REINSURANCE AGREEMENT
Between
SOUTHERN SECURITY LIFE INSURANCE COMPANY
of Lake Mary, Florida
and
SECURITY NATIONAL LIFE INSURANCE COMPANY
of Salt Lake City, Utah
TABLE OF CONTENTS
ARTICLES
I. GENERAL PROVISIONS................................................... 1
II. DURATION OF RISK..................................................... 4
III. PREMIUMS AND CONSIDERATIONS.......................................... 4
IV. BENEFIT PAYMENTS..................................................... 5
V. ACCOUNTING AND SETTLEMENTS........................................... 5
VI. ARBITRATION.......................................................... 6
VII. INSOLVENCY........................................................... 7
VIII. DAC TAX PROVISION.................................................... 8
IX. MISCELLANEOUS PROVISIONS............................................. 9
X. EXECUTION AND EFFECTIVE DATE........................................ 10
SCHEDULES
A. POLICIES AND RISKS REINSURED
B. REINSURANCE PREMIUMS
C. COMMISSION AND EXPENSE ALLOWANCE
D. MONTHLY REPORT OF ACTIVITY AND SETTLEMENTS
EXHIBITS
1. TRUST AGREEMENT
REINSURANCE AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into, effective this
31st day of December, 2005, by and between SOUTHERN SECURITY LIFE INSURANCE
COMPANY, a Florida domiciled insurance company (hereinafter referred to as the
"Company") and SECURITY NATIONAL LIFE INSURANCE COMPANY, a Utah domiciled
insurance company (hereinafter referred to as the "Reinsurer").
The Company and the Reinsurer mutually agree to reinsure on the terms and
conditions stated herein. This Agreement is an indemnity reinsurance agreement
solely between the Company and the Reinsurer and performance of the obligations
of each party under this Agreement shall be rendered solely to the other party.
In addition, this Agreement supersedes and replaces those certain Reinsurance
Agreements previously entered into between the Company and Reinsurer on October
1, 2003 and October 1, 2004.
ARTICLE I
GENERAL PROVISIONS
1. Contracts and Risks Reinsured. The Reinsurer agrees to indemnify and the
Company agrees to transfer risk to the Reinsurer, according to the terms and
conditions hereof, the risks described in Schedule A hereto, which are in force
on the effective date (the "Effective Date") of this Agreement; subject,
however, to the same rights, offsets, counterclaims, crossclaims and defenses as
are available to the Company. No such offsets, counterclaims, crossclaims or
defenses are waived but the same are expressly preserved, and Reinsurer is and
shall be fully subrogated thereto, either in its own name or in the name of the
Company, and whether the name be now known to exist or may hereafter be
discovered.
2. Coverages and Exclusions. Only risks under the life insurance policies
referred to in Schedule A, are reinsured under this Agreement.
3. Plan of Reinsurance. This indemnity reinsurance shall be on the
coinsurance plan. The Company and the Reinsurer shall establish, maintain, and
place all assets held in relation to the reserves in trust in accordance with
the terms of a certain Trust Agreement, a copy of which is attached hereto as
Exhibit 1 and by this reference is made a part hereof. The assets are to be
accounted for using statutory accounting principles of the state of domicile of
the Reinsurer. On the Effective Date of this Agreement, the assets transferred
to the Reinsurer shall be equal to the amount of reserves transferred thereunto.
4. Reserves. The expression net reserves, prior to the application of this
treaty, whenever used, shall mean the statutory reserves, net of existing
reinsurance ceded under all treaties in effect excluding this treaty, which
would have been reported by the Company on its NAIC Convention Blank as of
December 31, 2005, with respect to the policies reinsured hereunder, if this
treaty were not in effect.
The expression net due and deferred premiums, prior to the application of
this treaty, shall mean the due and deferred premiums, net of existing
reinsurance ceded under all treaties in effect excluding this treaty, which
would have been held by the Company on its NAIC Convention Blank as of December
31, 2005, with respect to the policies reinsured hereunder, if this treaty were
not in effect.
The expression net policy loans, prior to the application of this treaty,
shall mean the policy loans, net of existing reinsurance ceded under all
treaties in effect excluding this treaty, which would have been reported by the
Company on its NAIC Convention Blank as of December 31, 2005, with respect to
the policies reinsured hereunder, if this treaty were not in effect.
The expression advance premiums, prior to the application of this treaty,
shall mean the advance premiums, net of existing reinsurance ceded under all
treaties in effect excluding this treaty, which would have been reported by the
Company on its NAIC Convention Blank as of December 31, 2005, with respect to
the policies reinsured hereunder, if this treaty were not in effect.
5. Commission and Expense Allowance. There is to be a commission and
expense allowance equal to actual premium taxes paid, actual sales commission
paid and other administrative expenses, in accordance with Schedule C.
6. Extracontractual Damages. In no event shall the Reinsurer indemnify nor
be liable for any extracontractual damages or liability of any kind whatsoever
resulting from, but not limited to, the Company's negligent, reckless or
intentional wrongs, fraud, oppression, bad faith or strict liability. The
Reinsurer shall indemnify the Company for any extracontractual damages or
liability of any kind whatsoever resulting from but not limited to, the
Reinsurer's or its agents' neglect, reckless or intentional wrong, fraud,
oppression, bad faith or strict liability. The following liabilities are
examples of liabilities that would be considered extracontractual: compensatory
damages, damages for emotional distress, and punitive or exemplary damages.
7. Contract Administration. The Reinsurer shall administer the contracts
reinsured hereunder and shall perform all accounting, collection and all other
administrative functions at the expense of the Reinsurer. The Company shall make
the use of its name available in such administration and shall otherwise make
available all records and other material needed in such administration.
8. Inspection. At any reasonable time, the Reinsurer may inspect, during
normal business hours, at the principal office of the Company, the papers and
any and all other books or documents of the Company relating to reinsurance
under this Agreement. At any reasonable time, the Company may inspect, during
normal business hours, at the principal office of the Reinsurer, the papers and
any and all other books or documents of the Reinsurer relating to reinsurance
under this Agreement. Neither the Company nor the Reinsurer will use any
information obtained through any inspection pursuant to this section for
purposes not relating to reinsurance under this Agreement.
9. Condition. The reinsurance hereunder is subject to the same limitations
and conditions as the contracts written by the Company that are reinsured
hereunder, except as otherwise provided in this Agreement.
10. Misunderstandings and Oversights. If any failure to pay amounts due or
to perform any other act required by this Agreement is unintentional and caused
by misunderstanding and oversight, the Company and the Reinsurer will adjust the
situation to what it would have been had the misunderstanding or oversight not
occurred.
11. Age Adjustment. If the Company's liability under any of the contracts
reinsured under this Agreement is changed because of a misstatement of age, the
Reinsurer will share in the change proportionately to the amount reinsured
hereunder, and the Company and the Reinsurer will make any and all proportional
adjustments thereunto.
12. Reinstatements. If a contract reinsured hereunder that was reduced,
terminated, or lapsed, and is subsequently reinstated, the reinsurance for such
contract under this Agreement will be reinstated automatically to the amount
that would be in force if the contract had not been reduced, terminated, or
lapsed. The Company will pay to the Reinsurer the Reinsurer's proportionate
share of all amounts collected from, or charged to, the insured.
13. Amendments. This Agreement shall be amended only by written agreement
of the parties.
14. Policies, Contracts. The words policy or policies, and contract or
contracts as used herein shall have the same meaning. The Company hereby
warrants and represents that the contracts reinsured hereunder comply with all
applicable laws and regulations, including federal income tax regulations, and
have so complied since the date of issuance.
15. Policyholder Information. The Company shall not sell, distribute or in
any way use the policyholder information on contracts reinsured hereunder
without the prior approval of the Reinsurer.
16. Assumption Reinsurance. It is contemplated that the Company will be
sold to a third party or merged into the Reinsurer by December 31, 2006. Upon
such event, or by mutual agreement of the Company and Reinsurer, this Agreement
may be converted to an Assumption Reinsurance Agreement pending approval of the
Florida Office of Insurance Regulation, on the day prior to the change in
control or agreement .
17. Reinsurance With Other Companies. Existing reinsurance with other
insurance companies on the policies specified in Schedule A shall be retained by
the Company, except as agreed upon in writing by Reinsurer and Company. Any
amounts paid to other reinsurance companies shall be fully reimbursed by the
Reinsurer. Any amounts received by the Company from other insurance companies
will be paid to the Reinsurer.
ARTICLE II
DURATION OF RISK
1. Duration. Except as otherwise provided herein, this Agreement shall be
unlimited in duration and the Company and the Reinsurer shall have no right to
terminate it.
2. Reinsurer's Liability. The liability of the Reinsurer with respect to
any contract reinsured hereunder will begin simultaneously with that of the
Company, but not prior to the Effective Date of this Agreement. The Reinsurer's
liability with respect to any contract reinsured hereunder will terminate with
that of the Company on the date the Company's liability on such contract is
terminated.
3. Recapture. Contracts reinsured under this Agreement are not eligible for
recapture.
4. Contract Changes. The Company will not make any contract changes in any
policies reinsured hereunder except as required by law or as mutually agreed to
by the Company and the Reinsurer.
ARTICLE III
PREMIUM AND CONSIDERATIONS
1. Net Reserves. On the Effective Date of this Agreement, the Company
agrees to pay the Reinsurer as a reserve transfer an amount equal to the
adjusted net reserves, on the Effective Date of this Agreement with respect to
the liabilities reinsured as of such date and described in Schedule A less the
ceding allowance. Adjusted net reserves are calculated as net reserves, prior to
the application of this treaty, minus net due and deferred premiums, prior to
the application of this treaty, minus policy loans, prior to the application of
this treaty, plus advance premiums, prior to the application of this treaty.
2. Ceding Allowance. On the Effective Date of this Agreement, the Reinsurer
agrees to pay the Company a ceding allowance equal to Ten Dollars ($10.00) in
cash by certified funds or wire transfer and other good and valuable
consideration.
3. Reinsurance Premiums. The Company agrees to pay the Reinsurer
reinsurance premiums in accordance with Schedule B. For each contract, the
amount of reinsurance premium will be the amount which corresponds to the
portion of the contract reinsured. The Company makes representations and
warrants that it will make all reasonable efforts to keep the reinsured business
in force.
ARTICLE IV
BENEFIT PAYMENTS
1. Notice. The Reinsurer will notify the Company promptly after receipt of
any information as to a claim on a policy to the extent reinsured hereunder. The
reinsurance claim form and any copies of notifications, claim papers and proofs
will be furnished to the Company as soon as possible.
2. Liability and Payment. The Company will accept the decision of the
Reinsurer on payment of a claim or surrender on a policy reinsured hereunder.
The Reinsurer agrees to utilize to the extent possible the claims practices of
the Company. The Reinsurer will pay its proportionate share of such claim based
upon the form of claim settlement determined. In no instance shall anyone other
than the Company or the Reinsurer have any rights under this Agreement, and the
Company shall be and remain solely liable to any insured, policyowner, or
beneficiary under any policy reinsured hereunder, unless said liability is
caused by the actions of the Reinsurer, and in that instance, Reinsurer will be
liable and defend any litigation at its own cost.
3. Contract Claims. The Company will not contest, compromise or litigate a
claim involving a policy reinsured hereunder without the prior approval of the
Reinsurer. The Reinsurer will pay to the Company any litigation and
investigative expenses incurred on contested claims. Any expenses will be paid
on a monthly basis as described in Article V.
ARTICLE V
ACCOUNTING AND SETTLEMENT
1. Agreement Accounting Period. This Agreement shall be on a monthly
accounting period for all accounting settlements.
2. Monthly Accounting Reports. Accounting reports shall be submitted to the
Reinsurer by the Company and by the Reinsurer to the Company, not later than 15
business days after the end of each calendar month. Such reports shall include
information on the amount of reinsurance premiums, policy loans and policy loan
interest, the commission and expense allowance, claims, and reserves on the
contract reinsured for the preceding calendar month.
3. Monthly Accounting Period. The monthly accounting shall be on a
calendar-month basis, except that the initial monthly accounting period shall
run from the Effective Date of this Agreement, after the initial accounting has
occurred, through the last day of the calendar month in which the Effective Date
of this Agreement falls. The final monthly accounting period shall run from the
end of the preceding calendar month until the termination of this Agreement, but
prior to actual termination of this Agreement.
4. Monthly Settlements. Within 15 business days after the end of each
calendar month, the Company will pay the Reinsurer the sum of: (i) the
reinsurance premiums for the preceding month, determined in accordance with
Article III, plus (ii) the policy loan repayments and policy loan interest paid
in the preceding month, plus (iii) any amounts received from other reinsurance
companies. The Monthly Settlement Report is attached as Schedule D.
5. Amounts Due Monthly. Except as otherwise specifically provided in this
Agreement, all amounts due to be paid to either the Company or the Reinsurer
under this Agreement on a monthly basis shall be determined on a net basis as of
the last day of each calendar month and shall be due and payable as of such
date.
6. Estimations. If the amounts, as defined in Paragraph 4 above, cannot be
determined at such dates as defined in Paragraph 5 above, on an exact basis,
such payments will be paid in accordance with a mutually agreeable formula which
will approximate the actual payments.
7. Delayed Payments. For purposes of Paragraph 5 above, if there is a
delayed settlement of a payment due, there will be an interest penalty at an
interest rate equal to one-half of one percent (.5%) per month, for the period
that the amount is overdue. For purposes of this paragraph, a payment shall be
considered delayed 30 days after the date such payment is due.
8. Offset of Payments. All monies due to either the Company or the
Reinsurer under this Agreement may be offset against each other, dollar for
dollar, regardless of any insolvency of either party.
9. Accounting Reports. Annual reports shall be submitted to the Company by
the Reinsurer not later than 20 business days after the end of each calendar
year. Such reports shall include information for the analysis of increase in
reserves and the exhibit of life insurance of the NAIC Convention Blank based on
the contracts reinsured hereunder, as well as all other information required by
the Florida Office of Insurance Regulation. Quarterly accounting reports shall
be submitted to the Reinsurer by the Company not later than 20 business days
after the end of each calendar quarter and shall include information for pages
2, 3, 4, and 5 of the NAIC Quarterly Blank.
ARTICLE VI
ARBITRATION
1. General. All disputes and differences between the Company and the
Reinsurer on which an agreement cannot be reached will be decided by
arbitration. The arbitrators will regard this Agreement from the standpoint of
practical business and equitable principles rather than that of strict law.
2. Method. Three arbitrators will decide any differences. They must be
officers of life insurance companies other than the two parties to this
Agreement or any Company owned by, or affiliated with, either party. One of the
arbitrators is to be appointed by the Reinsurer, another by the Company, and
they shall select a third before arbitration begins. Should one of the two
parties decline to appoint an arbitrator or should the two arbitrators not be
able to agree upon the choice of a third arbitrator, the appointment(s) shall be
left to the President of the American Council of Life Insurance or its
successors. The arbitrators are not bound by any rules of evidence. They shall
decide by a majority of votes and their decision will be final and binding. The
cost of arbitration, including the fees of the arbitrators, shall be shared
equally by the parties unless the arbitrators decide otherwise.
ARTICLE VII
INSOLVENCY
1. General. In the event of the Company's insolvency, liquidation, entry
into rehabilitation, bankruptcy, or other significant adverse financial event,
this Agreement will be deemed to convert, pending approval by the Florida Office
of Insurance Regulation but without any action on the part of any party, to an
Assumption Reinsurance Agreement as of the day prior to such insolvency, change
of control, or other adverse event. Following such conversion, the Reinsurer is
hereby empowered without any need of action on the part of the Company, to take
all other steps necessary for such conversion including the issuance of
assumption certificates. Notwithstanding the forgoing, the Reinsurer may elect
not to have such automatic conversion occur. In the event the Reinsurer elects
not to have such automatic conversion to assumption reinsurance, then the
Reinsurer's contractual liability on contracts reinsured hereunder shall
continue to be determined by all the terms, conditions and limitations under
this Agreement, but the Reinsurer will make settlement (i) directly to the
Company's liquidator, receiver or statutory successor, and (ii) without increase
or diminution because of the Company's insolvency. The liquidator, receiver or
statutory successor of the Company shall give the Reinsurer written notice of
the pendency of a claim against the Company on any contract reinsured within
reasonable time after such claim is filed in the insolvency proceeding. During
the pendency of any such claim, the Reinsurer shall investigate such claim and
interpose in the Company's name (or in the name of the Company's liquidator,
receiver or statutory successor) in the proceeding where such claim is to be
adjudicated, any defense or defenses that the Reinsurer may deem available to
the Company or its liquidator, receiver or statutory successor. The expense thus
incurred by the Reinsurer shall be chargeable, subject to court approval,
against the Company as a part of the expense of liquidation to the extent of a
proportionate share of the benefit which may accrue to the Company solely as a
result of the defense undertaken by the Reinsurer.
ARTICLE VIII
DAC TAX PROVISION
1. The Company and Reinsurer hereby agree to abide by Section 1.848-2(g)(8)
of the Income Tax Regulations under Section 848 of the Internal Revenue Code of
1986, as amended. The terms used in this Article are defined by reference to
Regulation 1.848-2. The term "net consideration" will refer to either net
consideration as defined in Regulation Section 1.848-2(f) or gross amount of
premium and other considerations as defined in Regulation Section 1.848-3(b), as
appropriate.
2. Each party shall attach a schedule to its federal income tax return that
identifies the relevant reinsurance agreements for which the joint election
under the Regulation has been made.
3. The party with net positive consideration, as defined in the Regulation
promulgated under Code Section 848, for such Agreement for each taxable year,
shall capitalize specified policy acquisition expenses with respect to such
Agreement without regard to the general deductions limitation of Section 848
(c)(1).
4. Each party agrees to exchange information pertaining to the amount of
net consideration under such Agreement each year to ensure consistency.
5. This election shall be effective for the year that the Agreement was
entered into and for all subsequent years that such Agreement remains in effect.
6. The Reinsurer will submit to the Company by May 1 of each year its
calculation of the net consideration for the preceding calendar year. This
schedule of calculations will be accompanied by a statement signed by an officer
of the Reinsurer stating that the Reinsurer will report such net consideration
in its tax return for the preceding calendar year.
7. The Company may contest such calculation by providing an alternative
calculation to the Reinsurer in writing within 30 days of the Company's receipt
of the Reinsurer's calculation. If the Company does not so notify the Reinsurer,
the Reinsurer will report the net consideration as determined by the Reinsurer
in the Reinsurer's tax return for the previous calendar year.
8. If the Company contests the Reinsurer's calculation of the net
consideration, the parties will act in good faith to reach an agreement as to
the correct amount within 30 days of the date the Company submits its
alternative calculation. If the Reinsurer and the Company reach agreement on the
net amount of consideration, each party shall report such amount in their
respective tax returns for the previous calendar year.
ARTICLE IX
MISCELLANEOUS PROVISIONS
1. All Schedules referred to in this Agreement are attached hereto and
incorporated herein by reference.
2. Neither this Agreement nor any reinsurance under this Agreement shall be
sold, assigned or transferred by the Company without prior written consent of
the Reinsurer. Such approval shall not unreasonably be withheld. The provisions
of this section are not intended to preclude the Reinsurer from retroceding the
reinsurance on an indemnity basis.
3. This Agreement, including any of the schedules and amendments,
constitutes the entire agreement between the parties with respect to the
business being reinsured hereunder, and there are no understandings between the
parties other than as expressed in this Agreement. Any changes in this Agreement
shall be null and void unless such changes are made by written amendment to this
Agreement, signed by both parties.
4. Any notice or notification required under this Agreement requires
written notice or notification mailed or delivered to the Company at its home
office in Lake Mary, Florida, or to the Reinsurer at its administrative office
in Salt Lake City, Utah.
5. If any provision of this Agreement is determined to be invalid or
unenforceable, such determination will not impair or affect the validity or the
enforceability of the remaining provisions of the Agreement.
ARTICLE X
EXECUTION AND EFFECTIVE DATE
This Agreement shall be effective on and after December 31, 2005. In the
event of a death or other occurrence giving rise to a claim under one of the
policies, which death or occurrence occurred prior to the Effective Date,
regardless of whether the death claim or occurrence is reported prior to or
subsequent to the Effective Date, the Company shall be solely liable for the
payment of any claim made on account of any such death or occurrence and
Reinsurer shall pay to the Company the amount of the reserve of the policy with
respect to which the claim is paid, to the extent that such reserve is reduced
as a result of such payment.
IN WITNESS of the above, this Agreement is executed effective as of this
the 31st day of December, 2005.
SECURITY NATIONAL LIFE INSURANCE COMPANY
By: /s/ Scott M. Quist
Title: President and Chief Operating Officer
Date: December 31, 2005
Attest: /s/ R. Matthew Patch
Title: Legal Counsel
Date: December 31, 2005
SOUTHERN SECURITY LIFE INSURANCE COMPANY
By: /s/ Stephen M. Sill
Title: Vice President, Treasurer & Chief Financial Officer
Date: December 31, 2005
Attest: /s/ R. Matthew Patch
Title: Legal Counsel
Date: December 31, 2005
SCHEDULE A
POLICIES AND RISKS REINSURED
Under this Agreement, the Reinsurer reinsures that following quota share of
the risks on the blocks of insurance policies issued or assumed by the Company
and described below.
100% quota share of all policies in force as of the Effective Date, less amounts
previously ceded and new business written after the Effective Date. All policies
reflected in certain Reinsurance Agreements previously entered into between the
Company and Reinsurer on October 1, 2003 and October 1, 2004 are substituted and
replaced hereunder.
SCHEDULE B
REINSURANCE PREMIUMS
1. Reinsurance Premiums. The Company shall pay the Reinsurer a reinsurance
premium on all policies in effect from time to time under this Agreement in an
amount equal to the gross premium charged by the Company corresponding to the
amount and policies reinsured hereunder.
2. Mode of Payment. The Premium paid to the Reinsurer by the Company will
be paid as collected by the Company.
SCHEDULE C
COMMISSIONS AND EXPENSE ALLOWANCE
1. Ceding Commission Fee on Individual Life Insurance as a Percentage of
Collected Premiums
Plan Description Ceding Commission Fee
Calculation of Ceding Commission Fee
Premium Reserve Amount
Total Collected Premium $______________ $ ______________
Percentage Reinsured $ ___100%______ $___100%_______
Reinsured Collected Premiums $____________ $ ____________
Ceding Commission Fee Percentage $ ______0%_____ $ _____0%______
Ceding Commission Fee $ ____________ $ ____________
2. Monthly Commission and Expense Allowance.
A commission and expense allowance for any period the Company performs contract
administration functions in an amount to be mutually agreed upon by the parties.
3. Premium Taxes, including all other Licenses and Fees based on Premium.
A commission and expense allowance of 3.5 percent of collected premiums
will be paid in addition to all other allowances. An allowance of the amount
actually paid as sales commissions shall also be paid.
SCHEDULE D
MONTHLY SETTLEMENT
FROM
SOUTHERN SECURITY LIFE INSURANCE COMPANY
TO SECURITY NATIONAL LIFE INSURANCE COMPANY
AND FROM
SECURITY NATIONAL LIFE INSURANCE COMPANY
TO
SOUTHERN SECURITY LIFE INSURANCE COMPANY
Reporting Month: ____________/ _________/ __________
Date Report Completed: ________________/ ____________/ ___________
1) Direct Premiums ____________
Less Reinsurance Premiums Paid ____________
Net Premiums ____________
2) Policy Loans ____________
Policy Loans Repaid ____________
Policy Loan Interest Paid in Cash ____________
Total ____________
3) Benefits
Surrenders _____________
Deaths _____________
Other _____________
Less Reinsurance Recoveries _____________
Total _____________
4) Commissions and Expense Allowance (Schedule C) ____________
Less Allowances on Reinsured Ceded ____________
Net Commission and Expense Allowance ____________
5) New Policy Loans Paid Out in Cash ____________
Net due Equals (1) + (2) - (3) - (4) - (5) = ____________
SCHEDULE D CONTINUED
Supplemental Information
Direct Policy
- ------ # of Policies Reserves Face Amount
Beg. of Period ___________ ____________ _____________
+Additions ___________ ____________ _____________
- -Terminations ___________ ____________ _____________
End of Period ___________ ____________ _____________
Reinsurance Ceded
Policy
# of Policies Reserves Face Amount
Beg. of Period ____________ ____________ _____________
+Additions ____________ ____________ _____________
- -Terminations ____________ ____________ _____________
End of Period ____________ ____________ _____________
Direct Gross Net
- ------ ----- ---
Deferred Premiums: _____________ ____________
Due Premiums: _____________ ____________
Advance Premiums: _____________
Reinsurance Ceded
Deferred premiums: _____________ ____________
Due Premiums: _____________ ____________
Advance Premiums: _____________
Coinsurance Allowances on Reinsurance Ceded
- -------------------------------------------
Deferred Premium ____________
Due Premium ____________
Advance Premium ____________
Policy Loan Interest Due: _____________
Policy Loan Interest Accrued: _____________
Policy Loan Interest Unearned: _____________
Policy Loan Beginning of Period: _____________
+ New Loans Paid in Cash: ____________
+ New Loans to Cover Interest: ____________
+ New Loans to Pay Premiums: ____________
- - Loans Paid Off: ____________
Policy Loans End of Period: ____________
Policy Loans Interest Paid in Cash: ____________
Policy Loans Interest Added to Loan: ____________
Total Policy Loan Interest: ____________
EXHIBIT 1
TRUST AGREEMENT