Common use of RECAPTURE PRIVILEGES Clause in Contracts

RECAPTURE PRIVILEGES. A. The Retrocedent may recapture existing retrocessions in force in accordance with the following rules: 1. The Retrocedent shall notify the Retrocessionaire of its intention to recapture at least ninety (90) days prior to any recapture. 2. The Retrocedent may not recapture a retrocession unless this Agreement shall have been in force for fifteen (15) years, as measured from the Effective Date until the date of recapture. 3. The recapture shall apply to all retrocessions in force under this Agreement. 4. Recapture shall be available only provided the total carry-forward, upon release of Reserves hereunder, shall then be a positive amount. The total carry-forward shall be the sum of the carry-forwards outstanding as of that date under this Agreement that apply to the Reinsured Contracts specified in Schedule A. 5. The carry-forward for each Agreement shall be (a) the current period Retrocession Premium minus (b) all retrocession benefit claims paid thereto for the current period minus (c) a two-and-one-half (2.5) basis point annual expense allowance applied against the average aggregate Account Value for the current period minus (d) the change in Reserves from the prior period to the current period plus (e) the prior period’s loss carry-forward. The monthly carry-forward amount shall be accumulated at the ninety-(90) day federal Treasury ▇▇▇▇ rate as published in The Wall Street Journal on the first business day of the current period plus two percent (2%). 6. Recapture shall take place ratably over a thirty-six (36) month period (i.e., each month, the initial percentage reduces 2.78% times the initial percentage). The election to recapture shall be irrevocable. B. The Retrocedent and the Retrocessionaire shall exchange carry-forward calculations within ninety (90) days after each year-end and shall promptly seek to resolve any differences as to outstanding carry-forward amounts.