1
EXHIBIT A(8)(b)
STOPLOSS REINSURANCE AGREEMENT
BETWEEN
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
(The Ceding Company, hereinafter referred to as "ManAmerica")
AND
THE MANUFACTURERS LIFE INSURANCE COMPANY
OF TORONTO, ONTARIO, CANADA
(The Reinsuring Company, hereinafter referred to as
"Manufacturers Life")
2
I - SCOPE
This Agreement applies to stop-loss reinsurance of standard and
substandard insurance arising from Base Plan and attaching Benefit
Riders issued by ManAmerica, as described in Schedule A and later
referred to as Flexible Premium Variable Life (FPVL).
II - AUTOMATIC REINSURANCE
This coverage is automatically provided for all FPVL policies issued by
ManAmerica, up to the amounts shown in Schedule B, and sold in any
calendar year starting at the effective date specified in section XV.
Amounts over those shown in Schedule B will be submitted facultatively
to Manufacturers Life.
III - LIABILITY
For reinsurance under this Agreement, the exposure to liability of
Manufacturers Life will commence simultaneously with the liability of
ManAmerica. Subject to the provisions of this section and section VII
and conditional to the payment of reinsurance premiums as provided for
in section VI of this Agreement, Manufacturers Life's exposure will
continue as long as ManAmerica is liable under the original policies
and shall cease when the liability of ManAmerica ceases.
IV - PLAN OF REINSURANCE
Manufacturers Life will reimburse the total death claims less the
associated policy values plus 100% of the total monthly deductions
waived on the policies reinsured in excess of the Attachment Point, as
set in Schedule C, on a calendar quarter basis in arrears.
Manufacturers Life shall not reimburse surrender benefits paid by
ManAmerica. Death claims shall exclude any amounts reimbursed under any
other reinsurance agreement on the policies reinsured hereunder.
V - PREMIUMS
The reinsurance premiums will be computed for each calendar quarter in
arrears as set out in Schedule D attached hereto.
If there is a reduction in liability due to any other reinsurance
agreement on the policies reinsured hereunder, the total premium will
be reduced by the premium associated with that liability.
VI - PAYMENTS/REPORTING
Within 15 days after the end of each calendar quarter, ManAmerica will
send to Manufacturers Life an itemized statement of account, in
substantial accord with Schedule E, together with any remittance for
the balance due to Manufacturers Life as stated therein. Manufacturers
Life will have 15 days after receipt of the statement of account to pay
any amounts owing to ManAmerica.
2
3
ManAmerica will supply Manufacturers Life with details as outlined in
Schedule E. All policy details will be housed with ManAmerica.
VII - OVERSIGHTS
It is expressly understood and agreed that if non-payment of premiums
or failure to comply with any terms of this contract is shown to be
unintentional and the result of misunderstanding or oversights on the
part of either Manufacturers Life or ManAmerica, both Manufacturers
Life and ManAmerica shall be restored to the position they would have
occupied had no such error or oversights occurred.
VIII - CLAIMS
ManAmerica shall give Manufacturers Life a copy of the total death
benefit claims, the policy value of those policies as well as total
monthly deductions waived on the policies reinsured hereunder net of
any amount reimbursed under any other reinsurance agreement.
Manufacturers Life shall be liable to ManAmerica for the total claims
in excess of the Attachment Point as defined in Schedule C. Any
liability of Manufacturers Life shall be settled in one lump-sum.
IX - CURRENCY
Reinsurance under this Agreement will be effected on an original
currency basis whereby the risk and premium amounts will be expressed
in U.S. Dollars. Settlements for all amounts due to either party by the
other as a result of transactions under the provisions of this
Agreement shall be paid in U.S. Dollars.
X - INSOLVENCY
In the event of the insolvency of ManAmerica, all reinsurance under
this Agreement will be paid by Manufacturers Life directly to
ManAmerica, its liquidator, receiver or statutory successor, on the
basis of the liability of ManAmerica under the policies reinsured
without diminution because of the insolvency of ManAmerica, or because
the Company has failed to pay all or a portion of any claims.
XI - INSPECTION OF RECORDS
Manufacturers Life shall have the right, at any reasonable time, at the
office of ManAmerica to examine all books and documents relating to
reinsurance under this Agreement.
XII - ARBITRATION
All disputes and differences between the two contracting parties upon
which an amicable understanding cannot be reached are to be decided by
arbitration and the arbitrators, one is to be appointed by ManAmerica,
the second by Manufacturers Life and the third is to be selected by
these two representatives. Should the two arbitrators be unable to
agree on the choice of a third, the appointment shall be left to the
President of the American Council of Life insurance, or its successor.
3
4
The arbitrators are not bound by any rules of law. They 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 shared by each party unless the arbitrators shall decide
otherwise.
XIII - SEVERABILITY
In the event that any of the provisions herein contained shall be
invalid or unenforceable, such declaration or adjudication shall in no
manner affect or impair the validity or the enforceability of the other
provisions and the remaining provisions shall remain in full force and
effect as though such invalid or unenforceable provisions or clauses
had not been herein included or made part of the Agreement.
XIV - DURATION OF AGREEMENT
This Agreement will be effective on and after the effective date stated
in section XV.
This Agreement may be amended only be mutual consent of ManAmerica and
Manufacturers Life.
ManAmerica and Manufacturers Life may terminate this Agreement by
giving ninety (90) days prior written notice of termination. The day
the notice is received in the mail at the other party's Home Office,
or, if the mail is not used, the day it is delivered to the other
party's Home Office or to an Officer of the other party, as the case
may be, shall be the first day of the ninety (90) day period.
During the ninety (90) day period, this Agreement shall continue to
operate in accordance with its terms.
Manufacturers Life and ManAmerica shall remain liable after
termination, in accordance with the terms and conditions of this
Agreement, with respect to all reinsurance which was effective prior to
termination of this Agreement.
4
5
XV - EXECUTION
In witness of the above, this Agreement is signed in duplicate on the
dates and at the places indicated below.
The effective date of this Agreement is, the 1st day of January, 1988.
Date: ___________________________ For: ___________________________
Place ___________________________ By: ____________________________
Attest: _________________________ Title: _________________________
Date: ___________________________ For: ___________________________
Place ___________________________ By: ____________________________
Attest: _________________________ Title: _________________________
5
6
SCHEDULE A
POLICY SUBJECT TO REINSURANCE
Base Plan: Flexible Premium Variable Life
Riders: - Accidental Death Benefit
- Guaranteed Insurability Benefit
- Additional Life Benefit
- Supplementary Insurance Benefit
- Contingent Life Benefit
- Total Disability Waiver of Monthly Deductions Benefit
6
7
SCHEDULE B
RETENTION LIMITS OF MANUFACTURERS LIFE
Life $7,500,000
Aviation Risk $5,000,000
Accidental Death $1,000,000
Total Disability Waiver
of Monthly Deductions $5,000 per month
7
8
SCHEDULE C
ATTACHMENT POINT
The Attachment Point shall be 110% of the expected claims. Expected
claims, for a given period, are defined as 75% of the total insurance
charges for the base plan and riders, as described in Schedule A,
deducted during that period for the coverages reinsured hereunder.
8
9
SCHEDULE D
REINSURANCE PREMIUMS
Reinsurance premiums shall be paid at the end of each calendar quarter,
in arrears, and shall be computed as 5% of the expected claims as
defined in Schedule C.
9
10
SCHEDULE E
STOPLOSS REINSURANCE AGREEMENT BETWEEN MANAMERICA
AND MANUFACTURERS LIFE
Statement of account for the period
XX/XX/XX TO XX/XX/XX
A. Total insurance charges (base plans and riders)
deducted during the period: X,XXX.xx
B. Expected claims (75% of A): X,XXX.xx
C. Attachment point (110% of B): X,XXX.xx
D. Actual claims: X,XXX.xx
E. Policy values of policies at time of death X,XXX.xx
F. Reinsured claims (excess, if any, of D-E) over C X,XXX.xx
G. Reinsurance premium (5% of B): X,XXX.xx
Net amount due (owing) = F-G X,XXX.xx
========
10