REINSURANCE AGREEMENT
BETWEEN
GLENBROOK LIFE AND ANNUITY COMPANY, NORTHBROOK, ILLINOIS
(HEREINAFTER "GLENBROOK")
AND
ALLSTATE LIFE INSURANCE COMPANY, NORTHBROOK, ILLINOIS
(HEREINAFTER "ALLSTATE")
ARTICLE I
BASIS OF REINSURANCE
1. ALLSTATE will indemnify and GLENBROOK will automatically reinsure with
ALLSTATE, according to the terms and conditions hereof, the net liability
for applications received and contracts issued subsequent to the Effective
Date by GLENBROOK on the contracts listed in Schedule A.
2. The indemnity reinsurance provided hereunder shall be on a modified
coinsurance basis. GLENBROOK shall retain, maintain, and own all assets
held in relation to the Reserve, as defined in Article II of this
Agreement.
3. In no event will reinsurance on an application or a policy under this
Agreement be in force unless the corresponding application is pending with
GLENBROOK or policy issued by GLENBROOK, or the reinsurance accepted by
GLENBROOK, as the case may be, is in force.
ARTICLE II
LIABILITY OF ALLSTATE
1. The liability of ALLSTATE with respect to any contract reinsured hereunder
will begin simultaneously with that of GLENBROOK. ALLSTATE'S liability
with respect to any contract reinsured hereunder will terminate on the date
GLENBROOK'S liability on such contract terminates or the date this
Agreement is terminated, whichever is earlier. However, termination of
this Agreement will not terminate ALLSTATE'S liability for benefit payments
incurred prior to the date of termination.
2. For the purpose of this Agreement, the term "Reserve" will be the "Total
Liabilitites" of GLENBROOK'S Variable Annuity Separate Accounts
(corresponding to amounts shown on page 3, line 17 of 1992 Separate
Accounts Statutory Statements).
ARTICLE III
MONTHLY SETTLEMENTS
1. While this Agreement is in effect, GLENBROOK shall pay to ALLSTATE on a
daily basis, with respect to eligible policies under this Agreement, a
reinsurance premium equal to the sum of Items (a) and (b) below, less the
sum of Items (c) and (d) below.
(a) Gross premiums (direct and reinsurance assumed) collected by
GLENBROOK.
(b) Reserves transferred from the GLENBROOK General Account to a GLENBROOK
Separate Account.
(c) Gross premiums refunded by GLENBROOK to policyholders.
(d) Reserves transferred from a GLENBROOK Separate Account to the
GLENBROOK General Account.
2. While this Agreement is in effect, ALLSTATE shall pay to GLENBROOK on a
daily basis a benefit and expense allowance equal to the sum of Items (a),
(b), (c) and (d) below.
(a) Net benefits (as defined in Paragraph 3 of this Article III) paid by
GLENBROOK with respect to the contracts reinsured under this
Agreement.
(b) Commissions and other sales compensation incurred by GLENBROOK with
respect to the contracts reinsured under this Agreement.
(c) General insurance expenses incurred by GLENBROOK with respect to the
contracts reinsured under this Agreement.
(d) Insurance taxes, licenses and fees (excluding Federal Income Tax)
incurred by GLENBROOK with respect to the contracts reinsured under
this Agreement.
3. Net Benefits are defined as follows:
(a) For a contract issued directly by GLENBROOK and reinsured under this
Agreement, net benefits are the actual amounts payable by GLENBROOK to
the
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contractholder, less any amounts payable to GLENBROOK by another
reinsurer with respect to the contract. These payments include death
benefits, endowment benefits, annuity benefits, disability benefits,
benefits under A & H policies, withdrawals, surrender benefits and
payments on supplementary contracts with and without life
contingencies.
(b) For contracts reinsured by GLENBROOK and retroceded under this
Agreement, net benefits and commission and expense allowances are the
actual amounts payable by GLENBROOK to the ceding company with respect
to the contract reinsured by GLENBROOK.
4. Allstate shall pay to GLENBROOK, no less frequently than annually, any
taxes incurred by GLENBROOK as a result of Section 848 of the Internal
Revenue Code which concerns capitalization of policy acquisition costs.
ARTICLE IV
DAILY RESERVE ADJUSTMENTS
While this Agreement is in effect, on a daily basis a reserve adjustment equal
to the amount defined below shall be paid.
Let:
RC = The Reserve change in GLENBROOK'S Variable Annuity
Separate Accounts from the end of the prior
accounting period to the end of the current
accounting period for the reinsured contracts
(corresponding to the sum of the amounts on page
4, lines 10, 11, 12 and 13 of 1992 Separate
Account Statutory Statements).
NII = The net investment income in GLENBROOK'S
Variable Annuity Separate Accounts
(corresponding to the sum of the amounts
on page 4, line 2 of 1992 Separate
Account Statutory Statements), minus
interest income on GLENBROOK'S capital
investment in the Separate Accounts.
If RC is greater than NII then a reserve adjustment of RC-NII is payable by
ALLSTATE to GLENBROOK.
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If NII is greater than RC, then a reserve adjustment of NII-RC is payable
by GLENBROOK to ALLSTATE.
ARTICLE V
OVERSIGHTS
ALLSTATE shall be bound as GLENBROOK is bound, and it is expressly understood
and agreed that if failure to reinsure or failure to comply with any terms of
this Agreement is shown to be unintentional and the result of misunderstanding
or oversight on the part of either GLENBROOK or ALLSTATE, both GLENBROOK and
ALLSTATE shall be restored to the positions they would have occupied had such
error or oversight not occurred.
ARTICLE VI
INSPECTION OF RECORDS
GLENBROOK and ALLSTATE shall have the right, at any reasonable time, to examine
at the office of the other, any books, documents, reports or records which
pertain in any way to the contracts reinsured under this Agreement.
ARTICLE VII
INSOLVENCY
1. In the event of the insolvency of GLENBROOK, reinsurance hereunder is
payable by ALLSTATE on the basis of its liability hereunder without
diminution because of the insolvency of GLENBROOK.
2. Further, in the event of the insolvency of GLENBROOK, the liquidator,
receiver or statutory successor of the insolvent GLENBROOK shall give
written notice to ALLSTATE of the pendency of any obligation of the
insolvent GLENBROOK on any policy reinsured, whereupon ALLSTATE may
investigate such claim and interpose at its own expense, in the proceeding
where such claim is to be adjudicated, any defense or defenses which it may
deem available to GLENBROOK or its liquidator or statutory successor. The
expense thus incurred by ALLSTATE shall be chargeable, subject to court
approval, against the insolvent GLENBROOK as part of the expenses of
liquidation
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to the extent of a proportionate share of the benefit which may accrue to
GLENBROOK solely as a result of the defense undertaken by ALLSTATE.
3. All moneys due GLENBROOK or ALLSTATE under this agreement shall be offset
against each other, dollar for dollar, regardless of any insolvency of
either party.
ARTICLE VIII
ARBITRATION
Any dispute arising with respect to this Agreement which is not settled by
mutual agreement of the parties shall be referred to arbitration. Within twenty
(20) days from receipt of written notice from one party that an arbitrator has
been appointed, the other party shall also name an arbitrator. The two
arbitrators shall choose a third arbitrator and shall forthwith notify the
contracting parties of such choice. Each arbitrator shall be a present or
former officer of a life insurance company and should have no present or past
affiliation with this Agreement or with either party. The arbitrators shall
consider this Agreement as an honorable engagement rather than merely as a legal
obligation, and shall be relieved of all judicial formalities. The decision of
the arbitrators shall be final and binding upon the parties hereto. Each party
shall bear the expenses of its own arbitrator and shall jointly and equally bear
the expenses of the third arbitrator and of the arbitration. Any such
arbitration shall take place at the Home Office of GLENBROOK, unless some other
location is mutually agreed upon.
ARTICLE IX
PARTIES TO AGREEMENT
This Agreement is solely between GLENBROOK and ALLSTATE. The acceptance of
reinsurance hereunder shall not create any right or legal relation whatever
between ALLSTATE and any party in interest under any contract of GLENBROOK
reinsured hereunder. GLENBROOK shall be and remain solely liable to any
insured, contract owner, or beneficiary under any contract reinsured hereunder.
ARTICLE X
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DURATION OF AGREEMENT
This agreement will be effective as of September 1st, 1993, and will be
unlimited as to its duration; provided, however, it may be terminated with
respect to the reinsurance of new business by either party giving the other
party sixty (60) days prior written notice of termination.
ARTICLE XI
ENTIRE AGREEMENT
This Agreement constitutes the entire contract between ALLSTATE and GLENBROOK.
No variation, modification or changes to this Agreement shall be binding unless
in writing and signed by an officer of each party.
IN WITNESS HEREOF, the parties to this Agreement have caused it to be duly
executed in duplicate by their respective officers on the dates shown below.
GLENBROOK LIFE AND ANNUITY COMPANY of Northbrook, Illinois
By __________________________________________
Title _______________________________________
Date ________________________________________
ALLSTATE LIFE INSURANCE COMPANY of Northbrook, Illinois
By __________________________________________
Title _______________________________________
Date ________________________________________
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SCHEDULE A
CONTRACTS SUBJECT TO REINSURANCE
Any annuity contract whose reserve is invested, in whole or in part, in any
account designated as a GLENBROOK Separate Account shall be reinsured under this
Agreement; provided, however, that the portion of any such contract which is not
so invested is not covered under this Agreement.
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AMENDMENT # 1 TO THE
REINSURANCE AGREEMENT
BETWEEN
GLENBROOK LIFE AND ANNUITY COMPANY, NORTHBROOK, ILLINOIS
(HEREINAFTER "GLENBROOK")
AND
ALLSTATE LIFE INSURANCE COMPANY, NORTHBROOK, ILLINOIS
(HEREINAFTER "ALLSTATE")
WHEREAS, Glenbrook and Allstate entered into a Coinsurance Agreement
(hereinafter "Agreement") having an effective date of June 5, 1992; and,
WHEREAS, the California Insurance Department has determined that various changes
to the Agreement are required under California insurance law; and,
WHEREAS, Glenbrook and Allstate desire to amend the Agreement with respect to
coverage issued to California residents to meet the California requirements;
NOW THEREFORE, the Agreement is hereby amended with respect to California
residents, as follows;
1.) Article VIII, "INSOLVENCY", is hereby amended by deleting said Article
in its entirety, and replacing it with the following new Article VIII.
ARTICLE VIII
INSOLVENCY
1. The portion of any risk or obligation assumed by Allstate, when such
portion is ascertained, shall be payable on demand of Glenbrook at the
same time as Glenbrook shall pay its net retained portion of such risk
or obligation, and the reinsurance shall be payable by Allstate on the
basis of the liability of Glenbrook under the contract or contracts
reinsured under this Agreement without diminution because of the
insolvency of Glenbrook. In the event of insolvency and the
appointment of a conservator, liquidator or statutory successor of
Glenbrook, such portion shall be payable to such conservator,
liquidator or statutory successor immediately upon demand, on the
basis of claims allowed against
Glenbrook by any court of competent jurisdiction or, by any
conservator, liquidator, or statutory successor of Glenbrook having
authority to allow such claims, without diminution because of such
insolvency or because such conservator, liquidator or statutory
successor has failed to pay all or a portion of any claims. Payments
by Allstate as above set forth shall be made directly to Glenbrook or
its conservator, liquidator or statutory successor.
2. Further, in the event of the insolvency of Glenbrook, the liquidator,
receiver or statutory successor of the insolvent Glenbrook shall give
written notice to Allstate of the pendency of an obligation of the
insolvent Glenbrook on any policy reinsured, whereupon Allstate may
investigate such claim and interpose at its own expense, in the
proceeding where such claim is to be adjudicated, any defense or
defenses which it may deem available to Glenbrook or its liquidator or
statutory successor. The expense thus incurred by Allstate shall be
chargeable, subject to court approval, against the insolvent Glenbrook
as part of the expenses of liquidation to the extent of a
proportionate share of the benefit which may accrue to Glenbrook
solely as a result of the defense undertaken by Allstate
2.) Article IX, ARBITRATION, shall be amended to include the following
language at the end of that article:
The decision of the Arbitrators shall be handed down within
45 days of the date on which the arbitration is concluded.
3.) The second paragraph of Article X, PARTIES TO THE AGREEMENT, shall be
deleted in its entirety and shall be replaced with the following language:
This Agreement shall be effective as of June 5, 1992, and
will be unlimited as to its duration; provided, however, it
may be terminated with respect to the reinsurance of new
business by either party giving the other party ninety (90)
days prior written notice of termination to the other party.
4.) In addition, a new Article XII is added to the Agreement, as follows:
ARTICLE XII
OFFSET
All monies due Glenbrook or Allstate under this Agreement shall be
offset against each other dollar for dollar.
5.) Finally, a new Article XIII is added to the Agreement, as follows:
ARTICLE XIII
ENTIRE AGREEMENT
This Agreement constitutes the entire contract between ALLSTATE and
GLENBROOK. No variation, modification or changes to this Agreement
shall binding unless in writing and signed by an officer of each
party.
This Amendment shall be effective on ___________, 1995. Except as amended
hereby, the Agreement shall remain unchanged.
IN WITNESS HEREOF, the parties to the Agreement have caused this Amendment to be
duly executed in duplicate by their respective officers on the dates shown
below.
GLENBROOK LIFE AND ANNUITY COMPANY ALLSTATE LIFE INSURANCE
COMPANY
By: ________________________ By: _______________________
Title: ________________________ Title: _______________________
Date: ________________________ Date: _______________________
AMENDMENT # 2 TO THE
REINSURANCE AGREEMENT
BETWEEN
GLENBROOK LIFE AND ANNUITY COMPANY, NORTHBROOK, ILLINOIS
(HEREINAFTER "GLENBROOK")
AND
ALLSTATE LIFE INSURANCE COMPANY, NORTHBROOK, ILLINOIS
(HEREINAFTER "ALLSTATE")
IT IS HEREBY AGREED, that the Coinsurance Agreement effective June 5, 1992
between GLENBROOK and ALLSTATE (hereafter "Agreement"), is amended as follows;
1.) Schedule A, COVERAGES ELIGIBLE FOR REINSURANCE HEREUNDER, is hereby
amended by deleting said schedule in its entirety and replacing it with the
following Schedule A:
SCHEDULE A
COVERAGES ELIGIBLE FOR REINSURANCE HEREUNDER
1. All reinsurance accepted by GLENBROOK on or after the Effective Date of
this Agreement.
2. Coverages eligible for reinsurance shall be limited to any policy
whose reserve is invested, in whole or in part, in the GLENBROOK
General Account, except for those policies described in paragraph 3,
below; provided, however, that the portion of any such policy which is
not so invested is not so covered under this Agreement.
3. Policies which are registered with the Securities and Exchange
Commission and which are sold to a pension plan as the term "pension
plan" is defined under the Employee Retirement Income Security Act of
1974, including, but not limited to, pension plans qualified under
401(a), 401(k), and 403(b) of the Internal Revenue Code, shall not
be considered coverages eligible for reinsurance under this Agreement.
2.) This Amendment shall be effective September 1, 1995.
Except as amended hereby, the Agreement shall remain unchanged.
IN WITNESS HEREOF, the parties to the Agreement have caused this Amendment to be
duly executed in duplicate by their respective officers on the dates shown
below.
GLENBROOK LIFE AND ANNUITY COMPANY ALLSTATE LIFE INSURANCE
COMPANY
By: ________________________ By: _______________________
Title: ________________________ Title: _______________________
Date: ________________________ Date: _______________________
