Exhibit 7.3
VARIABLE ANNUITY REINSURANCE AGREEMENT
Effective Date of June 1, 1998
Between
GE CAPITAL LIFE ASSURANCE OF NEW YORK
(New York, New York)
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
(Hartford, Connecticut)
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
VARIABLE ANNUITY REINSURANCE AGREEMENT
between
GE CAPITAL LIFE ASSURANCE OF NEW YORK
(New York, New York)
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
(Hartford, Connecticut)
INDEX
ARTICLE PAGE
------- ----
Access to Records XII 6
Amounts at Risk II 1
Arbitration XVII 8
Automatic Excess Reinsurance III 2
Claims VII 4
Currency XIV 7
DAC Tax Regulation Election XVIII 9
Delays, Errors, or Omissions XIII 7
Effective Date; Term and Termination XIX 10
Extra Contractual Obligations IX 5
Hold Harmless XV 7
Insolvency XVI 8
Liability of Connecticut General IV 2
Litigation X 6
Notices XX 12
Offset XI 6
Parties to the Agreement I 1
Premium Accounting VI 3
Reinsurance Premiums V 2
Reserves VIII 5
SCHEDULES
A Maximum Limits of Reinsurance in Connecticut General
B Policy Forms and Funds Subject to this Reinsurance Agreement
C Limits and Rules of GE Capital
D Reinsurance Premium Rates and Calculation Criteria
E Monthly Reporting Format
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
VARIABLE ANNUITY REINSURANCE AGREEMENT
(hereinafter called Agreement)
between
GE CAPITAL LIFE ASSURANCE OF NEW YORK
(hereinafter called GE Capital)
and
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
(hereinafter called Connecticut General or CIGNA Reinsurance)
It is agreed by the two companies as follows:
ARTICLE I - PARTIES TO THE AGREEMENT
This Agreement shall be binding upon and shall inure solely to the benefit of GE
Capital and Connecticut General. This Agreement shall not and is not intended to
create any right or interest in any third party and shall not and is not
intended to create any legal relationship between either party and any third
party, including, without limitation, annuitants, insureds, certificate holders,
employees, dependents, beneficiaries, policy owners, applicants or assignees
under any policy or contract issued by GE Capital.
ARTICLE II - AMOUNTS AT RISK
A. This Agreement provides permanent coverage for fifty (50) percent of all
new issues of GE Capital's Individual Deferred Variable Annuity product on
forms and funds as identified in Schedule B written by GE Capital from the
effective date of this Agreement through May 31, 2001, unless terminated
pursuant to article XIX. The reinsurance death benefit payable by
Connecticut General upon the death of the Annuitant is the excess of the
guaranteed minimum death benefit over the contract value as defined in the
variable annuity contracts and funds listed in Schedule B. At issue, the
guaranteed minimum death benefit is equal to the initial contract value.
Refer to Schedule A for a detailed description of the guaranteed minimum
death benefit.
B. The contract value represents the Annuitant's invested assets in the funds
in Schedule B as it appears in the records of GE Capital before application
of any surrender charges, on any given date.
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
-1-
ARTICLE III - AUTOMATIC EXCESS REINSURANCE
A. On and after the Effective Date of this Agreement, subject to the limit of
Connecticut General's liability set forth in Schedule A and all other
terms, conditions and limitations set forth in this Agreement and the
Schedules attached to and made a part hereof, GE Capital shall cede and
Connecticut General shall accept fifty (50) percent of GE Capital's
guaranteed death benefit liability under the Variable Annuity Contracts, as
described in Article II A.
B. This Agreement covers fifty (50) percent of GE Capital's liability for
claims paid under Variable Annuity Contracts written on forms and
investment in funds which were reviewed by Connecticut General prior to
their issuance. Forms, as supplemented by additional materials, and funds
available as of the date of this Agreement are listed on Schedule B. If GE
Capital intends to cede to Connecticut General liability with respect to a
new form or fund, or a revised version of an approved form or fund, it must
provide to Connecticut General written notice of such intention together
with a copy of the proposed form, fund or revision, and a revised Schedule
B.
C. GE Capital shall provide written notice to Connecticut General of any
changes in its published limits and rules identified on Schedule C, and
Connecticut General shall have no liability pursuant to revised limits and
rules unless and until Connecticut General provides written notice to GE
Capital that such revised limits and rules are acceptable.
ARTICLE IV - LIABILITY OF CONNECTICUT GENERAL
Connecticut General's liability for reinsurance under this Agreement shall
follow that of GE Capital in every case, and be subject in all respects to the
general stipulations, terms, clauses, conditions, waivers and modifications of
the Variable Annuity Contracts.
In no event shall Connecticut General have any reinsurance liability unless the
Variable Annuity Contract issued by GE Capital is in force and the underwriting
and issuance of coverage by GE Capital constitutes the doing of business in a
state of the United States of America in which GE Capital was properly licensed
and authorized to do business at the time the contract was issued.
ARTICLE V - REINSURANCE PREMIUMS
Premiums for reinsurance subject to the terms and conditions of this Agreement
shall be paid on a monthly basis. Such premiums shall be determined by the
application of the basis points (bps) set forth in Schedule D to the amount of
reinsurance coverage provided for each annuity insured by GE Capital as
calculated based on the criteria defined in Schedule D.
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
-2-
ARTICLE VI - PREMIUM ACCOUNTING
A. Reinsurance premiums shall be paid on a monthly basis. On or before the
Due Date (as defined in Paragraph B), GE Capital shall forward to
Connecticut General its statement of account as set forth in Schedule E
together with its remittance for the net amount due as shown therein as
well as any premium adjustments from the prior month. If the statement
shows a balance due GE Capital, Reinsurer shall remit that amount to GE
Capital on or before the Remittance Date (the date occurring thirty days
after the Due Date). All outstanding balances due and unpaid beyond the
Remittance Date shall be subject to an annual interest charge on the unpaid
balance from the Due Date as specified in this Article to the date of
payment.
B. For the purposes of this Agreement the Due Date for Reinsurer's receipt of
the statement of account and premium due is the twentieth (20th) day
following the close of any reporting period. The payment of reinsurance
premiums in accordance with the provisions herein shall be a condition
precedent to the liability of Reinsurer for reinsurance covered by this
Agreement. In the event that reinsurance premiums are not received by
Reinsurer as of the Due Date following the close of the reporting period in
which they fall due, Reinsurer will notify GE Capital that such premiums
are due and unpaid, and GE Capital will remit the premium on or before the
Remittance Date. In the event that the premiums are not paid by the
Remittance Date, Reinsurer shall have the right to give GE Capital notice
of termination of such reinsurance immediately.
C. Whether or not Reinsurer exercises its right to terminate the reinsurance
as specified in the preceding paragraph, all such outstanding premiums
shall be subject to an annual interest charge on the unpaid balance from
the Due Date to the date of payment. Such interest charge shall be at the
three (3) month LIBOR Rate (as published in the Wall Street Journal), plus
.01, determined on the first business day following the end of the 60 day
notice period. The settlement is considered overdue at the end of the 60
day notice period and interest shall commence from the overdue date.
D. If reinsurance is terminated as provided in paragraph B, and if all
reinsurance premiums in default and any additional charge due in accordance
with paragraph B, including such premiums and charges which may become in
default are not paid by the Remittance Date, Reinsurer shall thereupon be
relieved automatically of future liability under all reinsurance for which
premiums and other charges remain unpaid. New and existing Reinsurance for
which premiums subsequently fall due will terminate automatically if
reinsurance premiums are not paid when due as provided in paragraph B of
this Article. The reinsurance so terminated may be reinstated at any time
within sixty days of the date of termination upon payment of all
reinsurance premiums and other charges in arrears; but in the event of such
reinstatement, Reinsurer shall have no liability in connection with any
claims incurred between the date of termination and the date of
reinstatement of the reinsurance.
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
-3-
E. Not withstanding termination of reinsurance as provided herein, GE Capital
shall continue to be liable to Reinsurer for all unpaid reinsurance
premiums earned by Reinsurer under this Agreement. Such premiums are
subject to an annual interest charge as specified in paragraph C above.
ARTICLE VII - CLAIMS
GE Capital is solely responsible for payment of its claims under the Policies
and underlying variable annuity contracts identified on Schedule B.
GE Capital shall provide written notice to Connecticut General of any Claim
which may impact the reinsurance coverage under this Agreement, including but
not limited to GE Capital's intent to contest or deny a claim, within thirty
(30) calendar days of receipt of notification of Claim. GE Capital shall also
provide prompt notice to Connecticut General of all subsequent significant
developments relating to such Claim. Inadvertent oversight or omission in the
provision of such notice shall not relieve Connecticut General of liability
provided GE Capital informs Connecticut General of such oversight or omission
promptly upon its discovery.
GE Capital shall provide Connecticut General with proof of claim, proof of claim
payment and any other claim documentation requested by Connecticut General in
accordance with Schedule E. Payment of reinsurance shall be made by Connecticut
General in one sum regardless of the method of payment by GE Capital and within
thirty (30) calendar days following receipt of required claim documentation.
GE Capital shall notify Connecticut General of its intention to contest or deny
a claim which may involve the reinsurance coverage under this Agreement before
any notice of contest or denial is provided to the claimant. Connecticut General
shall then have thirty (30) calendar days within which to advise GE Capital
whether it agrees that the claim should be contested or denied. If Connecticut
General does not agree that the claim should be contested or denied, then it
shall pay to GE Capital the full amount of the reinsurance on the risk
reinsured, as set forth in this Agreement, and Connecticut General shall have no
further obligation in respect to such claim. If Connecticut General agrees that
the claim should be contested or denied, then Connecticut General shall pay its
share of the following in accordance with its share of liability as set forth in
this Agreement:
. Expenses incurred by GE Capital in investigating, contesting
litigating or otherwise resisting the Claim, excluding salaries and
expenses of employees, officers and agents of GE Capital and ordinary
expenses of GE Capital, and costs of third party administrators acting
on behalf of GE Capital; and
. Interest which is paid by GE Capital in respect of the Claim.
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
-4-
If the denial of a Claim results in an award verdict or judgment against GE
Capital, where Connecticut General has agreed with the claim denial and GE
Capital intends to appeal the verdict or judgment, written notice of the
intention to appeal shall be provided to Connecticut General. Connecticut
General shall be entitled at that time to pay its share of the judgment,
together with any expenses and interest as set forth above, and to have no
further obligation in connection with such Claim. If Connecticut General does
not pay its share of the judgment and any expenses and interest due at that
time, Connecticut General shall pay its share of the expenses associated with
the appeal of the judgment or verdict, together with its share of any additional
interest charges that may accrue during the appeal.
ARTICLE VIII - RESERVES
The reserve held by Connecticut General for reinsurance of the variable annuity
death benefit will be determined in accordance with the NAIC Actuarial Guideline
XXXIV, but in no event less than the recognized statutory required reserve.
ARTICLE IX - EXTRA CONTRACTUAL OBLIGATIONS
A. In no event shall Connecticut General be liable for extra contractual
damages (whether they constitute Compensatory damages, Statutory penalties,
Exemplary or Punitive damages) which are awarded against GE Capital as a
result of an act, omission or course of conduct by GE Capital in connection
with policies subject to this Agreement, unless Connecticut General shall
have received notice in writing of and concurred with the actions taken or
not taken by GE Capital which led to its liability, in which case
Connecticut General shall pay its share of such liability. For this
purpose, Connecticut General's share shall be proportionate with its risk
under the business reinsured hereunder.
B. The following definitions shall apply:
(1) Punitive damages and Exemplary damages are those damages awarded as a
penalty, the amount of which is not governed nor fixed by statute.
(2) Statutory penalties are those amounts which are awarded as a penalty
but fixed in amount by statute.
(3) Compensatory damages are those amounts awarded to compensate for the
actual damages sustained and are not awarded as a penalty nor fixed in
amount by statute.
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
-5-
ARTICLE X - LITIGATION
In the event of any action brought against GE Capital under any Underlying
Annuity Contract that is subject to the terms and conditions of this Agreement,
GE Capital shall provide a copy of such action and written notice of such action
within ten (10) business days to Connecticut General. If Connecticut General is
a party to action brought against GE Capital, GE Capital shall seek agreement by
Connecticut General on the selection and appointment of local counsel to
represent GE Capital in such action.
ARTICLE XI - OFFSET
Either party shall have, and may exercise at any time and from time to time, the
right to offset any balance or amounts whether on account of premiums or on
account of losses or otherwise, due from one party to the other under the terms
of this Agreement. However, in the event of insolvency of GE Capital subject to
the provisions of Article XVI, offset shall only be allowed in accordance with
the statutes and/or regulations of the state having jurisdiction over the
insolvency.
ARTICLE XII - ACCESS TO RECORDS
Connecticut General, or its duly authorized representative, shall have access at
any reasonable time during regular business hours, to all records of GE Capital,
including the right to photocopy and retain copies of such documents, which
pertain in any way to this reinsurance. The right of access shall survive the
termination of this Agreement.
GE Capital and Connecticut General may come into the possession or knowledge of
Confidential Information of the other in fulfilling obligations under this
Agreement. Each party agrees to hold such confidential information in the
strictest confidence and to take all reasonable steps to ensure that such
Confidential Information is not disclosed in any form by any means by each of
them or by any of its employees to third parties of any kind, other than
attorneys, accountants, other consultants or retrocessionaires having an
interest in such information, except by advance written authorization by an
officer of the authorizing party; provided, however, that either party will be
deemed to have satisfied its obligations as to the Confidential Information by
protecting its confidentiality in the same manner that such party protects its
own proprietary or confidential information of like kind which shall be at least
a reasonable manner. "Confidential information" means any information which (1)
is not generally available to or known by the public, or (2) has not been
lawfully obtained or developed by either party independently and not in
violation of this Agreement or from any source other than the other party,
provided that such source is not bound by a duty of confidentiality to such
other party, and which consists of:
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
-6-
A. Information or knowledge about each party's products, processes, services,
finances, customers, research, computer programs, marketing and business
plans, claims management practices; and
B. Any medical or other personal, individually identifiable information about
people or business entities with whom the parties do business, including
customers, prospective customers, vendors, suppliers, individuals covered
by insurance plan, and each party's producers and employees.
ARTICLE XIII - DELAYS, ERRORS OR OMISSIONS
No accidental delay, errors or omissions on the part of GE Capital shall relieve
Connecticut General of liability provided immediate notice of such delay, errors
or omissions is provided to Connecticut General and are rectified as soon as
possible after discovery. However, Connecticut General shall not be liable with
respect to any reinsurance which may have been inadvertently included in the
premium computation but which ought not to have been included by reason of the
terms and conditions of this Agreement. It is expressly understood and agreed
that if failure to comply with any terms of this Agreement is shown to be
unintentional or the result of misunderstanding or oversight on the part of
either party, both parties shall be restored to the position they would have
occupied had no such error or oversight occurred, subject always to the
correction of the error or oversight.
ARTICLE XIV - CURRENCY
All retentions and limits hereunder are expressed in United States dollars and
all premium and loss payments shall be made in United States currency. For the
purposes of this Agreement, amounts paid or received by Connecticut General in
any other currency shall be converted into United States dollars at the rates of
exchange on the date such transactions are entered on the books of Connecticut
General.
ARTICLE XV - HOLD HARMLESS
A. The parties hereto shall indemnify and hold the other harmless from any and
all liability, loss, damage, fines, punitive damages, penalties and costs,
including expenses and attorney's fees, which results from any negligence
or willful misconduct of the other in fulfilling its duties and obligations
under this Agreement or which results from any action which exceeds its
authority under this Agreement.
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
-7-
ARTICLE XVI - INSOLVENCY
In the event of insolvency of GE Capital, the reinsurance under this Agreement
shall be payable directly by Connecticut General to GE Capital or to its
liquidator, receiver, conservator or statutory successor on the basis of
Connecticut General's liability to GE Capital without diminution because of the
insolvency of GE Capital or because the liquidator, receiver, conservator or
statutory successor of GE Capital has failed to pay all or a portion of any
claim. It is agreed, however, that the liquidator, receiver, conservator or
statutory successor of GE Capital shall give prompt written notice to
Connecticut General of the pendency of a claim against GE Capital within a
reasonable time after such claim is filed in the receivership, conservation,
insolvency or liquidation proceeding and that during the pendency of such claim,
Connecticut General may investigate such claim and interpose, at its own
expense, in the proceeding where such claim is to be adjudicated, any defense or
defenses that it may deem available to GE Capital or its liquidator, receiver,
conservator or statutory successor. The expense thus incurred by Connecticut
General shall be chargeable, subject to the approval of the Court, against GE
Capital as part of the expense of conservation or liquidation to the extent of a
pro-rata share of the benefit which may accrue to GE Capital solely as a result
of the defense undertaken by Connecticut General.
Where two or more reinsurers are involved in the same claim and a majority in
interest elect to interpose defense to such claim, the expense shall be
apportioned in accordance with the terms of this Agreement as though such
expense had been incurred by GE Capital.
ARTICLE XVII - ARBITRATION
A. As a condition precedent to any right of action hereunder, any dispute
between the parties with respect to the interpretation of this Agreement or
any right, obligation or liability of either party, whether such dispute
arises before or after termination of this Agreement, shall be submitted to
arbitration upon the written request of either party. Each party shall
select an arbitrator within thirty (30) days of the written request for
arbitration. If either party refuses or neglects to appoint an arbitrator
within thirty (30) days of the written request for arbitration, the other
party may appoint the second arbitrator. The two arbitrators shall select
an umpire within thirty (30) days of the appointment of the second
arbitrator. If the two arbitrators fail to agree on the selection of the
umpire within thirty (30) days of the appointment of the second arbitrator,
each arbitrator shall submit to the other a list of three umpire
candidates, each arbitrator shall select one name from the list submitted
by the other and the umpire shall be selected from the two names chosen by
a lot drawing procedure to be agreed upon by the arbitrators.
B. The arbitrators and the umpire all shall be active or retired, executive
officers of insurance or reinsurance companies and the umpire shall be
disinterested.
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
-8-
C. The arbitration panel shall interpret this Agreement as an honorable
engagement rather than merely as a legal obligation and shall make its
decision considering the custom and practice of the applicable insurance
and reinsurance business. The arbitration panel is released from judicial
formalities and shall not be bound by strict rules of procedure and
evidence.
D. The decision of the arbitration panel shall be final and binding on both
parties. The arbitration panel may, at its discretion, award costs and
expenses as it deems appropriate, including, but not limited to, attorneys'
fees, interest and punitive damages. Judgment maybe entered upon the final
decision of the arbitration panel in any court of competent jurisdiction.
E. All meetings and hearings before the arbitration panel shall take place in
Hartford, Connecticut unless some other place is mutually agreed upon by
both parties or ordered by the panel.
F. In the absence of a decision to the contrary by the arbitration panel, each
party shall bear the expense of its own arbitrator and shall jointly and
equally bear with the other party the expense of the umpire and of the
arbitration.
ARTICLE XVIII - DAC TAX REGULATION ELECTION
Connecticut General and GE Capital hereby agree to make an election pursuant to
Internal Revenue Code Regulation Section 1.848-2(g)(8). This election shall be
effective for all taxable years for which the Reinsurance Agreement remains in
effect.
The terms used in this article are defined by reference to Regulation Section
1.848-2 promulgated on December 28, 1992.
Connecticut General and GE Capital agree that the entity with net positive
consideration for the reinsurance agreement for each taxable year will
capitalize specified policy acquisition expenses with respect to the reinsurance
agreement without regard to the general deductions limitation of Section
848(c)(l) of the Internal Revenue Code of 1986, as amended.
Connecticut General and GE Capital agree to exchange information pertaining to
the amount of net consideration under the reinsurance agreement each year to
ensure consistency. To achieve this, GE Capital shall provide Connecticut
General with a schedule of its calculation of the net consideration for all
reinsurance agreements in force between them for a taxable year by no later than
April 30 of the succeeding year. Connecticut General shall advise GE Capital if
it disagrees with the amounts provided by no later than May 31, otherwise the
amounts will be presumed correct and shall be reported by both parties in their
respective tax returns for such tax year. If Connecticut General contests GE
Capital's calculation of the net consideration, the Parties agree to act in good
faith to resolve any differences within thirty (30) days of the date Connecticut
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
-9-
General submits its alternative calculation and report the amounts agreed upon
in their respective tax returns for such tax year.
Connecticut General represents and warrants that it is subject to U.S. taxation
under either Subchapter L or Subpart F of Part III of Subchapter N of the
Internal Revenue Code of 1986, as amended.
ARTICLE XIX - EFFECTIVE DATE, TERM AND TERMINATION
A. The effective date of this Agreement is June 1, 1998. This Agreement
remains effective for fifty percent (50%) of all annuity contracts subject
to this Agreement written by GE Capital through May 31, 2001, unless
terminated pursuant to the paragraphs listed below.
B. Once each calendar year, GE Capital shall have the option to recapture
existing contracts beginning with the twentieth (20th) anniversary of their
reinsurance hereunder. Recapture must be made on an issue year basis, and
no contracts can be recaptured unless all contracts with earlier issue
years are recaptured.
C. Connecticut General shall have the option of terminating this Agreement for
new business upon delivery of thirty (30) calendar days written notice to
GE Capital, within thirty (30) days of the happening of any of the
following events:
(1) GE Capital's A. M. Best rating is reduced to a "C" or lower.
(2) GE Capital's domiciliary state's insurance regulators take any
regulatory action potentially adversely affecting its license to
conduct business, including without limitation placement on a "watch
list;"
(3) An order appointing a receiver, conservator or trustee for management
of GE Capital is entered or a proceeding is commenced for
rehabilitation, liquidation, supervision or conservation of GE
Capital;
(4) GE Capital withdraws from or substantially reduces the active
marketing of policy forms identified in Schedule B.
(5) The Securities and Exchange Commission takes any regulatory action
with respect to GE Capital that potentially adversely affects its
conduct of business.
D. Connecticut General shall have the option of terminating this Agreement for
new and existing business should GE Capital fail to pay premium in
accordance with Article V and VI. If, during the thirty (30) days notice
period, Connecticut General receives all premiums in arrears and all
premiums which may become due within the thirty (30) days notice period,
the notice of termination shall be deemed withdrawn. In the event of
termination under this paragraph,
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
-10-
this Agreement may be reinstated upon the written consent of Connecticut
General if, at any time within sixty (60) days of termination, GE Capital
pays and Connecticut General receives all premiums due and payable up to
the date of reinstatement.
E. GE Capital shall have the option of terminating this Agreement for new
business upon delivery of thirty (30) calendar days written notice to
Connecticut General, within thirty (30) days of the happening of any of the
following events:
(1) Connecticut General's A. M. Best rating is reduced to a "C" or lower;
(2) Connecticut General is placed upon a "watch list" by its domiciliary
state's insurance regulators;
(3) An order appointing a receiver, conservator or trustee for management
of Connecticut General is entered or a proceeding is commenced for
rehabilitation, liquidation, supervision or conservation of
Connecticut General;
F. If this Agreement is terminated for new and existing business, Connecticut
General shall be relieved of all liability to GE Capital for claims
incurred following the termination date of this Agreement under such
underlying annuity contracts issued by GE Capital; and,
G. If this Agreement is terminated for new business only, Connecticut General
will remain liable, after termination, in accordance with the terms and
conditions of this Agreement, with respect to all reinsurance effective
prior to termination of the Agreement for new business.
H. Both parties shall continue to be entitled to all offset credits provided
by Article XI up to the effective date of termination.
I. GE Capital shall not have the right to assign or transfer any portion of
the rights, duties and obligations of GE Capital under the terms and
conditions of this Agreement without the written approval of Connecticut
General, which shall not be unreasonably withheld.
J. GE Capital shall provide Connecticut General with written certification on
or before September 1, 1999 that it has performed testing for Year 2000
systems capability on the mission critical systems on which reinsured
products are administered and that the testing protocols and testing
results satisfy standards reasonably acceptable to Connecticut General. In
the event GE Capital fails to provide such certification, Connecticut
General shall, at its sole discretion, have the right to terminate this
Agreement for new and existing business upon thirty (30) days written
notice, unless GE Capital provides such certification within the 30 day
notice period. In the event of such termination, Connecticut General shall
have no further liability under this Agreement for reinsured events
occurring after termination.
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
-11-
ARTICLE XX - NOTICES
All notices required to be given hereunder shall be in writing and shall be
deemed delivered if personally delivered, sent via facsimile, or dispatched by
certified or registered mail, return receipt requested, postage prepaid,
addressed to the parties as follows:
▇▇▇▇ ▇. ▇▇▇▇ Phone No. (▇▇▇) ▇▇▇-▇▇▇▇
Vice President Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
GE Capital Life Assurance of New York
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, FSA Phone No. ▇▇▇.▇▇▇.▇▇▇▇
Assistant Vice President Fax No. ▇▇▇.▇▇▇.▇▇▇▇
CIGNA Reinsurance
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Notice shall be deemed given on the date it is received in the mail or sent via
facsimile in accordance with the foregoing. Any party may change the address to
which to send notices by notifying the other party of such change of address in
writing in accordance with the foregoing.
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
-12-
The text of this Agreement and all Exhibits, Schedules and Amendments are
considered to be the entire contract between the parties. There are no other
understandings or agreements between the parties regarding the policies
reinsured other than as expressed in this Agreement. Either party may make
changes or additions to this Agreement, but they will not be considered to be in
effect unless they are made by means of a written amendment which has been
signed by both parties.
In witness whereof, the parties hereto have caused this Agreement to be signed
in duplicate on the dates indicated to be effective as of the date specified
above.
GE CAPITAL LIFE ASSURANCE OF NEW YORK
By: /s/ Illegible
------------------------------------
Date: 2/14 , 1999
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: /s/ Illegible
------------------------------------
Date: Feb, 10th , 1999
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
-13-
SCHEDULE A
Maximum Limits of Reinsurance in Connecticut General
Connecticut General requires prior notification of any annuity purchase in
excess of $5,000,000.00 per annuitant/owner. Upon receipt of such notification,
Connecticut General then has the obligation to notify GE Capital within 15 days
of its decision to accept or not accept the reinsurance risk for such an annuity
purchase. Should Connecticut General not respond within 15 days, it shall be
deemed that Connecticut General does not agree to accept such risk.
The purchase amount is the sum of all premium contributions less withdrawals in
the contract. For purchase amounts in excess of the maximum, Connecticut
General's death benefit liability will be reduced by the ratio of purchase
amounts in excess of the maximum to the total purchase amounts.
Guaranteed Minimum Death Benefit
The Guaranteed Minimum Death Benefit (GMDB) reinsured hereunder is as follows:
Standard Annuity GMDB, sometimes referred to as Six Year Ratchet, will be the
greater of (1) the minimum death benefit described below; or (2) the Account
Value on the date GE Capital received due proof of death of the Annuitant.
During the first six policy years, and subsequently if the Annuitant was age 81
or older on the policy date, the minimum death benefit is the total of premiums
paid, less adjustments for any partial surrenders. During any subsequent six
year period if the Annuitant was age 80 or younger on the policy date, the
minimum death benefit on the last day of the previous six year period, plus any
premiums paid since that day, less adjustments for any partial surrenders since
that day.
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
SCHEDULE A
SCHEDULE B
Contracts and Funds Subject to this Reinsurance Agreement
Form Number* Policy Description Date
----------- ------------------ ----
NY1066-697 Individual Deferred Variable Annuity Policy 6/1/98
* Includes all state variations
Fund Description
Fidelity Variable Insurance Products Fund
Equity-Income Portfolio
Overseas Portfolio
Fidelity Variable Insurance Products Fund II
Asset Manager Portfolio
Contrafund Portfolio
GE Investments Funds, Inc.
Money Market Fund
U.S. Equity Fund
S&P 500 Index Fund
Total Return Fund
International Equity Fund
Real Estate Securities Fund
Global Income Fund
Value Equity Fund
Income Fund
▇▇▇▇▇▇▇▇▇▇▇ Variable Account Funds
▇▇▇▇▇▇▇▇▇▇▇ High Income Fund
▇▇▇▇▇▇▇▇▇▇▇ Bond Fund
▇▇▇▇▇▇▇▇▇▇▇ Aggressive Growth Fund
▇▇▇▇▇▇▇▇▇▇▇ Growth Fund
▇▇▇▇▇▇▇▇▇▇▇ Multiple Strategies Fund
▇▇▇▇▇▇▇ ▇▇▇▇▇ Asset Management, Inc.
▇▇▇▇▇▇▇ Sachs Growth and Income Fund
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mid Cap Equity Fund
Janus Aspen Series
Growth Portfolio
Aggressive Growth Portfolio
Worldwide Growth Portfolio
International Growth Portfolio
Balanced Portfolio
Flexible Income Portfolio
Capital Appreciation Portfolio
Federated Insurance Series
Federated Utility Fund II
Federated High Income Bond Fund II
Federated American Leaders Fund II
The ▇▇▇▇▇ American Fund
▇▇▇▇▇ American Small Capitalization Portfolio
▇▇▇▇▇ American Growth Portfolio
PBHG Insurance Series Fund, Inc.
Growth II Portfolio
Large Cap Growth Portfolio
Fidelity Variable Insurance Products Fund III
Growth & Income Portfolio
Growth Opportunities Portfolio
SCHEDULE C
Limits and Rules of GE Capital
1) GE Capital will determine the Guaranteed Minimum Death Benefit for each
deceased within seven (7) working days of receiving due proof of death.
2) The minimum initial purchase payment is $5,000 for Non-Qualified and
Qualified Policies and $2,000 for ▇▇▇ Policies may be made any time before
Income Payments begin.
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
SCHEDULE C
SCHEDULE D
Reinsurance Premiums
1. The reinsurance premiums shall be based on the Annuitant's age at the end
of each month. GE Capital shall determine the Annuitant's age at the time
it prepares the monthly exposure data submission for the variable annuity
guaranteed death benefit, as set forth in Schedule E, attached hereto.
2. The Adjusted Aggregate Contract Value is the sum of the contract values in
all of GE Capital's variable annuities subject to this Agreement, minus
contract values attributable to amounts in excess of the maximum purchase
amounts listed in Schedule A.
3. The amount at risk each month will be calculated as the reinsurance death
benefit for each variable annuity contract covered under this agreement.
For determining the amount at risk, the guaranteed minimum death benefit
and the contract value are calculated as the average of the values at the
end of the current month and the end of the prior month. The amount at risk
cannot fall below zero.
4. Subject to the funds set forth in Schedule B, the premium over each
calendar month will be equivalent to fifty (50) percent of the Age Adjusted
Aggregate Contract Values times:
A. Monthly, 0.467 basis points for the Standard Annuity GMDB (5.6
bps annually) for all attained ages for the Six Year Ratchet
product and 1.2 basis points (14.4 bps annually) for issues with
an attained age greater than 80 for the Six Year Ratchet benefit.
B. All reinsurance premium rates assume a dollar-for-dollar
reduction in death benefits for partial withdrawals from Account
Value.
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
SCHEDULE D
SCHEDULE E
Monthly Reporting Format
1. Following the end of each calendar month, the Monthly Input Page,
Fund/Exposure-Based exhibit (Schedule E-1) and the Monthly Transaction
Summary (Schedule E-2) or an exhibit of similar form must be prepared for
each Qualified plan and Non-Qualified plan separately.
2. The tabulation should be on an Adjusted Basis, which requires omission of
excess contract values due to an issue amount in excess of $5 million.
3. The tabulation is on a seriatim basis, with each contract contributing
toward the totals for both exposure and aggregate contract value. Seriatim
data must be submitted in a data file similar to Schedule E-3 on or before
the tenth business day following each calendar quarter.
4. The tabulation is necessary to assess the correct amount at risk for
accurate calculation of reinsurance premium. GE Capital can choose to
report values a) as weighted averages during the month, or b) as of the end
of the month. This election must be denoted on the submission.
5. At year end reporting, a tabulation of exposures by age and sex based on a
percentage decrease in account value by fund type as specified by the NAIC
must be submitted for reserve purposes.
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
VARIABLE ANNUITY DEATH BENEFIT
Monthly Input Page
-----------
Calendar Year
-----------
Reporting Month
-----------
Male Female Male Female Male Female Male Female
Age Band Exposure* Exposure* Annuity Value Annuity Value Claims Claims GMDB GMDB
---------- --------- --------- ------------- ------------- ------ ------ ---- ------
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0 - 34
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35 - 39
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40 - 44
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45 - 49
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50 - 54
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55 - 59
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60 - 64
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65 - 69
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70 - 74
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75 - 79
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80 - 84
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85 - 89
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Total 0-79
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80+
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Total Male/Female
----------- ----------- ----------- -----------
Total 0-79
----------- ----------- ----------- -----------
Total 80+
----------- ----------- ----------- -----------
Grand Total
----------- ----------- ----------- -----------
Please use end of the period values.
* Exposure is defined as GMDB less Anuity Account Value, calculated on a
seriatum basis and aggregated.
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit CIGNA Reinsurance
Treaty No. 103315
Connecticut General Life Insurance Company
SCHEDULE E-1
VARIABLE ANNUITY DEATH BENEFIT
Monthly Transcation Summary
STANDARD DEATH BENEFIT GMDB
--------------
Calendar Year
--------------
Reporting Month
--------------
Monthly Reinsurance Premium Calculation
For All Attained Ages
--------------
1 Adjusted Aggregate Contract Value (BOM)
--------------
2 Adjusted Aggregate Contract Value (EOM)
--------------
3 Average Annuity Value
--------------
0.00004667
--------------
4 Monthly Fund Based Premium Rate
--------------
5 Monthly Earned Premium
--------------
6 Net Premium Due
--------------
For Attained Ages 80 and Above
--------------
7 Adjusted Aggregate Contract Value (BOM)
--------------
8 Adjusted Aggregate Contract Value (EOM)
--------------
9 Average Annuity Value
--------------
0.00012000
--------------
10 Monthly Fund Based Premium Rate
--------------
11 Monthly Earned Premium
--------------
12 Net Premium Due
--------------
13 Total Net Premium Due All Ages
Actual Claims
--------------
14 Monthly Reinsurance Amount*
--------------
Net Transaction
--------------
15 Premium Due Reinsurer
--------------
16 Monthly Reinsurance Claims
--------------
17 Prior Adjustment (attach explanation)
--------------
18 Amount Due to (from) Reinsurer
--------------
* Monthly Reinsurance Amount is defined as the aggregate sum of all
claims settled during a Month.
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit CIGNA Reinsurance
Treaty No. 103315
Connecticut General Life Insurance Company
SCHEDULE E-2
Schedule E-3
Seriatim Information
Seriatim Information (All Lives)
Date of Information
Policy Number
Product Code
Issue Date
Annuitant
Last Name
First Name
Sex
Date of Birth
Social Security Number
Owner
Last Name
First Name
Sex
Date of Birth
Social Security Number
Tax Status (Q/NQ)
Account Value
Surrender Value
Minimum Guaranteed Death Benefit
Loan Value
Funding Vehicle Values
Fund #1
:
Fund #N
Termination Information (Maintain for Quarter Following Applicable Event)
Termination Date
Termination Reason (Lapse = L/Death = D/Annuitization = A)
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GE Capital Life Assurance of New York [LOGO]
Variable Annuity Death Benefit Reinsurance CIGNA Reinsurance
Individual Deferred Variable Annuity Treaty Effective 6/1/98
Treaty No. 103315
Connecticut General Life Insurance Company
