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REINSURANCE AGREEMENT
between
AEGON USA COMPANIES
and
UICI COMPANIES
Effective January 1, 1995
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TABLE OF CONTENTS
Section 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reinsurance Pool
Section 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Designated Representative
Section 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . "Exhibit B" Annual Settlements
Section 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reinsurance Cash Flow Payable
Section 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liability
Section 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Claims
Section 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inspection
Section 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reserves
Section 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Term and Cancellation
Section 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reinstatements
Section 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Custodial Account
Section 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Temporary Offsetting of Custodial Accounts
Section 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Administration
Section 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Joint Election Pursuant to IRC Reg 1.848-2(g)(8)
Section 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Oversights
Section 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Arbitration
Section 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insolvency
Section 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assignment
Section 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amendment
Section 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Choice of Law
Exhibit A . . . . . . . . . . . . . . . . . . . . . . . . . . Policy Identification and Reinsurance Risk Percentage Ceded
Exhibit B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annual Settlements Worksheet
Exhibit C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Quota Share Percentage
Exhibit D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Administration Fee
Exhibits E.1/E.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Custodial Agreement
Exhibit F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Designated Representative
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REINSURANCE AGREEMENT
This Reinsurance Agreement (effective January 1, 1995) is entered into
by and between
NATIONAL MANAGERS LIFE INSURANCE COMPANY,
a Turks and Caicos Island, British West Indies company,
UNITED GROUP REINSURANCE INC.,
a Turks and Caicos Island, British West Indies company,
U. S. MANAGERS LIFE INSURANCE COMPANY,
a British Virgin Island company,
FINANCIAL SERVICES REINSURANCE COMPANY,
a British Virgin Island company,
MEGA LIFE INSURANCE COMPANY,
an Oklahoma insurance company.
These companies shall hereinafter be referred to as "UICI Companies".
and
PFL LIFE INSURANCE COMPANY,
an Iowa insurance company,
LIFE INVESTORS INSURANCE COMPANY OF AMERICA,
an Iowa insurance company,
BANKERS UNITED LIFE ASSURANCE COMPANY,
an Iowa insurance company,
MONUMENTAL LIFE INSURANCE COMPANY,
a Maryland insurance company.
These companies shall hereinafter be referred to as "AEGON Companies".
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WITNESSETH:
WHEREAS, AEGON Companies and UICI Companies have been parties to
contracts of reinsurance in prior years and all parties to this contract of
reinsurance wish to alter the allocation of risk ceded to UICI Companies on
policies or certificates described on "Exhibit A" attached hereto and made a
part hereof;
NOW, THEREFORE, in consideration of the premises, the mutual
agreements contained herein and the good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, it is agreed:
The AEGON Companies and UICI Companies mutually agree to terminate the
following individual Reinsurance Agreements:
PFL Life Insurance Company and Financial Services Reinsurance Company
Dated February 14, 1994
PFL Life Insurance Company and U. S. Managers Life Insurance Company
Dated February 14, 1994
Bankers United Life Assurance Company and United Group Insurance Company
Dated February 14, 1994 and amended for merger of United Group Insurance Company into MEGA Life
Insurance Company on September 30, 1994
Life Investors Insurance Company of America and National Managers Life Insurance Company
Dated February 14, 1994
PFL Life Insurance Company and National Managers Life Insurance Company
Dated February 14, 1994
Monumental Life Insurance Company and Financial Services Reinsurance Company
Dated February 14, 1994
Monumental Life Insurance Company and National Managers Life Insurance Company
Dated February 14, 1994
Monumental Life Insurance Company and United Group Insurance Company
Dated February 14, 1994 and amended for merger of United Group Insurance Company into MEGA Life
Insurance Company on September 30, 1994
PFL Life Insurance Company and United Group Insurance Company
Dated February 14, 1994 and amended for merger of United Group Insurance Company into MEGA Life
Insurance Company on September 30, 1994
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These Reinsurance Agreements will be replaced by agreement of reinsurance
between AEGON Companies and UICI Companies. AEGON Companies and UICI Companies
individually waive their rights under the Term and Cancellation Paragraph 8 of
the Reinsurance Agreements executed on February 14, 1994.
1. Reinsurance Pool. Each of the AEGON Companies will create a
Reinsurance Pool. These Reinsurance Pools will be comprised of the policies
and certificates described in "Exhibit A" multiplied by the appropriate
"Reinsurance Ceded Percentage" for the product and time period. The
"Reinsurance Ceded Percentage" is defined in "Exhibit A". The AEGON Companies
hereby individually cede to the individual UICI Companies, and the UICI
Companies hereby assume from the AEGON Companies, on a "Quota Share Percentage
Reinsurance" basis, their applicable risk percentage as defined in "Exhibit C"
of the Reinsurance Pool.
Where applicable in states which have maximum reinsurance retention
rates for what they term as "Small Group Health Insurance" the applicable risk
percentage as defined in "Exhibit A" shall not exceed the maximum ceded
retention in applicable states for health insurance policies referred to as
"Small Employer Health Insurance". AEGON Companies will increase the retention
percentage rate on non small employer health insurance policies and
certificates included in the reinsurance pool "Exhibit A" to achieve an overall
percentage of reinsurance defined in "Exhibit C" Quota Share Percentage
Reinsurance.
2. Designated Representative. Each member of the UICI Companies
have designated in "Exhibit F" a representative company to be the "Designated
Representative" to the AEGON Companies for purposes of communication concerning
this Reinsurance Agreement. With the mutual consent of the parties of the UICI
Companies, the Designated Representative can be changed with 10 days notice to
the AEGON Companies. The Designated Representative will have the
responsibility to send and receive communications for the UICI Companies.
3. "Exhibit B" Annual Settlements. As referenced above in
Section 1. and "Exhibit A", the Reinsurance Percentage increases in each
calendar year from 1995 through 1997. During the first quarter of each
accounting period subsequent to a Reinsurance Percentage
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change, the settlement sheet shown as "Exhibit B" will be completed
by each AEGON Company. Each AEGON Company will transfer assets equal to the
"Net Assets Transferred" multiplied by the respective "Quota Share Percentage"
defined in "Exhibit C" to each UICI Company.
4. Reinsurance Pool Cash Flow Payable. Each AEGON Company on a
monthly basis will prepare a worksheet showing the monthly cash activity in the
Reinsurance Pool. Net Life and Accident and Health Premiums shall mean
premiums collected less premiums refunded on policies or certificates described
in Exhibit "A" less any stop loss reinsurance costs incurred on policies
described in Exhibits "A". The Net Life and Accident and Health Reinsurance
Pool Premiums shall equal the current reinsurance percentage described in
Exhibits "A" of the Net Life and Accident and Health Premiums. The Reinsurance
Pool Cash Flow Payable is defined as Net Life and Accident and Health
Reinsurance Premiums less the current reinsurance percentage as described in
Exhibits "A" of benefit payments, less the current reinsurance percentage of
commission payments, less administrative expenses as defined in Section 13.
The Reinsurance Pool Cash Flow Payable will be multiplied by the Quota Share
Percentage as defined in "Exhibit C" for settlement with the appropriate UICI
Company. Settlement for each calendar month will occur within 25 days
following the close of such calendar month during the term of this Agreement.
5. Liability. Each UICI Company shall be liable to each AEGON
Company for its prorated share, calculated on the basis of the Quota Share
Percentage of risk assumed by UICI Company, of all claim payments, cash
surrender payments, policyholder benefit payments, premium taxes, legal
expenses, extra contractual damages, claims cost containment expenses, PPO
charges, or any other payments made under the policies reinsured hereunder or
as a result of the sale or issuance of any policies reinsured hereunder. UICI
Companies shall not be liable to AEGON Companies for costs attributable to the
operation of AEGON Companies, or of any affiliates of AEGON Companies, nor
shall UICI Companies be liable to AEGON Companies for fees attributable to any
service provided by an employee of AEGON Companies or an employee of any
affiliate of AEGON Companies, except as expressly provided for in Section 13
below.
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6. Claims. Each UICI Company will accept the decision of the
AEGON Companies on payment of a claim under policies reinsured hereunder
providing the settlement of that claim does not include litigation.
Each AEGON Company shall advise UICI Companies' Designated
Representative of its intention to litigate a claim involving a policy or
policies reinsured hereunder. UICI Companies reserve the right to choose not
to participate in litigation. If UICI Companies so choose, it will discharge
its liability by payment of the "full amount of reinsurance" to AEGON
Companies. In the event UICI Companies choose to discharge their liability by
payment of the "full amount of reinsurance", in lieu of participating in or
litigation, the "full amount of reinsurance" shall be UICI Companies's prorated
share calculated on the basis of the Quota Share Percentage of the amount of
the most recent settlement demand made upon the AEGON Companies by or on behalf
of the litigant.
If no settlement demand has been made by or on behalf of the litigant
at the time UICI Companies chooses not to participate in the litigation, the
AEGON Company shall have a reasonable time within which to solicit a settlement
demand from the litigant in order that UICI Companies' "full amount of
reinsurance" may be calculated.
IF UICI Companies tender to the AEGON Companies the "full amount of
reinsurance" as specified herein, the AEGON Companies shall be entitled to
retain said funds regardless of the outcome of the litigation. Further, the
AEGON companies shall be entitled to utilize said funds to negotiate a
settlement with the litigant if it so chooses, or to satisfy any judgement
rendered against the AEGON Companies.
UICI Companies will have 15 days after the election to not participate
to make payment equal to its prorated share of the full settlement. If payment
is not received within the 15 days then UICI Companies' election to not
participate will be at the discretion of the AEGON Companies. Failure to make
payment in no way effects UICI companies decision not to participate in future
elections.
7. Inspection. UICI Companies' Designated Representative shall
have the right at any time to inspect all of the AEGON Companies' records
concerning any policy reinsured hereunder or concerning any claim made against
a policy reinsured hereunder. Upon request
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made by UICI Companies' Designated Representative, AEGON Companies shall make
all such records available to UICI Companies during normal business hours at
the administrative offices in North Richland Hills, Texas of the AEGON
Companies. Upon request made by UICI Companies' Designated Representative, the
AEGON Companies shall deliver to UICI Companies' Designated Representative
copies of all papers connected with claims made on any policies reinsured
hereunder.
8. Reserves. UICI Companies shall fund and maintain statutory
reserves against its quota share percentage of liabilities under policies
reinsured under this Agreement in an amount equal to the reserves required by
the Insurance Department of the Ceding AEGON Company's state of Domicile (the
"Statutory Reserves"). The Reserves shall be funded and maintained according
to the provisions of the Ceding AEGON Company's state of domicile Insurance
Code. The assets constituting the Statutory Reserves shall consist of cash,
Certificates of Deposit in State or Federally chartered banks or Savings and
Loan Associations, Government obligations, or corporate obligations of the
types permitted as reserve investments for an insurance company under the
provisions of the applicable insurance code.
If the AEGON Company determines that the Statutory Reserves are
insufficient with respect to the risk reinsured hereunder, the AEGON Company
may require the UICI Company to maintain reserves in an amount which is
calculated in accordance with sound actuarial practices. UICI Companies shall
maintain such additional reserves.
9. Term and Cancellation. This Agreement may be terminated by
AEGON Companies or UICI Companies jointly by giving sixty (60) days written
notice by certified mail to the other group. The effective date of such
termination shall be sixty (60) days from the date such written notice is
mailed by certified mail (the "Termination Date"). Upon termination by either
group, the terms and conditions of this Agreement shall continue to apply to
all policies described in Exhibits "A", which are issued prior to the
Termination Date. The Reinsurance Percentage Ceded (as tabled in Exhibits "A")
shall be the percentage in effect at the date of notice of termination of the
Agreement.
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Notice to AEGON Companies from the Designated Representative of UICI
Companies of a change in the distribution of the Quota Share Percentage
allocation of the Reinsurance Pool among the members of the UICI Company group
shall not be deemed a termination of this agreement. Such change in the
allocation of the Quota Share Percentages shall be accomplished by mutual
agreement to a replacement of Exhibit C. Likewise, a change of a member of the
group of UICI Companies shall not be deemed a termination of this agreement,
and shall be noted as an amendment to the agreement. All provisions of the
then current contract will be acknowledged as acceptable by the current group
of UICI Companies.
UICI Companies agree that, when a policy is reinsured hereunder, it
shall be bound to retain such risk so long as the original policy shall remain
in force, either continuously or by reinstatement. In the event the policy is
terminated, the risk of such policy shall also terminate on the effective date
of the termination of the policy. In the event the face amount of any policy
reinsured hereunder is increased or reduced because of an overstatement or
understatement of age being established after the death of the insured, AEGON
Companies and UICI Companies shall share proportionately in such increase or
reduction. Any adjustment for the difference in reinsurance premiums arising
from reductions, increases, terminations or changes as described in this
section shall be made, without interest, in the month following the calendar
month in which the reduction, termination or change becomes effective.
10. Reinstatements. If any policy reinsured hereunder shall lapse
and if it is subsequently reinstated in accordance with its terms and prior to
any termination of this Agreement, the applicable reinsurance shall be
reinstated by UICI Companies subject to the condition that AEGON Companies
shall pay to UICI Companies all reinsurance premiums in arrears with interest
at the same rate and in like manner as AEGON Companies has received. The
payment of all such reinsurance premiums in arrears shall be made in the month
following the calendar month in which a policy is reinstated.
11. Custodial Account. Each of the UICI Companies hereto agree to
maintain a Custodial Account ("Custodian") with a bank selected by UICI
Companies and agreed to by the AEGON Companies in the form attached hereto as
Exhibit "E". The bank or trust company selected shall have corporate trust
powers and is duly authorized to act as a Custodian or Trustee
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and is organized under the laws of the United States of America or any State
thereof and is either a member of the Federal Reserve System or is a member of
the Federal Deposit Insurance Corporation.
Each UICI Company hereby agrees to deposit and maintain asset value
equal to the reserves as described in Section 8 above, in the Custodial Account
in the form of cash, Certificates of Deposit in State or Federally chartered
banks or Savings and Loan Associations, Government obligations, or corporation
obligations of the types permitted as reserve investments for an insurance
company under the provisions of the applicable insurance code. The basis of
valuation of the assets in the Custodial Account will be "admitted asset" value
which is the lower of the applicable provisions of the AEGON Companies' states
of Domicile law and the rules and regulations of the Insurance Commissioner of
the States of Domicile of the AEGON Company and the National Association of
Insurance Commissioners, or market. Within 20 days following notification to
UICI Companies' Designated Representative by AEGON Companies of a deficiency
between the Reserves and the value of the Custodial Account, UICI Companies
shall deposit in the Custodial Account additional assets that will bring the
value of the Custodial Account to the above defined minimum balance as of the
close of the preceding calendar month. Such assets will be held by the UICI
Companies' Custodian for the sole use and benefit of the insurance policies of
AEGON companies which have been reinsured by UICI companies in accordance with
this Agreement.
UICI companies agree that the assets of UICI companies held by the
Custodian shall be utilized by UICI Companies and AEGON Companies or their
successors in interest in accordance with the terms hereof, for the following:
a. To reimburse AEGON Companies for UICI Companies'
Quota Share Percentage of the Liability for the insurance ceded
hereunder; and
b. To reimburse AEGON Companies for UICI Companies'
Quota Share Percentage of returned premiums for the insurance ceded
hereunder or of cash surrenders.
In the event that UICI Companies fail, for a period of 10 days
following the due date of settlement for the Reinsurance Pool Cash Flow
Payable, providing that the AEGON Companies have supplied written notice of the
required settlement within the dates required by Section 4
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above, to reimburse AEGON Companies for the Reinsurance Pool Cash Flow Payable,
then the AEGON Companies shall have the right to withdraw the amounts owed by
UICI Companies from the Custodial Account.
UICI Companies agree that it shall have no withdrawal rights from the
Custodial Account until such time as the account balance in the Custodial
Account exceed the Reserves as described in Section 8.
Notwithstanding the provisions of the preceding paragraph, each UICI
Company may from time to time, with prior written consent from AEGON Companies,
withdraw assets from the Custodial Account, provided that at the time of such
withdrawal the UICI Company replaces the withdrawn assets with assets of a
similar kind and quality and of equal value.
Each UICI Company shall pay all fees charged by the Custodian for
services provided in connection with their Custodial Account.
12. Temporary Offsetting of Custodial Assets. The parties to this
agreement have agreed to strictly comply to Sections 8 and 11 of this
Reinsurance Agreement concerning the establishment, funding, and maintenance of
Custodial Accounts by each UICI Company. As detailed in Section 11 above,
additional funding of the custodial accounts is required by the AEGON Companies
when the admitted asset value of a UICI company's Custodial Account is less
than the Statutory Reserves ceded to the respective UICI company. This
additional funding is to be completed within 20 days of notification of the
deficiency by AEGON Companies to UICI Companies. This time period could result
in creating undue financial and other hardships on a UICI Company.
a. Notification Option. If notification is given by
AEGON Companies to one or more of the UICI Companies, the other UICI
Companies (hereinafter called non-notified companies) of this
agreement mutually agree to pledge their custodial assets to reduce or
eliminate any "shortfall" to the extent that the non-notified
companies of this agreement have assets which are in excess of that
required to meet their own admitted asset requirements. "Notification
option" is the exercising of the rights under this agreement by the
notified party to reduce or eliminate any "shortfall" in its custodial
account with pledged assets from the other non-notified companies.
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b. In the event that two or more of the UICI Companies
should elect to exercise their "notification option" and the
non-notified companies have excess assets to pledge, then such
custodial assets will be applied to the first party properly
exercising its notification options and any remaining excess custodial
assets will be applied equally among the other notified parties.
c. One or more of the UICI Companies can exercise their
"notification option" by written communication from the UICI
Designated Representative to AEGON Companies and the other UICI
parties to this agreement. The notified companies or company
exercising their right under the "notification option" have 50 days
from its election to fund its asset "shortfall". During the period of
the "shortfall" the assets used to reduce or eliminate the "shortfall"
can't be used for any other purpose by any of the parties of this
agreement.
4. This agreement does not change title of the assets,
interest, dividends or other income earned on the assets of the
custodial accounts. In the event that the UICI Company(s) have failed
to satisfy the "shortfall" in their Custodial Account by the 50th day,
AEGON Companies shall have the right to withdraw assets from the other
UICI companies accounts to offset the "shortfall" amount from the
"notified" UICI company. AEGON will not be able to transfer assets
from any UICI company's custodial account that would reduce that UICI
company's custodial account below the required balance for the
statutory reserves ceded to that company.
13. Administration. The inforce hereunder shall be administered
by AEGON Companies. Administration shall include all functions necessary to
service and administer all insurance policies, including but not limited to
premium billing and the payment of policy benefits. The AEGON Companies shall
be entitled to a Monthly Expense Allowance which shall be the sum of the
following:
(a) an Administrative Fee equal to the current percentage
listed in Exhibit "D" multiplied by the "net life and accident and
health reinsurance premiums" collected during the preceding calendar
month on all premiums reinsured hereunder; and
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(b) a Claim Administration Fee equal to three percent (3%) of
UICI Companies' Quota Share Percentage of claim payments accumulated
in the Reinsurance Pool actually made for policy benefits, during the
preceding calendar month on all policies described in Exhibits "A" and
reinsured hereunder.
(c) the current reinsurance percentage described in Exhibits
"A" of the actual expense paid by the Company for various Cost
Containment Services and Outside Legal Services that involve insurance
policies and certificates covered by this Agreement multiplied by the
appropriate Quota Share Percentage. Neither Cost Containment Services
nor Outside Legal Services shall include any cost for services
provided by AEGON Companies employees or any functions AEGON Companies
was paying to have done on a routine basis prior to the effective date
of this Agreement. Cost Containment Services include, but are not
limited to, amounts paid to preferred provider organizations, and
amounts paid for services such as utilization review, preadmission
authorization and case management. Outside Legal Services include,
but are not limited to, amounts paid to Outside Counsel for litigation
charges, and/or legal opinions.
(e) a Premium Tax Fee equal to the effective premium tax rate
paid by the AEGON Companies which includes prorated statutory
assessments charged to expense on all premium ceded to UICI Companies
on policies described in Exhibits "A". AEGON Companies shall report
to UICI Companies no later than the 20th day of each calendar month on
all policies reinsured hereunder and upon which premiums were
collected during the preceding calendar month or which were issued,
terminated, changed or reduced during the preceding calendar month,
showing the reinsurance premiums due on all premiums collected,
adjusted as provided in Section 4 (the "Reinsurance Pool Cash Flow
Payable"). The accounting furnished UICI Companies by AEGON Companies
shall also contain all pertinent information with respect to all
premiums, benefits, commissions, and cash surrenders paid or made
during the preceding calendar month. UICI Companies has the right to
request a detailed listing of the premium collections, commission
payments, or claims payments made under this reinsurance Agreement.
AEGON Companies shall also provide to UICI Companies a statement of
statutory assets and liabilities (statutory amounts may be estimated
on an interim basis; however, each
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calendar quarter such reports shall be stated on the basis of actual
data processing reports) which shall be reviewed and approved by
qualified actuaries and their determination shall be final. Reporting
forms have been mutually agreed upon between the parties.
14. Joint Election Pursuant to IRC proposed regulation
1.848-2(g)(8). NOW THEREFORE, the undersigned parties agree that the party
with net positive consideration for each taxable year as determined under
Regulation 1.848- 2(f) and 1.848-3 will capitalize specified policy acquisition
expenses with respect to the Reinsurance Agreement without regard to the
general deductions limitation under IRC Section 848(c)(1).
The parties also agree to exchange information by June 1st, following
the end of the year, pertaining to the amount of net consideration under the
Reinsurance Agreements to ensure consistency. Any disagreement between the
parties as to the amount of net consideration shall be resolved no later than
July 1st.
All parties represent and warrant they are subject to U.S. taxation
under Subchapter L of the Internal Revenue code. The parties agree that the
party with net positive consideration for each taxable year, as determined
pursuant to this Agreement, will capitalize specified policy acquisition
expenses with respect to the Reinsurance Agreement without regard to its
general deductions limitation.
15. Oversights. It is understood and agreed that either party may
correct its failure to comply with a requirement of this Agreement if the
failure was unintentional or caused by clerical oversight or misunderstanding,
within ninety (90) days after the notice of the failure is given to such party
in writing. In the event any such failure is corrected in a timely manner,
both parties shall be restored to the position they would have occupied had the
failure not occurred.
16. Arbitration. It is the intention of the parties that customs
and usages of the business of reinsurance shall be given full effect to the
interpretation of this Agreement. The parties shall act in all matters with
the highest of good faith. Any dispute or difference between
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the parties with respect to the operation or interpretation of this Agreement
on which an amicable understanding cannot be reached shall be decided by
arbitration reserving to each party the right to seek civil injunctive relief
pending the decision of the arbitrators. The arbitrators are empowered to
decide all questions or issues and shall be free to reach their decision from
the standpoint of equity and customary practices of the insurance industry.
The Court of Arbitration shall be held in a city mutually agreed upon by the
parties and shall consist of three arbitrators. AEGON Companies shall appoint
one arbitrator and UICI Companies the second. These two arbitrators shall then
select the third before arbitration begins. Should one of the parties decline
to appoint an arbitrator or should the two arbitrators be unable to agree upon
the choice of a third, such appointment shall be made by the American
Arbitration Association (AAA), and the AAA appointed arbitrator shall act as
chairman of the arbitration tribunal. The arbitrators shall decide by a
majority of votes, and from their written decision there can be no appeal. The
court of arbitration, including the fees of arbitrators, shall be borne as the
arbitrators decide; however, the parties hereto shall bear their own costs,
including attorney's fees, for their presentations to the arbitrators.
17. Insolvency. In the event of the insolvency of any AEGON
Company, all reinsurance under this Agreement shall be payable directly to its
liquidator, receiver or statutory successor without diminution because of
insolvency. It is agreed that the liquidator, receiver or statutory successor
of the AEGON Company shall give written notice to UICI Companies' Designated
Representative of the pendency of a claim against the AEGON Company on any of
the reinsured policies within a reasonable time after such claim is filed in
the insolvency proceeding and during the pendency of such claim, UICI Companies
may investigate such claim and interpose itself, at its own expense, in the
proceeding where such claim is to be adjudicated and may raise any defense or
defenses which are available to the AEGON Company or its liquidator, receiver
or statutory successor. The expenses thus incurred by UICI Companies shall be
chargeable, subject to Court approval, against the AEGON Company as part of the
expense of liquidation. Notwithstanding anything in the preceding portions of
this paragraph to the contrary, the liability of UICI Companies as Reinsurer
shall neither increase nor decrease because of the insolvency of the AEGON
Company.
13
16
In the event any UICI Company shall become insolvent, then AEGON
Companies shall have the right to terminate this Agreement upon notice to UICI
Companies, its liquidator, receiver, or statutory successor. If AEGON
Companies shall terminate this Agreement pursuant to the terms of this Section
17, then AEGON Companies shall be entitled to withdraw from the Custodial
Account an amount equal to (1) the reserves which are required to be maintained
under the Insurance Code of the State of State of Domicile of the AEGON
Companies, as of the date of termination, for the insurance ceded hereunder and
(2) any other amounts which are due and owing to AEGON Companies, on the date
of termination, under the terms of this Agreement.
18. Assignment. This Agreement, or any right hereunder, shall not
be voluntarily assigned by either party without the prior written consent of
the other party. Furthermore, UICI Companies agrees that it will not enter
into any other agreement with respect to the business reinsured under this
Agreement without the express written consent of AEGON Companies and the AEGON
Companies agree that such consent shall not be unreasonably withheld. Subject
to the foregoing, the obligations of the parties hereunder shall be binding
upon and inure to the benefit of the parties hereto, and their respective
transferees, successors and assigns.
19. Amendment. This Agreement constitutes the entire contract
between the parties and may not be altered, modified, or in any way amended,
except by an instrument in writing duly executed by the proper officers of both
parties.
20. Choice of Law. Whereas, UICI Companies are not licensed to
act as an insurer in each state that the coinsured business referred to above
is written; and
Whereas, various state insurance departments have rules and
regulations affecting the accounting for assets of each insurance company
committed to the liabilities under coinsurance and reinsurance agreements; and
Whereas, the above referred parties have entered into a custodian
agreement with custodian to provide for the establishment of a custodial
account to hold securities of UICI Companies in regard to assets received as a
result of the coinsurance agreements; and
14
17
Whereas, the parties desire to take credit for reserves on risks ceded
or may be ceded in the future to UICI Companies;
Now, therefore, in consideration of the mutual agreements contained
herein, the parties agree as follows:
(1) That in the event of the failure of UICI Companies to perform
its obligations under the terms of the reinsurance agreement, UICI Companies,
at the request of AEGON Companies, shall submit to the jurisdiction of any
court of competent jurisdiction in any state of the United States, shall comply
with all requirements necessary to give such court jurisdiction, and shall
abide by the final decision of such court or of any appellate court in the
event of an appeal.
(2) That the respective AEGON Companies State of Domicile
Insurance Commissioner is the true and lawful attorney of UICI Companies upon
whom may be served any lawful process in any action, suit, or proceeding
instituted by or on behalf of AEGON Companies.
15
18
IN WITNESS HEREOF, the parties have caused this Reinsurance
Agreement to be executed by their respective officers this 20 day of
March, 1995.
UICI COMPANIES AEGON COMPANIES
National Managers Life Insurance Company PFL Life Insurance Company
/s/ Vernon R. Woelke /s/ James Parker
- ---------------------------------------- -------------------------------------------
President Vice President
- ---------------------------------------- -------------------------------------------
United Group Reinsurance Inc. Life Investors Insurance Company of America
/s/ Vernon R. Woelke /s/ James Parker
- ---------------------------------------- -------------------------------------------
President Vice President
- ---------------------------------------- -------------------------------------------
U. S. Managers Life Insurance Company Bankers United Life Assurance Company
/s/ Vernon R. Woelke /s/ James Parker
- ---------------------------------------- -------------------------------------------
President Vice President
- ---------------------------------------- -------------------------------------------
Financial Services Reinsurance Company Monumental Life Insurance Company
/s/ Vernon R. Woelke /s/ James Parker
- ---------------------------------------- -------------------------------------------
President Vice President
- ---------------------------------------- -------------------------------------------
EGA Life Insurance Company
/s/ Vernon R. Woelke
- ----------------------------------------
Vice President
- ----------------------------------------
16
19
EXHIBIT "A" Effective 1/1/95
POLICY IDENTIFICATION AND REINSURANCE PERCENTAGE CEDED
Policy Identification
The block of life and accident and health policies reinsured are all
policies and certificates of insurance (including riders thereto) which are
identified on the Company's in force runs by the following Division Codes:
BLOCK 1
RLOB DIV RLOB DIV RLOB DIV
- ---- --- ---- --- ---- ---
07 05/80 08 15/18/80 09 05
10 05 12 05 13 05
14 04/84 15 05/80 16 05/80
17 05/80 20 23 28 15/18
32 15/18 39 37 39 87
56 56/85 ADB
BLOCK 2
RLOB DIV RLOB DIV
- ---- --- ---- ---
05 26/83 11 62/82
18 06/86 19 24/82
34 03
It is agreed that the above listed plans of insurance shall include any state
variations whether group or individual coverage regardless of different form
numbers due to filing of forms for state approval purposes.
Reinsurance Ceded Percentage
It is agreed that AEGON Companies will increase the percentage of
reinsurance ceded to be applied to the policies/certificates listed as Block 1
above in this "Exhibit A" pursuant to the table below:
January 1, 1995-December 31, 1995 55.0%
January 1, 1996-December 31, 1996 57.5%
January 1, 1997 and thereafter 60.0%
The policies/certificates listed as Block 2 above in this "Exhibit A"
shall have a Reinsurance Ceded Percentage of 50%.
17
20
EXHIBIT "B" EFFECTIVE 1/1/94
ANNUAL SETTLEMENT WORKSHEET
On each January 1 of the years 1996 and 1997, the reinsurance
percentage to be ceded by AEGON Companies is to increase according to the
schedule in Exhibit "A". The net settlement of reserves, policy liabilities,
policy assets, expense allowances, and the consideration shall be completed by
AEGON Companies for the review of UICI Companies. The following settlement
worksheet shall be completed for review within 75 days of the effective date of
the reinsurance percentage change. The transfer of cash or cash equivalents by
AEGON Companies will be completed no later than March 31.
ANNUAL SETTLEMENT WORKSHEET
January 1, 199X
Reinsurance Percentage Increasing from ____ to ____
POLICY ASSETS
Due Premium XXX.
Deferred Premium Assets XXX.
POLICY LIABILITIES
Advance Premium XXX.
Unearned Premium XXX.
Due Commission XXX.
RESERVES
Claim Reserves XXX.
Active Life Reserves XXX.
NET STATUTORY RESERVES X,XXX.
------
GAAP ADJUSTMENTS
Deferred Premium XX.
PAC Unearned Comm XX.
Assets XXX.
Unearned Premium XX.
Active Life Reserve XX.
Liabilities XXX.
NET GAAP ADJUSTMENTS X,XXX.
------
CONSIDERATION XXX
---
NET CASH TRANSFERRED XX,XXX.
-------
21
EXHIBIT C EFFECTIVE 1/1/95
QUOTA SHARE PERCENTAGE
The percentage of reinsurance risk ceded by each AEGON Company to each
UICI Company will be based on the following table:
United Group Reinsurance Inc. 75%
National Managers Life Insurance Company 10%
U.S. Managers Life Insurance Company 5%
Financial Services Reinsurance Company 10%
The percentage of reinsurance risk will be applied equally to each
component of the Reinsurance Pool Cash Flow Payable for monthly financial
activity as defined in Section 4. of the Reinsurance Agreement.
22
EXHIBIT D EFFECTIVE 1/1/95
ADMINISTRATIVE FEE
UICI Companies shall pay AEGON Companies a fixed percentage of net
life and accident and health reinsurance premiums for administrative expenses.
This payment of expense allowance shall be reimbursement for policy
underwriting, policy issue, billing and collection, and general policy
administration. The expense percent is five and 79/100 percent (5.79%).
23
EXHIBIT "E.1" Effective 1/1/95
AGREEMENT FOR CUSTODIAL ACCOUNT
AGREEMENT by and between MELLON BANK OF PHILADELPHIA, PA (the "Bank")
and NATIONAL MANAGERS LIFE INSURANCE COMPANY, a Turks and Caicos Island,
British West Indies company, hereinafter referred to as "NMLIC",
and
PFL LIFE INSURANCE COMPANY,
an Iowa insurance company,
LIFE INVESTORS INSURANCE COMPANY OF AMERICA,
an Iowa insurance company,
BANKERS UNITED LIFE ASSURANCE COMPANY,
an Iowa insurance company,
MONUMENTAL LIFE INSURANCE COMPANY,
a Maryland insurance company.
These companies shall hereinafter be referred to as "AEGON Companies".
In consideration of the mutual covenants and agreements hereinafter
set forth and the mutual benefits hereunder, the parties hereto agree as
follows:
1. The Bank agrees to open and establish a separate Custodial
Account (the "Account") for and in the name of AEGON Companies and NMLIC and to
hold therein, as Custodian for the AEGON Companies and NMLIC, all stocks,
bonds, securities and any other property (the "Assets") from time to time
deposited with or received by the Bank for the account of the AEGON Companies
and NMLIC.
2. The Bank is authorized to collect, receive, and hold for the
account of the AEGON Companies and NMLIC all income from the Assets within the
custody of the Bank from time to time under the terms hereof. All such income
shall be credited to the Account at the Bank subject to further instruction of
the AEGON Companies and NMLIC.
3. The Bank is authorized to sign any declarations, affidavits,
certificates of ownership or other documents that are or may hereafter be
required concerning all coupons, registered interest, dividends or other income
on Assets that may from time to time be within the custody of the Bank under
the terms hereof, and NMLIC agrees to reimburse, indemnify and hold the Bank
harmless of and from any and all liability, loss, claim, damage, fees, or
expenses that may arise or to which the Bank may be subjected by reason of
executing any of these documents.
4. The Bank is authorized to collect, receive, and hold the
principal of all Assets that may from time to time be within the custody of the
Bank under the terms hereof when and as the same may mature or be redeemed,
sold, exchanged, or otherwise disposed of upon the order of AEGON Companies and
NMLIC. All principal collected or received by the Bank shall be
24
credited to the Account at the Bank subject to further instructions of AEGON
Companies and NMLIC.
5. Within fifteen (15) days following the close of a calendar
month, the Bank will, upon the written request of AEGON Companies or NMLIC,
forward to AEGON Companies and NMLIC a statement of principal and income
transactions effected during the preceding calendar month together with a
statement reflecting all Assets within the custody of the Bank under the terms
hereof as of the close of the preceding calendar month.
6. The Bank, upon written instructions of AEGON Companies and
NMLIC, will make delivery for the sale of securities held by the Bank for the
account of AEGON Companies and NMLIC in deliverable form against payment for
these securities. The Bank will not be liable or responsible for or on account
of any act or omission of any broker or other agent designated by AEGON
Companies and NMLIC.
7. The Bank will, in the absence of written instructions of AEGON
Companies and NMLIC, be under no obligation to take any action regarding stock
dividends, warrants, rights to subscribe, plans of reorganization or
recapitalization, or plans for the exchanges of Assets that may from time to
time be within the custody of the Bank under the terms hereof.
8. Any and all Assets deposited with the Bank hereunder may be
withdrawn from the Bank at any time only upon receipt by the Bank of a written
order or request executed by the Commissioner of Insurance of the state of
Domicile of the AEGON Company, the Commissioner of Insurance of the NMLIC
domicile, or a duly authorized representative of either of such Commissioners
of Insurance, or a duly authorized Officer of AEGON Companies designated to the
Bank by appropriate resolution and incumbency certificates of the AEGON
Companies relating to such Officers.
9. NMLIC assumes the duty of filing any and all tax reports and
returns as well as full responsibility for paying all taxes due on the income
and principal collected by the Bank under the terms hereof.
10. All Assets that may from time to time be within the custody of
the Bank under the terms hereof shall be kept separate from the assets of the
Bank.
11. The Bank will hold certificates representing or evidencing
Assets that may from time to time be within the custody of the Bank under the
terms hereof separate from certificates representing or evidencing assets owned
by other insurance companies for which the Bank serves as custodian. The
certificates representing or evidencing these Assets shall be kept separate and
physically apart from all other assets for which the Bank serves as a custodian
or fiduciary.
12. No certificate representing or evidencing Assets that may from
time to time be within the custody of the Bank under the terms hereof may be
merged into or with one or more certificates of a larger denomination
representing or evidencing those Assets of any third party including any other
insurance company.
13. The Bank will furnish upon written request by AEGON Companies,
NMLIC, the Commissioner of Insurance of the AEGON Companies states of domicile,
the Commissioner of Insurance of the NMLIC domicile, or a duly authorized
representative of either of such Commissioners of Insurance, a certified list
of all Assets held by the Bank in the Account. AEGON Companies and NMLIC
expressly authorize the Bank to respond to any direct inquiry made by the
Commissioner of Insurance of the AEGON Companies state of domicile, the
Commissioner of Insurance of the NMLIC domicile, or a duly authorized
representative of such Commissioners of Insurance, and the Bank shall permit
such parties to examine and audit all
25
Assets held by the Bank hereunder.
14. All Assets, other than obligations of the United States
Government, that may from time to time be within the custody of the Bank under
the terms hereof shall remain physically on the Bank's premises and the Bank
will not deposit these Assets with correspondent banks, investment bankers,
brokers of any other third party. The Bank will not pledge or hypothecate any
Asset in any manner nor will the Bank be permitted to use these Assets for the
benefit of the Bank.
15. During the term of this Agreement, the Bank will maintain
fidelity and other insurance coverage that the Bank deems necessary or
appropriate to cover any certificates representing or evidencing Assets that
are lost because of any error, omission or other culpable act of the Bank or
any agent, employee or authorized representative of the Bank. All insurance
coverage of this type shall be in addition to and not in substitution of, the
full faith and credit of the Bank.
16. The Bank will provide the Assets that may from time to time be
within the custody of the Bank the same degree of care and protection that the
Bank provides its own property, and the AEGON Companies and NMLIC agree that
the Bank will not be liable for loss or damage caused directly or indirectly by
invasion, insurrection, riot, civil war or commotion, or military or usurped
power, or by order of any civil authority, or other cause beyond the control of
the Bank.
17. The Bank will not be under any obligation to defend any legal
action or engage in any legal proceedings regarding the Account or regarding
any Assets that may from time to time be within the custody of the Bank unless
the Bank is indemnified in advance to its own satisfaction.
18. NMLIC agree to indemnify and hold the Bank harmless from any
and all costs, damages, expenses, fees and liability that it may incur from any
action taken or omitted to be taken by it upon instruction of AEGON Companies
and NMLIC concerning the Account or in the case of a withdrawal pursuant to
Paragraph 19 hereof in instruction of AEGON Companies, the Commissioner of
Insurance of the AEGON Companies state of domicile, the Commissioner of
Insurance of the NMLIC domicile, or a duly authorized representative of either
of such Commissioner of Insurance.
19. The AEGON Companies or the Commissioner of Insurance of the
AEGON Companies state of domicile, or a duly authorized representative of such
Commissioner, will have the right, without the consent of NMLIC, to withdraw
assets within the custody of the Bank from time to time for the purpose of
satisfying any liability of NMLIC under the Agreement of Reinsurance between
AEGON Companies and NMLIC dated March 20, 1995. No Assets within the custody
of the Bank under the terms hereof and no income thereon collected by the Bank
will be withdrawn from the Account by NMLIC without the approval of AEGON
Companies, which approval shall be given for all withdrawals made pursuant to
the terms of the Agreement of Reinsurance between the AEGON Companies and NMLIC
dated March 20, 1995.
26
DATED: March 20,1995
- ----------------------
AEGON COMPANIES
National Managers Life Insurance Company PFL Life Insurance Company
/s/ Vernon R. Woelke /s/ James Parker
- ---------------------------------------- -------------------------------------------
President Vice President
- ---------------------------------------- -------------------------------------------
Life Investors Insurance Company of America
/s/ James Parker
-------------------------------------------
Vice President
-------------------------------------------
Bankers United Life Assurance Company
/s/ James Parker
-------------------------------------------
Vice President
-------------------------------------------
Monumental Life Insurance Company
/s/ James Parker
-------------------------------------------
Vice President
-------------------------------------------
27
EXHIBIT "E.2" Effective 1/1/95
AGREEMENT FOR CUSTODIAL ACCOUNT
AGREEMENT by and between MELLON BANK OF PHILADELPHIA (the "Bank") and
UNITED GROUP REINSURANCE, INC., a Turks and Caicos Island, British West Indies
company, hereinafter referred to as "UGRI",
and
PFL LIFE INSURANCE COMPANY,
an Iowa insurance company,
LIFE INVESTORS INSURANCE COMPANY OF AMERICA,
an Iowa insurance company,
BANKERS UNITED LIFE ASSURANCE COMPANY,
an Iowa insurance company,
MONUMENTAL LIFE INSURANCE COMPANY,
a Maryland insurance company.
These companies shall hereinafter be referred to as "AEGON Companies".
In consideration of the mutual covenants and agreements hereinafter
set forth and the mutual benefits hereunder, the parties hereto agree as
follows:
1. The Bank agrees to open and establish a separate Custodial
Account (the "Account") for and in the name of AEGON Companies and UGRI and to
hold therein, as Custodian for the AEGON Companies and UGRI, all stocks, bonds,
securities and any other property (the "Assets") from time to time deposited
with or received by the Bank for the account of the AEGON Companies and UGRI.
2. The Bank is authorized to collect, receive, and hold for the
account of the AEGON Companies and UGRI all income from the Assets within the
custody of the Bank from time to time under the terms hereof. All such income
shall be credited to the Account at the Bank subject to further instruction of
the AEGON Companies and UGRI.
3. The Bank is authorized to sign any declarations, affidavits,
certificates of ownership or other documents that are or may hereafter be
required concerning all coupons, registered interest, dividends or other income
on Assets that may from time to time be within the custody of the Bank under
the terms hereof, and UGRI agrees to reimburse, indemnify and hold the Bank
harmless of and from any and all liability, loss, claim, damage, fees, or
expenses that may arise or to which the Bank may be subjected by reason of
executing any of these documents.
4. The Bank is authorized to collect, receive, and hold the
principal of all Assets that may from time to time be within the custody of the
Bank under the terms hereof when and as the same may mature or be redeemed,
sold, exchanged, or otherwise disposed of upon the order of AEGON Companies and
UGRI. All principal collected or received by the Bank shall be credited to the
Account at the Bank subject to further instructions of AEGON Companies and
28
UGRI.
5. Within fifteen (15) days following the close of a calendar
month, the Bank will, upon the written request of AEGON Companies or UGRI,
forward to AEGON Companies and UGRI a statement of principal and income
transactions effected during the preceding calendar month together with a
statement reflecting all Assets within the custody of the Bank under the terms
hereof as of the close of the preceding calendar month.
6. The Bank, upon written instructions of AEGON Companies and
UGRI, will make delivery for the sale of securities held by the Bank for the
account of AEGON Companies and UGRI in deliverable form against payment for
these securities. The Bank will not be liable or responsible for or on account
of any act or omission of any broker or other agent designated by AEGON
Companies and UGRI.
7. The Bank will, in the absence of written instructions of AEGON
Companies and UGRI, be under no obligation to take any action regarding stock
dividends, warrants, rights to subscribe, plans of reorganization or
recapitalization, or plans for the exchanges of Assets that may from time to
time be within the custody of the Bank under the terms hereof.
8. Any and all Assets deposited with the Bank hereunder may be
withdrawn from the Bank at any time only upon receipt by the Bank of a written
order or request executed by the Commissioner of Insurance of the state of
Domicile of the AEGON Company, the Commissioner of Insurance of the UGRI
domicile, or a duly authorized representative of either of such Commissioners
of Insurance, or a duly authorized Officer of AEGON Companies designated to the
Bank by appropriate resolution and incumbency certificates of the AEGON
Companies relating to such Officers.
9. UGRI assumes the duty of filing any and all tax reports and
returns as well as full responsibility for paying all taxes due on the income
and principal collected by the Bank under the terms hereof.
10. All Assets that may from time to time be within the custody of
the Bank under the terms hereof shall be kept separate from the assets of the
Bank.
11. The Bank will hold certificates representing or evidencing
Assets that may from time to time be within the custody of the Bank under the
terms hereof separate from certificates representing or evidencing assets owned
by other insurance companies for which the Bank serves as custodian. The
certificates representing or evidencing these Assets shall be kept separate and
physically apart from all other assets for which the Bank serves as a custodian
or fiduciary.
12. No certificate representing or evidencing Assets that may from
time to time be within the custody of the Bank under the terms hereof may be
merged into or with one or more certificates of a larger denomination
representing or evidencing those Assets of any third party including any other
insurance company.
13. The Bank will furnish upon written request by AEGON Companies,
UGRI, the Commissioner of Insurance of the AEGON Companies states of domicile,
the Commissioner of Insurance of the UGRI domicile, or a duly authorized
representative of either of such Commissioners of Insurance, a certified list
of all Assets held by the Bank in the Account. AEGON Companies and UGRI
expressly authorize the Bank to respond to any direct inquiry made by the
Commissioner of Insurance of the AEGON Companies state of domicile, the
Commissioner of Insurance of the UGRI domicile, or a duly authorized
representative of such Commissioners of Insurance, and the Bank shall permit
such parties to examine and audit all Assets held by the Bank hereunder.
29
14. All Assets, other than obligations of the United States
Government, that may from time to time be within the custody of the Bank under
the terms hereof shall remain physically on the Bank's premises and the Bank
will not deposit these Assets with correspondent banks, investment bankers,
brokers of any other third party. The Bank will not pledge or hypothecate any
Asset in any manner nor will the Bank be permitted to use these Assets for the
benefit of the Bank.
15. During the term of this Agreement, the Bank will maintain
fidelity and other insurance coverage that the Bank deems necessary or
appropriate to cover any certificates representing or evidencing Assets that
are lost because of any error, omission or other culpable act of the Bank or
any agent, employee or authorized representative of the Bank. All insurance
coverage of this type shall be in addition to and not in substitution of, the
full faith and credit of the Bank.
16. The Bank will provide the Assets that may from time to time be
within the custody of the Bank the same degree of care and protection that the
Bank provides its own property, and the AEGON Companies and UGRI agree that the
Bank will not be liable for loss or damage caused directly or indirectly by
invasion, insurrection, riot, civil war or commotion, or military or usurped
power, or by order of any civil authority, or other cause beyond the control of
the Bank.
17. The Bank will not be under any obligation to defend any legal
action or engage in any legal proceedings regarding the Account or regarding
any Assets that may from time to time be within the custody of the Bank unless
the Bank is indemnified in advance to its own satisfaction.
18. UGRI agree to indemnify and hold the Bank harmless from any
and all costs, damages, expenses, fees and liability that it may incur from any
action taken or omitted to be taken by it upon instruction of AEGON Companies
and UGRI concerning the Account or in the case of a withdrawal pursuant to
Paragraph 19 hereof in instruction of AEGON Companies, the Commissioner of
Insurance of the AEGON Companies state of domicile, the Commissioner of
Insurance of the UGRI domicile, or a duly authorized representative of either
of such Commissioner of Insurance.
19. The AEGON Companies or the Commissioner of Insurance of the
AEGON Companies state of domicile, or a duly authorized representative of such
Commissioner, will have the right, without the consent of UGRI, to withdraw
assets within the custody of the Bank from time to time for the purpose of
satisfying any liability of UGRI under the Agreement of Reinsurance between
AEGON Companies and UGRI dated March 20, 1995. No Assets within the custody of
the Bank under the terms hereof and no income thereon collected by the Bank
will be withdrawn from the Account by UGRI without the approval of AEGON
Companies, which approval shall be given for all withdrawals made pursuant to
the terms of the Agreement of Reinsurance between the AEGON Companies and UGRI
dated March 20, 1995.
30
DATED: March 20, 1995
AEGON COMPANIES
United Group Reinsurance, Inc. PFL Life Insurance Company
/s/ Vernon R. Woelke /s/ James Parker
- ----------------------------------------- -------------------------------------------
President Vice President
- ----------------------------------------- -------------------------------------------
Life Investors Insurance Company of America
/s/ James Parker
-------------------------------------------
Vice President
-------------------------------------------
Bankers United Life Assurance Company
/s/ James Parker
-------------------------------------------
Vice President
-------------------------------------------
Monumental Life Insurance Company
/s/ James Parker
-------------------------------------------
Vice President
-------------------------------------------
31
EXHIBIT "E.3" Effective 1/1/95
AGREEMENT FOR CUSTODIAL ACCOUNT
AGREEMENT by and between MELLON BANK OF PHILADELPHIA (the "Bank") and
U. S. MANAGERS LIFE INSURANCE COMPANY, INC., a British Virgin Island Company,
hereinafter referred to as "USMLIC",
and
PFL LIFE INSURANCE COMPANY,
an Iowa insurance company,
LIFE INVESTORS INSURANCE COMPANY OF AMERICA,
an Iowa insurance company,
BANKERS UNITED LIFE ASSURANCE COMPANY,
an Iowa insurance company,
MONUMENTAL LIFE INSURANCE COMPANY,
a Maryland insurance company.
These companies shall hereinafter be referred to as "AEGON Companies".
In consideration of the mutual covenants and agreements hereinafter
set forth and the mutual benefits hereunder, the parties hereto agree as
follows:
1. The Bank agrees to open and establish a separate Custodial
Account (the "Account") for and in the name of AEGON Companies and USMLIC and
to hold therein, as Custodian for the AEGON Companies and USMLIC, all stocks,
bonds, securities and any other property (the "Assets") from time to time
deposited with or received by the Bank for the account of the AEGON Companies
and USMLIC.
2. The Bank is authorized to collect, receive, and hold for the
account of the AEGON Companies and USMLIC all income from the Assets within the
custody of the Bank from time to time under the terms hereof. All such income
shall be credited to the Account at the Bank subject to further instruction of
the AEGON Companies and USMLIC.
3. The Bank is authorized to sign any declarations, affidavits,
certificates of ownership or other documents that are or may hereafter be
required concerning all coupons, registered interest, dividends or other income
on Assets that may from time to time be within the custody of the Bank under
the terms hereof, and USMLIC agrees to reimburse, indemnify and hold the Bank
harmless of and from any and all liability, loss, claim, damage, fees, or
expenses that may arise or to which the Bank may be subjected by reason of
executing any of these documents.
4. The Bank is authorized to collect, receive, and hold the
principal of all Assets that may from time to time be within the custody of the
Bank under the terms hereof when and as the same may mature or be redeemed,
sold, exchanged, or otherwise disposed of upon the order of AEGON Companies and
USMLIC. All principal collected or received by the Bank shall be credited to
the Account at the Bank subject to further instructions of AEGON Companies and
32
USMLIC.
5. Within fifteen (15) days following the close of a calendar
month, the Bank will, upon the written request of AEGON Companies or USMLIC,
forward to AEGON Companies and USMLIC a statement of principal and income
transactions effected during the preceding calendar month together with a
statement reflecting all Assets within the custody of the Bank under the terms
hereof as of the close of the preceding calendar month.
6. The Bank, upon written instructions of AEGON Companies and
USMLIC, will make delivery for the sale of securities held by the Bank for the
account of AEGON Companies and USMLIC in deliverable form against payment for
these securities. The Bank will not be liable or responsible for or on account
of any act or omission of any broker or other agent designated by AEGON
Companies and USMLIC.
7. The Bank will, in the absence of written instructions of AEGON
Companies and USMLIC, be under no obligation to take any action regarding stock
dividends, warrants, rights to subscribe, plans of reorganization or
recapitalization, or plans for the exchanges of Assets that may from time to
time be within the custody of the Bank under the terms hereof.
8. Any and all Assets deposited with the Bank hereunder may be
withdrawn from the Bank at any time only upon receipt by the Bank of a written
order or request executed by the Commissioner of Insurance of the state of
Domicile of the AEGON Company, the Commissioner of Insurance of the USMLIC
domicile, or a duly authorized representative of either of such Commissioners
of Insurance, or a duly authorized Officer of AEGON Companies designated to the
Bank by appropriate resolution and incumbency certificates of the AEGON
Companies relating to such Officers.
9. USMLIC assumes the duty of filing any and all tax reports and
returns as well as full responsibility for paying all taxes due on the income
and principal collected by the Bank under the terms hereof.
10. All Assets that may from time to time be within the custody of
the Bank under the terms hereof shall be kept separate from the assets of the
Bank.
11. The Bank will hold certificates representing or evidencing
Assets that may from time to time be within the custody of the Bank under the
terms hereof separate from certificates representing or evidencing assets owned
by other insurance companies for which the Bank serves as custodian. The
certificates representing or evidencing these Assets shall be kept separate and
physically apart from all other assets for which the Bank serves as a custodian
or fiduciary.
12. No certificate representing or evidencing Assets that may from
time to time be within the custody of the Bank under the terms hereof may be
merged into or with one or more certificates of a larger denomination
representing or evidencing those Assets of any third party including any other
insurance company.
13. The Bank will furnish upon written request by AEGON Companies,
USMLIC, the Commissioner of Insurance of the AEGON Companies states of
domicile, the Commissioner of Insurance of the USMLIC domicile, or a duly
authorized representative of either of such Commissioners of Insurance, a
certified list of all Assets held by the Bank in the Account. AEGON Companies
and USMLIC expressly authorize the Bank to respond to any direct inquiry made
by the Commissioner of Insurance of the AEGON Companies state of domicile, the
Commissioner of Insurance of the USMLIC domicile, or a duly authorized
representative of such Commissioners of Insurance, and the Bank shall permit
such parties to examine and audit all Assets held by the Bank hereunder.
33
14. All Assets, other than obligations of the United States
Government, that may from time to time be within the custody of the Bank under
the terms hereof shall remain physically on the Bank's premises and the Bank
will not deposit these Assets with correspondent banks, investment bankers,
brokers of any other third party. The Bank will not pledge or hypothecate any
Asset in any manner nor will the Bank be permitted to use these Assets for the
benefit of the Bank.
15. During the term of this Agreement, the Bank will maintain
fidelity and other insurance coverage that the Bank deems necessary or
appropriate to cover any certificates representing or evidencing Assets that
are lost because of any error, omission or other culpable act of the Bank or
any agent, employee or authorized representative of the Bank. All insurance
coverage of this type shall be in addition to and not in substitution of, the
full faith and credit of the Bank.
16. The Bank will provide the Assets that may from time to time be
within the custody of the Bank the same degree of care and protection that the
Bank provides its own property, and the AEGON Companies and USMLIC agree that
the Bank will not be liable for loss or damage caused directly or indirectly by
invasion, insurrection, riot, civil war or commotion, or military or usurped
power, or by order of any civil authority, or other cause beyond the control of
the Bank.
17. The Bank will not be under any obligation to defend any legal
action or engage in any legal proceedings regarding the Account or regarding
any Assets that may from time to time be within the custody of the Bank unless
the Bank is indemnified in advance to its own satisfaction.
18. USMLIC agree to indemnify and hold the Bank harmless from any
and all costs, damages, expenses, fees and liability that it may incur from any
action taken or omitted to be taken by it upon instruction of AEGON Companies
and USMLIC concerning the Account or in the case of a withdrawal pursuant to
Paragraph 19 hereof in instruction of AEGON Companies, the Commissioner of
Insurance of the AEGON Companies state of domicile, the Commissioner of
Insurance of the USMLIC domicile, or a duly authorized representative of either
of such Commissioner of Insurance.
19. The AEGON Companies or the Commissioner of Insurance of the
AEGON Companies state of domicile, or a duly authorized representative of such
Commissioner, will have the right, without the consent of USMLIC, to withdraw
assets within the custody of the Bank from time to time for the purpose of
satisfying any liability of USMLIC under the Agreement of Reinsurance between
AEGON Companies and USMLIC dated March 20, 1995. No Assets within the custody
of the Bank under the terms hereof and no income thereon collected by the Bank
will be withdrawn from the Account by USMLIC without the approval of AEGON
Companies, which approval shall be given for all withdrawals made pursuant to
the terms of the Agreement of Reinsurance between the AEGON Companies and
USMLIC dated March 20, 1995.
34
DATED: March 20, 1995
--------------
AEGON COMPANIES
U.S. Managers Life Insurance Company PFL Life Insurance Company
/s/ Vernon R. Woelke /s/ James Parker
- ----------------------------------- --------------------------------
President Vice President
- ----------------------------------- --------------------------------
Life Investors Insurance Company of America
/s/ James Parker
---------------------------------
Vice President
---------------------------------
Bankers United Life Assurance Company
/s/ James Parker
----------------------------------
Vice President
----------------------------------
Monumental Life Insurance Company
/s/ James Parker
----------------------------------
Vice President
----------------------------------
35
EXHIBIT "E.4" Effective 1/1/95
AGREEMENT FOR CUSTODIAL ACCOUNT
AGREEMENT by and between MELLON BANK OF PHILADELPHIA (the "Bank") and
FINANCIAL SERVICES REINSURANCE COMPANY, INC., a British Virgin Island Company,
hereinafter referred to as "FSR",
and
PFL LIFE INSURANCE COMPANY,
an Iowa insurance company,
LIFE INVESTORS INSURANCE COMPANY OF AMERICA,
an Iowa insurance company,
BANKERS UNITED LIFE ASSURANCE COMPANY,
an Iowa insurance company,
MONUMENTAL LIFE INSURANCE COMPANY,
a Maryland insurance company.
These companies shall hereinafter be referred to as "AEGON Companies".
In consideration of the mutual covenants and agreements hereinafter
set forth and the mutual benefits hereunder, the parties hereto agree as
follows:
1. The Bank agrees to open and establish a separate Custodial
Account (the "Account") for and in the name of AEGON Companies and FSR and to
hold therein, as Custodian for the AEGON Companies and FSR, all stocks, bonds,
securities and any other property (the "Assets") from time to time deposited
with or received by the Bank for the account of the AEGON Companies and FSR.
2. The Bank is authorized to collect, receive, and hold for the
account of the AEGON Companies and FSR all income from the Assets within the
custody of the Bank from time to time under the terms hereof. All such income
shall be credited to the Account at the Bank subject to further instruction of
the AEGON Companies and FSR.
3. The Bank is authorized to sign any declarations, affidavits,
certificates of ownership or other documents that are or may hereafter be
required concerning all coupons, registered interest, dividends or other income
on Assets that may from time to time be within the custody of the Bank under
the terms hereof, and FSR agrees to reimburse, indemnify and hold the Bank
harmless of and from any and all liability, loss, claim, damage, fees, or
expenses that may arise or to which the Bank may be subjected by reason of
executing any of these documents.
4. The Bank is authorized to collect, receive, and hold the
principal of all Assets that may from time to time be within the custody of the
Bank under the terms hereof when and as the same may mature or be redeemed,
sold, exchanged, or otherwise disposed of upon the order of AEGON Companies and
FSR. All principal collected or received by the Bank shall be credited to the
Account at the Bank subject to further instructions of AEGON Companies and
36
FSR.
5. Within fifteen (15) days following the close of a calendar
month, the Bank will, upon the written request of AEGON Companies or FSR,
forward to AEGON Companies and FSR a statement of principal and income
transactions effected during the preceding calendar month together with a
statement reflecting all Assets within the custody of the Bank under the terms
hereof as of the close of the preceding calendar month.
6. The Bank, upon written instructions of AEGON Companies and
FSR, will make delivery for the sale of securities held by the Bank for the
account of AEGON Companies and FSR in deliverable form against payment for
these securities. The Bank will not be liable or responsible for or on account
of any act or omission of any broker or other agent designated by AEGON
Companies and FSR.
7. The Bank will, in the absence of written instructions of AEGON
Companies and FSR, be under no obligation to take any action regarding stock
dividends, warrants, rights to subscribe, plans of reorganization or
recapitalization, or plans for the exchanges of Assets that may from time to
time be within the custody of the Bank under the terms hereof.
8. Any and all Assets deposited with the Bank hereunder may be
withdrawn from the Bank at any time only upon receipt by the Bank of a written
order or request executed by the Commissioner of Insurance of the state of
Domicile of the AEGON Company, the Commissioner of Insurance of the FSR
domicile, or a duly authorized representative of either of such Commissioners
of Insurance, or a duly authorized Officer of AEGON Companies designated to the
Bank by appropriate resolution and incumbency certificates of the AEGON
Companies relating to such Officers.
9. FSR assumes the duty of filing any and all tax reports and
returns as well as full responsibility for paying all taxes due on the income
and principal collected by the Bank under the terms hereof.
10. All Assets that may from time to time be within the custody of
the Bank under the terms hereof shall be kept separate from the assets of the
Bank.
11. The Bank will hold certificates representing or evidencing
Assets that may from time to time be within the custody of the Bank under the
terms hereof separate from certificates representing or evidencing assets owned
by other insurance companies for which the Bank serves as custodian. The
certificates representing or evidencing these Assets shall be kept separate and
physically apart from all other assets for which the Bank serves as a custodian
or fiduciary.
12. No certificate representing or evidencing Assets that may from
time to time be within the custody of the Bank under the terms hereof may be
merged into or with one or more certificates of a larger denomination
representing or evidencing those Assets of any third party including any other
insurance company.
13. The Bank will furnish upon written request by AEGON Companies,
FSR, the Commissioner of Insurance of the AEGON Companies states of domicile,
the Commissioner of Insurance of the FSR domicile, or a duly authorized
representative of either of such Commissioners of Insurance, a certified list
of all Assets held by the Bank in the Account. AEGON Companies and FSR
expressly authorize the Bank to respond to any direct inquiry made by the
Commissioner of Insurance of the AEGON Companies state of domicile, the
Commissioner of Insurance of the FSR domicile, or a duly authorized
representative of such Commissioners of Insurance, and the Bank shall permit
such parties to examine and audit all Assets held by the Bank hereunder.
37
14. All Assets, other than obligations of the United States
Government, that may from time to time be within the custody of the Bank under
the terms hereof shall remain physically on the Bank's premises and the Bank
will not deposit these Assets with correspondent banks, investment bankers,
brokers of any other third party. The Bank will not pledge or hypothecate any
Asset in any manner nor will the Bank be permitted to use these Assets for the
benefit of the Bank.
15. During the term of this Agreement, the Bank will maintain
fidelity and other insurance coverage that the Bank deems necessary or
appropriate to cover any certificates representing or evidencing Assets that
are lost because of any error, omission or other culpable act of the Bank or
any agent, employee or authorized representative of the Bank. All insurance
coverage of this type shall be in addition to and not in substitution of, the
full faith and credit of the Bank.
16. The Bank will provide the Assets that may from time to time be
within the custody of the Bank the same degree of care and protection that the
Bank provides its own property, and the AEGON Companies and FSR agree that the
Bank will not be liable for loss or damage caused directly or indirectly by
invasion, insurrection, riot, civil war or commotion, or military or usurped
power, or by order of any civil authority, or other cause beyond the control of
the Bank.
17. The Bank will not be under any obligation to defend any legal
action or engage in any legal proceedings regarding the Account or regarding
any Assets that may from time to time be within the custody of the Bank unless
the Bank is indemnified in advance to its own satisfaction.
18. FSR agree to indemnify and hold the Bank harmless from any and
all costs, damages, expenses, fees and liability that it may incur from any
action taken or omitted to be taken by it upon instruction of AEGON Companies
and FSR concerning the Account or in the case of a withdrawal pursuant to
Paragraph 19 hereof in instruction of AEGON Companies, the Commissioner of
Insurance of the AEGON Companies state of domicile, the Commissioner of
Insurance of the FSR domicile, or a duly authorized representative of either of
such Commissioner of Insurance.
19. The AEGON Companies or the Commissioner of Insurance of the
AEGON Companies state of domicile, or a duly authorized representative of such
Commissioner, will have the right, without the consent of FSR, to withdraw
assets within the custody of the Bank from time to time for the purpose of
satisfying any liability of FSR under the Agreement of Reinsurance between
AEGON Companies and FSR dated March 20, 1995. No Assets within the custody of
the Bank under the terms hereof and no income thereon collected by the Bank
will be withdrawn from the Account by FSR without the approval of AEGON
Companies, which approval shall be given for all withdrawals made pursuant to
the terms of the Agreement of Reinsurance between the AEGON Companies and FSR
dated March 20, 1995.
38
DATED: March 20, 1995
--------------
AEGON COMPANIES
Financial Services Reinsurance Company PFL Life Insurance Company
/s/ Vernon R. Woelke /s/ James Parker
- -------------------------------------- -------------------------------
President Vice President
- -------------------------------------- -------------------------------
Life Investors Insurance Company of America
/s/ James Parker
-------------------------------
Vice President
-------------------------------
Bankers United Life Assurance Company
/s/ James Parker
--------------------------------
Vice President
--------------------------------
Monumental Life Insurance Company
/s/ James Parker
---------------------------------
Vice President
---------------------------------
39
Exhibit F Effective 1/1/95
Designated Representative
National Managers Life Insurance Company, Financial Services Reinsurance
Company, U. S. Managers Life Insurance Company, and United Group Reinsurance
Inc. hereby mutually agree the Designated Representative of the UICI Companies
for purposes of communicating to AEGON Companies will be an officer of United
Group Reinsurance Inc.
PFL Life Insurance Company, Bankers United Life Assurance Company, Monumental
Life Insurance Company, and Life Investors Insurance Company of America hereby
mutually agree the Designated Representative of the AEGON Companies for
purposes of communicating to UICI Companies will be an officer of PFL Life
Insurance Company.
40
AMENDMENT NUMBER ONE
EXHIBIT D EFFECTIVE 7/1/95
ADMINISTRATIVE FEE
The Administrative Fee discussed in Exhibit D of the reinsurance
agreement between "AEGON Companies" and "UICI Companies" dated March 20, 1995,
is hereby replaced with this Exhibit D effective 7/1/95.
The UICI Companies shall pay AEGON Companies a fixed percentage of net
life and accident and health reinsurance premiums for administrative expenses.
This payment of expense allowance shall be reimbursement for policy
underwriting, policy issue, billing and collection, and general policy
administration. The expense percent is five and 50/100 percent (5.5%).
IN WITNESS HEREOF, the parties have caused this Amendment Number One
to be executed by their respective officers this 2nd day of August, 1995.
UICI COMPANIES AEGON COMPANIES
National Managers Life Insurance Company PFL Life Insurance Company
/s/ Robert B. Vlach /s/ James Parker
- ---------------------------------------- -------------------------------------------
Vice President and Secretary Vice President
- ---------------------------------------- -------------------------------------------
United Group Reinsurance Inc. Life Investors Insurance Company of America
/s/ Mark D. Hauptman /s/ James Parker
- ---------------------------------------- -------------------------------------------
Treasurer Vice President
- ---------------------------------------- -------------------------------------------
U. S. Managers Life Insurance Company Bankers United Life Assurance Company
/s/ Mark D. Hauptman /s/ James Parker
- ---------------------------------------- -------------------------------------------
Treasurer Vice President
- ---------------------------------------- -------------------------------------------
Financial Services Reinsurance Company Monumental Life Insurance Company
/s/ Mark D. Hauptman /s/ James Parker
- ---------------------------------------- -------------------------------------------
Treasurer Vice President
- ---------------------------------------- -------------------------------------------
41
AMENDMENT NUMBER TWO
EXHIBIT "A" EFFECTIVE 11/1/95
IN WITNESS HEREOF, the parties have caused this Amendment Number Two
to be executed by their respective officers this 1st day of November, 1995.
This Exhibit "A" shall replace Exhibit "A" that was effective 1/1/95.
POLICY IDENTIFICATION AND REINSURANCE PERCENTAGE CEDED
Policy Identification
The block of life and accident and health policies reinsured are all
policies and certificates of insurance (including riders thereto) which are
identified on the Company's in force runs by the following Division Codes:
BLOCK 1
RLOB DIV RLOB DIV RLOB DIV
- ---- --- ---- --- ---- ---
07 05/80/90 08 15/18/80 09 05
10 05 12 05 13 05
14 04/84/94 15 05/80/90 16 05/80/90
17 05/80/90 20 23 28 15/18
32 15/18 39 37/87/97 56 56/85/95
ADB 38 33 73 73/88/98
BLOCK 2
RLOB DIV RLOB DIV
- ---- --- ---- ---
05 26/83/93 11 62/82
18 06/86/96 19 24/82
34 03
It is agreed that the above listed plans of insurance shall include any state
variations whether group or individual coverage regardless of different form
numbers due to filing of forms for state approval purposes.
42
Reinsurance Ceded Percentage
It is agreed that AEGON Companies will increase the percentage of
reinsurance ceded to be applied to the policies/certificates listed as Block 1
above in this "Exhibit A" pursuant to the table below:
January 1, 1995-December 31, 1995 55.0%
January 1, 1996-December 31, 1996 57.5%
January 1, 1997 and thereafter 60.0%
The policies/certificates listed as Block 2 above in this "Exhibit A"
shall have a Reinsurance Ceded Percentage of 50%.
UICI COMPANIES AEGON COMPANIES
National Managers Life Insurance Company PFL Life Insurance Company
/s/ Robert B. Vlach /s/ James Parker
- ------------------------------- -------------------------------
Vice President and Secretary Vice President
- ------------------------------- -------------------------------
United Group Reinsurance Inc. Life Investors Insurance Company of America
/s/ Mark D. Hauptman /s/ James Parker
- ------------------------------- -------------------------------
Treasurer Vice President
- ------------------------------- -------------------------------
U. S. Managers Life Insurance Company Bankers United Life Assurance Company
/s/ Mark D. Hauptman /s/ James Parker
- ------------------------------- -------------------------------
Treasurer Vice President
- ------------------------------- -------------------------------
Financial Services Reinsurance Company Monumental Life Insurance Company
/s/ Mark D. Hauptman /s/ James Parker
- ------------------------------- -------------------------------
Treasurer Vice President
- ------------------------------- -------------------------------
43
AMENDMENT NUMBER THREE
CONSENT TO ASSIGNMENT OF
REINSURANCE AGREEMENT
WHEREAS, United Insurance Companies, Inc., a Delaware corporation, is
in the process of incorporating two new companies to be governed under the laws
of the Turks and Caicos Islands to be named, respectively, U.S. Managers Life
Insurance company, Ltd. ("U.S. Managers-TCI") and Financial Services
Reinsurance, Ltd. ("Financial Services-TCI"), for the sole purpose of
redomesticating to the Turks and Caicos Islands U.S. Managers Life Insurance
Company, Ltd., a corporation organized under the laws of the British Virgin
Islands ("U.S. Managers-BVI") and Financial Services Reinsurance, Ltd., a
corporation organized under the laws of the British Virgin Islands ("Financial
Services-BVI"); and
WHEREAS, upon the issuance of a license under the Insurance Ordinance
1989 to carry on business in or from within the Turks and Caicos Islands to
U.S. Managers-TCI, the existence of U.S. Managers-BVI will cease and all assets
and liabilities will be transferred to U.S. Managers-TCI; and
WHEREAS, upon the issuance of a license under the Insurance Ordinance
1989 to carry on business in or from within the Turks and Caicos Islands to
Financial Services-TCI, the existence of Financial Services-BVI will cease and
all assets and liabilities will be transferred to Financial Services-TCI; and
WHEREAS, U.S. Managers-BVI and Financial Services-BVI are parties to
that certain Reinsurance Agreement effective January 1, 1995 (the "Agreement")
by and between the "UICI Companies" and the "AEGON Companies", as those terms
are defined in the Agreement, and, pursuant to Paragraph 18 of the Agreement,
the assignment of the Agreement may not occur without the prior written consent
of the AEGON Companies;
IT IS HEREBY AGREED, that the interests and liabilities of U.S.
Managers-BVI and Financial Services-BVI under this Contract shall be
transferred to U.S. Managers-TCI and Financial Services-TCI, respectively. In
accordance therewith, U.S. Managers-BVI and Financial Services-BVI shall assign
and U.S. Managers-TCI and Financial Services-TCI shall assume all of the
rights, interests, liabilities and obligations of the "UICI Companies" under
this Contract. U.S. Managers-TCI and Financial Services-TCI shall then be
subject to all of the terms and conditions of this contract, and the term "UICI
Companies" wherever it is used in this contract shall include reference to U.S.
Managers-TCI and Financial Services-TCI.
NOW, THEREFORE, the AEGON Companies hereby consent to assignment of
the Agreement by U.S. Managers-BVI to U. S. Managers-TCI, and the assignment
by Financial Services-BVI to Financial Services-TCI, such assignments to be
effective immediately upon the issuance of a license to each company under the
Insurance Ordinance 1989 to carry on business in or from within the Turks and
Caicos Islands.
44
This consent of Assignment may be executed in any number of
counterparts, and by different parties hereto on separate counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be
original and all or which counterparts, taken together, shall constitute but
one and the same document.
This Consent to Assignment of Reinsurance Agreement has been executed
as of the 21st of November, 1995.
UICI COMPANIES AEGON COMPANIES
National Managers Life Insurance Company PFL Life Insurance Company
/s/ Robert B. Vlach /s/ James Parker
- ------------------------------- -------------------------------
Vice President and Secretary Vice President
- ------------------------------- -------------------------------
United Group Reinsurance Inc. Life Investors Insurance Company of America
/s/ Mark D. Hauptman /s/ James Parker
- ------------------------------- -------------------------------
Treasurer Vice President
- ------------------------------- -------------------------------
U. S. Managers Life Insurance Company Bankers United Life Assurance Company
/s/ Mark D. Hauptman /s/ James Parker
- ------------------------------- -------------------------------
Treasurer Vice President
- ------------------------------- -------------------------------
Financial Services Reinsurance Company Monumental Life Insurance Company
/s/ Mark D. Hauptman /s/ James Parker
- ------------------------------- -------------------------------
Treasurer Vice President
- ------------------------------- -------------------------------