Non-Guaranteed Elements Policy (1) including any change exceptions thereto mutually agreed in initial or renewal crediting rateswriting), Policy Loan rates or index cap or any other similar change or any change required by any the terms of the Covered Insurance Policies, Applicable Law and generally accepted actuarial standards of practice (the “NGE Standards”). The Ceding Company shall fully consider all such recommendations and act reasonably and in good faith in determining whether any such recommendations should be accepted and shall not unreasonably delay implementation of any accepted recommendations; provided, that the Reinsurer shall indemnify and hold harmless the Ceding Company for Losses arising out of or Governmental Authority or (2) any change in term Premiums charged in respect of term Covered Insurance Policies that have reached resulting from the end Ceding Company’s acceptance and implementation of the level-term period (each of the items listed (1) or (2), a an “Excluded NGE Change”)Reinsurer’s recommendations in accordance with Article IX. The Ceding Company agrees that in considering any such recommendations in good faith, the Ceding Company shall notify take into account, among other factors, the relative 42115819.1 economic interests of the Ceding Company and the Reinsurer in writing the acceptance and implementation of such change recommendation together with the written report of the appointed actuary. (b) From time to any time, either Party may propose changes or exceptions to the Non-Guaranteed Elements Policy and will consult in good faith with the other Party as soon as practicable but in no case later than forty-five (45) calendar days after the effective date of to such change; provided, however, that, in the case of any such change that affects more than five percent (5%) of the Covered Insurance Policies in any Reinsured Portfolio, the Ceding Company will use its reasonable best efforts to notify the Reinsurer thirty (30) calendar days before such change takes place (each form of notice described in this sentence, an “ NGE Change Notice”)proposed changes or exceptions.

Non-Guaranteed Elements. (a) The Reinsurer acknowledges that the Ceding Company shall have the ultimate authority to establish and control (i) the non-guaranteed elements of the Covered Insurance Policies, including (A) the initial and renewal crediting rates, (B) Premiums following the expiration of the period during which Premium amounts for the applicable Covered Insurance Policies are fixed and constant (i.e., rate guarantee periods), (C) insurance charges, (D) loads and expense charges, (E) mortality and expense charges, (F) administrative expense risk charges, (G) policyholder dividends, (H) Policy Loan rates, (I) index cap and (J) participation rates and (ii) in respect of the Surplus Participation Payments, (A) the average payout timing of such payments and (B) the surplus tally calculation of such payments (each of such items, a “Non-Guaranteed Element”); provided, however, that the Ceding Company shall manage all Non-Guaranteed Elements in a manner consistent with the practices and procedures applied by the Ceding Company for its similar businesses and in accordance with Applicable Law. The Ceding Company agrees that, from and after the Amendment Date, it shall take into account the recommendations of the Reinsurer regarding the Non-Guaranteed Elements (whether in response to a change proposed by the Ceding Company or at the initiative of the Reinsurer), and, to the extent such recommendations comply with Applicable Law, the terms of this Agreement, the applicable Covered Insurance Policies and generally accepted actuarial standards of practice, the Ceding Company shall not unreasonably reject such recommendations. Each time the Ceding Company elects to change any Non- Non-Guaranteed Elements, other than (1) any change in initial or renewal crediting rates, Policy Loan rates or rates, index cap or participation rates, any other similar change or any change required by any Applicable Law or Governmental Authority or (2) any change in term Premiums charged in respect of term Covered Insurance Policies that have reached the end of the level-term period (each of the items listed (1) or (2), a an “Excluded NGE Change”), the Ceding Company shall notify the Reinsurer in writing of such change to any Non-Non- Guaranteed Elements as soon as practicable but in no case later than forty-five (45) calendar days after the effective date of such change; provided, however, that, in the case of any such change to a Non- Guaranteed Element specified in clauses (i) or (ii)(A) of the definition thereof that affects more than five percent (5%) of the Covered Insurance Policies in any Reinsured Portfolio, the Ceding Company will use its reasonable best efforts to notify the Reinsurer thirty (30) calendar days before such change takes place (each form of notice described in this sentence, an “ “NGE Change Notice”). (b) If the Reinsurer reasonably determines that any such change, or the unreasonable rejection of any recommendations by the Reinsurer, to the Non-Guaranteed Elements, other than Excluded NGE Changes, would reasonably be expected to have a material adverse impact on the Reinsurer’s liability hereunder (an “NGE MAE”), the Reinsurer may so notify the Ceding Company in writing of such determination within twenty-five (25) calendar days following the Reinsurer’s receipt of notice from the Ceding Company of the change, including an NGE Change Notice. Within thirty (30) calendar days of receipt of such a notice from the Reinsurer, the Ceding Company shall engage an Independent Actuary, with the selection of the Independent Actuary subject to the Reinsurer’s prior written consent, not to be unreasonably withheld, to (i) determine whether the change to the Non- Guaranteed Elements will have an NGE MAE (if the existence of an NGE MAE is disputed) and (ii) if so, estimate the present value of the NGE MAE impact (if any). If the Independent Actuary determines that there will be an NGE MAE, the Ceding Company will work together in good faith with the Reinsurer to put the Reinsurer in substantially the same economic position as it would have been in if such change had not occurred. Both Parties will promptly supply the Independent Actuary with the necessary data to perform its analysis, subject to such Independent Actuary’s entry into a customary non-disclosure agreement. The Independent Actuary’s written decision as to the existence and amount of any NGE MAE will be binding on the Parties. The fees and expenses of the Independent Actuary will be borne equally by the Ceding Company and the Reinsurer; provided, that if the Independent Actuary determines there will not be any NGE MAE, the Reinsurer will pay or promptly reimburse the Ceding Company for all fees and expenses of the Independent Actuary. The Reinsurer hereby agrees that any change to a Non- Guaranteed Element that is initiated, recommended, approved or ratified by the Reinsurer, any Affiliate of the Reinsurer or a Reinsurer Appointed Administrator shall be deemed not to have a material adverse effect on the Reinsurer’s liability hereunder. (c) Within a reasonable period of time prior to effecting any Excluded NGE Change required by Applicable Law or a Governmental Authority, the Ceding Company shall provide reasonably detailed notice to the Reinsurer describing the nature of such change and the reasons for making such change. Within five (5) Business Days following the Reinsurer’s receipt of notice of any such Excluded NGE Change, the Reinsurer shall provide written notice to the Ceding Company of any disagreement that such change is an Excluded NGE Change. If the Reinsurer fails to provide such notice to the Ceding Company within such time period, the Reinsurer shall be deemed to have accepted such change. Should the Reinsurer provide timely notice of disagreement, during the five (5) Business Days immediately following the delivery of such notice, the Ceding Company and the Reinsurer will seek in good faith to resolve any disputes as to the change. In the event the Parties cannot resolve such dispute within such period, either Party may elect to refer the dispute for arbitration pursuant to Section 10.3(b). In the event of any such proceeding, the arbitration panel shall only be authorized to determine whether the disputed change is an Excluded NGE Change. If the resolution of the dispute results in a determination that the change was not an Excluded NGE Change, the Parties will use the mechanism set forth in Section 2.5(b) to value the impact of the change.

Non-Guaranteed Elements. (a) The Reinsurer acknowledges that the Ceding Company shall have the ultimate authority to establish and control the non-guaranteed elements of the Covered Insurance Policies, including (A) the initial and renewal crediting rates, (B) Premiums following the expiration of the period during which Premium amounts for the applicable Covered Insurance Policies are fixed and constant (i.e., rate guarantee periods), (C) insurance charges, (D) loads and expense charges, (E) mortality and expense charges, (F) administrative expense risk charges, (G) policyholder dividends, (H) Policy Loan rates, (I) index cap and (J) participation rates (each of such items, a “said all Non-Guaranteed Element”Elements with respect to the Direct Business and the Indirect Business, taking into account the written recommendations of Designated Representative of the Reinsurer. The Company shall, with in a commercially reasonable period after receipt (which in no case shall exceed thirty (30) days), provide the Reinsurer with written notice of the Company’s election to approve or disapprove the Reinsurer’s recommendations, which approval shall not be unreasonably withheld; provided, however, that the Ceding Company shall manage all Non-Guaranteed Elements in a manner consistent be deemed to have unreasonably withheld its approval. If it fails to approve the Reinsurer’s recommendations where, along with the practices and procedures applied by the Ceding Company for its similar businesses and in accordance with Applicable Law. The Ceding Company agrees thatrecommendation, from and after the Amendment Date, it shall take into account the recommendations of the Reinsurer regarding has provided the Non-Guaranteed Elements Company with (whether in response to i) a change proposed by the Ceding Company or at the initiative of statement from the Reinsurer)’s general counsel, and, to the extent senior most legal officer or retained counsel that such recommendations comply recommendation complies with Applicable Law, applicable common law and the terms of this the applicable Policies and the KILICO Agreement, and (ii) a statement from the applicable Covered Insurance Policies and generally accepted actuarial standards Reinsurer’s chief or most senior actuary that such recommendation complies with Actuarial Standards of practicePractice promulgated by the Actuarial Standards Board governing re-determination of non-guaranteed charges or elements. If the Company approves such recommendations, the Ceding Company shall not unreasonably reject such shall, at the Reinsurer’s expense, use commercially reasonable efforts to effect promptly the file Reinsurer’s recommendations. Each time Notwithstanding the Ceding Company elects foregoing, prior to change implementation of any Non- Guaranteed Elements, other than (1) any change in initial or renewal crediting rates, Policy Loan rates or index cap or any other similar change or any change required by any Applicable Law or Governmental Authority or (2) any change in term Premiums charged in recommendation of Reinsurer with respect to administration of term Covered Insurance Policies that have reached the end of the level-term period (each of the items listed (1) or (2), a an “Excluded NGE Change”), the Ceding Company shall notify the Reinsurer in writing of such change to any Non-Non Guaranteed Elements as soon as practicable but in no case later than forty-five (45) calendar days after with respect to the effective date of such change; provided, however, thatDirect Business and the Indirect Business, in the case event that the Company has reasonable cause to believe that such recommendation fails to comport with the provisions of any Policy, the KILICO Agreement, Applicable Law, applicable common law or the Actuarial Standards of Practice promulgated by the Actuarial Standard Board governing re-determination of non-guaranteed charges, then the Company may commence a privileged and confidential non-binding mediation, provided that there shall be no written briefs or written communications among the Parties and the mediator which address the merits of either Party’s position. In the event of a disagreement with respect to such change recommendation that affects more than five percent (5%) is not resolved by agreement through the aforementioned mediation procedure, the Company’s decision shall control for purposes of the Covered Insurance Policies in any Reinsured Portfoliomatter at issue, the Ceding Company will use its reasonable best efforts to notify but the Reinsurer thirty (30) calendar days before such change takes place (each form of notice described in shall be deemed to have preserved and reserved all rights under this sentence, an “ NGE Change Notice”)Agreement to seek all remedies to which it may be entitled.