REINSURANCE AGREEMENT
This AGREEMENT (the "Agreement") is made as of January 1, 2006, METLIFE
INVESTORS USA INSURANCE COMPANY (the "Reinsured"), 000 Xxxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxxx, Xxxxxxxx 00000, a life insurance corporation organized and
existing under the laws of the State of Delaware, and METROPOLITAN LIFE
INSURANCE COMPANY (the "Reinsurer") 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, a life
insurance corporation organized and existing under the laws of the State of New
York.
THE BACKGROUND OF THIS AGREEMENT is that the Reinsured has certain issued and
outstanding life insurance policies and annuity contracts that provide for the
payment of benefits using supplemental insurance contracts, including retained
asset accounts (each a "TCA") that the Reinsured desires to cede on a one
hundred percent (100%) coinsurance basis to the Reinsurer and that it wishes
engage an Administrator to administer its TCA liabilities and the Reinsurer
desires to accept the TCA liabilities on that basis and to provide the
appropriate administrative services.
IN CONSIDERATION of the promises set forth herein, the parties agree as follows:
A. REINSURANCE COVERAGE
--------------------
1. The Reinsured cedes and the Reinsurer accepts as indemnity
reinsurance, on a coinsurance basis, in accordance with the terms and
conditions hereof, one hundred percent (100%) of the Reinsured's
liabilities on each TCA heretofore issued or that shall hereafter
during the term of this Agreement be issued by the Reinsured in the
United States by the Reinsured, except as provided herein below.
2. This Agreement shall take effect as of January 1, 2006, or such later
date as the parties may agree (the "Effective Date").
3. The Reinsurer's liability with respect to any TCA will begin
simultaneously with that of the Reinsured, but not prior to the
Effective Date.
4. Reinsurance under this Agreement with respect to any TCA shall be
maintained in force so long as the Reinsured's TCA liability remains
in force, unless terminated or reduced as provided herein.
5. New TCAs established during the term of this Agreement shall be
automatically reinsured hereunder. No ceding commission shall be paid
hereunder, except as may be otherwise specifically agreed with respect
to future cessions.
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B. REGULATORY APPROVALS
--------------------
This Agreement shall not take effect until all required regulatory
approvals have been obtained.
C. PREMIUMS AND CONSIDERATIONS
---------------------------
1. The Reinsured shall pay to the Reinsurer, as reinsurance premium, an
amount equal to the account value of the TCA as of the Effective Date.
2. Any TCA that is established after the Effective Date shall be reported
and the Reinsured shall pay to the Reinsurer a reinsurance premium
equal to the account value simultaneously with its establishment.
D. TERMS OF REINSURANCE
--------------------
1. The Reinsurer shall pay the Reinsured as reinsurance recoverables the
amounts of all TCA benefits paid by the Reinsured.
2. The Reinsurer shall reimburse the Reinsured for required State premium
taxes and assessments, if any, applicable to a TCA.
3. The Reinsurer shall reimburse the Reinsured for any TCA interest
credited after the Effective Date of this Agreement.
4. The Reinsurer shall reimburse the Reinsured for allocated TCA
administrative expenses, if any, that the Reinsured incurs directly.
5. The Reinsured and Reinsurer shall timely provide the information to
each other that is needed to produce quarterly and annual financial
statements.
6. The Reinsured shall be solely responsible for the investigation,
settlement and payment of claims under the TCAs; provided, however,
that the Reinsured may enter into an Administrative Services Agreement
for the provision of such functions subject to its direction and
control.
7. All reinsurance settlements and other payments will be effected
through offsetting balances, electronic funds transfers or as the
parties may otherwise agree to carry out the purposes of this
Agreement.
8. The Reinsurer shall pay to Reinsured the experience refund specified
in Schedule A and the ceding commission, if any, specified therein.
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9. The Reinsurer shall provide to the Reinsured a quarterly
reconciliation report of amounts due the Reinsured and Reinsurer under
this Agreement and, except as the parties shall otherwise agree, all
amounts due shall be paid within thirty (30) days of the delivery of
such report with interest on past due amounts at an annual rate of
seven percent (7%), compounded annually, from the date that the
payment was due to the date of payment.
E. INDEMNITY REINSURANCE
---------------------
This Agreement of indemnity reinsurance is solely between the Reinsured and
the Reinsurer. Performance of the obligations of each party under the
Agreement shall be rendered solely to the other party. In the event the
Reinsured's liability to make any payment is changed due to a modification
or cancellation of a TCA, the Reinsurer's liability shall also be changed
in the same manner and to the same extent that the Reinsured's liability
has been changed. Claim settlements made by the Reinsured in good faith,
including compromises, shall be unconditionally binding on the Reinsurer.
F. ADJUSTMENTS
-----------
In the event that the amount of liability provided by a TCA is increased or
reduced because of a change in the underlying policy or contract benefit,
the liability of the Reinsurer hereunder shall increase or reduce by the
same amount. Any adjustment in reinsurance purchase payments for this
reason shall be made without interest.
G. CONTRACT CHANGES
----------------
The Reinsured shall not make any material changes in TCA provisions and
conditions after the Effective Date, other than as may be legally mandated,
without the express written consent of the Reinsurer, which consent shall
not be unreasonably withheld. Upon receipt of such consent, there shall be
a corresponding change in the related reinsurance with appropriate
reinsurance premium adjustments. In the event that the Reinsured makes any
change, other than a mandated change, in the TCAs that is not accepted by
the Reinsurer, the Reinsured will bear for its own account any additional
cost or expense of such change so that the change will not adversely affect
the Reinsurer.
H. ERRORS AND OMISSIONS
--------------------
Any inadvertent errors or omissions on the part of one party occurring in
connection with this Agreement or any transaction hereunder shall not
relieve the other party from any liability to the first party that would
have otherwise attached
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had such error or omission not occurred, provided that such error or
omission is rectified as soon as reasonably practicable after discovery
thereof.
I. MAINTENANCE OF RECORDS
----------------------
All original files or suitable copies that are transferred to the Reinsurer
by the Reinsured or produced by the Reinsurer for the benefit of the
Reinsured pursuant to this Agreement (including but not limited to all
policy and case files, correspondence and data processing tapes and files)
shall be or remain the property of the Reinsured. The Reinsurer shall
provide security for the files that are in its possession, including
disaster recovery procedures, and shall maintain them in space owned or
leased by the Reinsured or segregated within a facility of the Reinsurer in
accessible form for either (i) the period of time specified by the
Reinsurer's procedures unless the Reinsured specifies otherwise or (ii)
until such files are returned to the Reinsured upon the termination of the
Agreement, if earlier; provided, however, the original underwriting files
shall be delivered to and retained by the Reinsured when not in actual use
by the Reinsurer for claims determination, actuarial studies, audits and
its other activities pursuant to the Agreement. Upon request by the
Reinsurer, the Reinsured shall deliver such files to the Reinsurer and,
upon completion of any such use by the Reinsurer, the Reinsurer shall
deliver such files to the Reinsured. The Reinsurer shall provide files to
the Reinsured promptly upon request and shall cooperate with any regulatory
authority having jurisdiction over the Reinsured in providing access to
such files. Each party shall take all reasonable actions necessary to
ensure that at all times the Reinsured has timely access to all claims and
underwriting information relating to the TCAs.
J. AUDIT
-----
The Reinsurer and the Reinsured and their employees and authorized
representatives, respectively, may audit, inspect and examine, during
regular business hours, at the home office of the other party, provided
that reasonable advance notice has been given, any and all books, records,
statements, correspondence, reports, and their related documents or other
documents that relate to a TCA. The audited party agrees to provide a
reasonable work space for such audit, inspection or examination, to
cooperate fully and to disclose the existence of and to produce any and all
necessary and reasonable materials requested by such auditors,
investigators or examiners. Each party will bear its own audit expenses.
All such information, including audit reports and analyses, will be kept
confidential.
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K. ARBITRATION
-----------
1. All disputes and differences between the parties will be decided by
arbitration, regardless of the insolvency of either party, unless the
conservator, receiver, liquidator or statutory successor is
specifically exempted from an arbitration proceeding by applicable
state law.
2. Either party may initiate arbitration by providing written
notification to the other party. Such written notice shall set forth
(i) a brief statement of the issue(s); (ii) the failure of the parties
to reach agreement; and (iii) the date of the demand for arbitration.
3. The arbitration panel shall consist of three arbitrators. The
arbitrators must be impartial and must, at that time, either be
accredited as an arbitrator by XXXXX-US or be an active or former
officer of a life insurance or reinsurance company other than the
parties or their affiliates.
4. Each party shall select an arbitrator within thirty (30) days from the
date of the demand. If either party shall refuse or fail to appoint an
arbitrator within the time allowed, the party that has appointed an
arbitrator may notify the other party that, if it has not appointed
its arbitrator within the following ten (10) days, an arbitrator will
be appointed on its behalf. Within thirty (30) days after the
appointment of the second arbitrator, the two (2) arbitrators shall
select the third arbitrator, who must also be, at that time,
accredited by XXXXX-US as an umpire. If the two arbitrators fail to
agree on the selection of the third arbitrator within the time
allowed, the Umpire Selection Procedures of XXXXX-US, as then in
force, shall be used to select the third arbitrator.
5. The arbitrators shall interpret this Agreement as an honorable
engagement rather than merely as a legal obligation and shall consider
practical business and equitable principles as well as industry custom
and practice regarding the applicable insurance and reinsurance
business. The arbitrators are released from judicial formalities and
shall not be bound by strict rules of procedure and evidence.
6. The arbitrators shall determine all arbitration schedules and
procedural rules. Organizational and other meetings will be held in
New York, NY. The arbitrators shall decide all matters by majority
vote.
7. The decisions of the arbitrators shall be final and binding on both
parties. The arbitrators may, at their discretion, award costs and
expenses, as they deem appropriate, including but not limited to legal
fees and interest.
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The arbitrators may not award exemplary or punitive damages. Judgment
may be entered upon the final decision of the arbitrators in any court
of competent jurisdiction.
8. Unless the arbitrators shall provide otherwise, each party will be
responsible for (a) all fees and expenses charged by its respective
counsel, accountants, actuaries and other representatives in
connection with the arbitration and (b) one-half of the expenses of
the arbitration, including the fees of the arbitrators.
L. INSOLVENCY
----------
1. In the event of the insolvency, liquidation or rehabilitation of the
Reinsured or the appointment of a liquidator, receiver or statutory
successor of the Reinsured, the reinsurance provided hereunder shall
be payable by the Reinsurer directly to the Reinsured or to its
liquidator, receiver or statutory successor on the basis of the TCA
liability of the Reinsured without diminution because of such
insolvency, liquidation, rehabilitation or appointment or because such
liquidator, receiver or statutory successor of the Reinsured has
failed to pay any or a portion of any claims.
2. In any such event, the liquidator, receiver or statutory successor of
the Reinsured shall give the Reinsurer written notice of the pendency
of each TCA claim against the Reinsured within a reasonable time after
each such claim is filed in the insolvency, liquidation or
rehabilitation proceeding.
3. During the pendency of any such TCA claim, the Reinsurer may, at its
own expense, investigate such claim and interpose in the proceeding in
which such claim is to be adjudicated any defense or defenses that the
Reinsurer may reasonably deem available to the Reinsured or its
liquidator, receiver or statutory successor. The expenses incurred in
connection therewith by the Reinsurer shall be chargeable, subject to
court approval, against the Reinsured as part of the expenses of such
insolvency, liquidation or rehabilitation to the extent of any benefit
that accrues to the Reinsured solely as a result of the defense or
defenses undertaken by the Reinsurer.
M. AMENDMENT AND NON-WAIVER
------------------------
Any change or modification of this Agreement shall be null and void unless
made by amendment to the Agreement and signed by both parties. No waiver by
either party of any default by the other party in the performance of any
promise, term or condition of this Agreement shall be construed to be a
waiver by such
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party of any other or subsequent default in performance of the same or any
other promise, term or condition of this Agreement. No prior transactions
or dealings between the parties shall be deemed to establish any custom or
usage waiving or modifying any provision hereof. The failure of either
party to enforce any part of this Agreement shall not constitute a waiver
by such party of its right to do so, nor shall it be deemed to be an act of
ratification or consent.
N. OFFSET
------
All moneys due either the Reinsured or the Reinsurer under this Agreement
shall be offset against each other, dollar for dollar, regardless of any
insolvency of either party.
O. SEVERABILITY
------------
In the event that any provision or term of this Agreement shall be held by
any court to be invalid, illegal or unenforceable, all of the other terms
and provisions shall remain in full force and effect to the extent that
their continuance is practicable and consistent with the original intent of
the parties. In addition, if provisions are held invalid, illegal or
unenforceable, the parties will attempt in good faith to renegotiate the
Agreement to carry out its original intent.
P. EXTRA-CONTRACTUAL OBLIGATIONS
-----------------------------
1. The Reinsurer assumes no liability under this Agreement for any
damages, fines, penalties, costs or expenses, or portion thereof,
levied on or assessed against the Reinsured by any court or regulatory
body on the basis of negligence, oppression, malice, fraud, fault,
wrongdoing or bad faith by the Reinsured in connection with any TCA
claim or for any act or omission that is not consistent with the
generally accepted practices and standards of the life insurance
industry applicable at the time of such act or omission, unless the
Reinsurer shall have received notice of and concurred with the actions
taken or not taken by the Reinsured that led to the levy or
assessment, in which case the Reinsurer shall pay its proportional
share determined by the ratio of reinsurance to TCA liability.
2. The Reinsurer will have no liability under this Agreement for any
payment by the Reinsured in excess of the TCA amount because of
negligence, oppression, malice, fault, wrongdoing or bad faith of the
Reinsured in connection with any TCA claim or for any act or omission
not consistent with the generally accepted practices and standards of
the life insurance industry applicable at the time of such act or
omission, unless the
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Reinsurer shall have received notice of and concurred with the actions
taken or not taken by the Reinsured that led to the excess payment, in
which case the Reinsurer shall pay, as its proportional share of such
excess payment determined by the ratio of reinsurance to the TCA.
Q. PAYMENTS UPON RECAPTURE
-----------------------
The Reinsured may recapture all reinsurance ceded under this Agreement at
any time upon thirty (30) days prior notice. Upon recapture, the Reinsurer
shall pay to the Reinsured an amount to be agreed upon by the parties as of
the date that the recapture is effective, which amount shall be calculated
in a manner that is consistent with the calculation of the original
consideration.
R. DURATION OF AGREEMENT
---------------------
1. Except as otherwise provided herein, the Agreement shall be unlimited
in duration.
2. This Agreement may be terminated prospectively at any time by either
the Reinsurer or the Reinsured upon ninety (90) days written notice. A
termination of this Agreement shall be effective as of the date
specified in a notice of termination given under this Agreement or on
such other date as shall be agreed to in writing.
3. Notwithstanding any other provisions of this Agreement, in the event
that (a) the Reinsurer shall commence voluntary liquidation or
dissolution or (b) the New York Insurance Department shall be directed
to liquidate or dissolve the Reinsurer pursuant to an order of
liquidation or dissolution, as provided in New York Insurance Law,
Article 74 ((S)(S) 7401 et seq.), reinsurance hereunder shall, at the
option of the Reinsured, be terminated as of a date concurrent with or
subsequent to the filing of the articles of dissolution or issuance of
the order of liquidation, as selected by the Reinsured. Written
notification of such termination and date shall be given by the
Reinsured to the Reinsurer. Termination under this provision shall be
subject to the provisions of the New York Insurance Law.
S. NOTICES
-------
Written notices under this Agreement shall be effective when delivered to
any party at the address provided herein:
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If to the Reinsurer:
Xxxxxxx Xxxxx, Vice President and Senior Actuary
Metropolitan Life Insurance Company
1 MetLife Plaza
00-00 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxxx Xxxx, XX 00000
Xxxxx Xxxxxx, Associate General Counsel
Metropolitan Life Insurance Company
1 MetLife Plaza
00-00 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxxx Xxxx, XX 00000
If to the Reinsured:
Xxxx Xxxxxxx. Executive Vice President, General Counsel and Secretary
MetLife Investors USA Insurance Company
000 Xxxxxxxx Xxxxxx, Xxxxx 000
XX Xxx 00000
Xxxxxxxxxx, XX 00000
Either party may change its address by giving the other party written
notice of its new address.
T. CHOICE OF LAW
-------------
This Agreement is subject to and is to be interpreted in accordance with
the laws of the State of New York without regard to the New York choice of
law rules.
U. ENTIRE AGREEMENT
----------------
This Agreement supersedes all prior discussions and agreements between the
parties and constitutes their sole and entire agreement with respect to its
subject matter and there are no understandings between the parties with
respect thereto other than as expressed in the Agreement.
V. SURVIVAL
--------
All provisions of this Agreement shall, to the extent necessary to carry
out the purposes of this Agreement or to ascertain and enforce the parties'
rights hereunder, survive its termination.
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W. COUNTERPARTS
------------
This Agreement may be signed in any number of counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first
above written.
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ [ILLEGIBLE]
-----------------------------------
Title: Vice President and Sr. Actuary
METLIFE INVESTORS USA INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Title: Executive Vice President
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SCHEDULE A
----------
Ceding Commission:
No ceding commissions shall be payable with respect to liabilities ceded
hereunder.
Experience Refund:
The Reinsurer shall pay each Reinsured an experience refund calculated quarterly
as seventy five percent (75%) times (investment income earned - investment
income credited - allocated expenses - loss carry-forward) but not less than
zero.
For this purpose, the loss carry-forward shall be calculated quarterly as (prior
quarter loss carry-forward times (1 + calculated portfolio rate for the quarter)
+ investment income credited + allocated expenses - investment income earned)
but not less than zero.
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ADMINISTRATIVE SERVICES AGREEMENT
---------------------------------
THIS AGREEMENT (the "Agreement") is made as of January 1, 2006, BETWEEN METLIFE
INVESTORS USA INSURANCE COMPANY (the "Company"), 000 Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxx 00000, a life insurance corporation organized and existing
under the laws of the State of Delaware, and METROPOLITAN LIFE INSURANCE COMPANY
(the "Administrator"), 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000 a life insurance
corporation organized and existing under the laws of the State of New York.
THE BACKGROUND OF THIS AGREEMENT is that the parties desire that the
Administrator shall administer the Company's retained asset account supplemental
contract liabilities (each a TCA"), which TCA liabilities are the subject of a
Reinsurance Agreement between the parties of even date herewith.
NOW, THEREFORE, in consideration of the mutual promises herein set forth, the
parties hereto agree as follows:
1. RETENTION OF ADMINISTRATOR AS SERVICING AGENT. The Company hereby retains
the Administrator as its servicing agent to provide services as described
in this Agreement (the "Services") on behalf of the Company.
2. DUTIES OF THE ADMINISTRATOR. The Administrator shall:
2.1 Provide necessary and appropriate TCA services, including record
maintenance and financial transactions;
2.2 Xxxx and process TCA remittances for appropriate accounting
reconciliations;
2.3 Provide all required federal, state and local tax reporting, with
copies to TCA owners, as applicable, and with timely remittance of
withheld amounts;
2.4 Provide monthly, quarterly and annual reports, as applicable, with
respect to:
(a) the number and value of each in force TCA; and
(b) local, state and federal income taxes withheld by contract
number;
2.5 Maintain a current transaction file, including such fields as may
reasonably be required by the Company, with monthly reports to the
Company; and
2.6 Perform such other acts as may be necessary or appropriate to carry
out the foregoing or as may be agreed between the parties.
3. CAPACITY. The Administrator shall state in all correspondence that it is
acting as Administrator for the Company and shall include in such
correspondence and related forms a statement reasonably designed to
indicate clearly that the coverage is provided under a TCA of the Company.
Any letter sent to any TCA owner shall contain the name, address and
telephone number of the Company and, if the number of the TCA is contained
therein, will state the name of the Company next to the TCA number. If the
Administrator's address is included in any form indicating where the
completed form should be sent, it will indicate that the completed form is
to be sent to the Company care of the Administrator or to the Administrator
as Administrator for the Company. If any correspondence or related forms
state that the Administrator can be called for further information, the
Administrator's telephone number can be given; provided, however, that the
Administrator shall answer either in the name of the Company or in its name
as Administrator for the Company.
4. ADMINISTRATION.
4.1 The Administrator shall administer and service each TCA that is in
force as of the date of this Agreement in accordance with TCA terms
and conditions and the standards and practices specified by the
Company. The Administrator shall have all required power, both express
and implied, to carry out its duties and obligations under this
Agreement, including, without limitation, the power and authority to
sign documents in the name of the Company. The Company shall retain
the authority to make all final decisions with respect to TCA
administration. The failure of the Company affirmatively to exercise
such authority shall not constitute a waiver of such authority or an
omission for the purposes of Section 14.
4.2 All original files or suitable copies that are held by the Company or
produced by the Administrator pursuant to this Agreement (including,
but not limited to, all contract, correspondence and data processing
tapes and files) shall be the property of the Company. The
Administrator shall provide security for the files that are in its
possession, including disaster recovery procedures, and shall maintain
them in space segregated within a facility of the Administrator in
accessible form until such files are at the Company's direction and
expense transferred to the Company upon the termination of this
Agreement. The Administrator shall provide such files to the Company
promptly upon request and shall cooperate with any regulatory
authority having jurisdiction over the Company in providing access to
such files. Each party shall take all reasonable action necessary to
assure that at all times the Company shall have timely access to all
TCA information.
4.3 The Administrator shall provide to the Company such information and
documents as the Company may reasonably require from time to time to
track the TCA experience; prepare all reports required by law (or by
GAAP
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accounting regardless of whether required by law); respond to requests
by regulators, TCA owners or others; and otherwise take any actions
required or reasonably contemplated by this Agreement. The
Administrator shall provide to the Company any such information or
documents within thirty (30) days of the Company's request, unless the
production of such information requires a change in the
Administrator's procedures, in which case delivery at a mutually
agreed later date will be provided. The Company will reimburse the
Administrator for necessary changes in procedures except for those
deemed minimal by the Administrator.
4.4 The Administrator shall handle all Contract inquiries and
transactions, including, but not limited to, processing of TCA
withdrawals, giving TCA owners or others information about tax
reporting and providing TCA annual reports to TCA owners. The
Administrator shall not liberalize or waive TCA provisions (regardless
of past practice) without the Company's specific agreement.
4.5 The Administrator shall receive all TCA funds on behalf of the Company
in a fiduciary capacity and all such receipts shall be promptly
deposited in a separate bank account in the name and on behalf of the
Company or as the parties shall otherwise agree.
4.6 The Company and the Administrator and their designated agents may, on
reasonable notice, audit and copy all records and any other
information obtained, assembled, maintained or produced by or for the
Administrator, or pertaining to the performance of any of the services
of the Administrator, under this Agreement (including any claims or
financial audits or reviews) at the location of such records during
normal business hours. The audited party shall provide a reasonable
workspace for such audit, shall cooperate fully with and shall
disclose the existence of and produce any and all necessary and
reasonable materials requested by such auditors. Each party will bear
its own audit expenses. All such information, including audit reports
and analyses, will be kept confidential.
4.7 Upon the Company's request, the Administrator shall provide
appropriate documentation for verification of TCA payments or other
TCA transactions.
4.8 In order to pay TCA benefits, the Administrator shall establish a
checking account in the name of the Company or as the parties may
otherwise agree. The Company will pay account maintenance charges and
any check handling fees associated with this account.
4.9 The Administrator shall produce, using the Company's Federal ID
number, for the applicable tax years, while this Agreement is in
force, all required tax reporting tapes and printed forms, including
but not limited to Forms 1099R,
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1099MISC, 1099INT, W2-P, 5498. The Administrator shall also remit any
federal and/or state income taxes withheld at the designated rate,
including special rates prescribed for resident and nonresident
aliens, to the appropriate taxing authority at least as frequently as
required by the taxing authority. The Administrator will provide the
Company with a summary of applicable tax reports.
4.10 Net amounts due the Company or the Administrator in accordance with
this Agreement or the Reinsurance Agreement, for any month, shall be
promptly settled within thirty (30) days of receipt of notice of any
such net amounts due. All moneys due either party under this Agreement
shall be offset against each other, dollar for dollar, regardless of
any insolvency of either party.
4.11 The Administrator shall establish a file into which all correspondence
from or inquiries by any state regulatory agency concerning the
Administrator's TCA operations and the responses to such
correspondence or inquiries. The Administrator shall keep a file
register of such correspondence and shall provide a copy of the file
register to the Company on a quarterly basis. Any formal complaint or
regulatory inquiry brought by any state regulatory agency shall be
sent immediately to the Company. The Company shall be responsible for
the final resolution of any consumer complaint.
4.12 The parties shall abide by and conform to all applicable state laws,
rules and regulations of the various states in which they do business
pursuant to the Agreement, including minimum record keeping
requirements regarding origin, maintenance and reproduction of
information.
4.13 The Administrator shall defend or handle any legal or regulatory TCA
matter in the name and on behalf of the Company, at the
Administrator's expense, unless the Company shall assume the direct
handling of such matter at its expense, in which case the
Administrator shall be relieved of further liability; provided,
however, that no such matter shall be settled or compromised adverse
to the Company without the Company's prior written consent. The
Administrator shall not institute, prosecute or maintain any legal or
regulatory proceedings on behalf of the Company, except as may be
expressly provided in this Agreement without the prior written consent
of the Company.
4.14 Where required by law, the Administrator, at the expense of the
Company, shall give written notice to TCA owners of the identity of
the Administrator and of the relationship between the Administrator,
the Company and the TCA owners. The Administrator shall obtain the
Company's approval before the distribution of such notice, which
approval shall not be unreasonably withheld.
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4.15 The Administrator shall not use the Company's name, trademarks, logo
or the name of any other affiliated entity in any way or manner not
specifically authorized in writing by the Company. Any and all
materials bearing the Company's name or proposing to represent the
Company shall be approved by the Company prior to publication. All
advertising materials will be submitted to the Company for approval
prior to use.
4.16 In no event shall the Administrator solicit, negotiate, procure or
issue insurance policies or annuity contracts or otherwise act or hold
itself out as acting as an agent of the Company for the production or
underwriting of insurance.
5. COMPENSATION AND REIMBURSEMENT.
5.1 In recognition of the existence of the Reinsurance Agreement between
the parties with respect to the Contracts, it is agreed that the
Administrator shall perform the specified Services without additional
compensation or reimbursement for its general expenses.
5.2 The Administrator shall account and be reimbursed at cost for all
reasonable expenses authorized by this Agreement, out-of-pocket
expenses for long distance telephone costs and postage, service
charges for special incoming WATS (800) lines that are used
exclusively in connection with the Services and such other expenses as
the Company shall specifically authorize in advance.
5.3 The Administrator shall reimburse the Company for incorrect payments,
with interest at the then current TCA rate. The Company will cooperate
with the Administrator if the Administrator, at its own expense, seeks
recovery of erroneous payments.
6. INDEPENDENT CONTRACTOR. The Administrator shall be an independent
contractor and not an employee of the Company and the Administrator's
authority shall be limited as set forth in the provisions of this
Agreement.
7. INSURANCE. At the request of the Company, the Administrator shall, at its
own expense, maintain:
7.1 Valuable papers and records coverage in an amount equal to provable
worth (but not less than $100,000.00) for the protection of files,
records, and other property of the Company in the possession of the
Administrator; and
7.2 Electronic data processing coverage to include replacement value for
equipment (hardware) and data/media (software) and coverage for
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replacing entered computer data, in an amount equal to provable worth.
8. TERM AND TERMINATION. This Agreement shall terminate on the earlier to
occur of (1) the date this Agreement is terminated by either party as
provided herein or (2) the date that the TCA liability of the Company is
terminated. Either party may terminate this Agreement in the event that the
other party is in material breach of the terms or conditions of this
Agreement provided that the terminating party has notified the other party
of the breach and the other party has not initiated the cure of such breach
within thirty (30) days after such notice. This Agreement shall terminate
immediately upon the termination of the Reinsurance Agreement.
9. ASSIGNMENT AND BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective personal
representatives, successors and permitted assigns. Neither party may assign
this Agreement or any rights hereunder without the written consent of the
other party; provided, however, that the Administrator may assign this
Agreement or delegate duties under this Agreement to an affiliate of the
Administrator.
10. SEVERABILITY. In the event that any provision or term of this Agreement
shall be held by any court to be invalid, illegal or unenforceable, all of
the other terms and provisions shall remain in full force and effect to the
extent that their continuance is practicable and consistent with the
original intent of the parties. In addition, if provisions are held
invalid, illegal or unenforceable, the parties will attempt in good faith
to renegotiate the Agreement to carry out its original intent.
11. CHOICE OF LAW. This Agreement shall be construed in accordance with the law
of the State of New York without regard to the New York choice of law
rules.
12. NOTICE. Any notice required or permitted to be given hereunder shall be
deemed to be given if delivered by hand or if mailed by first class or
certified mail, postage prepaid, or by postal or a commercial express
document delivery service which issues an individual delivery receipt, to
the following address:
12.1 If to the Administrator, to
Xxxxx X. Xxxxxx, Associate General counsel
Metropolitan Life Insurance Company
1 MetLife Plaza
00-00 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxxx Xxxx. XX 00000
12.2 If to the Company, to
Xxxxxxx C, Xxxxxxx, Executive Vice President, General Counsel &
Secretary
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MetLife Investors USA Insurance Company
000 Xxxxxxxx Xxxxxx, Xxxxx 000
XX Xxx 00000
Xxxxxxxxxx, XX 00000
12.3 Either party may change its address by giving the other party written
notice of its new address.
13. COOPERATION. No less than ten (10) days before this Agreement terminates,
the Administrator shall provide to the Company an inforce TCA file and all
other documents and information necessary for it to assume TCA
administration. The Administrator will promptly update this information and
forward all TCA files and other documents and information as of the
termination date.
14. INDEMNIFICATION. Each party will indemnify and hold the other party, its
affiliates, directors, officers, employees and all other persons and
entities acting on behalf of or under the control of any of them harmless
from and against any and all claims, including reasonable attorneys fees
and court costs, that result from any negligent, dishonest, malicious,
fraudulent or criminal act or omission or arising out of or related to any
incorrect representation, warranty or obligation of this Agreement or any
failure or breach of this Agreement by the indemnifying party, its
directors, officers, employees, other representatives or any other person
or entity acting on behalf of or under the control of any of them.
15. LIMITATION OF LIABILITY. In no event shall either party to this Agreement
be liable to the other party for any punitive, indirect or consequential
damages arising under this Agreement for any cause whatsoever, whether or
not such party has been advised or could have foreseen the possibility of
such damages.
16. MERGER AND AMENDMENT. This Agreement constitutes the entire agreement and
merges and supersedes all prior oral or written agreements of the parties
and there are no understandings between the parties with regard thereto
other than as expressed herein. Any waiver of or failure to require
adherence to any provision of this Agreement in any instance or series of
instances by any party hereto shall not constitute a waiver of such
provision in any other instance or constitute a modification of the
Agreement. This Agreement may not be amended or modified except by a
written instrument signed by authorized representatives of the parties.
17. CONFIDENTIALITY. Each party shall maintain the confidentiality of all
information, including legally protected consumer privacy information, that
is provided to it by the other party in connection with this Agreement in
accordance with applicablr state and federal laws. However, this obligation
of confidentiality shall not apply (a) if and to the extent that disclosure
is required by applicable law or any court, governmental agency or
regulatory authority or by subpoena or discovery request
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in pending litigation; (b) if the information is or becomes available from
public information (other than as a result of prior unauthorized disclosure
by the disclosing party); (c) if the information is or was received from a
third party not known by the disclosing party to be under a confidentiality
obligation with regard to such information; or (d) if the information was
in the possession of the disclosing party (having received such information
on a non-confidential basis) other than by reason of the services performed
pursuant to this Agreement. In the event that either party becomes legally
compelled to disclose any secret or confidential information, such party
will give prompt written notice of that fact to the other party so that
such other party may seek an appropriate remedy to prevent such disclosure;
provided, however, that this provision shall not apply to information that
is or otherwise becomes available to the public or that was previously
available on a non-confidential basis.
18. ARBITRATION.
18.1 All disputes and differences between the parties will be decided by
arbitration, regardless of the insolvency of either party, unless the
conservator, receiver, liquidator or statutory successor is
specifically exempted from an arbitration proceeding by applicable
law.
18.2 Either party may initiate arbitration by providing written
notification to the other party. Such written notice shall set forth
(1) a brief statement of the issue(s); (2) the failure of the parties
to reach agreement; and (3) the date of the demand for arbitration.
18.3 The arbitration panel shall consist of three arbitrators. The
arbitrators must be impartial and must, either be accredited as an
arbitrator by XXXXX-US or be an active or former officer of a life
insurance or reinsurance company other than the parties or their
affiliates.
18.4 Each party shall select an arbitrator within thirty (30) days from the
date of the demand, If either party shall refuse or fail to appoint an
arbitrator within the time allowed, the party that has appointed an
arbitrator may notify the other party that, if it has not appointed
its arbitrator within the following ten (10) days, an arbitrator will
be appointed on its behalf. Within thirty (30) days after the
appointment of the second arbitrator, the two (2) arbitrators shall
select the third arbitrator, who must also be, at that time,
accredited by XXXXX-US as an umpire. If the two arbitrators fail to
agree on the selection, of the third arbitrator within the time
allowed, the Umpire Selection Procedures of XXXXX-US, as then in
force, shall be used to select the third arbitrator.
18.5 The arbitrators shall interpret this Agreement as an honorable
engagement rather than merely as a legal obligation and shall consider
practical
8
business and equitable principles as well as industry custom and
practice regarding the applicable insurance and reinsurance business.
The arbitrators are released from judicial formalities and shaft not
be bound by strict rules of procedure and evidence.
18.6 The arbitrators shall determine all arbitration schedules and
procedural rules. Organizational and other meetings will be held in
New York, NY. The arbitrators shall decide all matters by majority
vote. Judgment may be entered upon the final decision of the
arbitrators in any court of competent jurisdiction.
18.7 The decisions of the arbitrators shall be final and binding on both
parties. The arbitrators may, at their discretion, award costs and
expenses, as they deem appropriate, including but not limited to legal
fees and interest.
18.8 Unless the arbitrators shall provide otherwise, each party will be
responsible for (a) all fees and expenses of its respective counsel,
accountants, actuaries and other representatives in connection with
the arbitration and (b) one-half (1/2) of the expenses of the
arbitration, including the fees and expenses of the arbitrators.
19. ERRORS AND OMISSIONS. Neither party shall be relieved of liability because
of an error or accidental omission with respect to any TCA covered by or
Service to be provided under this Agreement, provided that the error or
omission is rectified promptly after discovery.
20. SURVIVAL. All provisions of this Agreement, to the extent necessary to
carry out the purposes of this Agreement or to ascertain and enforce the
parties' rights hereunder, shall survive its termination.
21. REGULATORY APPROVALS. This Agreement shall be put into effect as soon as
practicable after all required regulatory approvals have been obtained.
22. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and permitted
assigns.
23. COUNTERPARTS. This Agreement may be signed in any number of counterparts,
each of which shall be deemed an original and all of which shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of
the date first above written.
METLIFE INVESTORS USA INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Title: Executive Vice President
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ [ILLEGIBLE]
----------------------------
Title: Vice President
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