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EXHIBIT 10.8
Self-Administered
Automatic Reinsurance Agreement
Effective
between
Citizens Insurance Company of America
Denver, Colorado
(hereinafter referred to-as the "Ceding Company")
and
Riunione Adriatica di Sicurta', S.p.A.
Trieste, Italy
(hereinafter referred to as the "Reinsurer")
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Table of Contents Page
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Article I Basis of Reinsurance 3
Article II Mode of Notification and Cession 4
Article III Liability of Reinsurer 4
Article IV Plan of Reinsurance 5
Article V Reinsurance Premiums 5
Article VI Premium Taxes and Policy Expenses 6
Article VII Automatic Reinsurance Coverage after Policy Change 6
Article VIII Information to Reinsurer after Policy Change 8
Article IX Recapture 8
Article X Claims 9
Article XI List of Risks Reinsured and List of Amendments 10
Article XII Accounting 10
Article XIII Errors and Omissions 11
Article XIV Inspection of Records 12
Article XV Insolvency 12
Article XVI Arbitration 13
Article XVII Parties to Agreement 13
Article XVIII Duration of Agreement; Termination 14
Article XIX Effective Date; Execution 14
Exhibit I SAR Reinsurance Premiums 15
Exhibit II Retention Limits of the Ceding Company 23
Exhibit III Limits and Special Conditions for the First Excess 24
Exhibit IV Calculation of the Net Amount at Risk Reinsured 25
Exhibit V List of Risks Reinsured 26
Exhibit VI List of Amendments 27
Exhibit VII Preliminary Surplus Advice
Exhibit VIII Automatic Cession Notification
Appendix I International Guidelines 28
Appendix I-A Foreign National Business 29
Appendix I-B Conditional Receipt 31
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Article I
Basis of Reinsurance 1. On and after the effective date of
this Agreement, the Ceding Company
shall cede to Reinsurer, subject to
the limitations outlined in Exhibit
III, its entire (100%) First Excess,
i.e., the amount of new direct
agency Standard and Substandard
individual issues of Life Insurance
policies and Waiver of Premium
Disability benefits in excess of the
Ceding Company's regular retention
for such benefits as shown in
Exhibit II. Reinsurer shall
automatically accept such First
Excess within the limits indicated
in Exhibit III, provided that the
Ceding Company has applied its
normal underwriting rules and
retains its regular retention.
2. The term "new direct agency issues"
as used in this Article shall
include issues on the lives of U.S.
Citizens and non-U.S. Citizens as
stipulated in Appendix I-A. It shall
not include brokerage business,
reinsurance business, or except as
provided herein, issues of
conversions.
3. If the Ceding Company is already on
the risk for its regular retention
under policies previously issued,
reinsurance up to the limits
indicated in Exhibit III will be
accepted automatically in accordance
with Paragraph 1 above, provided the
Ceding Company has assessed the risk
under the new application by
applying the same underwriting rules
it would have applied had the new
policy fallen completely within its
regular retention.
4. Any risk which falls within the
automatic coverage granted by this
Agreement may nevertheless be
submitted to Reinsurer for its
underwriting opinion. If such risk
is acceptable for coverage, it shall
automatically be reinsured under-
this Agreement. Any other risk
ineligible for automatic coverage
hereunder, or which the Ceding
Company desires to reinsure
facultatively, may be submitted to
Reinsurer for facultative
underwriting by forwarding to
Reinsurer copies of the original
applications, all medical
examinations or reports, inspection
reports and all other information
which the Ceding Company may have
pertaining to the insurability of
the risk. Any such risk shall, upon
acceptance by the Ceding Company of
Reinsurer's underwriting decision,
be reinsured under this Agreement.
5. The reinsurance under this Agreement
shall be maintained in force as long
as the original policy carried by
the Ceding Company remains in force,
except as provided in Articles VII
Automatic Reinsurance Coverage after
Policy Change, IX Recapture, and
XVIII Duration of Agreement;
Termination.
6. Notwithstanding any provision to the
contrary in Article I Basis of
Reinsurance of said Agreement,
Reinsurer shall be automatically
bound under any claim for which the
Ceding Company is liable under a
conditional receipt issued in
respect of business reinsured
automatically or submitted
exclusively to Reinsurer under said
Article I. Reinsurer's liability on
standard retention on the policy
applied-for. In no event, however,
shall Reinsurer's liability on any
one life,
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including previous reinsurance ceded
to Reinsurer, by the Ceding Company,
exceed the automatic acceptance
limits provided by this Agreement.
The Ceding Company's conditional
receipt is attached hereto and the
Ceding Company shall be obligated to
advise Reinsurer of any changes or
modifications of such receipt.
Article II
Mode of Notification Ceding
and Cession 1. If (a) the First Excess as defined
in Exhibit m herein is greater than
$300,000 of life Insurance and (b)
the Ceding Company automatically
cedes to Reinsurer as herein
provided and the total amount ceded
to Reinsurer on the same life,
including previous cessions, exceeds
either of the foregoing specified
amounts, then the Ceding Company
shall notify Reinsurer:
a. within forty-eight (48) hours
after underwriting approval
of the risk by mailing a
Preliminary Surplus Advice
(Exhibit VII), and either
b. within five (5) working days
after the policy issued on
such application has been
delivered and paid for, by
mailing a copy of the
Preliminary Surplus Advice
indicating the actual amount
ceded hereunder, or
c. within sixty (60) working days
after underwriting approval
of the risk if the policy
issued on such application
was refused or remains
undelivered, by mailing a
copy of the Preliminary
Surplus Advice marked
"Canceled" and indicating
date of cancellation.
2. For risks automatically ceded and
not subject to the notification
requirements of Paragraph 1. The
first notice to Reinsurer regarding
any such automatic cession will be
sent to Reinsurer on the first of
each month following the Issue
Month. The notification will be a
copy of Citizen's Underwriter
Worksheet (see Exhibit VIII).
3. For risks to be reinsured
facultatively hereunder in
accordance with Article I, Paragraph
4, the Ceding Company shall forward
to Reinsurer a Preliminary Surplus
Advice marked "Facultative" within
five (5) working days after the
original policy has been reported
delivered and paid for.
Article III
Liability of Reinsurer 1. The liability of Reinsurer shall
begin and terminate simultaneously
with that of the Ceding Company,
provided that, in the case of a
facultative submission, Reinsurer
has notified the Ceding Company of
its acceptance of the risk and the
Ceding Company has mail Advice in
accordance with Paragraph 3 of
Article II Mode of Notification and
Cession.
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2. Reinsurer has no liability under
this Agreement for any policy amount
or benefit not expressly referred to
in Article I Basis of Reinsurance,
or in any Addendum to this Agreement
relating to reinsurance of other
benefits.
3. The Ceding Company will provide
Reinsurer with copies of its policy
and rider forms, rate schedules and
underwriting rules for the business
eligible fr reinsurance under this
Agreement and shall keep Reinsurer
informed of any changes therein.
4. Reinsurer shall not be liable for
any amount paid by the Ceding
Company for punitive, exemplary, or
compensatory damages awarded to the
beneficiary of an insured, arising
out of the conduct of the Ceding
Company in the investigation, trial,
or settlement of any claim, or the
failure to pay or a delay to pay any
benefits under any policy unless
Reinsurer was informed of the
circumstances and participated in
the decision which resulted in such
liability.
Article IV
Plan of Reinsurance l. Life reinsurance shall be ceded on
the Risk Premium basis for the Net
Amount at Risk reinsured. For the
purpose of this Agreement, the Net
Amount at Risk reinsured during any
calendar year is defined as the
difference between the First Excess
(as defined in Article I and Exhibit
III) and the reserve thereon at the
end of the prior calendar year. Such
reserve shall be determined as the
statutory mean reserve based on the
Ceding Company's reserve standard
unless an approximate method of
determination is applicable as shown
in Exhibit IV. In either case,
reserves shall be rounded to the
nearer dollar.
2. For original policies issued on a
level term plan for twenty (20)
years or less or on a reducing term
plan for any period of years, the
Net Amount at Risk reinsured during
all years shall be for the amount of
the First Excess reinsured and
reserves shall be disregarded.
3. Except as otherwise provided in
Exhibit IV hereof, or by Addendum to
this Agreement, the Net Amount at
Risk reinsured will be level during
any calendar year.
4. Reinsurance of Waiver of Premium
Disability benefits shall be in
accordance with the original policy
terms of the Ceding Company subject
to the limitations in Exhibit III.
Article V
Reinsurance Premiums 1. The reinsurance premiums for Life
reinsurance shall consist of a basic
rate per thousand of Net Amount at
Risk reinsured in accordance with the
schedule of rates attached hereto
(Exhibit I). Rates for females at
ages 15 and higher are equal to the
rates for a male four years younger.
For females aged 11-14, males age 10
rates are used. Male and female rates
for ages 0-10 are identical.
2. For purposes of premium calculation,
based on the table of rates
contained in Exhibit I, the attained
age shall be taken as the issue
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age (nearest or last birthday as
appropriate),-plus the difference
between the respective calendar year
and the calendar year at issue
3. The reinsurance premiums for Waiver
of Premium Disability benefits shall
be as shown in Exhibit I.
4. Except as otherwise provided in
Exhibit m, for all new reinsurance
originating without current evidence
of insurability (conversions,
options, etc.) calendar years for
entering the premium table, Exhibit
I will be counted starting with the
calendar year of the last check of
insurability.
5. All reinsurance premiums payable by
the Ceding Company to Reinsurer
under this Agreement shall be paid
on the calendar year basis in
advance regardless of the mode of
premium payment of the policies
reinsured. Reinsurance premiums
shall be payable as long as the
reinsurance remains in force.
Should any reinsurance be reduced or
terminated within any calendar year,
the proportionate part of the
reinsurance premium paid shall be
refunded at the beginning of the
calendar year next following the
reduction or termination provided,
however, that for policies reduced
or terminated during the second
calendar year after issue the refund
shall not exceed 50% of the
reinsurance premium paid.
6. For technical reasons relating to
the uncertain status of deficiency
reserve requirements by the various
state insurance departments, the
Life reinsurance premiums contained
herein cannot be guaranteed for more
than one year. For all reinsurance
ceded at these rates, however,
Reinsurer shall continue to accept
premiums no lower than those arrived
at based on these rate schedules.
Article VI
Premium Taxes and Policy
Expenses 1. When Reinsurer is not required to pay
state premium taxes on reinsurance
premiums received from the Ceding
Company, it shall reimburse the
Ceding Company for any such taxes
the latter may be required to pay
with respect to the part of the
premium received under the Ceding
Company's original policies which is
remitted to Reinsurer as reinsurance
premium.
2. The Ceding Company shall bear the
expense of all medical examinations,
inspection fees, and other charges
incurred in connection with the
issuance of any policy reinsured
hereunder.
Article VII
Automatic Reinsurance Coverage
after Policy Change l. Reinsurer will continue to grant
automatic reinsurance coverage in
accordance with the provisions of
this Agreement after renewal,
conversion or amendment of any
policy reinsured hereunder provided
that the amounts and benefits to be
reinsured following the change do
not exceed the amounts and benefits
initially reinsured hereunder in
respect of such policy. The
following rules will apply for
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the recalculation of the amounts
reinsured with Reinsurer after a
policy change.
2. If an original policy is reduced,
the Ceding Company will retain the
same Net Amount at Risk and the same
other benefits on that life that it
had before the reduction. The
reduction shall be applied first to
the reinsurance based on the
original policy or policies reduced
or terminated. If further reduction
in reinsurance is required, the
policies for which reinsurance is to
be terminated or reduced shall be
determined by the chronological
order in which they were issued,
the first issued being the first
terminated or reduced, and so on. If
the reinsurance required to be
reduced under this Article is shared
among Reinsurer and other
reinsurers, the reduction shall be
pro-rated among all reinsurers in
proportion to the amount of
reinsurance carried by each. If the
amount of reinsurance remaining is
less than the amount of the minimum
cession specified in Exhibit II,
such reinsurance shall be canceled.
3. If any policy reinsured hereunder is
changed to extended term insurance,
Reinsurer's proportion of the amount
of insurance under such policy shall
remain unchanged.
4. Should any change or conversion of
any policy reinsured hereunder
increase the et Amount at Risk or
other benefits insured, Reinsurer's
proportion of the amount of
insurance and benefits under such
policy shall remain unchanged unless
the limits provided under Paragraph
1 are exceeded. In the event that
the limits under Paragraph 1 are
exceeded, Reinsurer will accept both
the excess and any additional
amounts required to be reinsured in
order to keep the Ceding Company's
retention within the limits stated
in Exhibit II, provided that the
total Net Amount at Risk reinsured
after the increase does not exceed
the limitations of automatic
Coverage (Exhibit III), and provided
further that such increase is
underwritten in accordance with
Article I Basis of Reinsurance,
Paragraph 3. Premiums for the
amended cessions will be calculated
in accordance with Article V
Reinsurance Premiums, Paragraph 4.
5. If after any reinsured policy has
been terminated, changed to reduced
paid-up insurance or changed to
extended- term insurance, such
policy is reinstated according to
the general reinstatement rules of
the Ceding Company, the-reinsurance
hereunder shall be restored with the
same Net Amount at Risk and other
benefits reinsured as if no change
had occurred.
6. Policies issued because of options
exercised under provisions of
Guaranteed Insurability benefits are
not included under this Agreement,
and shall be added by Addendum if
such benefits are to be reinsured.
Article VIII
Information to Reinsurer
after Policy Change 1. All amendments and terminations of
reinsurance under this Agreement
occurring during any calendar year
will be shown in the
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List of Amendments prepared for such
calendar year in accordance with
Article XI List of Risks Reinsured
and List of Amendments.
2. If any policy change increases the
Net Amount at Risk or other benefits
reinsured hereunder by more than
10%, the Ceding Company will notify
Reinsurer within two (2) weeks after
such change becomes effective by
submitting a Preliminary Surplus
Advice (Exhibit VII) marked
"Amended."
Article IX
Recapture 1. At intervals of five (5) years, the
Ceding Company is entitled to
recapture reinsurance on all cessions
which have been in force under this
Agreement for at least five (5)
years. The first recapture date is
the end of the seventh (7th) full
calendar year following the effective
date of this Agreement. Subsequent
recapture dates will follow at
intervals of five (5) full calendar
years.
2. In order to effect recapture, the
Ceding Company will reduce each
cession eligible under this
Agreement by an amount which will
increase the Net Amount at Risk for
life insurance or other benefit
retained by the Ceding Company to
its then regular retention. Any
recapture reducing the Net Amount at
Risk reinsured below the amount of
the minimum cession according to
Exhibit II will result in complete
recapture of the reinsurance on that
life.
3. Before recapturing on a cession
according to this provision, the
Ceding Company will proceed with all
recaptures allowed for policies
previously issued on the same life
and for all other reinsurance
cessions on the same policy, whoever
the reinsurer may be.
4. The Ceding Company may waive
recapture on any recapture date, but
only if such waiver applies to all
reinsurance then eligible for
recapture hereunder.
5. The Ceding Company shall notify
Reinsurer at least sixty (60) days
prior to each recapture date of its
intended recapture action. Any
questions of recapture eligibility
or procedure will then be resolved
during such sixty (60) day period.
6. If recapture is effected, the List
of Risks Reinsured for the calendar
year following recapture will
identify the risks involved and show
the new reinsurance amounts
applicable. In the event recapture
results in cancellation of any
cession, such cancellation will be
shown on the List of Amendments for
the calendar year of recapture.
7. It is hereby agreed and understood
that risks of which no part is
retained by the Ceding Company or
where the Ceding Company does not
retain its regular retention limit
at issue, shall be considered not
subject to recapture.
Article X
Claims 1. In the event any policy is
terminated by death while reinsured
under this Agreement, Reinsurer
shall pay to the Ceding Company the
Net
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Amount at Risk reinsured with respect
to such policy during the calendar
year of death.
2. In the event Waiver of Premium
Disability benefits are validly
claimed under any policy reinsured
for such benefits hereunder,
Reinsurer shall pay the Ceding
Company annually during the
continuance of disability the yearly
gross premium (exclusive of the
premiums for the Waiver benefit
itself) due under such policy for
the reinsured portion of the Waiver
benefit. In suitable cases, the
Ceding Company and Reinsurer may
agree to replace the annual payments
of Reinsurer by the payment of a
lump sum. If disability terminates,
a refund, if appropriate, will be
made by the Ceding Company to
Reinsurer. The payment of
reinsurance premiums in accordance
with Article V Reinsurance Premiums
for the other benefits still
reinsured will continue during the
disability claim period.
3. In the event any policy reinsured
hereunder becomes a claim before
such policy has appeared on any List
of Risks Reinsured, the Ceding
Company will calculate the amount
payable by Reinsurer in accordance
with this Agreement and will submit
to Reinsurer all papers necessary to
demonstrate that the risk involved
was covered automatically hereunder.
In addition, the Ceding Company will
inform Reinsurer of all other
reinsurance, if any, ceded on the
same policy.
4. For any claim incurred after the
policy affected has appeared on a
List of Risks Reinsured, Reinsurer
will pay the Net Amount at Risk or
other benefits reinsured, as
appropriate, shown in the List of
Risks Reinsured applicable to the
calendar year of incurral, unless
the benefits reinsured were amended
according to Article VII Automatic
Reinsurance Coverage after Policy
Change, but not reflected in such
List. In such case, Reinsurer will
pay the Net Amount at Risk or other
benefits reinsured which would
appear in the List of Amendments for
the calendar year of incurral, and
the Ceding Company shall furnish
proof that the amended Net Amount at
Risk and other benefits reinsured
are in accordance with the
provisions of this Agreement.
5. In the event less than the full
amount insured is paid as a claim or
if any special expenses are incurred
in the settlement of a claim (such
as attorney's fees, court and
arbitration costs, special
investigations, etc., but excluding
salaries of employees), Reinsurer
and the Ceding Company shall share
in the amount of such reduction or
special expenses in proportion to
their respective Net Amounts at Risk
under the policy affected.
6. Reinsurer and the Ceding Company
shall share in any increase or
reduction resulting from the
Insured's misstatement of his age in
proportion to their respective Net
Amounts at Risk under the policy
affected.
7. Notice will be faxed to the
Reinsurer of any claim reinsured
under this agreement. In every case
of loss, proofs acceptable to the
Ceding Company shall likewise be
taken as sufficient by Reinsurer.
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The Ceding Company shall fax
Reinsurer copies of death
certificates.
8. At the end of each calendar quarter,
a copy of the checks showing payment
of all claims and claim expenses
paid by the Ceding Company during
the quarter and reinsured by the
Reinsurer under this agreement will
be faxed to the Reinsurer and paid
within ten days of receipt by the
Reinsurer. Should-the total amount
of claims and claim expenses paid by
the Ceding Company exceed $250,000
prior to the end of any quarter,
proof of such payments will be faxed
to the Reinsurer and paid within ten
days of receipt by the Reinsurer.
Article XI
Lists of Risks Reinsured and
List of Amendments 1. Before January 15 of each calendar
year following the date of this
Agreement, the Ceding Company will
provide Reinsurer with the List of
Risks Reinsured for the current
calendar year. This List will
include all reinsurance in force
under this Agreement at the
beginning of the calendar year and
contain information as outlined in
Exhibit V.
2. Before January 15 of each calendar
year, beginning with the second year
following the date of this
Agreement, the Ceding Company will
provide Reinsurer, for adjustment of
coverage and premium, with the List
of Amendments for the preceding
calendar year. This List will
include all cessions amended during
the preceding calendar year in
accordance with Article VII
Automatic Reinsurance Coverage after
Policy Change, exclusive of (a)
amendments occurring during the
calendar year of issue of any
policy, and (b) certain corrections
referred to in Article XIII Errors
and Omissions. In detail, the List
will contain information as outlined
in Exhibit VI.
Article XII
Accounting and Nondisclosure
of Confidential Information 1. The Ceding Company shall remit the
total of the reinsurance premiums
shown - in the List of Risks
Reinsured simultaneously with the
List.
2. Should the balance of changes in
reinsurance premiums for the
preceding calendar year shown in the
List of Amendments be in favor of
Reinsurer, the Ceding Company shall
remit said balance, increased by 2%
for interest, simultaneously with
the List. Should this balance be in
favor of the Ceding Company,
Reinsurer shall remit said balance,
increased by 2% for interest, within
ten (10) working days of receipt of
the List.
3. Reinsurer is entitled to ask for
correction of any of the Lists
within ninety (90) days after their
receipt. The amount of any
correction in reinsurance premiums
is due immediately after agreement
between the Ceding Company and
Reinsurer.
4. Failure of the Ceding Company to pay
any of the reinsurance premiums
shown in the List of Risks Reinsured
by March 31 of the
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calendar year covered by such List
shall automatically terminate the
liability of Reinsurer under this
Agreement as of midnight on that
date. Payment of only a portion of
this premium by said March 31 shall
reduce the liability of Reinsurer
under this Agreement as of midnight
on that date. The reduced liability
will be determined by applying to the
total liability under this Agreement
the ratio of the reinsurance premiums
paid to the total of the reinsurance
premiums due. Payment of a portion or
of the total of the outstanding
premiums and interest, if any, after
said March 31 shall reinstate a
proportionate part of the total
liability of Reinsurer effective on
and after the date of receipt of the
payment at Reinsurer's home office.
5. All amounts due under Paragraphs 1,
2, and 3 preceding and not paid by
March 31 of the respective calendar
year, are subject to 0.5% additional
interest for each full month after
March 31.
6. Since reinsurance coverage and
premium payments are on the calendar
year basis, Reinsurer, will not hold
any reserves, other than claims
reserves, for the reinsurance
covered by this Agreement at the end
of the calendar year.
7. During the course of business
necessary under this agreement, CICA
may reveal to RAS certain
confidential or proprietary
information which includes but is
not limited to the following:
various trade secrets, data
processing methods, marketing
concepts, programs, formulas,
pattens, devices, inventions,
processes, policy forms and
identities of customers, sales
agents, managing agents, associates
and employees of CICA RAS shall not
disclose, directly or indirectly, to
others, Including corporate
subsidiaries and affiliates, any
confidential or proprietary
information of CICA except as may be
specifically authorized in writing
by an officer of CICA. RAS will also
do all things necessary to prevent
any of its employees,
representatives and agents from
disclosing any such information. RAS
*er agrees to use any confidential
or proprietary information of CICA
solely for the purpose of
reinsurance under this agreement.
Article XIII
Errors and Omissions 1. The List of Risks Reinsured is the
basis for the reinsurance coverage
provided by Reinsurer for the
respective calendar year on the
reinsurance in force at the beginning
of that year. Any unintentional
clerical error or omission in the
amounts reinsured shall not be
corrected during the current calendar
year but will be reflected in the
List of Risks Reinsured for the
subsequent calendar year, unless by
such error or omission
a. any risk not eligible for
reinsurance under this
Agreement is shown as
reinsured, or
b. the amount retained by the
Ceding Company exceeds its
retention at issue (Exhibit
II) by more than $5,000 or
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c. the benefits reinsured by
Reinsurer and other
reinsurers exceed the
benefits insured under the
policy less the Ceding
Company's retention thereon,
if any, or
d. the amount of any benefit
reinsured by Reinsurer
exceeds 125% of the
corresponding amount during
the preceding calendar year,
or
e. the amount of any benefit
reinsured by Reinsurer
exceeds the Automatic
Coverage (Exhibit III).
2. In those cases described in
Paragraph 1, Reinsurer shall be
notified in writing and the
reinsurance shall be corrected
retroactively. Correction of the
reinsurance premium will be
accounted for in the List of
Amendments applicable to the
calendar year in which the error was
discovered. The Ceding Company shall
also check its entire reinsured
portfolio for similar discrepancies.
3. Any other failure of either party to
comply with any provision of this
Agreement, if shown to be
unintentional and the result of
misunderstanding or oversight, shall
be corrected by restoring both
parties to the positions they would
have occupied had no such error or
oversight occurred.
Article XIV
Inspection of Records Reinsurer shall have the right, at any
reasonable time, to inspect, at the office of
the Ceding Company, all books, records and
documents relating to the reinsurance under
this Agreement.
Article XV
Insolvency 1. In the event of insolvency of the
Ceding Company, all reinsurance shall
be payable directly to the
liquidator, receiver or statutory
successor of said Ceding Company,
without diminution because of the
insolvency of the Ceding Company.
2. In the event of insolvency of the
Ceding Company, the liquidator,
receiver or statutory successor
shall give Reinsurer written notice
of the pendency of a claim on a
policy reinsured hereunder within a
reasonable time after such claim is
filed in the insolvency proceeding.
During the pendency of any such
claim, Reinsurer may investigate
such claim and interpose in the name
of the Ceding Company (its
liquidator, receiver or statutory
successor), but at its own expense,
in the proceeding where such claim
is to be adjudicated, any defense or
defenses which Reinsurer may deem
available to the Ceding Company or
its liquidator, receiver or
statutory successor.
3. The expense thus incurred by
Reinsurer shall be chargeable,
subject to court approval, against
the Ceding Company as part of the
expense of it liquidation to the
extent of a proportionate share of
the benefit which may accrue to the
Ceding Company solely as a result of
the defense undertaken by Reinsurer.
Where two r more reinsures are
participating in the same claim and
a majority in
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interest elect to interpose a defense
or defenses to any such claim, the
expense shall be apportioned in
accordance with the terms of the
respective reinsurance agreements as
though such expense had been
incurred by the Ceding Company.
4. In the event of insolvency of the
CEDING COMPANY, the arbitration
provisions of this agreement shall
also be subject to the laws of the
State of Colorado.
Article XVI
Arbitration 1. All disputes and differences between
the two contracting parties upon
which an amicable understanding
cannot be reached are to be decided
by arbitration. The arbitrators shall
regard this Agreement rather from the
standpoint of practical business and
equity than from that of the strict
law, for the purpose of carrying out
its evident intent.
2. The court of arbitration, which is
to be held in the city in which the
Executive office of the Ceding
Company is located, shall consist of
three arbitrators who must be
executive officers of life insurance
companies, other than the two
parties to this Agreement, familiar
with the reinsurance business. One
of the arbitrators is to be
appointed by the Ceding Company, the
second by Reinsurer, and the third
is to be selected by these two
representatives before the beginning
of the arbitration. Should the two
arbitrators be unable to agree upon
the choice of a third, the
appointment shall be left to the
President of the American Council of
Life Insurance. or its successor
organization.
3. The arbitrators shall decide by a
majority of votes and from their
written decision there can be no
appeal. The cost of arbitration,
including the fees of the
arbitrators, shall be borne by the
losing party unless the arbitrators
shall decide otherwise.
Article XVII
Parties to Agreement
Colorado Law This is an agreement solely between the
Ceding Company and Reinsurer. The acceptance
of reinsurance hereunder shall not create any
right or legal relation whatever between
Reinsurer and the insured or the beneficiary
under any policy of the Ceding Company which
may be reinsured hereunder.
All provisions of this reinsurance agreement
other than the arbitration provisions are
subject to the laws of the State of Colorado.
Reinsurer agrees to maintain continuous
qualification as a reinsurer in the State of
Colorado during the continuance of any
insurance contracts under this Agreement.
Article XVIII
Duration of Agreement:
Termination 1. This Agreement shall be unlimited as
to its duration, but may be
terminated at any time, for new
reinsurance only, by either party
giving not less than ninety (90) days
notice of termination in writing
13
14
to the other party and the Colorado
Insurance Department by registered
mail stating the Termination Date.
Reinsurer shall continue to accept
reinsurance during the ninety (90)
days aforesaid and shall remain
liable on all reinsurance already
placed in force under the terms of
this Agreement until such contracts
are terminated between the original
insured and the Ceding Company.
2. In the event of non-payment of any
amounts due hereunder by either
party within three (3) months of the
respective due dates, except as
provided by Article XIII Errors and
Omissions, Paragraph 2, the other
party shall have the right to cancel
all reinsurance in force under this
Agreement by giving thirty (30) days
written notice. Payment of the
amounts due, with interest according
to Article XII Accounting, Paragraph
5, during such thirty (30) days will
nullify the cancellation.
Article XIX
Effective Date;
Execution The said Citizens Insurance Company of
America, Denver, Colorado, and the said
Reinsurer, declare that this Agreement and
all its terms shall be effective as of
January 1, 1995, and shall apply to eligible
policies applied for on and after such date,
notwithstanding that such policies may have
been backdated for up to six (6) months to
save age. In witness whereof they have by
their respective officers executed and
delivered this Agreement in duplicate.
Citizens Insurance Company of America
By:/s/ Roby Dollar
------------------------------------
Title: President
Date: October 4, 1994
Riunione Adriatica di Sicurta', S.p.A.
By:/s/ Lino Loer
------------------------------------
Title: Manager
Date: October 4, 1994
14
15
Exhibit 1
SAR Reinsurance Premiums
1. Reinsurance premiums under this Agreement for the first calendar year
(from the effective date of the policy to the net December 31) are,
with certain exceptions noted below, zero.
2. Life reinsurance premiums for standard risks shall be calculated by
multiplying the Net Amount at Risk reinsured during the calendar year
by the appropriate premium rate for such year from the appropriate
schedule shown in this Exhibit:
Age Nearest Birthday SAR NR ANB
Age Last Birthday SAR NR ALB
Rates for females shall be in accordance with the respective rate
schedule applicable.
3. Life reinsurance premiums for substandard risks accepted subject to a
Table Rating shall be calculated by multiplying the corresponding
standard risk life reinsurance premiums by the appropriate Mortality
Factor from the table:
Table Rating Mortality Factor**
------------ --------- ------
A (1) 1.25
AA (1 1/2) 1.375
B (2) 1.50
BB (2 1/2) 1.625
C (3) 1.75
D (4) 2.00
E (5) 2.25
F (6) 2.50
G (7) 2.75
H (8) 3.00
I (9) 3.25
J (10) 3.50
L (12) 4.00
P (16) 5.00
** Substandard reinsurance premiums for the second calendar year only
shall be 150% of the premiums calculated from the table.
15
16
Exhibit I
(continued)
4. Life reinsurance premiums for substandard risks accepted subject to a
flat extra premium shall be the sum of
a. The applicable standard or substandard reinsurance premiums,
calculated from Paragraphs 2 and 3 above, and
b. The following percentages of the policy annual flat extra
premiums applicable to the initial amount of reinsurance
hereunder on such risks:
Term of Flat Second Subsequent
Extra Premium Calendar Year Calendar Years
------------- ------------- ---------------
More than five years 102.5% 90%
Five years or less 135.0% 90%
5. Reinsurance premiums for Waiver of Premium Disability benefits payable
for the second and later calendar years shall be equal to 90% of the
policy annual premiums for such benefits applicable to the amount of
such benefits reinsured hereunder. If premiums for the Waiver of
Premium Disability benefit are automatically included in the gross
Life Insurance premiums under any policy reinsurance hereunder, then
reinsurance premiums for the Waiver of Premium Disability benefit, for
second and later calendar years, shall be 100% of the Ceding Company's
net annual premiums for the reinsured amount of such benefit.
6. For standard risks only, the reinsurance premium for the excess over
$1,500,000 on any one life reinsured under this Agreement for the
first calendar year (from the effective date of the policy to the net
December 31) shall be based on the second calendar year rate for the
issue age. Such first year premium shall be prorated over the year of
issue as follows:
First year prorated premium = n/360 (tabular rate), where n is
the number of days from the issue date to December 31,
assuming 30-day months, and the tabular rate is the second
calendar-year rate for the age at issue.
7. The Life reinsurance premiums for reinsurance of Joint Whole Life
policies at Standard or Substandard rates shall for each insured be
85% of the premium applicable for an individual life shown in Exhibit
I of the Agreement. Such rate shall be applied to the Net Amount at
Risk for each individual.
In case of reinsurance under a Joint Whole Life Policy where the Joint
Insureds die simultaneously or within 60 days of each other, thus
requiring the Ceding Company to pay twice the amount of Life Insurance
insured under the Joint Whole Life Policy, Reinsurer shall for each of
the joint lives reinsured pay the net amount at risk plus 50% of the
terminal reserve used in calculating the net amount at risk in
accordance with Article IV, Paragraph 1, relating to the amount
reinsured on the respective life.
16
17
Exhibit I (Continued)
Self-Administered Automatic Reinsurance Premiums Per $1,000
Standard Non-Refund Age Last Birthday Appendix 2
Calender Year
Issue
Age 1 2 3 4 5 6 7 8 9
0 0.00 3.41 1.65 1.34 1.19 1.10 1.04 0.99 0.95
1 0.00 1.65 1.34 1.19 1.10 1.04 0.99 0.95 0.91
2 0.00 1.34 1.19 1.10 1.04 0.99 0.95 0.91 0.90
3 0.00 1.19 1.10 1.04 0.99 0.95 0.91 0.90 0.90
4 0.00 1.10 1.04 0.99 0.95 0.91 0.90 0.90 0.94
5 0.00 1.04 0.99 0.95 0.91 0.90 0.90 0.94 1.03
6 0.00 0.99 0.95 0.91 0.90 0.90 0.94 1.03 1.17
7 0.00 0.95 0.91 0.90 0.90 0.94 1.03 1.17 1.34
8 0.00 0.91 0.90 0.90 0.94 1.03 1.17 1.34 1.52
9 0.00 0.90 0.90 0.94 1.03 1.17 1.34 1.52 1.69
10 0.00 0.90 0.94 1.03 1.17 1.34 1.52 1.69 1.84
11 0.00 0.94 1.03 1.17 1.34 1.52 1.69 1.84 1.94
12 0.00 1.12 1.23 1.37 1.53 1.68 1.82 1.93 1.98
13 0.00 1.36 1.46 1.57 1.70 1.81 1.89 1.96 1.99
14 0.00 1.53 1.62 1.70 1.81 1.89 1.93 1.96 1.97
15 0.00 1.64 1.71 1.78 1.86 1.91 1.93 1.93 1.93
16 0.00 1.69 1.76 1.81 1.87 1.90 1.89 1.89 1.88
17 0.00 1.70 1.77 1.82 1.86 1.87 1.85 1.84 1.83
18 0.00 1.67 1.74 1.78 1.81 1.81 1.79 1.78 1.77
19 0.00 1.60 1.67 1.71 1.74 1.73 1.71 1.70 1.71
20 0.00 1.52 1.58 1.64 1.65 1.64 1.63 1.63 1.65
21 0.00 1.44 1.51 1.57 1.58 1.57 1.57 1.58 1.62
22 0.00 1.38 1.45 1.52 1.53 1.52 1.53 1.56 1.61
23 0.00 1.33 1.42 1.49 1.50 1.49 1.52 1.56 1.62
24 0.00 1.29 1.39 1.46 1.47 1.48 1.51 1.57 1.64
25 0.00 1.26 1.37 1.45 1.47 1.48 1.53 1.60 1.70
26 0.00 1.25 1.37 1.45 1.48 1.51 1.57 1.66 1.78
27 0.00 1.27 1.39 1.48 1.51 1.57 1.64 1.76 1.90
28 0.00 1.32 1.43 1.53 1.58 1.65 1.74 1.87 2.05
29 0.00 1.37 1.49 1.59 1.66 1.72 1.79 1.89 2.04
30 0.00 1.43 1.56 1.67 1.76 1.82 1.85 1.93 2.07
31 0.00 1.49 1.63 1.76 1.88 1.96 2.01 2.12 2.29
32 0.00 1.54 1.69 1.86 2.00 2.11 2.19 2.33 2.52
33 0.00 1.57 1.76 1.95 2.13 2.27 2.38 2.55 2.77
34 0.00 1.60 1.83 2.06 2.28 2.44 2.59 2.79 3.04
Standard Non-Refund Age Last Birthday Appendix 2
Calender Year
Issue Attained
Age 10 11 12 13 14 15 16+ Age
0 0.91 0.90 0.91 0.96 1.06 1.21 1.39 15
1 0.90 0.90 0.95 1.05 1.20 1.39 1.59 16
2 0.90 0.94 1.04 1.19 1.38 1.58 1.77 17
3 0.94 1.04 1.18 1.37 1.56 1.76 1.92 18
4 1.03 1.18 1.36 1.55 1.74 1.91 2.03 19
5 1.17 1.35 1.54 1.73 1.89 2.02 2.07 20
6 1.34 1.53 1.71 1.88 2.00 2.06 2.05 21
7 1.52 1.69 1.86 1.98 2.04 2.04 2.02 22
8 1.69 1.84 1.96 2.02 2.02 2.01 1.99 23
9 1.84 1.95 2.00 2.00 1.99 1.98 1.97 24
10 1.94 1.98 1.98 1.97 1.96 1.96 1.95 25
11 1.97 1.96 1.95 1.94 1.94 1.94 1.93 26
12 1.97 1.94 1.94 1.94 1.94 1.94 1.93 27
13 1.97 1.94 1.93 1.94 1.95 1.96 1.98 28
14 1.95 1.92 1.91 1.93 1.96 2.00 2.03 29
15 1.91 1.88 1.88 1.92 1.98 2.03 2.09 30
16 1.86 1.84 1.85 1.91 1.98 2.05 2.13 31
17 1.82 1.81 1.83 1.90 1.97 2.06 2.15 32
18 1.77 1.78 1.81 1.89 1.97 2.08 2.19 33
19 1.73 1.75 1.80 1.89 2.00 2.12 2.26 34
20 1.69 1.73 1.80 1.91 2.04 2.20 2.86 35
21 1.67 1.73 1.83 1.96 2.12 2.30 2.50 36
22 1.67 1.76 1.88 2.04 2.23 2.44 2.67 37
23 1.70 1.81 1.96 2.15 2.37 2.62 2.89 38
24 1.74 1.88 2.06 2.29 2.55 2.84 3.14 39
25 1.82 1.97 2.18 2.44 2.74 3.08 3.42 40
26 1.92 2.10 2.34 2.63 2.96 3.34 3.72 41
27 2.06 2.27 2.54 2.86 3.23 3.63 4.05 42
28 2.24 2.47 2.78 3.13 3.53 3.97 4.43 43
29 2.22 2.46 2.80 3.18 3.61 4.09 4.72 44
30 2.22 2.48 2.85 3.27 3.73 4.25 5.05 45
31 2.48 2.77 3.19 3.64 4.14 4.71 5.56 46
32 2.75 3.08 3.54 4.04 4.61 5.24 6.15 47
33 3.03 3.41 3.92 4.49 5.14 5.85 6.84 48
34 3.34 3.77 4.33 4.99 5.73 6.55 7.63 49
Female Rates: Ages 0-10 same as male rates ages 0-10; ages 11-14
same as male rate age 10;
Ages 15 & over same as male rates ages 4 years younger.
17
18
Exhibit I (Continued)
Self-Administered Automatic Reinsurance Premiums Per $1,000
Standard Non-Refund Age Last Birthday Appendix 2
Calender Year
Issue
Age 1 2 3 4 5 6 7 8 9
35 0.00 1.64 1.91 2.18 2.44 2.64 2.83 3.06 3.33
36 0.00 1.70 2.02 2.34 2.63 2.87 3.10 3.36 3.67
37 0.00 1.80 2.17 2.53 2.85 3.13 3.41 3.71 4.06
38 0.00 1.94 2.36 2.76 3.11 3.43 3.76 4.10 4.49
39 0.00 2.10 2.57 3.02 3.39 3.76 4.15 4.53 4.97
40 0.00 2.28 2.80 3.29 3.70 4.12 4.57 4.99 5.49
41 0.00 2.45 3.04 3.58 4.03 4.50 5.01 5.48 6.03
42 0.00 2.62 3.27 3.87 4.37 4.89 5.46 5.99 6.58
43 0.00 2.78 3.50 4.17 4.74 5.30 5.92 6.51 7.14
44 0.00 2.95 3.73 4.48 5.12 5.73 6.40 7.06 7.72
45 0.00 3.12 3.98 4.81 5.52 6.20 6.93 7.67 8.36
46 0.00 3.31 4.26 5.17 5.96 6.70 7.52 8.35 9.09
47 0.00 3.52 4.58 5.57 6.42 7.25 8.21 9.15 9.96
48 0.00 3.74 4.93 6.00 6.89 7.85 9.00 10.07 10.96
49 0.00 3.99 5.31 6.46 7.38 8.48 9.85 11.06 12.05
50 0.00 4.25 5.71 6.95 7.92 9.15 10.73 12.09 13.18
51 0.00 4.52 6.13 7.48 8.51 9.85 11.62 13.13 14.31
52 0.00 4.78 6.55 8.03 9.13 10.54 12.47 14.11 15.38
53 0.00 5.04 6.95 8.60 9.78 11.24 13.27 15.02 16.37
54 0.00 5.31 7.37 9.19 10.47 11.97 14.08 15.94 17.37
55 0.00 5.65 7.90 9.93 11.33 12.85 15.04 17.00 18.54
56 0.00 6.11 8.57 10.87 12.41 13.97 16.20 18.28 19.97
57 0.00 6.66 9.37 11.99 13.74 15.29 17.50 19.69 21.62
58 0.00 7.31 10.31 13.33 15.32 16.83 18.92 21.22 23.45
59 0.00 8.05 11.36 14.82 17.09 18.54 20.49 22.87 25.46
60 0.00 8.89 12.53 16.42 18.99 20.43 22.25 24.71 27.69
61 0.00 9.86 13.83 18.11 20.99 22.49 24.25 26.82 30.16
62 0.00 1098 15.25 19.79 22.96 24.67 26.50 29.18 32.84
Standard Non-Refund Age Last Birthday Appendix 2
Calender Year
Issue Attained
Age 10 11 12 13 14 15 16+ Age
35 3.68 4.15 4.79 5.53 6.36 7.28 8.47 50
36 4.06 4.58 5.28 6.09 7.00 8.01 9.30 51
37 4.49 5.06 5.82 6.69 7.68 8.78 10.17 52
38 4.97 5.59 6.41 7.37 8.44 9.65 11.15 53
39 5.49 6.16 7.06 8.12 9.32 10.65 12.29 54
40 6.04 6.76 7.77 8.97 10.33 11.84 13.63 55
41 6.62 7.41 8.53 9.90 11.46 13.17 15.14 56
42 7.22 8.07 9.32 10.87 12.63 14.57 16.75 57
43 7.81 8.74 10.12 11.86 13.84 16.01 18.43 58
44 8.43 9.45 10.97 12.89 15.10 17.51 20.16 59
45 9.12 10.23 11.89 14.00 16.42 19.08 21.98 60
46 9.92 11.12 12.93 15.24 17.90 20.81 23.98 61
47 10.86 12.17 14.13 16.68 19.60 22.81 26.26 62
48 11.96 13.37 15.49 18.32 21.56 25.11 28.87 63
49 13.16 14.68 16.98 20.12 23.73 27.66 31.75 64
50 14.42 16.06 18.57 22.05 26.06 30.40 34.86 65
51 15.69 17.49 20.22 24.06 28.49 33.27 38.16 66
52 16.89 18.87 21.87 26.10 30.98 36.25 41.59 67
53 18.03 20.21 23.50 28.13 33.47 39.24 45.09 68
54 19.17 21.59 25.18 30.21 36.00 42.28 48.64 69
55 20.53 23.17 27.06 32.53 38.85 45.71 52.67 70
56 22.21 25.13 29.31 35.24 42.19 49.75 57.38 71
57 24.15 27.49 32.12 38.43 45.94 54.21 62.55 72
58 26.33 30.16 35.43 42.27 50.21 59.08 68.17 73
59 28.74 33.14 39.12 46.72 55.33 64.71 74.40 74
60 31.41 36.44 43.24 51.71 61.31 71.48 81.89 75
61 34.39 40.12 47.79 57.25 67.99 79.31 90.78 76
62 37.65 44.14 52.76 63.35 75.36 87.99 100.67 77
Female Rates: Ages 0-10 same as male rates ages 0-10; ages 11-14
same as male rate age 10;
Ages 15 & over same as male rates ages 4 years younger.
18
19
Exhibit I (Continued)
Self-Administered Automatic Reinsurance Premiums Per $1,000
Standard Non-Refund Age Last Birthday Appendix 2
Calender Year
Issue
Age 1 2 3 4 5 6 7 8 9
63 0.00 12.24 16.78 21.44 24.89 26.95 28.98 31.77 35.71
64 0.00 13.65 18.45 23.17 26.91 29.42 31.74 34.66 38.85
65 0.00 15.19 20.30 25.11 29.18 32.19 34.85 37.94 42.42
66 0.00 16.86 22.36 27.37 31.84 35.38 38.41 41.73 46.56
67 0.00 18.67 24.63 29.96 34.90 39.00 42.45 46.07 51.30
68 0.00 20.63 27.14 32.89 38.36 43.04 46.96 50.94 56.65
69 0.00 22.73 29.91 36.25 42.34 47.60 52.02 56.44 62.74
70 0.00 24.78 32.71 39.83 46.61 52.38 57.26 62.19 69.12
Standard Non-Refund Age Last Birthday Appendix 2
Calender Year
Issue Attained
Age 10 11 12 13 14 15 16+ Age
63 41.16 48.50 58.13 69.97 83.41 97.49 111.52 78
64 45.01 53.26 63.95 77.10 92.01 107.63 123.12 79
65 49.34 58.57 70.32 84.74 101.11 118.25 135.26 80
66 54.29 64.54 77.41 93.12 110.96 129.67 148.26 81
67 59.89 71.20 85.26 102.30 121.79 142.18 162.49 82
68 66.13 78.56 93.96 112.73 134.01 156.33 178.48 83
69 73.14 86.73 103.68 124.51 148.10 172.69 196.76 84
70 80.40 95.06 113.60 136.70 162.80 189.74 217.22 85
237.80 86
258.16 87
278.86 88
297.29 89
311.99 90
324.11 91
337.40 92
356.94 93
383.45 94
409.92 95
431.40 96
451.12 97
471.61 98
492.50 99
Female Rates: Ages 0-10 same as male rates ages 0-10; ages 11-14
same as male rate age 10;
Ages 15 & over same as male rates ages 4 years younger.
19
20
Exhibit I (Continued)
Self-Administered Automatic Reinsurance Premiums Per $1,000
Standard Non-Refund Age Nearest Birthday Appendix 2
Calender Year
Issue
Age 1 2 3 4 5 6 7 8 9
0 0.00 4.96 1.86 1.43 1.24 1.13 1.07 1.01 0.97
1 0.00 1.86 1.43 1.24 1.13 1.07 1.01 0.97 0.92
2 0.00 1.43 1.24 1.13 1.07 1.01 0.97 0.92 0.90
3 0.00 1.24 1.13 1.07 1.01 0.97 0.92 0.90 0.89
4 0.00 1.13 1.07 1.01 0.97 0.92 0.90 0.89 0.90
5 0.00 1.07 1.01 0.97 0.92 0.90 0.89 0.90 0.97
6 0.00 1.01 0.97 0.92 0.90 0.89 0.90 0.97 1.09
7 0.00 0.97 0.92 0.90 0.89 0.90 0.97 1.09 1.25
8 0.00 0.92 0.90 0.89 0.90 0.97 1.09 1.25 1.43
9 0.00 0.90 0.89 0.90 0.97 1.09 1.25 1.43 1.60
10 0.00 0.89 0.90 0.97 1.09 1.25 1.43 1.60 1.77
11 0.00 0.90 0.97 1.09 1.25 1.43 1.60 1.77 1.90
12 0.00 0.97 1.09 1.25 1.43 1.60 1.77 1.90 1.97
13 0.00 1.26 1.36 1.48 1.63 1.76 1.86 1.95 1.99
14 0.00 1.46 1.55 1.65 1.77 1.86 1.92 1.97 1.98
15 0.00 1.60 1.68 1.75 1.84 1.91 1.94 1.95 1.95
16 0.00 1.67 1.74 1.80 1.87 1.91 1.91 1.91 1.90
17 0.00 1.70 1.77 1.82 1.87 1.89 1.87 1.86 1.85
18 0.00 1.70 1.77 1.81 1.84 1.84 1.82 1.81 1.80
19 0.00 1.64 1.71 1.75 1.78 1.77 1.75 1.74 1.74
20 0.00 1.56 1.62 1.67 1.69 1.68 1.66 1.66 1.67
21 0.00 1.47 1.54 1.60 1.61 1.60 1.59 1.60 1.63
22 0.00 1.40 1.47 1.53 1.55 1.54 1.54 1.56 1.61
23 0.00 1.35 1.43 1.50 1.51 1.50 1.52 1.56 1.61
24 0.00 1.31 1.40 1.47 1.48 1.48 1.51 1.56 1.62
25 0.00 1.27 1.37 1.45 1.46 1.47 1.51 1.58 1.66
26 0.00 1.25 1.36 1.44 1.47 1.49 1.54 1.62 1.73
27 0.00 1.25 1.37 1.45 1.48 1.53 1.60 1.70 1.83
28 0.00 1.29 1.41 1.50 1.54 1.60 1.68 1.81 1.97
29 0.00 1.34 1.45 1.55 1.61 1.69 1.80 1.93 2.12
30 0.00 1.40 1.52 1.62 1.70 1.75 1.78 1.84 1.96
31 0.00 1.46 1.59 1.71 1.81 1.88 1.92 2.02 2.17
Standard Non-Refund Age Nearest Birthday Appendix 2
Calender Year
Issue Attained
Age 10 11 12 13 14 15 16+ Age
0 0.92 0.90 0.90 0.92 0.99 1.12 1.29 15
1 0.90 0.89 0.91 0.99 1.12 1.29 1.49 16
2 0.89 0.91 0.98 1.11 1.28 1.48 1.68 17
3 0.90 0.97 1.10 1.27 1.47 1.67 1.85 18
4 0.97 1.10 1.26 1.46 1.65 1.84 1.99 19
5 1.09 1.25 1.45 1.64 1.82 1.98 2.07 20
6 1.25 1.44 1.63 1.81 1.96 2.06 2.07 21
7 1.43 1.61 1.79 1.94 2.04 2.06 2.03 22
8 1.60 1.77 1.92 2.02 2.04 2.02 2.00 23
9 1.77 1.91 2.00 2.02 2.00 1.99 1.98 24
10 1.90 1.98 2.00 1.98 1.97 1.97 1.96 25
11 1.97 1.98 1.96 1.95 1.95 1.95 1.94 26
12 1.97 1.94 1.93 1.93 1.93 1.93 1.91 27
13 1.97 1.94 1.94 1.94 1.94 1.94 1.95 28
14 1.96 1.93 1.92 1.93 1.95 1.98 2.00 29
15 1.93 1.90 1.90 1.93 1.97 2.01 2.05 30
16 1.88 1.85 1.86 1.91 1.98 2.05 2.12 31
17 1.84 1.83 1.84 1.90 1.97 2.05 2.13 32
18 1.79 1.79 1.82 1.89 1.96 2.06 2.16 33
19 1.75 1.76 1.80 1.88 1.98 2.09 2.21 34
20 1.70 1.73 1.79 1.89 2.01 2.15 2.30 35
21 1.67 1.72 1.81 1.93 2.07 2.24 2.42 36
22 1.66 1.74 1.85 1.99 2.16 2.36 2.57 37
23 1.68 1.77 1.91 2.09 2.29 2.52 2.77 38
24 1.71 1.84 2.00 2.21 2.45 2.72 3.00 39
25 1.77 1.91 2.11 2.36 2.64 2.95 3.27 40
26 1.86 2.03 2.25 2.52 2.84 3.20 3.56 41
27 1.98 2.17 2.42 2.73 3.08 3.47 3.87 42
28 2.14 2.36 2.65 2.99 3.37 3.79 4.23 43
29 2.33 2.58 2.91 3.27 3.68 4.14 4.62 44
30 2.10 2.34 2.69 3.09 3.53 4.03 4.81 45
31 2.34 2.62 3.01 3.44 3.92 4.46 5.29 46
Female Rates: Ages 0-10 same as male rates ages 0-10; ages 11-14
same as male rate age 10;
Ages 15 & over same as male rates ages 4 years younger.
20
21
Exhibit I (Continued)
Self-Administered Automatic Reinsurance Premiums Per $1,000
Standard Non-Refund Age Nearest Birthday Appendix 2
Calender Year
Issue
Age 1 2 3 4 5 6 7 8 9
32 0.00 1.52 1.66 1.81 1.94 2.03 2.10 2.22 2.40
33 0.00 1.55 1.72 1.90 2.06 2.18 2.28 2.43 2.64
34 0.00 1.58 1.79 2.00 2.20 2.35 2.48 2.66 2.90
35 0.00 1.61 1.86 2.11 2.35 2.53 2.70 2.91 3.17
36 0.00 1.66 1.95 2.25 2.52 2.75 2.95 3.20 3.49
37 0.00 1.74 2.08 2.42 2.73 2.99 3.24 3.52 3.85
38 0.00 1.86 2.25 2.63 2.97 3.27 3.57 3.90 4.26
39 0.00 2.01 2.46 2.88 3.24 3.59 3.95 4.30 4.72
40 0.00 2.19 2.68 3.15 3.54 3.93 4.35 4.75 5.22
41 0.00 2.36 2.92 3.43 3.86 4.30 4.78 5.23 5.75
42 0.00 2.53 3.15 3.72 4.19 4.69 5.23 5.73 6.30
43 0.00 2.70 3.38 4.02 4.55 5.08 5.68 6.25 6.85
44 0.00 2.86 3.61 4.32 4.92 5.51 6.15 6.77 7.42
45 0.00 3.03 3.85 4.63 5.31 5.95 6.65 7.35 8.02
46 0.00 3.21 4.11 4.98 5.73 6.44 7.21 7.98 8.70
47 0.00 3.41 4.41 5.36 6.18 6.96 7.83 8.71 9.48
48 0.00 3.62 4.74 5.78 6.65 7.54 8.58 9.587 10.43
49 0.00 3.86 5.11 6.22 7.12 8.15 9.41 10.55 11.49
50 0.00 4.11 5.50 6.69 7.64 8.80 10.29 11.57 12.61
51 0.00 4.38 5.92 7.20 8.20 9.49 11.17 12.61 13.75
52 0.00 4.65 6.34 7.75 8.81 10.20 12.06 13.64 14.87
53 0.00 4.91 6.75 8.31 9.45 10.88 12.87 14.57 15.88
54 0.00 5.17 7.15 8.88 10.10 11.59 13.67 15.47 16.86
55 0.00 5.45 7.59 9.50 10.83 12.34 14.49 16.40 17.87
56 0.00 5.85 8.20 10.36 11.82 13.36 15.58 17.60 19.20
57 0.00 6.36 8.93 11.37 13.00 14.57 16.81 18.95 20.74
58 0.00 6.96 9.811 12.61 14.47 16.01 18.18 20.43 22.49
59 0.00 7.65 10.80 14.04 16.16 17.64 19.66 22.00 24.40
60 0.00 8.44 11.91 15.59 18.01 19.44 21.31 23.73 26.51
61 0.00 9.34 13.15 17.25 19.97 21.42 23.18 25.69 28.86
62 0.00 10.38 14.51 18.97 22.00 23.56 25.31 27.94 31.46
Standard Non-Refund Age Nearest Birthday Appendix 2
Calender Year
Issue Attained
Age 10 11 12 13 14 15 16+ Age
C>
32 2.61 2.92 3.36 3.83 4.36 4.95 5.83 47
33 2.88 3.24 3.72 4.25 4.85 5.52 6.47 48
34 3.18 3.58 4.11 4.73 5.42 6.18 7.21 49
35 3.50 3.95 4.55 5.25 6.04 6.91 8.05 50
36 3.85 4.35 5.02 5.80 6.67 7.64 8.89 51
37 4.26 4.81 5.53 6.37 7.32 8.37 9.71 52
38 4.71 5.31 6.10 7.01 8.04 9.19 10.63 53
39 5.22 5.86 6.71 7.72 8.84 10.10 11.67 54
40 5.76 6.45 7.40 8.52 9.793 11.20 12.90 55
41 6.32 7.07 8.13 9.42 10.87 12.47 14.35 56
42 6.92 7.74 8.92 10.38 12.04 13.86 15.93 57
43 7.51 8.40 9.712 11.35 13.22 15.27 17.57 58
44 8.11 9.08 10.53 12.36 14.46 16.75 19.28 59
45 8.75 9.823 11.40 13.42 15.73 18.26 21.04 60
46 9.49 10.64 12.37 14.58 17.11 19.89 22.92 61
47 0.34 11.60 13.48 15.90 18.68 21.73 25.03 62
48 1.38 12.74 14.77 17.45 20.52 23.89 27.49 63
49 2.54 14.00 16.21 19.18 22.60 26.33 30.25 64
50 3.78 15.35 17.75 21.06 24.86 28.98 33.24 65
51 5.06 16.77 19.38 23.04 27.26 31.81 36.48 66
52 6.32 18.20 21.05 25.08 29.72 34.73 39.83 67
53 7.46 19.54 22.68 27.12 32.24 37.76 43.35 68
54 8.59 20.88 24.31 29.14 34.70 40.72 46.82 69
55 9.75 22.30 26.05 31.27 37.30 43.83 50.46 70
56 1.31 24.04 28.06 33.78 40.40 47.59 54.87 71
57 3.11 26.22 30.56 36.69 43.98 51.90 59.88 72
58 5.18 28.75 33.68 40.17 47.89 56.52 65.22 73
59 7.47 31.57 37.17 44.36 52.52 61.64 71.12 74
60 0.00 34.70 41.07 49.07 58.14 67.77 77.67 75
61 2.82 38.18 45.40 54.34 64.48 75.19 86.10 76
62 5.96 42.05 50.18 60.16 71.49 83.42 95.46 77
Female Rates: Ages 0-10 same as male rates ages 0-10; ages 11-14
same as male rate age 10;
Ages 15 & over same as male rates ages 4 years younger.
21
22
Exhibit I (Continued)
Self-Administered Automatic Reinsurance Premiums Per $1,000
Standard Non-Refund Age Nearest Birthday Appendix 2
Calender Year
Issue
Age 1 2 3 4 5 6 7 8 9
63 0.00 11.57 15.98 20.61 23.92 25.78 27.68 30.41 34.22
64 0.00 12.91 17.57 22.27 25.86 28.12 30.28 33.13 37.19
65 0.00 14.38 19.32 24.07 27.96 30.72 33.20 36.19 40.51
66 0.00 15.99 21.27 26.14 30.39 33.66 36.50 39.69 44.33
67 0.00 17.72 23.44 28.59 33.28 37.09 40.32 43.77 48.79
68 0.00 19.61 25.82 31.11 36.52 40.90 44.58 48.36 53.81
69 0.00 21.64 28.45 34.44 40.20 45.17 49.34 53.51 59.49
70 0.00 23.82 31.36 38.05 44.48 50.03 54.70 59.37 65.98
Standard Non-Refund Age Nearest Birthday Appendix 2
Calender Year
Issue Attained
Age 10 11 12 13 14 15 16+ Age
63 39.33 46.23 55.34 66.53 79.23 92.56 105.88 78
64 42.98 50.76 60.91 73.41 87.58 102.42 117.16 79
65 47.04 55.76 66.98 80.78 96.441 112.83 129.07 80
66 51.64 61.37 73.66 88.70 105.78 123.67 141.44 81
67 56.94 67.70 81.15 97.540 116.13 135.66 155.08 82
68 62.83 74.69 89.37 107.21 127.44 148.69 169.89 83
69 69.42 82.43 98.55 118.25 140.58 163.96 187.07 84
70 76.86 91.03 108.80 130.77 155.62 181.41 206.44 85
227.99 86
247.60 87
268.72 88
289.00 89
305.57 90
318.41 91
329.80 92
344.99 93
368.89 94
398.01 95
421.82 96
440.97 97
461.26 98
481.96 99
Female Rates: Ages 0-10 same as male rates ages 0-10; ages 11-14
same as male rate age 10;
Ages 15 & over same as male rates ages 4 years younger.
22
23
Exhibit II
Retention Limits of the Ceding Company
The retention limits of the Ceding Company on any one life for the benefits
reinsured hereunder are as follows:
Life Insurance
Issue
Ages Standard Substandard
----- -------- -----------
Tables 1 Tables 5
through 4 through 16
--------- ----------
All
Ages 75,000 75,000 None to be
accepted
Minimum Cession: $1,000
Waiver of Premium Disability Benefits
Same as for Life Insurance
Accidental Death Benefits
None
23
24
Exhibit III
Limits and Special Conditions
for the First Excess
1. Overall Limits
Automatic coverage of any risk for Life Insurance with or without Waiver of
Premium Disability benefits shall be granted under this Agreement only if,
according to the Ceding Company's papers, the overall sum in force and applied
for on the same life with all insurance companies does not exceed 1,500.000 of
Life Insurance with or without Waiver of Premium Disability benefits.
2. First Excess
The First Excess of the Ceding Company to be automatically covered under this
Agreement, including previous reinsurance ceded to Reinsurer by the Ceding
Company on the same life, is defined as follows:
a. Life Insurance
1. Issue ages up to 65 years.
2. Standard and Substandard risks rated up to and
including Table 16 (500% total mortality) written by
the Ceding Company on any U.S. citizen through duly
licensed agents contracted with the Ceding Company.
Issues also include non-U.S. Citizens in countries
stipulated in Appendix I-A.
3. United States of America Risks: 600% of the retention
of the Ceding Company, but not more than $300,000 on
any one life.
International Risks: 400% of the retention of the
Ceding Company, but not more than $300,000 on any one
life.
The minimum cession will be $1,000. If the total
First Excess is less than such minimum, the Ceding
Company will increase its retention to the full
amount insured on that life.
b. Waiver of Premium Disability benefits
Same as for Life insurance, subject to age and substandard
issue limits imposed by the Ceding Company on such risks.
3. Supplementary Benefit Forms
Supplementary benefits to be covered automatically under this Agreement shall
be those provided in the following policy forms issued by the Ceding Company:
a. Waiver of Premium Disability benefits, Form Nos. B11172S,
B11372S, B11472S, B11572S, B11972E, B12172E, B12272E.
b. Increasing Term Death Benefit in amount of Premium Coverage.
100% reinsurance shall be provided for an amount equal to or
greater than $5,000 with respect to each person.
c. No Accidental Death supplemental benefits are covered under
this Agreement.
24
25
Exhibit IV
Calculation of the Net Amount at Risk Reinsured
For calculate Net Amount at Risk according to Article IV Plan of Reinsurance,
Paragraph 1, the Ceding Company will use the following approximate procedure:
* Subtract Tabular Benefit Decreases
* Subtract Decreases in Commuted Value
* Add Tabular Benefit Increases
* Add Built-In Return Premium Benefit Increases
* Subtract Accumulated Statutory Mean Reserves
25
26
Exhibit V
List of Risks Reinsured
The List of Risks Reinsured will be prepared at the beginning of each calendar
year in accordance with Article X and will include, for each cession in force
at that time, the following information for the applicable reinsurance, in
policy number order:
1. Basic
a. Policy Number
b. Name of Insured (last name first)
c. Plan code
d. Sex
e. Date of birth (month, day, year)
f. Effective date of issue (month, day, year)
g. Age at issue
h. Business code (new, new with issue effective before preceding
calendar year, converted, reinstated, unchanged, amended by
change of direct policy, amended by recapture).
2. Life Insurance
a. Rating (Table and/or Flat Extra)
b. Total Gross Life Amount Insured on this policy
c. Amount of First Excess reinsured
d. Attained age for the current calendar year
e. Life Net Amount at Risk reinsured for the current
calendar-year
f. Life reinsurance Premium for the current calendar year.
3. Waiver of Premium Disability benefits
a. Rating
b. Insured Code (Insured, Payor)
c. Benefit Code
d. Life Amount reinsured for WPD
e. WPD reinsurance premium for the current calendar year.
A policy count and subtotals for new issues and renewals along with grand
totals should be provided for items in Sub-paragraphs 2d, 2e, 2f, 3d, and 3e.
26
27
Exhibit VI
List of Amendments
The List of Amendments will be prepared as of the end of each calendar year in
accordance with Article XI, and will include, for each cession which is amended
during that calendar year because of policy change (Article VII) or because of
certain errors and omissions (Article XIII), the following information for the
applicable reinsurance:
1. Basic
a. Policy Number
b. Name of insured (last name first)
c. Sex
d. Date of birth (month, day, year)
e. Attained age for the calendar year
f. Amendment Code
g. Effective date of amendment (month, day, year)
h. Number of days from date of amendment through December 1 of
the calendar year (for business amended in the second calendar
year not more than 183 days).
2. Life Insurance
a. Rating Table and/or Flat Extra)
b. Life Net Amount at Risk reinsured on last List of Risks
Reinsured or prior to amendment
c. New Life Net Amount at Risk reinsured
d. Adjustment to life reinsurance premium for the calendar year.
3. Waiver of Premium Disability benefits
a. Rating
b. Life amount reinsured for WPD on last List of Risks Reinsured
or prior to amendment
c. New Life amount reinsured for WPD
d. Adjustment to WPD reinsurance premium for the calendar year.
A policy count and subtotals by Amendment Code along with a grand total should
be provided for items in Sub-paragraphs 2b, 2c, 2d, 3b, 3c, and 3d.
The List of Amendments will also include policies with issue dates in the
previous calendar year which failed to appear on the List of Risks Reinsured
applicable to the current calendar year.
27
28
APPENDIX I
CITIZEN'S
INTERNATIONAL GUIDELINES
1. Must be in U.S. Currency.
2. Minimum issue amount is $50,000
3. Amount over $375,000 will be sent facultative to _______________ and
they will consider on an individual basis.
4. Application and Medical Papers must be written in English or Spanish.
5. Attending Physician's Statement required on all applicants.
6. Supplemental benefits will be offered only on rider forms that contain
special protective exceptions. (see attached examples)
7. We will not consider applications on:
A. Political or Military figures or their families.
B. Private pilots or crew members without an aviation exclusion.
C. Children under the age of 14 for an amount exceeding $150,000.
(includes in force and applied for)
D. Children age 15-20 for an amount exceeding 250,000. (includes
in force and applied for)
E. Applicant over Age 65.
F. Applicants with coronary artery disease or insulin dependent
diabetic.
G. Will not issue with rating over Table four.
H. Substandard risks rated higher than Table 4.
8. Medical examinations by an MD. required on all applications. (see
other medical requirements attached)
9. We will use appointed examiners or, when available, Embassy Affiliated
doctors.
10. Inspection Requirements: Inspection reports are made by investigative
firms with H. O. approval.
Inspection Report required on all amounts.
11. We will keep our full retention on each risk. (In force coverage and
current application combined)
28
29
Appendix IA
Any of the countries listed below upon mutual agreement between Ceding Company
and Reinsurer.
NORTH AMERICA Ukraine Djibouti
Uzbekistan Egypt
Canada Equatorial Guinea
Ethiopia
ASIA Gabon
MIDDLE AMERICA Gambia
Afghanistan Ghana
Antigua and Barbuda Bahrain Guinea
Aruba Bangladesh Guinea-Bissau
Anguilla Bhutan Kenya
Cayman Islands Brunei Lesotho
British Virgin Islands Cambodia Liberia
Montserrat China Libya
Turks and Caicos Islands Cyprus, Northern Madagascar
Cuba India Malawi
Dominica Indonesia Mali
Guadeloupe Iran Mauritania
Martinique Iraq Mauritius
Haiti Israel Morocco
Nicaragua Japan Mozambique
St. Kitts and Nevis Jordan Namibia
Korea, North Niger
Korea, South Nigeria
SOUTH AMICA Kuwait Reunion
Laos Rwanda
Falkland Islands Lebanon St. Helena
Suriname Malaysia Sao Tome and Principe
Maldives Senegal
Mongolia Seychelles
EUROPE Myanmar Sierra Leone
Nepal Somalia
Albania Oman South Africa
Andorra Pakistan Sudan
Armenia Gatar Swaziland
Azerbaijan Saudi Arabia Tanzania
Belarus Sri Lanka Togo
Bosnia and Herzegovina Syria Tunisia
Bulgaria Taiwan Uganda
Croatia Thailand. Zaire
Czechoslovakia Turkey Zambia
Estonia United Arab Emirates Zimbabwe
Georgia Vietnam
Gibraltar Yemen
Greece OCEANIA
Hungary
Kazakhstan AFRICA Fiji
Kyrgyzstan Kiribati
Latvia Algeria Marshall Islands
Lithuania Angola Micronesia
29
30
Malta Benin Nauru
Macedonia Botswana Northern Mariana Islands
Moldova Burkina Faso Palau
Monaco Burundi Papua New Guinea
Poland Cameroon Pitcairn Islands
Romania Cape Verde Solomon Islands
Russia Central African Republic Tonga
San Marino Chad Tuvalu
Slovenia Comoros Vanuatu
Tajikistan Congo Western Samoa
Turkmenistan Cote D' Ivoire
30
31
Appendix 1B
- --------------------------------------------------------------------------------
RECEIPT
DO NOT DETACH UNLESS FULL FIRST PREMIUM IS PAID WITH APPLICATION
No. 007258
RECEIVED FROM ___________________________ THE SUM OF $____________ for the
full first premium specified in the application for insurance in the
Citizens Insurance Company of America which bears the same number and date
as this receipt. The insurance under the policy for which application is
made shall be effective on the date of this receipt or the date of
completion of the medical examination (if and when required by the
Company) whichever is the later date, if the Proposed insured is on this
date in good health and if, in the opinion of the authorized Officers of
the Company, at its offices in Austin, Texas, the Proposed insured is a
risk insurable and acceptable for insurance under the Company's
underwriting rules and practices on the plan of insurance for the amount
of insurance and at the premium rate set forth in the application,
exclusive of any amendments in the space for "Home Office Endorsement."
However, even if the Proposed insured is so insurable and acceptable, the
maximum liability of the Company's under this receipt shall be $50,000 or
the amount of the application, whichever is the lesser, insurance under
this receipt shall terminate upon issuance and delivery to the applicant
to the policy applied for. If the Proposed Insured is not now in good
health and is not so insurable and acceptable the Company has no liability
under this receipt and the above payment will be returned by the Company's
check, upon surrender of this receipt. This receipt shall be void if given
for check or draft which is not honored on presentation. The Company shall
have 60 days from the date of application to consider and act upon said
application. Either an affirmative declination of the application by the
Company or failure of the Company to offer a policy within such 60 days
shall be deemed a declination of the application, and this receipt shall
be void as of the date of such declination.
DATE: ______, 19____ AGENTS SIGNATURE _________________________
- --------------------------------------------------------------------------------
P.O. BOX 149151, AUSTIN, TEXAS 78714-9151 TELEPHONE: 512-837-7100
- --------------------------------------------------------------------------------
AGREEMENT CONTAINED IN APPLICATION: I hereby declare that all statements
and answers herein and on the reverse side of this application and
attachments hereto are complete and true and made by me to obtain the
policy applied for and I agree that: (1) the Company shall not be bound
by any promise or statement made by or to any salesman or other person,
unless same be in writing and approved by the Company; (2) my acceptance
of any contract issued hereon shall constitute a ratification of any
changes noted by the Company in the space for "Home Office Endorsement";
(3) if within sixty (60) days from the date of this application a policy
is not received by me, or if I am not notified of its approval or
declination within that period, this application will be declined; (4)
should I obtain this insurance as a result of false, misleading, omitted,
or incomplete statements in the application and death should occur due to
a cause directly or indirectly related to such statements or directly or
indirectly form bodily injury intentionally or unintentionally inflicted
by another person, or from (i) any activity that is illegal or criminal
in nature, or the association with person involved in such activity; (ii)
the commission of an assault or crime by or against the insured; (iii)
involvement with or use of illegal or controlled chemicals, drugs or
substances; (iv) war or any act of war, declared or undeclared, or nation
against nation, state against state or faction against faction including
but not limited to the use of military or police forces or any other
governmental agency to protect the public; (v) involvement in or as a
result of any riot, insurgency or insurrection; (vi) service in police or
military forces or political or judicial positions of any country,
combination or countries or international organization; (vii) voluntary
exposure to hazards which result in bodily injury; (viii) failure to
exercise the care that a prudent person would employ in the operation or
use of any vehicle, tool, or machine; (ix) any immunological disorder or
any infection resulting form the disease AIDS (Acquired Immune Deficiency
Syndrome) and/or ARC (AIDS Related Complex); or if coverage would not
have been issued, for any reason, for the amount applied for due to such
stats, the liability under this policy shall be limited to the premiums
paid hereon; (5) unless the initial premium is paid in cash with this
application, there shall be no insurance contract until a policy has been
delivered to me during the good health of the Proposed Insured, and while
the habits and occupation remain as described in this application. The
owner of the policy, if other than the Proposed Insured, adopts as his
own all statements and answers made in this application.
- --------------------------------------------------------------------------------
ABOVE REFERENCED IN SPANISH WITH RECEIPT No. 116404
31
32
AMENDMENT TO SELF ADMINISTERED
AUTOMATIC REINSURANCE AGREEMENT
between
Citizens Insurance company of America (CICA)
Denver, Colorado
(Ceding Company)
and
Riunione Adriatics di Sicurta', S.p.A. (RAS)
Trieste, Italy
(Reinsurer)
By the Amendment, it is hereby mutually agreed and understood that Addendum No.
1, Intermediary Clause, is deleted from this agreement prior to its effective
date and that all transactions under this agreement are to be direct
transactions between the ceding company and the Reinsurer.
All other terms and conditions remain unchanged.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed in triplicate by their duly authorized officers.
In Austin, Texas this 29th day of December, 1994.
Citizens Insurance Company of America
/s/ Roby Dollar /s/ Charles Melgar
- ------------------------------- ----------------------
By: Roby Dollar, Vice Chairman Charles Melgar, V.P.
and in Trieste, Italy this 30th day of December, 1994.
Riunione Adriatica di Sicurta', S.p.A.
By:/s/ Lino Loer Title: Manager
----------------
32
33
ADDENDUM NO. 1
INTERMEDIARY CLAUSE
to
Self-Administered Automatic Reinsurance Agreement
between
Citizens Insurance Company of America (CICA)
Denver, Colorado
(Ceding Company)
and
Riunione Adriatica di Sicurta', S.p.A. (RAS)
Trieste, Italy
(Reinsurer)
Ballantyne, McKean & Sullivan, Ltd. (BMS) London, England, is hereby recognized
as the Intermediary negotiating this Agreement for all business hereunder. All
communications (including but not limited to notice, statements, premiums,
return premiums, commissions, taxes, losses, loss adjustment expense, salvages
and loss settlements) relating thereto shall be transmitted to CICA or RAS
through BMS. Payments by CICA to BMS shall be deemed to constitute payment to
RAS. Payments by RAS to BMS shall be deemed only to constitute payment to CICA
to the extent that such payments are actually received by CICA.
All other terms and conditions remain unchanged.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed
in triplicate by their duly authorized officers.
In Austin, Texas this 4th day of October, 1994.
CITIZENS INSURANCE COMPANY OF AMERICA
/s/ Roby Dollar Title: President
- -----------------------
By: Roby Dollar
and in Austin this 4th day of October, 1994.
Riunione Adriatica di Sicurta', S.p.A.
/s/ Lino Loer Title: Manager
- -----------------------
33
34
AMENDMENT TO SELF ADMINISTERED
AUTOMATIC REINSURANCE AGREEMENT
between
Citizens Insurance Company of America (CICA)
Denver, Colorado
(Ceding Company)
and
Riunione Adriatica di Sicurta', S.p.A. (RAS)
Trieste, Italy
(Reinsurer)
By this Amendment, it is hereby mutually agreed and understood that Addendum
No. 1, Intermediary Clause, is deleted from this agreement prior to its
effective date and that all transactions under this agreement are to be direct
transactions between the ceding company and the Reinsurer.
All other terms and conditions remain unchanged.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed in triplicate by their duly authorized officers.
In Austin, Texas this 29th day of December, 1994.
Citizens Insurance Company of America
/s/ Roby Dollar /s/ Charles Melgar
- ------------------------------ ---------------------
By: Roby Dollar, Vice Chairman Charles Melgar, V.P.
and in Trieste, Italy this 4th day of January, 1995
Riunione Adriatica di Sicurta', S.p.A.
By:/s/ Dario Schiller Title: Manager
---------------------
Dario Schiller
/s/ Enrico Stokelj Proxyholder
- ------------------------
Enrico Stokelj
34
35
AMENDMENT NO. 3
to the
SELF-ADMINISTERED AUTOMATIC REINSURANCE AGREEMENT
dated January 1, 1995
between
CITIZENS INSURANCE COMPANY OF AMERICA
DENVER, COLORADO
(hereinafter referred to as the CEDING COMPANY)
and
RIUNIONE ADRIATICA DI SICURTA' S.P.A.
TRIESTE, ITALY
(hereinafter referred to as the REINSURER)
35
36
Effective April 13, 1995, this agreement shall be amended as follows:
Paragraph 9 shall be added to Article X "Claims",:
CLAIMS
9. The REINSURER agrees to reimburse the CEDING COMPANY
for each claim with respect to which this agreement
affords indemnity within 90 days after the REINSURER
receives proof which is satisfactory to the REINSURER
that the CEDING COMPANY has paid the claim.
Article XVII, shall be amended as follows:
PARTIES TO AGREEMENT;
COLORADO LAW
This is an agreement solely between the Ceding Company and
Reinsurer. The acceptance of reinsurance hereunder shall not
create any right or legal relation whatever between Reinsurer
and the insured or the beneficiary under any policy of the
Ceding Company which may be reinsured hereunder.
All provisions of this reinsurance agreement including the
arbitration provisions are subject to the laws of the State of
Colorado.
Reinsurer agrees to maintain continuous qualification as a
reinsurer in the State of Colorado during the continuance of
any insurance contracts under this Agreement.
This Agreement shall constitute the entire agreement between
the parties with respect to the business being reinsured
hereunder. There are no other understandings between the
parties other than as expressed in this agreement. Any change
or modification to this agreement shall be null and void
unless made by amendment to this agreement and signed by both
parties.
This Amendment shall be attached to and form a part of the Self-Administered
Automatic Reinsurance Agreement between the Ceding Company and Riunione
Adriatica di Sicurta', S.p.A., effective January l, 1995.
IN WITNESS WHEREOF, the said Citizens Insurance Company of America, Denver,
Colorado, and the said Riunione Adriatica di Sicurta', Trieste, Italy, have by
their respective officers executed and delivered this Amendment in duplicate.
CITIZENS INSURANCE COMPANY OF AMERICA
/s/ Roby Dollar Vice Chairman
---------------- ---------------
signature title
/s/ Mark A. Oliver EVP
------------------- ---------------
signature title
Date: June 5, 1995
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RIUNIONE ADRIATICA DI SICURTA', S.P.A.
By:/s/ Dario Schiller Manager
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By:/s/ Lino Loer Manager
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signature title
Date: Trieste, May 18, 1995
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ADDENDUM NO. 1
SELF ADMINISTERED AUTOMATIC REINSURANCE AGREEMENT
dated January 1, 1995
between
CITIZENS INSURANCE COMPANY OF AMERICA
Denver, Colorado
- - Hereinafter referred to as CEDING COMPANY
AND
RIUNIONE ADRIATICA DI SICURTA', S.p.A.
Trieste, Italy
- - hereinafter referred to as the REINSURER
Ballantyne, McKean & Sullivan Ltd. Latham House, 16 Minories, London, EC3N 1AX,
is hereby recognized as the Intermediary under this Life Insurance Treaty for
all business hereunder. All communications (including but not limited to
notices, statements, premiums, return premiums, commissions, taxes, losses,
loss adjustment expenses, salvages and loss settlements) relating thereto shall
be transmitted to the CEDING COMPANY or the REINSURER through Ballantyne,
McKean & Sullivan Ltd. Payments made by the CEDING COMPANY to the Intermediary
shall be deemed to constitute payment to the REINSURER. Payments by the
REINSURER to the Intermediary shall be deemed only to constitute payment to the
CEDING COMPANY to the extent that such payments are actually received by the
CEDING COMPANY.
Made in duplicate to one effect only.
London, TRIESTE O9 AGO. 1995
THE CEDING COMPANY THE REINSURER
CITIZENS INSURANCE COMPANY OF RIUNIONE ADRIATICA DI SICURTA'
AMERICA
/s/ Roby Dollar /s/ Dario Schiller
- ---------------- -------------------
Vice Chairman
/s/ Mark A. Oliver
- -------------------
Executive Vice President
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BMS TERMS OF ENGAGEMENT
This contract defines the basis of trading between Ballantyne, McKean
and Sullivan Limited (hereinafter referred to as "BMS") and Citizens Insurance
Company of America, Denver, Colorado (hereinafter referred to as the Client).
1. FUNDAMENTAL PRINCIPLES.
As a Lloyd's Broker BMS is governed by Lloyd's Regulations. In
addition the Lloyd's Code of Practice defines a recognized standard of
professional conduct for all members of the Lloyd's community and this is
followed within BMS. Many of the recommendations of this Code are included
within these Terms of Engagement and a full copy is attached for your
information.
Our principles of operation are as follows:
1.1 BMS will at all times conduct its business with utmost good
faith and integrity.
1.2 BMS will comply with the written standards established by the
Client for the cession or retrocession of all risks.
2. INITIAL ADVICE/FIRM ORDER
2.1 BMS will provide objective and independent advice relating to
the stated reinsurance requirements of the Client.
2.2 The Client will provide BMS with written instructions to
procure a reinsurance contract on his behalf and comply with
the reasonable requests of BMS made in connection with the
procurement of the reinsurance contract.
2.3 Upon receipt of written instructions to proceed BMS will
provide the Client with copy of the Placing Slip. This
information should be reviewed by the Client.
2.4 During the placing of the reinsurance contract, BMS will keep
the Client advised of progress made on a timely basis.
3. DISCLOSURE OF INFORMATION.
3.1 It is the duty of the Client to disclose all material
information. Failure to disclose such information may result
in the reinsurance contract and/or a claim being rescinded
and/or not paid.
3.2 Upon request from the Client BMS shall disclose the amount of
brokerage and where practicable the nature and amount of
commission or other remuneration BMS receives as a result of
effecting reinsurances for the Client.
4. CONFIDENTIALITY OF INFORMATION.
4.1 Any information acquired by BMS from the Client will not be
used or disclosed except in the normal course of negotiating,
maintaining or renewing a contract of reinsurance for that
Client or unless the consent of the Client has been obtained
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5. CHOICE OF REINSURERS.
5.1 BMS will exercise reasonable skill and care in the selection
of security.
5.2 BMS will select Reinsurers objectively in the best interests
of the Client.
5.3 BMS will regularly review the Reinsurers used and will advise
the Client of any significant changes in status.
5.4 BMS will select security in accordance with its current
Security and Evaluation Procedures.
5.5 BMS does not warrant or guarantee the performance of the
contract between the Client and the Reinsurers.
5.6 BMS will disclose any relationship with any reinsurer to which
business will be ceded or retroceded.
6. BOOKS AND RECORDS.
6.1 BMS will at all times comply with Section 10-2-905 of the
Colorado Insurance Laws (Books and records - reinsurance
intermediary-producers) a copy of which is attached hereto).
6.2 The Client will have access to and the right to copy and audit
all accounts and records maintained by BMS related to the
business BMS transacts on the Client's behalf. Such accounts
and records will be kept in a form which is usable by the
Client.
7. ACCOUNTING.
7.1 BMS will render accounts accurately detailing all material
transactions, including information necessary to support all
commissions, charges, and other fees received by, or owing to
BMS. Any funds due to the Client will be remitted as quickly
as possible but nevertheless within 15 days of receipt by BMS.
7.2 All funds collected for the Client's account will be held in a
fiduciary capacity in a bank which is a U.S. financial
institution acceptable to the Insurance Commissioner of the
State of Colorado.
8. CLAIMS.
8.1 The Client must notify BMS promptly of all claims affecting
the reinsurance contract and disclose all material facts.
Should the claim require a collection to be made from
Reinsurers reasonable evidence will be required that the
original claim has been paid.
8.2 BMS will advise Reinsurers of all claims notified by the
Client and will co-ordinate all further negotiations.
8.3 Where required by the contract BMS will arrange for Funding
Securities to be established in respect of loss and unearned
premium reserves at the end of each year.
9. TRANSFER OF BUSINESS.
9.1 Should the Client wish to transfer business to another Broker,
BMS will make available all such documentation to which the
Client is entitled and which is reasonably necessary for the
new Broker to discharge his duties to the Client.
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10. GENERAL SERVICING.
10.1 BMS shall be responsible for and will provide any relevant
service requested by the Client in relation to any reinsurance
contract placed for the Client by BMS notwithstanding the
expiry of the contract, unless BMS is satisfied that the
Client has instructed a new broker to assume such
responsibilities and that the new broker has accepted such
instructions.
11. COMPLAINTS.
11.1 Any complaints regarding the service provided by BMS should be
made in writing to the Chairman of Ballantyne, McKean &
Sullivan Ltd and in the event that the Client fails to obtain
satisfaction from BMS he should appeal to the Council of
Lloyd's as regulators of Lloyd's Brokers.
12. STATEMENT OF FINANCIAL CONDITION.
12.1 Upon request BMS will provide the Client with a copy of the
latest audited accounts.
12.2 Upon request BMS will provide the client with details of its
current E & O coverage.
12.3 BMS will notify the Client in writing if it fails to meet the
Lloyd's Solvency requirements, fails to comply with any
Lloyd's Rules or enters into any disputes with the Council of
Lloyd's.
13. COMPLIANCE WITH. APPLICABLE LAW
13.1 Where appropriate BMS will comply with all applicable law
regarding the operations of reinsurance intermediaries.
14. TERMINATION.
14.1 The Client may terminate this agreement at any time, with or
without cause, by giving BMS 10 days notice in writing.
15. CONTACTS.
15.1 This document applies to all contracts of reinsurance placed
by BMS for the Client.
16. GOVERNING LAW.
16.1 This agreement shall be construed, interpreted and enforced in
accordance with the Law of the State of Colorado in the United
States of America.
SIGNED: /s/ Roger Cooke DATED: July 17, 1995
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on behalf of Ballantyne, McKean and Sullivan Ltd.
SIGNED: /s/ Mark A. Oliver DATED: August 17, 1995
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/s/ Roby Dollar
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on behalf of Citizens Insurance Company of America
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