Exhibit (g)(6)
THIS REINSURANCE AGREEMENT
is made between
[name of reinsurance company]
of [city and state of reinsurance company]
(hereinafter referred to as "the Reinsurer")
and
IDS LIFE INSURANCE COMPANY OF NEW YORK
of 00 Xxxxxxxx Xxxxx Xxxx, Xxxxxx, XX 00000
(hereinafter referred to as "the Company")
The following Articles, qualified by the
Exhibits of the Agreement, will form
the basis of the Agreement.
This Agreement may be referred to as Agreement No. BA052-86
TABLE OF CONTENTS
ARTICLES
I Business Covered - Forms and Manuals - Underwriting and Issue Rules
II Amounts of Coverage - Facultative Coverage
III Plan of Reinsurance - Reinsurance Premiums - Conversions
IV Mode of Cession - Papers for Automatic Cessions - Data Notification
V Premium Accounting
VI Liability - Conditional or Interim Receipt Liability - Amount and Duration - Currency - Taxes and
Expenses
VII Policy Changes - Lapses - Reinstatements - Minimum Cession - Unearned Premium
VIII Increase in Retention - Recapture
IX Claims
X Oversights - Arbitration
XI Insolvency
XII Alterations to Agreement - Parties to Agreement - Inspection of Records
XIII Duration of Agreement - Severability - Benefit - Construction
EXHIBITS
A-I Business Covered
A-II Underwriting Forms and Issue Rules
B Application for Reinsurance
C Premium Rates and General Terms, Administration Instructions
D The Ceding Company's Retention Limits
E The Reinsurer's Automatic Acceptance Limits
F Reinsurance Listing
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ARTICLE I
Business Covered This Agreement applies to all insurance policies and supplementary benefits and
riders attached thereto, set out in Exhibit A-1 which are accepted by the Company
in accordance with the underwriting evidence and issue rules set out in Exhibit
A-II. These policies, benefits and riders will be at the rates shown in the rate
manual and will provide the coverages shown in the policy forms supplied to the
Reinsurer and in force at the date of this Agreement.
The Company agrees to cede to the Reinsurer and the Reinsurer agrees to accept
automatically, in accordance with the terms of this Agreement, amounts of the
above life insurance and benefits that exceed the Company's retention. The
Company's retention limits are set out in Exhibit D.
The amounts retained by the Company on the business covered by this Agreement
shall not be reinsured by the Company on any basis whatsoever without the
agreement of the Reinsurer.
Reinsurances accepted by the Company shall not be included hereunder unless
mutually agreed otherwise by the Company and the Reinsurer.
Forms and Manuals The Company agrees to file with the Reinsurer, copies of all appropriate policy
forms, rate manuals, retention schedules, application forms, receipts, underwriting
questionnaires (e.g. financial, smokers, etc.), authorization forms for release of
medical information and other related material. If new material is published, or
changes made in the material already filed, the Company agrees to promptly provide
the Reinsurer with copies of such material.
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The Company hereby declares that its forms are in accord with current M.I.B.
regulations.
Underwriting and Issue The Company hereby declares and agrees that all policies and benefits covered
Rules under this Agreement shall be issued in accordance with the Company's normal
underwriting rules for each such policy and/or benefit and which are in effect at
the commencement date of this Agreement. These rules shall be provided to the
Reinsurer on request and any material change in these rules shall be subject to
the approval of the Reinsurer before being applied to policies and benefits to be
covered by this Agreement.
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ARTICLE II
Amounts of Coverage Except as provided below for facultative coverage, whenever the Company retains
its full retention (as at the time of underwriting) on any one life, taking into
account the age and mortality classification of the life insured in question, the
Company shall cede to the Reinsurer all the excess up to the limits specified in
Exhibit E. The Reinsurer agrees to accept such business automatically.
It is understood that the amount retained by the Company shall include its
retention under any previous issues.
Facultative Coverage If the Company receives an application that meets any of the criteria below, the
reinsurance shall be on a facultative basis:
(a) applications for amounts in excess of the Company's retention and the
Reinsurer's automatic coverage;
(b) applications on any one life if the total of the new reinsurance and the
amount already reinsured on that life under this Agreement and all other
Agreements with the Reinsurer exceeds the automatic acceptance limits set
out in Exhibit E;
(c) applications on lives under which the Company intends to retain none of the
risk or less than its appropriate retention for the age and rating;
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(d) applications on any one life if the total of the application and all amounts
currently applied for, together with the amount already in force on that one
life exceeds the jumbo limit set out in Exhibit E;
(e) applications on any life, if that life has been offered on a facultative
basis to the Reinsurer or any other reinsurer.
Any application for a policy on a plan shown in Exhibit A-1 may be offered
facultatively.
The relevant terms and conditions of this Agreement shall apply to those
facultative applications that are accepted by the Reinsurer.
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ARTICLE III
Plan of Reinsurance Reinsurance under this Agreement shall be on a Yearly Renewable Term basis for the
net amount at risk on that portion of the Company's policy which is reinsured with
the Reinsurer. The net amount at risk shall be the difference between the gross
amount of reinsurance and the cash values of the Company applicable to the face
amount reinsured and subject to the "ten year level decrement" (if appropriate)
method of approximation. However, commuted values may be used, if applicable,
(e.g. in the case of F.I.B. plans) to determine the net amount at risk. Where the
original policy is issued on a term plan for [number] years or less, reinsurance
shall be for the gross amount, and cash values shall be disregarded.
Reinsurance of Waiver of Premium and Accidental Death Benefits shall be in
accordance with the Company's original forms.
Reinsurance Premiums The premiums to be paid to the Reinsurer by the Company for reinsurance shall be
in accordance with the terms set out in Exhibit C, attached hereto.
The premium for each policy year shall be the product of the appropriate rate
based on the issue age and duration from issue and the amount at risk for that
year, together with any policy fee payable.
Conversions In the event of the conversion of a policy reinsured hereunder, the policy arising
from the conversion shall be reinsured with the Reinsurer. The amount to be
reinsured shall be determined on the same basis as used for the original policy
(e.g. excess of retention, quota share) but shall not exceed the amount reinsured
as at
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the date of the conversion unless mutually agreed otherwise. If the contract
arising from a conversion is on a plan that is reinsured on a YRT basis, or is not
covered by any reinsurance agreement with the Reinsurer, reinsurance will be on a
YRT basis on the rates set out in Exhibit C. The appropriate YRT rate at the
attained age and duration of the original policy would be used unless stated
otherwise in Exhibit C. If the contract arising from the conversion is on a plan
reinsured on a coinsurance basis with the Reinsurer, the appropriate premium at
the attained age would be used and the policy year for the purpose of commission
rates would be based on the duration of the original policy, unless stated
otherwise in Exhibit C.
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ARTICLE IV
Mode of Cession Automatic Cessions
For all automatic cessions the Company shall advise the Reinsurer in the manner
described in Exhibit F.
Facultative Cessions
The Company may apply for reinsurance by mailing to the Reinsurer, copies of all
pertinent papers, including the original application, medical examination,
inspection reports, physician's statements, urinalyses, and all other information
which the Company may have relating to the insurability of the risk along with an
Application for reinsurance, a sample of which is attached as Exhibit B. The
Company shall indicate on the application that the cession is to be processed on a
self-administered (bulk) basis.
After consideration of the reinsurance application and papers, the Reinsurer shall
promptly inform the Company of its underwriting decision. If the underwriting
decision is acceptable to the Company and the Company's policy is subsequently
placed in force in accordance with the placement rules set out in Exhibit A-II,
the Company shall notify the Reinsurer in accordance with the method agreed with
the Reinsurer. The Company shall indicate that the cession is to be processed on a
self-administered (bulk) basis.
If any application to the Reinsurer is not to be placed with the Reinsurer, the
Company shall advise the Reinsurer in writing (indicating the reason for
non-placement) so that the Reinsurer can complete its records.
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Papers For Automatic Copies of the medical and other papers shall be sent for automatic reinsurance of
Cessions any life at the request of the Reinsurer.
Data Notification For all business reinsured under this Agreement, the Company shall provide the
Reinsurer with the Reports in the manner as set out in Exhibit F.
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ARTICLE V
Premium Accounting The Company undertakes to send to the Reinsurer during each accounting period an
account as set out in Exhibit F showing all first year and renewal premiums which
became due during the previous accounting period. Also included will be any
adjustments made necessary by changes in reinsurance effective during the previous
month, or changes due to any agreed errors on a previous account.
The balance due shall then become payable. If the balance so calculated is due to
the Reinsurer, the Company shall forward a remittance in settlement with the
account. If the balance is due to the Company, the Reinsurer shall forward a
remittance in settlement within fifteen (15) days of receipt of the account.
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ARTICLE VI
Liability The Reinsurer shall indemnify the Company for the amount of the Company's
contractual insurance reinsured hereunder. The liability of the Reinsurer shall
commence simultaneously with that of the Company for all cessions ceded and
accepted by the Reinsurer in accordance with the terms of this Agreement. If,
however, a case is offered facultatively to any other reinsurer, the liability of
the Reinsurer shall commence when the Reinsurer has received notice in such
written form as agreed to by the Reinsurer, that the Reinsurer's offer has been
accepted, provided that in no case will the Reinsurer's offer be deemed to be
still open after sixty (60) days have elapsed from the date of the final offer,
unless the Reinsurer explicitly states in writing that the offer is extended for
some further period of time.
The Reinsurer may assume liability for claims arising prior to the time of
notification if it is shown to the satisfaction of the Reinsurer that the policy
would have been reinsured with the Reinsurer.
Conditional or Interim For claims admitted by the Reinsurer that have arisen under the conditional
Receipt Liability receipt or interim receipt coverage (a copy of which is set out in Exhibit A-II),
the liability of the Reinsurer under no circumstances shall exceed the lesser of:
(a) [dollar amount] or
(b) the automatic acceptance limits or
(c) the difference calculated by taking the amount of insurance provided by the
conditional receipt or interim receipt and subtracting the Company's maximum
retention had the life in question been
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underwritten as standard. The Company's retention shall include any net
amounts retained then by the Company in respect of the life.
Amount and Duration The liability of the Reinsurer for all cessions under this Agreement shall cease
at the same time as the liability of the Company ceases and shall not exceed the
Company's contractual liability under the terms of its policies. The Reinsurer is
not liable for extracontractual damages, such as punitive damages, bad faith
damages or other damages which may arise from the acts or omissions of the Company
in its conduct with its own insured, policyowner, beneficiary or assignee of the
policy or others.
Notwithstanding the foregoing, the Reinsurer at its option, on fifteen (15) days
notice to the Company in writing, may terminate its liability for any reinsurances
for which the reinsurance premiums have not been paid within sixty (60) days after
billing.
Currency All cessions under this Agreement shall be effected in the same currency as the
original policy and the premiums and liabilities shall be expressed and payable in
that currency.
Taxes and Expenses Apart from any taxes, allowances, commissions, refunds, and expenses specifically
referred to elsewhere in this Agreement, no commissions, allowances, taxes or
proportion of any expense shall be paid by the Reinsurer to the Company in respect
of any cession.
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ARTICLE VII
Policy Changes Changes to policies reinsured under this Agreement shall be made in accordance
with the provisions set out below.
If the change affects the plan, the amount of reinsurance, premiums or commissions
under the cession, the Company shall inform the Reinsurer in the subsequent
Reinsurance Report as set out in Exhibit F.
Plan Changes
(i) Automatic Cessions:
Whenever the plan of insurance on any policy reinsured hereunder is being
changed, including internal replacements, and the Company is not obtaining
evidence in accordance with the Company's full new business issue
underwriting rules, the reinsurance shall remain in effect with the
Reinsurer on the following basis:
(a) the reinsurance rates and the durations shall be based on those
applicable to the original cession;
(b) the reinsurance amount at risk shall be determined according to the
terms of this Agreement but in no event shall be more than the
original cession at the time of the change in plan.
(ii) Facultative Cessions:
Any changes shall be subject to the Reinsurer's approval.
For plan changes and replacements which are made in accordance with the Company's
new business underwriting rules, the reinsurance terms shall be agreed by the
Company and the Reinsurer.
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Increase in Amount and Reunderwriting
(a) Automatic Cessions
Any reunderwriting, including any change in rating or class, or
non-contractual increase in amount at risk for any cession shall be subject
to the Company's full new business issue underwriting rules or as agreed
otherwise with the Reinsurer. If the amount of the policy shall increase
above the jumbo limit (Exhibit E) or if the amount to be reinsured exceeds
the automatic coverage limits, the increase shall be subject to the
Reinsurer's approval.
(b) Facultative Cessions
Any non-contractual increase or reunderwriting, including any change in
rating or class, shall be subject to the Reinsurer's approval.
Reductions and Cancellations
If all or any part of the original amount of insurance upon which reinsurance is
based shall be reduced in amount or terminated, or if all or any part of the
original insurance in force at the date reinsurance was effected and not covered by
previous reinsurance shall be reduced in amount or terminated, the amount of
reinsurance shall be reduced by a like amount as of the date of such reduction or
termination; in no case, however, shall the Company be required to assume a risk
for an amount in excess of its regular retention for the age at issue and mortality
rating of the policy under which reinsurance is being terminated. If reinsurance
has been effected in more than one company, the reduction in the reinsurance
carried by the Reinsurer shall not exceed that proportion of the total amount of
reduction which the reinsurance carried by the Reinsurer bears to the total amount
reinsured.
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The above Reduction and Cancellation terms shall not apply to fluctuations in the
amount at risk caused by the normal workings of the cash value fund in Universal
Life type plans. All such fluctuations shall be shared in such a way as to maintain
the original proportion of reinsurance.
Extended Term
Reinsurance on policies changed to an extended term basis shall be subject to an
additional extra premium of one table.
Special Changes
If any special or unusual change, which is not covered above and which may affect
the terms of the cession in question, is requested, the Reinsurer's approval shall
be obtained before such a change becomes effective.
Lapses When a reinsured policy lapses, the cession in question shall be cancelled. If the
Company allows extended or paid-up insurance following a lapse, the reinsurance
will be appropriately amended. If the Company allows the policy to remain in force
under its automatic premium loan regulations, the reinsurance shall continue
unchanged and in force as long as such regulations remain in effect, except as
provided for otherwise in this Agreement.
Reinstatements If a policy reinsured on an automatic basis is reinstated in accordance with its
terms or the rules of the Company set out in Exhibit A-II, the reinsurance shall be
reinstated automatically by the Reinsurer. Notification of reinstatement shall be
mailed to the office of the Reinsurer not later than four weeks after the
reinstatement of the original policy. The approval of the Reinsurer must be
obtained before any policy reinsured on a facultative basis may be reinstated.
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Minimum Cession For Universal Life type plans where the amount at risk fluctuates, a minimum of
[dollar amount] of reinsurance shall be kept in force, notwithstanding any terms
to the contrary, until the time the reinsurance may be cancelled permanently in
full according to the terms of this Agreement (e.g. lapse, reduction, etc.). For
other plans, the minimum initial amount to be reinsured shall be as set out in
Exhibit C. Reinsurance under this Agreement shall be cancelled automatically
whenever the net amount at risk becomes less than the Minimum Final Reinsurance
Limit set out in Exhibit C.
If the Minimum Final Reinsurance Limit is increased, the new limit shall not apply
to any cessions existing at the time of the increase until they have been in force
for at least five years.
Unearned Premium The Company shall take credit, without interest, for any unearned premiums, net of
allowances, arising due to reductions or cancellations or death claims, in its
account. The Company shall pay the balance of arrears of premiums due under a
reinstated cession. In the event of termination, lapse or death claim, unearned
premiums, net of allowances and policy fees, will be refunded according to the
following formula:
Number of days to next policy anniversary
----------------------------------------- x premium
365
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ARTICLE VIII
Increase in Retention The reinsurance under this Agreement shall be maintained in force without
reduction except as specifically provided for elsewhere in this Agreement.
The Company may increase its limits of retention on new business being issued at
any time by giving written notice to the Reinsurer of the new limits of retention
and the effective date of such new retention schedule.
The Company's retention limits are set out in Exhibit D.
Recapture The Company may apply the new limits of retention to existing reinsurance and
reduce reinsurance in force in accordance with the following rules.
(a) The Company shall give the Reinsurer written notice of its intention to
apply the new limits of retention to existing business.
(b) Such reductions shall be made on the next anniversary of each cession
affected but no reduction shall be made until such reinsurance has been in
force for the period stated in Exhibit C.
(c) A reduction may be made only if the Company retained its maximum limit of
retention for the plan, age and mortality rating at the time the policy was
issued.
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(d) Any class of fully reinsured business or any classes of risks for which the
Company established special retention limits less than the Company's maximum
retention limits for the plan, age and mortality rating at the time the
policy was issued, are not eligible for reduction.
(e) A reduction may be made only if the Company has applied its increase in
retention in a consistent manner to all categories of its normal retention
limits. No reduction shall be made if the Company has stop loss reinsurance
for the business covered hereunder.
In applying its new retention to existing reinsurance, the rating at the time of
issue and the issue age of the existing reinsurance shall be used to determine the
amount of the Company's new retention.
Recapture as provided herein shall be optional with the Company, but if any
reinsurance is recaptured, all reinsurance eligible for recapture under the
provisions of this Article must be recaptured.
If there is reinsurance in other companies on risks eligible for recapture, the
necessary reduction is to be applied pro rata to the total outstanding reinsurance.
The Reinsurer shall not be liable, after the effective date of recapture, for any
cessions or portions of such cessions eligible for recapture, which the Company has
overlooked. The Reinsurer shall be liable only for a credit of the premiums,
received after the recapture date, less any commission or allowance and without
interest.
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If there is a Waiver of Premium (W.P.) claim in effect when recapture takes place,
the W.P. claim shall stay in effect until the W. P. claim terminates. The Reinsurer
shall not be liable for any other benefits, including the basic life risk, that are
eligible for recapture. All such eligible benefits shall be recaptured as if there
was no W.P. claim.
If there is an extension of that W. P. claim under the terms of the Company's
policy, the Reinsurer shall pay its share of the W. P. benefit, provided the
Company pays to the Reinsurer all W. P. premiums for the period from the date of
recapture.
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ARTICLE IX
Claims The Reinsurer shall be liable to the Company for the benefits reinsured and
reinsurance shall not exceed the Company's contractual liability under the terms
of its policies. However, payment of death claims by the Reinsurer shall be in one
lump sum regardless of the mode of settlement under the original policy.
Copies of all underwriting and claims papers shall be mailed immediately by the
Company to the Reinsurer. The settlement made by the Company shall be binding on
the Reinsurer, however, for claims made during the contestable period or in any
case where the total amount of reinsurance ceded to the Reinsurer is greater than
the amount retained by the Company, or if the Company retained less than, or none
of, its usual retention on the basic plan or supplementary benefits and riders,
then all papers in connection with the claim shall be submitted to the Reinsurer
and the Company shall wait for up to ten days from the date of mailing for the
Reinsurer's recommendation before conceding liability or making settlement to the
claimant.
The Company shall provide the Reinsurer with all further reports and papers
required by the Reinsurer for its consideration of the claim.
Should any claim be settled on a reduced compromise basis, or should a contested
claim be settled for a reduced sum, the Company and the Reinsurer shall
participate in such reductions in proportion to their respective liabilities under
the policy or policies reinsured.
Likewise shall any special expense for investigative or legal fees (excluding
compensation of salaried employees) be shared.
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In the event that the Reinsurer does not deem it advisable to contest a claim, and
pays the Reinsurer's share of the death benefit, the Reinsurer shall not be liable
for any special expenses incurred by the Company in contesting the claim.
The Reinsurer shall indemnify the Company for the amount of the Company's
contractual insurance reinsured hereunder. The liability of the Reinsurer shall
commence simultaneously with that of the Company for all cessions ceded and
accepted by the Reinsurer in accordance with the terms of this Agreement.
The Reinsurer is not liable for extracontractual damages, such as punitive damages,
bad faith damages or other damages which may arise from the acts or omissions of
the Company in its conduct with its own insured, policyowner, beneficiary or
assignee of the policy or others.
In the event of an increase or reduction in the amount payable under a policy due
to misstatement in age, the proportionate liabilities hereunder shall be the basis
for determining each party's share of any increase or reduction in settlement of
the claim. The Reinsurance Cession shall be rewritten from commencement on the
basis of the adjusted amounts using premiums and amounts at risk at the correct
ages, and proper adjustment for the difference in reinsurance premiums, without
interest, shall be made.
The Reinsurer shall pay to the Company premiums at the rate applicable to the
original policy for the life and supplementary benefits reinsured hereunder on any
policy approved for a waiver of premium claim, provided always that the waiver of
premium benefit applicable to such benefits has been reinsured hereunder.
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ARTICLE X
Oversights It is agreed that in the event that any unintentional or accidental failure to
comply with the terms of this Agreement can be shown to be the result of a
misunderstanding, oversight or clerical error, both parties shall be restored to
the position they would have occupied had the misunderstanding, oversight or
clerical error not occurred.
This provision shall apply only to misunderstandings, oversights or clerical
errors relating to the administration of reinsurance covered by this Agreement and
not to the administration of the insurance provided by the Company to its insured.
Any negligent or deliberate acts or omissions by the Company regarding the
insurance provided are the responsibility of the Company and its liability
insurer, if any, but not that of the Reinsurer.
Arbitration Any controversy or claim arising out of or relating to this contract, or the breach
thereof, shall be settled by arbitration, and the arbitrators, who shall regard
this Agreement from the standpoint of practical business as well as the law, are
empowered to determine as to the interpretation of the treaty obligation.
Each party shall appoint one arbitrator and these two arbitrators shall select a
third arbitrator within two weeks of the appointment of the second. The second
arbitrator is to be selected within two weeks after the notice is provided that
the first arbitrator is selected. If either party declines to appoint an
arbitrator or should the two arbitrators not agree on the choice of the third,
then the appointment shall be left to the President for the time being of the
American Council of
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Life Insurance. All three arbitrators must be officers of Life Insurance Companies
or Life Reinsurance Companies, excluding however, officers of the two parties to
this Agreement, their affiliates or subsidiaries or past employees of any of these
entities. The place of meeting of the arbitrators shall be decided by a majority
vote of the arbitrators. The written decision of a majority of the arbitrators
shall be final and binding on both parties and their respective successors and
assigns. All costs of the arbitration and expenses and fees of the arbitrators
shall be borne equally by the parties.
The arbitrators shall render a decision within four months of the appointment of
the third arbitrator, unless both parties agree otherwise. In the event no
decision is rendered within four months, new arbitrators shall be selected as
above.
Alternatively, if both parties consent, any controversy may be settled by
arbitration in accordance with the rules of the American Arbitration Association.
Judgement upon the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof.
It is specifically the intent of both parties that these arbitration provisions
shall replace and be in lieu of any statutory arbitration provision, if the law so
permits.
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ARTICLE XI
Insolvency In the event of the insolvency of either the Reinsurer or the Company, any amounts
owed by the Company to the Reinsurer and by the Reinsurer to the Company with
respect to this Agreement shall be set-off and only the balance shall be paid.
The Reinsurer shall be liable only for the amounts reinsured and shall not be or
become liable for any amounts or reserves to be held by the Company on policies
reinsured under this Agreement.
All reinsurance under this Agreement shall be payable by the Reinsurer directly to
the Company, its liquidator, receiver or statutory successor, on the basis of the
liability of the Company under the policy or policies reinsured without diminution
because of the insolvency of the Company. It is understood, however, that in the
event of such insolvency, the liquidator or receiver or statutory successor of the
Company shall give written notice of the pendency of a claim against the Company on
the policy reinsured within a reasonable time after such claim is filed in the
insolvency proceedings, and that during the pendency of such claim the Reinsurer
may investigate such claim and interpose, at its own expense, in the proceedings
where such claim is to be adjudicated, any defense or defenses which it may deem
available to the Company or its liquidator or receiver or statutory successor.
It is further understood that the expense thus incurred by the Reinsurer shall be
chargeable, subject to court approval, against the Company as part of the expense
of liquidation to the extent of a proportionate share of
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the benefit which may accrue to the Company solely as a result of the defense
undertaken by the Reinsurer. 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 the reinsurance
Agreement as though such expense had been incurred by the Company.
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ARTICLE XII
Alterations to Agreement Any alteration which may from time to time become necessary in this Agreement
shall be made by addendum or by correspondence attached to the Agreement embodying
such alterations as may be agreed upon and taken as part of this Agreement and
equally binding.
Parties to This is an Agreement solely between the Company and the Reinsurer. The acceptance
Agreement of reinsurance here- under shall not create any right or legal relation between
the Reinsurer and the insured, beneficiary, or any other party to any policy of
the Company which may be reinsured hereunder.
Inspection of The Reinsurer shall have the right, at any reasonable time, to inspect at the
Records office of the Company all records, books and documents relating to the insurance
under this Agreement.
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ARTICLE XIII
Duration of Agreement This Agreement is effective as from the date set out in Exhibit A and is unlimited
as to its duration. It may be made inapplicable to future insurances either in
whole or in part by either party giving at least ninety (90) days notice to that
effect by registered letter addressed to the other party at its office as stated
on the first page of this Agreement. During the period of such ninety (90) days
the Reinsurer shall continue to participate in all insurances coming under the
terms of this Agreement. Further, the Reinsurer remains liable for all cessions
existing at the date of the expiration set forth in the notice until their natural
expiration, unless the parties mutually decide otherwise or as specified otherwise
in this Agreement.
Severability In the event that any of the provisions herein contained shall be invalid or
unenforceable, such declaration or adjudication shall in no manner affect or
impair the validity or the enforceability of the other and remaining provisions of
this Agreement and such other and remaining provisions shall remain in full force
and effect as though such invalid or unenforceable provisions or clauses had not
been herein included or made a part of this Agreement.
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Benefit Except as herein otherwise provided, this Agreement shall be binding upon the
parties hereto and their respective successors and assigns.
Construction This Agreement shall be construed and administered in accordance with the laws of
the State of New York and the rights and obligations of this Agreement shall, at
all times, be regulated under the laws of the State of New York.
Made in duplicate and executed by both parties.
Signed for and on behalf of IDS LIFE INSURANCE COMPANY OF NEW YORK
[ILLEGIBLE]
Albany, this day of ,19
Signed for and on behalf of [name of reinsurance company]
[signature] [signature]
[city and state of reinsurance company], this 7th day of May 1986
Prepared by [signature]
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EXHIBIT A-I
BUSINESS COVERED
Effective Date:
October 1, 1985. The commencement dates for specific business are shown below.
Business Covered:
The policies, riders and supplementary benefits on the plans shown below with
policy issue dates falling in the period that begins with the Commencement Date
and ends with the Termination Date are covered subject to any limitations shown
below or elsewhere in this Agreement.
Limitations:
1. All policies on lives with surnames commencing with the letters H to P
inclusive a re eligible for automatic and facultative coverage. (Policies
on other lives may be offered on a facultative basis only.)
Commencement Termination
Policies Form No. Limitations Date Date
-------- -------- ----------- ---- ----
Universal Life 50 (UL50) Lives H to P October 1, 1985
as in 1. above
Universal Life 100 (UL100) As above As above
Riders
N/A
Supplementary Benefits
Waiver of Premium A above As above
EXHIBIT A-II
COMPANY'S UNDERWRITING FORMS AND
EVIDENCE AND ISSUE RULES
The following information and items are to be included in this Exhibit by the
Company.
1. Policy Application Form and Part II
2. Conditional Receipt and/or Temporary Receipt Forms
3. Policy Delivery Rules and Reinstatement Rules
4. Non-medical and Medical Requirements
5. Underwriting Approval Limits
6. Financial and Non-smoking Questionnaires
[logo]
APPLICATION FOR REINSURANCE EXHIBIT B
TO
[NAME OF REINSURANCE COMPANY]
FROM
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------- --------------- ------ -------
NAME DATE AGE SEX
OF BIRTH
--------------------------------------------------------------- --------------- ------ -------
LAST NAME FIRST NAME MIDDLE NAME
-------------------------------------------------------------------------------------------------------------------------
PLAN SMOKER |_| NON SMOKER |_| REUNDERWRITING |_|
-------------------------------------------------------------------------------------------------------------------------
CURR. |_| RESIDENCE FOR |_| POLICY |_| POLICY |_| PRELIMINARY |_|
PREMIUM TAX NUMBER DATE TERM FROM
TYPE OF APPLICATION FACULTATIVE |_| AUTOMATIC |_| PLACEMENT |_| SELF ADMINISTERED |_| TERMS YRT |_| COINSURANCE |_|
DECREMENT CASH |_| RESERVES |_| AGE |_| RETENTION CODE |_| FULL |_| REDUCED |_| NIL |_|
VALUES BASIS
------------------------------------------------------------------------------------------------------------------------------------
REINSURANCE AMOUNTS BASIC LIFE COVERAGE ADDITIONAL WAIVER PREMIUM ACCIDENTAL OTHER BENEFITS
LIFE COVERAGE BENEFIT DEATH BENEFIT
------------------------------------------------------------------------------------------------------------------------------------
PREVIOUS INSURANCE IN FORCE --
---------------------------------------------------------------------------------------------------
OF WHICH WE RETAINED --
---------------------------------------------------------------------------------------------------
INSURANCE NOW APPLIED FOR --
---------------------------------------------------------------------------------------------------
OF WHICH WE WILL RETAIN --
---------------------------------------------------------------------------------------------------
REINSURANCE THIS CESSION --
---------------------------------------------------------------------------------------------------
EXTRA PREMIUM --
---------------------------------------------------------------------------------------------------
RATING IF SUBSTANDARD --
---------------------------------------------------------------------------------------------------
COINSURANCE PREMIUM --
------------------------------------------------------------------------------------------------------------------------------------
FOR YRT CASES STATE GROSS
PREMIUMS AND EXPIRY AGES AMOUNT OF PREMIUM ANNUAL DECREMENT
FOR BENEFITS WP AD OTHER TO BE WAIVED: FOR AMOUNT AT RISK
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
CONFIRMATION OF REINSURANCE PENDING (TO BE COMPLETED BY CEDING COMPANY)
WHEN POLICY PLACED, COMPLETE SECTION BELOW AND MAIL THIS PAGE TO [NAME OF REINSURANCE COMPANY].
THE [NAME OF REINSURANCE COMPANY] WILL THEN SEND A FORMAL REINSURANCE CESSION
|_| OUR POLICY PLACED AND REINSURANCE REQUIRED AS APPLIED FOR (OR AS QUOTED BY [NAME OF REINSURANCE COMPANY]).
|_| OUR POLICY PLACED AND REINSURANCE REQUIRED, BUT WITH THE FOLLOWING CHANGES:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
------------------ --------------------
DATE BY
------------------ --------------------
PAGE 3
PRINTED IN CANADA (08/85) [GRAPHIC OMITTED]
EXHIBIT C
Page 1
FOR UNIVERSAL LIFE PLAN
GENERAL TERMS
1. RATES: The rates set out in Exhibit C ("Current Rate") shall be used for
the reinsurance of any policy on a plan covered automatically provided
that the total reinsurance amount, ceded annually to the Reinsurer on a
facultative basis under this Agreement, does not exceed [percentage] of
the total amount reinsured on an automatic basis.
For the purpose of the above calculation, any cessions containing policy
dates in the calendar year in question shall be included in the
calculation. It Is understood that the Reinsurer's year-end records shall
be used to determine the proportion of facultative business, and if the
proportion exceeds [percentage] the Reinsurer reserves the right to adjust
the reinsurance rates for facultative business.
2. PREMIUM TAX: The Reinsurer shall not make a separate reimbursement of
premium tax.
3. RATE GUARANTEE: For technical reasons relating to deficiency reserve
requirements, reinsurance rates contained in this Agreement cannot be
guaranteed for more than one year, except that in no case may rates be
increased beyond the appropriate one year term premiums calculated at
[percentage] of the 1958 C.S.O. aggregate mortality table at [percentage]
interest.
4. MINIMUM INITIAL REINSURANCE LIMIT:
[dollar amount] facultative.
[dollar amount] automatic.
MINIMUM FINAL REINSURANCE LIMIT: [dollar amount]
5. REINSURANCE BASIS: The rates are on a non-participating basis.
6. YRT RATES FOR CONVERSIONS: MG111 YRT rates.
7. RECAPTURE PERIOD: [number] Years.
8. NET AMOUNTS AT RISK: If the death benefit is Option 2, the amount at risk
will be the gross amount of reinsurance. When the death benefit is Option
1, the amount at risk win be the difference between the gross amount of
reinsurance and the cash values applicable to the face amount reinsured.
EXHIBIT C
Page 2
FOR UNIVERSAL LIFE PLAN
INSTRUCTIONS FOR ADMINISTRATION
The following shall apply in connection with the administration of
non-experience rated premium rates.
LIFE REINSURANCE
1. The life reinsurance rates are shown on a per thousand dollar basis. There
shall be no policy fee payable. These rates shall be reduced by the
following allowances:
Non-Smoker Smoker
------------ ------------
First Year [percentage] [percentage]
2nd to 10th Year [percentage] [percentage]
Thereafter [percentage] [percentage]
2. For policies issued to lives aged 0 through 19, Non-smoker rates will not
apply. The Smoker rates will be used for all insurance issued at ages 0
through 19 and will continue to be used until the insurance switches to a
Smoker/ Non-smoker plan.
3. When a flat extra premium is payable for 5 years or less, an allowance of
10% of the gross flat extra charged by the Company will be made each year.
When a flat extra premium is payable for more than 5 years, an allowance
of 85% of the gross flat extra charged by the Company will be made in the
first year and an allowance of 12 (1)/2% in each year thereafter.
4. The rates will apply to reinsurance amounts of up to $3,000,000 on any one
life. Individual consideration will be given to the rate for any amounts
over $3,000,000.
5. For Substandard risks issued at table ratings, multiply the above rates by
the appropriate mortality factor.
Mortality Mortality
Table Rating Factor Table Rating Factor
------------------ ------------- ----------------- --------------
1 OR A [percentage] 6 OR F [percentage]
1.5 AA [percentage] 7 G [percentage]
2 B [percentage] 8 H [percentage]
2.5 BB [percentage] 9 1 [percentage]
3 C [percentage] 10 j [percentage]
4 D [percentage] 12 L [percentage]
5 E [percentage] 16 P [percentage]
6. All business will be reinsured on a Smoker/ Non-smoker basis, and the
Company will indicate to the Reinsurer any policy that is issued on a
Non-Smoker basis. If there is no such indication, the policy will be
processed on a Smoker basis.
EXHIBIT C
Page 3
7. Conversions to UL50 or UL100 will be on a YRT basis on the rates set out
in Exhibit C. The appropriate premium at the attained age shall be used
and the policy year for the purpose of allowances shall be based on the
duration of the original policy.
OTHER BENEFITS AND RATINGS
For Waiver of Premium, Accidental Death, Double Indemnity, Payor Death and
Disability, Occupational, Aviation and Residence premiums, an allowance of
[percentage] of the gross premium charged by the Company in the first year will
be paid and an allowance of [percentage] in each year thereafter.
EXHIBIT C
Page 4
UL-50
RATE AND EXPENSE CHARGE TABLE MALE
------------------------------------------------------------------------------------------------------------------
ANNUAL COST OF INSURANCE PER $1,000
----------------------------------------------------------------------------------
First Year Standard Non-Smoker
Annual Expenses -------------------------------------- -----------------------------------------
Att. Charge Per Current Waiver of Current Waiver of
Age $1000 Rate Mo. Ded. ADB Rate Mo. Ded. ADB
------------------------------------------------------------------------------------------------------------------
0
1
2
3
4
------------------------------------------------------------------------------------------------------------------
5
6
7
8
9
------------------------------------------------------------------------------------------------------------------
10
11
12
13
14
------------------------------------------------------------------------------------------------------------------
15
16
17
18
19
------------------------------------------------------------------------------------------------------------------
20
21
22
23
24
------------------------------------------------------------------------------------------------------------------
25
26
27
28
29
------------------------------------------------------------------------------------------------------------------
30
31
32
33
34
------------------------------------------------------------------------------------------------------------------
35
36
37
38
39
------------------------------------------------------------------------------------------------------------------
40
41
42
43
44
------------------------------------------------------------------------------------------------------------------
* First 12 months only and for the first 12 months of any subsequent
increase in specified arnount.
13
EXHIBIT C
Page 5
UL-50
RATE AND EXPENSE CHARGE TABLE MALE
------------------------------------------------------------------------------------------------------------------
ANNUAL COST OF INSURANCE PER $1,000
----------------------------------------------------------------------------------
First Year Standard Non-Smoker
Annual Expenses -------------------------------------- -----------------------------------------
Att. Charge Per Current Waiver of Current Waiver of
Age $1000 Rate Mo. Ded. ADB Rate Mo. Ded. ADB
------------------------------------------------------------------------------------------------------------------
45
46
47
48
49
------------------------------------------------------------------------------------------------------------------
50
51
52
53
54
------------------------------------------------------------------------------------------------------------------
56
56
57
58
59
------------------------------------------------------------------------------------------------------------------
60
61
62
63
64
------------------------------------------------------------------------------------------------------------------
65
66
67
68
69
------------------------------------------------------------------------------------------------------------------
70
71
72
73
74
------------------------------------------------------------------------------------------------------------------
75
76
77
78
79
------------------------------------------------------------------------------------------------------------------
80
81
82
83
84
------------------------------------------------------------------------------------------------------------------
85
86
87
88
89
------------------------------------------------------------------------------------------------------------------
90
91
92
93
94
95
------------------------------------------------------------------------------------------------------------------
CIR Guaranteed Waiver Of
Annual Cost of Insurance Rate Mo. Ded.
Per Unit --------------------------------------------------
(Maximum - 10 Units) [dollar amount] [dollar amount]
------------------------------------------------------------------------------------------------------------------
* First 12 months only and for the first 12 months of any subsequent
increase in specified arnount.
14
EXHIBIT C
Page 6
UL-50
RATE AND EXPENSE CHARGE TABLE FEMALE
------------------------------------------------------------------------------------------------------------------
ANNUAL COST OF INSURANCE PER $1,000
----------------------------------------------------------------------------------
First Year Standard Non-Smoker
Annual Expenses -------------------------------------- -----------------------------------------
Att. Charge Per Current Waiver of Current Waiver of
Age $1000 Rate Mo. Ded. ADB Rate Mo. Ded. ADB
------------------------------------------------------------------------------------------------------------------
0
1
2
3
4
------------------------------------------------------------------------------------------------------------------
5
6
7
8
9
------------------------------------------------------------------------------------------------------------------
10
11
12
13
14
------------------------------------------------------------------------------------------------------------------
15
16
17
18
19
------------------------------------------------------------------------------------------------------------------
20
21
22
23
24
------------------------------------------------------------------------------------------------------------------
25
26
27
28
29
------------------------------------------------------------------------------------------------------------------
30
31
32
33
34
------------------------------------------------------------------------------------------------------------------
35
36
37
38
39
------------------------------------------------------------------------------------------------------------------
40
41
42
43
44
------------------------------------------------------------------------------------------------------------------
* First 12 months only and for the first 12 months of any subsequent
increase in specified amount.
15
EXHIBIT C
Page 7
UL-50
RATE AND EXPENSE CHARGE TABLE FEMALE
------------------------------------------------------------------------------------------------------------------
ANNUAL COST OF INSURANCE PER $1,000
----------------------------------------------------------------------------------
First Year Standard Non-Smoker
Annual Expenses -------------------------------------- -----------------------------------------
Att. Charge Per Current Waiver of Current Waiver of
Age $1000 Rate Mo. Ded. ADB Rate Mo. Ded. ADB
------------------------------------------------------------------------------------------------------------------
45
46
47
48
49
-----------------------------------------------------------------------------------------------------------------
50
51
52
53
54
-----------------------------------------------------------------------------------------------------------------
55
56
57
58
59
-----------------------------------------------------------------------------------------------------------------
60
61
62
63
64
-----------------------------------------------------------------------------------------------------------------
65
66
67
68
69
-----------------------------------------------------------------------------------------------------------------
70
71
72
73
74
-----------------------------------------------------------------------------------------------------------------
75
76
77
78
79
-----------------------------------------------------------------------------------------------------------------
80
81
82
83
84
-----------------------------------------------------------------------------------------------------------------
85
86
87
88
89
-----------------------------------------------------------------------------------------------------------------
90
91
92
93
94
95
-----------------------------------------------------------------------------------------------------------------
CIR Guaranteed Waiver Of
Annual Cost of Insurance Rate Mo. Ded.
Per Unit --------------------------------------------------
(Maximum - 10 Units) [dollar amount] [dollar amount]
-----------------------------------------------------------------------------------------------------------------
* First 12 months only and for the first 12 months of any subsequent
increase in specified amount.
16
EXHIBIT C
Page 8
UL-100
RATE AND SURRENDER CHARGE TABLE MALE
-------------------------------------------------------------------------------------------------
SURRENDER
ANNUAL COST OF INSURANCE CHARGE
PER $1,000 PER $1,000*
-------------------------------------------------------------------------------------
Guar. Standard Non-Smoker
------------ Cost -------------------------------------------------
Att. Of Current Current Non-
Age Ins.** Rate WMD ADB Rate WMD ADB Standard Smoker
-------------------------------------------------------------------------------------------------
0
1
2
3
4
-------------------------------------------------------------------------------------------------
5
6
7
8
9
------------------------------------------------------------------------------------------------
10
11
12
13
14
------------------------------------------------------------------------------------------------
I5
16
17
18
19
------------------------------------------------------------------------------------------------
20
21
22
23
24
------------------------------------------------------------------------------------------------
25
26
27
28
29
------------------------------------------------------------------------------------------------
30
31
32
33
34
------------------------------------------------------------------------------------------------
35
36
37
38
39
------------------------------------------------------------------------------------------------
40
41
42
43
44
-------------------------------------------------------------------------------------------------
* The Surrender Charge per $1,000 of specified amount is based on the
insured's issue age. The Charge decreases over a 10 year period by 1/10
each year until it reaches zero at the end of year 10.
** This is the monthly guaranteed cost of insurance rate shown in the policy
multiplied by 12.
17
EXHIBIT C
Page 9
UL-100
RATE AND SURRENDER CHARGE TABLE MALE
-------------------------------------------------------------------------------------------------
SURRENDER
ANNUAL COST OF INSURANCE CHARGE
PER $1,000 PER $1,000*
-------------------------------------------------------------------------------------
Guar. Standard Non-Smoker
------------ Cost -------------------------------------------------
Att. Of Current Current Non-
Age Ins.** Rate WMD ADB Rate WMD ADB Standard Smoker
-------------------------------------------------------------------------------------------------
45 5.28 5.28 .48 .96 4.08 .36 .96 17.78 14.10
46 5.76 5.76 .48 .96 4.44 .36 .96 18.48 14.64
47 6.36 6.36 .48 .96 4.80 .36 .96 19.02 15.02
48 6.96 6.84 .48 .96 5.16 .36 .96 19.66 15.50
49 7.56 7.20 .60 .96 5.52 .48 .96 20.38 16.10
-------------------------------------------------------------------------------------------------
50 8.28 7.68 .84 .96 6.00 .60 .96 21.02 16.58
51 9.12 8.04 .96 .96 6.36 .72 .96 21.54 16.94
52 9.96 8.40 1.08 .96 6.72 .84 .96 22.26 17.46
53 10.92 8.88 1.32 1.08 7.20 1.08 1.08 22.92 17.90
54 11.88 9.36 1.56 1.08 7.68 1.32 1.08 23.82 18.52
-------------------------------------------------------------------------------------------------
55 13.08 10.20 1.92 1.08 8.16 1.68 1.08 24.46 18.86
56 14.28 11.04 2.40 1.08 8.64 2.04 1.08 25.30 19.44
57 15.60 12.00 2.88 1.08 9.48 2.52 1.08 26.14 20.04
58 17.04 12.84 3.48 1.20 10.32 3.00 1.20 26.98 20.62
59 18.72 13.80 4.08 1.20 11.28 3.60 1.20 27.66 21.00
-------------------------------------------------------------------------------------------------
60 20.52 15.00 .00 1.20 12.48 .00 1.20 28.44 21.42
61 22.44 16.32 .00 1.20 13.80 .00 1.20 29.32 21.88
62 24.60 17.76 .00 1.32 15.12 .00 1.32 30.10 22.16
63 26.88 19.56 .00 1.32 16.44 .00 1.32 31.06 22.56
64 29.40 21.72 .00 1.32 17.88 .00 1.32 31.96 22.90
-------------------------------------------------------------------------------------------------
65 32.28 24.24 .00 1.44 19.56 .00 1.44 32.56 23.00
66 35.40 27.00 .00 1.56 21.36 .00 1.56 33.08 23.12
67 38.76 30.00 .00 1.68 23.64 .00 1.68 33.52 23.36
68 42.60 33.24 .00 1.80 26.28 .00 1.80 33.64 23.50
69 46.68 36.72 .00 1.92 29.52 .00 1.92 33.74 23.62
-------------------------------------------------------------------------------------------------
70 51.12 40.56 .00 .00 33.36 .00 .00 33.86 23.74
71 55.80 44.64 .00 .00 37.44 .00 .00 33.98 23.86
72 60.48 49.08 .00 .00 41.88 .00 .00 34.10 24.00
73 65.52 54.00 .00 .00 46.68 .00 .00 34.22 24.24
74 70.68 59.28 .00 .00 51.84 .00 .00 34.34 24.56
-------------------------------------------------------------------------------------------------
75 76.44 64.92 .00 .00 57.48 .00 .00 34.46 24.56
76 82.68 77.04 .00 .00 63.60 .00 .00 34.46 24.56
77 89.88 77.52 .00 .00 70.20 .00 .00 34.46 24.56
78 98.04 84.24 .00 .00 77.28 .00 .00 34.46 24.56
79 107.04 91.32 .00 .00 85.20 .00 .00 34.46 24.56
-------------------------------------------------------------------------------------------------
80 117.00 98.88 .00 .00 93.60 .00 .00 34.46 24.56
81 127.68 106.80 .00 .00 102.60 .00 .00 34.46 24.56
82 139.06 115.20 .00 .00 112.08 .00 .00 34.46 24.56
83 150.96 124.08 .00 .00 122.04 .00 .00 34.46 24.56
84 163.56 133.56 .00 .00 132.48 .00 .00 34.46 24.56
------------------------------------------------------------------------------------------------
85 177.00 143.52 .00 .00 143.52 .00 .00 34.46 24.56
86 191.16 155.40 .00 .00 155.40 .00 .00
87 206.40 168.84 .00 .00 168.84 .00 .00
88 222.96 184.08 .00 .00 184.08 .00 .00
89 241.20 200.88 .00 .00 200.88 .00 .00
-------------------------------------------------------------------------------------------------
90 261.72 219.72 .00 .00 219.72 .00 .00
91 285.36 239.40 .00 .00 239.40 .00 .00
92 313.08 261.12 .00 .00 261.12 .00 .00
93 346.32 284.40 .00 .00 284.40 .00 .00
94 386.76 309.36 .00 .00 309.36 .00 .00
-------------------------------------------------------------------------------------------------
CIR Guaranteed Waiver Of
Annual Cost Of Insurance Rate Mo. Ded.
Per Unit ----------------------------------------------
(Maximum - 10 Units) $6.96 $.24
-------------------------------------------------------------------------------------------------
* The Surrender Charge per $1,000 of specified amount is based on the
insured's issue age. The Charge decreases over a 10 year period by 1/10
each year until it reaches zero at the end of year 10.
** This is the monthly guaranteed cost of insurance rate shown in the policy
multiplied by 12.
19
EXHIBIT C
Page 00
XX-000
Rate and Surrender Charge Table Female
-------------------------------------------------------------------------------------------------
Surrender
Annual Cost of Insurance Charge
Per $1,000 Per $1,000*
-------------------------------------------------------------------------------------------------
Guar. Standard Non-Smoker
---------- Cost -------------------------------------------------
Att. Of Current Current Non-
Age Ins.** Rate WMD ADB Rate WMD ADB Standard Smoker
-------------------------------------------------------------------------------------------------
0
1
2
3
4
-------------------------------------------------------------------------------------------------
5
6
7
8
9
-------------------------------------------------------------------------------------------------
10
11
12
13
14
-------------------------------------------------------------------------------------------------
15
16
17
18
19
-------------------------------------------------------------------------------------------------
20
21
22
23
24
-------------------------------------------------------------------------------------------------
25
26
27
28
29
-------------------------------------------------------------------------------------------------
30
31
32
33
34
-------------------------------------------------------------------------------------------------
35
36
37
38
39
-------------------------------------------------------------------------------------------------
40
41
42
43
44
-------------------------------------------------------------------------------------------------
* The Surrender Charge per $1,000 of specified amount is based on the
insured's issue age. The Charge decreases over a 10 year period by 1/10
each year until it reaches zero at the end of year 10.
** This is the monthly guaranteed cost of insurance rate shown in the policy
multiplied by 12.
20
EXHIBIT C
Page 00
XX-000
Rate and Surrender Charge Table Female
-------------------------------------------------------------------------------------------------
Surrender
Annual Cost of Insurance Charge
Per $1,000 Per $1,000*
-------------------------------------------------------------------------------------------------
Guar. Standard Non-Smoker
---------- Cost -------------------------------------------------
Att. Of Current Current Non-
Age Ins.** Rate WMD ADB Rate WMD ADB Standard Smoker
-------------------------------------------------------------------------------------------------
45
46
47
48
49
-------------------------------------------------------------------------------------------------
50
51
52
53
54
-------------------------------------------------------------------------------------------------
55
56
57
58
59
-------------------------------------------------------------------------------------------------
60
61
62
63
64
-------------------------------------------------------------------------------------------------
65
66
67
68
69
-------------------------------------------------------------------------------------------------
70
71
72
73
74
-------------------------------------------------------------------------------------------------
75
76
77
78
79
-------------------------------------------------------------------------------------------------
80
81
82
83
84
-------------------------------------------------------------------------------------------------
85
86
87
88
89
-------------------------------------------------------------------------------------------------
90
91
92
93
94
-------------------------------------------------------------------------------------------------
CIR Guaranteed Waiver Of
Annual Cost Of Insurance Rate Mo. Ded.
Per Unit ----------------------------------------------
(Maximum - 10 Units) [dollar amount] [dollar amount]
-------------------------------------------------------------------------------------------------
* The Surrender Charge per $1,000 of specified amount is based on the
insured's issue age. The Charge decreases over a 10 year period by 1/10
each year until it reaches zero at the end of year 10.
** This is the monthly guaranteed cost of insurance rate shown in the policy
multiplied by 12.
20
EXHIBIT D
THE CEDING COMPANY'S RETENTION LIMITS
Life, Waiver of Premium, Accidental Death
Listed by Age and Rating
Life:
Ages A B C
---- -------------- --------------- --------------
0 - 55 [percentage] [percentage] [percentage]
56 - 65 [percentage] [percentage] [percentage]
66 and over [percentage] [percentage] [percentage]
A. Standard through [percentage] or Table D including lives rates on flat
extra basis (temporary or permanent), [dollar amount] or less per [dollar
amount].
B. Higher ratings than those in A.
Spillover: IDS, in addition to the amounts shown above, win retain an
additional [percentage] of each amount whenever possible to avoid
reinsurance of small amounts.
C. For military aviation risks, the Company retains one-half of all policies
of [dollar amount] or more. If two plans are involved, the Company retains
one-half of each plan. If the first year decreased amount at risk is under
[dollar amount], the Company shall retain the entire amount. However, if
there is previous military reinsurance, the Company shall retain one-half
of all new cases regardless of the first year risk amount.
W.P.:
Corresponding to life risk retained.
A.D.:
Not Reinsured.
EXHIBIT E
THE REINSURER'S AUTOMATIC ACCEPTANCE LIMITS
Life:
The Reinsurer agrees to accept up to 9 times the amount retained by the
Company but not more than the following limits on any one life:
Standard(100%) through Table 5(225%) through
Ages Table 4(200%) Table 12(400%)
---- --------------------------- --------------------------
All ages [dollar amount] [dollar amount]
W.P.:
Any amount in excess of the Company's retention but not exceeding an
amount corresponding to the life insurance automatically reinsured.
Jumbo Limit:
Life: $5,000,000 inforce and applied for on any one life. ----
W.P.: (i) Plans with an Increasing Premium Feature
Issue Ages Initial Face Amount
---------- ----------------------
Under 40 [dollar amount]
40 - 49 [dollar amount]
50 and over [dollar amount]
(ii) Other plans - [dollar amount] of annual premium to be waived.
EXHIBIT F
PREMIUM ACCOUNTING AND DATA NOTIFICATION
PREMIUM ACCOUNTING: The premium accounting details shall be sent to the
Reinsurer each month in the summary as set out in Exhibit F, page 3.
DATA NOTIFICATION: The Company shall send to the Reinsurer the reports shown
below at the times indicated below:
Report Frequency Due Date Example Reference
------ --------- -------- -----------------
1. Reinsurance Ceded Monthly 21st Exhibit F, page 2
2. Summary Report Monthly 21st Exhibit F, page 3
3. Scheduled Increases and Decreases, Termination Monthly 21st Exhibit F, page 4
Summary
4. Movement Summary Annually January 21st Exhibit F, page 5
5. Valuation Reserve Certification Annually January 21st Exhibit F, page 6
6. Quarterly Valuation Reserve Quarterly 21 days after Exhibit F, page 7
quarter
PRELIMINARY ADVICE: If the reinsurance ceded report is not being sent on a
monthly basis, the Company will send the Reinsurer each month a list of all
policies being reinsured automatically for more than $250,000.
ERRORS AND OMISSIONS: Should any items be inadvertently omitted from or entered
in error on an account or tabulation, such omissions or errors shall not affect
the liability of the Reinsurer in regard to any cession and the mistakes shall
be rectified upon discovery.
PRELIMINARY ESTIMATES:
First Three Quarters' Reserves
An estimate is required within 10 days after the close of each of the first 3
quarters. Actual reserve figures are required within 21 days after the end of
each quarter.
Year End Figures
By October 31st of each year the Company shall provide the Reinsurer with an
estimate of the premiums, commissions and the amount of reserves for the
reinsurance to be in force under this Agreement as of December 31st of the
current year. The Company shall advise the Reinsurer of any change that will
materially change such estimate and send the Reinsurer a revised estimate by
December 15th of the current year.
RESERVES: The Company shall advise the Reinsurer of the reserve figures for the
first 3 quarters of each year as provided above.
The Company shall advise the Reinsurer by January 21st of each year of the
amount of reserves calculated on the reinsurance in force under this Agreement
as of December 31st of the preceding year and will also indicate the valuation
method used. These reserves shall be certified by the Company's valuation
actuary.
EXHIBIT F
Page 2
REINSURANCE CEDED TO [name of reinsurance company]
FROM _________________________________________________________
PLAN _________________________________________________________
POLICY EXHIBIT MONTH ENDING __________________________________
TRANSACTION TYPE _____________________________________________
Premiums Commissions Net
S O R F D ------------------------- ------------------- ------
Policy Att Eff. E P T L R S A Reins Reins (1) (11) Total
Name No. Age DOB DOI Date X T G T N N F S.I. AAR ADB Base EP WP ADB Total Base EP ADB Total (1-11)
---- ------- --- --- --- ---- - - - - - - - ---- ----- ------ ---- -- -- --- ----- ---- -- --- ----- ------
EXHIBIT F
Page 3
TRANSACTION TYPE ________________________________________
SUMMARY REPORT FOR MONTH ENDING _________________________
Premiums Commissions Net
No. of Current ------------------------------------------ -------------------------------------- ------------
Policies Reins. AAR Basic EP WP ADB Total (I) Basic EP WP ADB Total (II) Total (I-II)
-------- ---------- ----- -- -- --- --------- ----- -- -- --- ---------- ------------
NSM Auto
NSM Fac
SM Auto
SM Fac
Total
EXHIBIT F
Page 4
I. SUMMARY OF SCHEDULED INCREASES
FOR MONTH ENDING
--------------
NO. OF POLICIES AMOUNT OF INCREASE
----------------- ------------------
SM NSM SM NSM
II. SUMMARY OF SCHEDULED DECREASES
FOR MONTH ENDING
---------------
NO. OF POLICIES AMOUNT OF INCREASE
----------------- ------------------
SM NSM SM NSM
III. TERMINATION SUMMARY
DURATION SINCE ISSUE NO. OF POLICIES REINSURANCE AMOUNT
-------------------- --------------- ------------------
SM NSM SM NSM
- 12 months or less
- 24 months or less, but
greater than 12 months
- 36 months or less, but
greater than 24 months
- Greater than 36 months
- TOTAL
EXHIBIT F
Page 5
SUMMARY OF POLICY MOVEMENTS
FOR YEAR ENDING _____________
No. of Policies Reinsurance Amount
--------------- ------------------
SM NSM SM NSM
BEGINNING INFORCE
NEW BUSINESS
REVIVED
UNSCHEDULED INCREASES
BONUS ADDITIONS
REINSTATEMENTS
OTHER ONS
DEATHS
EXPIRY (MATURITY)
SURRENDER
UNSCHEDULED DECREASES
LAPSES
RECAPTURES
OTHER OFFS
ENDING INFORCE
EXHIBIT F
Page 6
VALUATION RESERVE CERTIFICATION FOR
SELF-ADMINISTERED BUSINESS CEDED TO
[name of reinsurance company]
FROM (NAME OF COMPANY)
I, (name of valuation actuary), as the valuation actuary of the above named
company certify that the following amounts are correct as at December 31, 19xx.
Plan:
Inforce Reinsured Amount:
Inforce Number of Policies:
Valuation Reserve as at December 31, 19xx:
Reserve
Type Reserve Basis Amount
---- ------------- ----------
Life
WP
Accidental Death
Total
Signature:
Actuarial Designation:
Title:
Date:
EXHIBIT F
Page 7
QUARTERLY VALUATION RESERVE
SELF-ADMINISTERED BUSINESS CEDED TO
[name of reinsurance company]
FROM (NAME OF COMPANY)
For Quarter Ending:
An estimate is required within 10 days after the close of each of the first 3
quarters and by October 31st for the December 31st estimate. Actual reserve
figures are required within 21 days after the end of each quarter. For the
fourth quarter actual reserve figures, please use the certification form instead
of this form.
Plan:
Inforce Reinsured Amount:
Inforce Number of Policies:
Valuation Reserve as at: 19xx:
Reserve
Type Reserve Basis Amount
---- ------------- ------
Estimate Actual
-------- ------
Life
WP
Accidental Death
Total
Signature:
Actuarial Designation:
Title:
Date:
