1
EXHIBIT 10.14
Colorado ID #045
Self-Administered
Automatic Reinsurance Agreement
Effective: July 1, 1993
between
Citizens Insurance Company of America
Denver, Colorado
(hereinafter referred to as the "Ceding
Company") and
Business Men's Assurance Company
Kansas City, Missouri
(hereinafter referred to as the "Reinsurer")
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Table of Contents
Article I
Article II
Article III
Article IV
Article V
Article VI
Article VII
Article VIII
Article IX
Article X
Article XI
Article XII
Article XIII
Article XIV
Article XV
Article XVI
Article XVII
Article XVIII
Article XIX
Exhibit I
Exhibit II
Exhibit III
Exhibit IV
Exhibit V
Exhibit VI
Exhibit VII
Exhibit VIII
Addendum #1
Addendum #2
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Article I 1. On and after the effective date of this Agreement, the Ceding
Basis of Reinsurance Company shall cede to Reinsurer, subject to the limitations outlined in Exhibit III,
30% of its 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 III. Reinsurer shall automatically accept such First
Excess within the limits indicated in Exhibit 111, 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
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 Reinsurers
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 V-H Automatic Reinsurance Coverage after Policy Change, IX Recapture, and
XVIII Duration of Agreement; Termination.
Article II 1. If (a) the First Excess as defined in Exhibit III herein is greater than
Mode of Notification $425,000 of life Insurance and (b) the Ceding Company automatically
and Cession 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
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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 Citizens'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 1. The liability of Reinsurer shall begin and terminate simultaneously
Liability of Reinsure 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 mailed a Preliminary Surplus Advice in accordance
with Paragraph 3 of Article II Mode of Notification and Cession.
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 other forms,
rate schedules and underwriting rules for the business eligible for reinsurance under
this Agreement and shall keep Reinsurer informed of any changes therein.
Article IV 1. Life reinsurance shall be ceded on the Risk Premium basis for the
Plan of Reinsurance 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 111) 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 ten-n 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.
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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 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 1). Rate 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
1, the attained age shall be taken as the issue 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 1.
4. Except as otherwise provided in Exhibit III, for all new reinsurance originating
without current evidence of insurability (conversions, options, etc.) calendars 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 those premiums less than ones based on the 1980 CSO Table at 4 1/2% interest, only
the latter premiums can be guaranteed for renewal. Should BMA increase the
reinsurance premium to the 1980 CSO table at 4 1/2% interest, then Citizens shall have
the right to immediately recapture any business affected by such change.
Article VI 1. When Reinsurer is not required to pay state premium taxes on reinsurance premiums
Premium Taxes and received from the Ceding Company, it shall reimburse the Ceding Company for any such
Policy Expenses 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 issuance of any policy reinsured
hereunder.
3. The Ceding Company will take responsibility for paying all foreign or excise taxes.
The Reinsurer will not be responsible to reimburse these taxes.
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Article VII 1. Reinsurer will continue to grant automatic reinsurance coverage in accordance with the
Automatic Reinsurance provisions of this Agreement after renewal, conversion or amendment of any
Coverage after Policy policy reinsured hereunder provided that the amounts and benefits to be
Change 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
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 that the amount of the minimum
cession specified in Exhibit 11, 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 Net
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 I are exceeded. In the event that the limits under Paragraph
I 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 11, 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 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.
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Article VIII 1. All amendments and terminations of reinsurance under this Agreement occurring
Information to Reinsurer during any calendar year will be shown after Policy Change in the 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 1. At intervals of five (5) years, the Ceding Company is entitled to
Recapture recapture reinsurance on all cessions which have been in force under
this Agreement for a 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 1. In the event any policy is terminated by death while reinsured under
Claims this Agreement, Reinsurer shall pay to the Ceding Company the Net 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
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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 of
special expenses in proportion to their respective Net Amounts at Risk under the
policy affected.
6. Reinsurer and 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. In every case of loss, proofs acceptable to the Ceding Company shall likewise be taken
as sufficient by Reinsurer. The Ceding Company shall furnish Reinsurer with copies of
proof of loss. It is agreed, however, that the Ceding Company shall give Reinsurer
advance notice of any claim which is contestable in accordance with the policy
provisions if at least 50% of the Life risk or Waiver of Premium Disability benefit
claimed is reinsured by Reinsurer hereunder. On request by Reinsurer, all papers in
connection with such claim shall be submitted to Reinsurer for its opinion before
commitment or payment is made to the claimant.
Article XI 1. Before January 15 of each calendar year following the date of this
List of Risks Agreement, the Ceding Company will provide Reinsurer with the List
Reinsured and List of Risks Reinsured for the current calendar year. This List will include
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of Amendments 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 MH Errors and Omissions. In
detail, the List will contain information as outlined in Exhibit VI.
Article XII 1. The Ceding Company shall remit the total of the reinsurance
Accounting 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 (IO) 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 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 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.
Article XIII 1. The List of Risks Reinsured is the basis for the reinsurance coverage
Errors and Omissions 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
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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
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. 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 position they would have occupied had no
such error or oversight occurred.
Article XIV Reinsurer shall have the right, at any reasonable time to inspect, at
Inspection of the office of the Ceding Company, all books, records and documents relating
Records to the reinsurance under this Agreement.
Article XV 1. In the event of insolvency of the Ceding Company, all reinsurance
Insolvency 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.
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3. The expense thus incurred by Reinsurer shall be chargeable, subject to court approval,
against the Ceding Company as part of the expense of 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 or more reinsurers are
participating in the same claim and a majority in 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 though such expense had been
incurred by the Ceding Company.
Article XVI 1. All disputes and differences between the two contracting parties
Arbitration 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 where the home office of the
Ceding Company is domiciled, 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 American Arbitration Association. Arbitration will be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association which are in effect on the date of delivery of demand for arbitration.
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 1. This is an agreement solely between the Ceding Company and
Parties to Reinsurer. The acceptance of reinsurance hereunder shall not create
Agreement 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.
Article XVIII 1 . This Agreement shall be unlimited as to its duration, but may be
Duration of Agreement terminated at any time, for new reinsurances only, by either party
giving not less than ninety (90) days notice of termination in writing 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 the
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reinsurance in force under this Agreement by giving thirty (30) days written notice.
Payment of the amounts due, with interest according to Article MI Accounting,
Paragraph 5, during such thirty (30) days will nullify the cancellation.
Article XIX The said Citizens Insurance Company of America, Denver, Colorado, Effective Date;
Execution and the said Reinsurer, declare that this Agreement and all its terms shall be
effective as of July 1, 1993, 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/ Th Dollar
-------------------------
Title: President
----------------------
Attest: /s/ Mark A. Oliver, VP Date: 7/21/93
-------------------------- ----------------------
Business Men's Assurance Company
By: /s/ John M
-------------------------
Title: Mrg Dir
----------------------
Attest: /s/ W.M. Crouch Date: 8/4/93
-------------------------- -----------------------
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Page 1
Exhibit I
SAR Reinsurance Premiums
1. Reinsurance premiums under this Agreement for the first calendar year
(from the effective date of the policy to the next December 3 1) 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.
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Page 2
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 next
December 3 1) 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.
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ADDENDUM
to the Automatic YRT Agreement
dated July 1, 1993
between
CITIZENS LIFE INSURANCE COMPANY OF AMERICA
Denver, Colorado
(hereinafter called the CEDING COMPANY)
and
BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA
Kansas City, Missouri
(hereinafter called the BMA)
Purpose: To include the attached revised retention schedule for this
agreement.
1. The attached retention schedule marked Exhibit II
will replace the previous Exhibit II in the
agreement.
2. THE EFFECTIVE DATE shall be September 1, 1994.
Except as herein amended, the provisions of the said Reinsurance Agreement
shall remain unchanged.
IN WITNESS WHEREOF, this addendum is hereby executed in duplicate between the
parties concerned, and is duly signed by both parties respective officers as
follows:
CEDING COMPANY
/s/ R Dollar Pres
-------------------- --------------
signature title
/s/ Mark Oliver VP & Treas.
-------------------- --------------
signature title
10/24/94
--------------
date
BMA
/s/ John Walker Managing Director Reinsurance
- --------------- -----------------------------------------
signature title
/s/ Bill Crouch Reinsurance Administrative Vice President
- --------------- -----------------------------------------
signature title
November 2, 1994
-----------------------------------------
10.14-15
16
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 7
through 6 through 16
--------- ----------
All
Ages $75,000 $75,000 -0-
- ----
Minimum Cession: $1,000
Waiver of Premium Disability Benefits
Same as for Life Insurance
Accidental Death Benefits
None
10.14-16
17
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 -0-
- ----
Minimum Cession: $1,000
Waiver of Premium Disability Benefits
Same as for Life Insurance
Accidental Death Benefits
None
10.14-17
18
Page 1
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 $3,000,000 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 70 years.
2. Standard and Substandard risks rated up to and
including Table 4 (200% 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. Domestic Risks: 30% of $425,000 in excess of the
Ceding Company's $75,000 retention.
International Risks: 30% of $425,000 in excess of the
Ceding Company's $75,000 retention.
The minimum cession will be $5,000. 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.
10.14-18
19
Page 2
Exhibit III
(Continued)
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, B I 1472S, B I 1572S, B I 1972E, B 12172E, B 12272E.
10.14-19
20
Exhibit IV
Calculation of the Net Amount at Risk Reinsured
For calculating the Net Amount at Risk according to Article IV Plan of
Reinsurance, Paragraph 1, the Ceding Company will use the following approximate
procedure:
The calculation of the Net Amount At Risk at Issue Age x and year t is done as
follows:
t (NAAR)X = Face Amount At Issue - Decreases since issue on decreasing
benefit coverage
+ Increases since issue on increasing benefit coverage
- Mean Reserve
10.14-20
21
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 XI 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 YVTD
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.
10.14-21
22
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 31 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 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.
10.14-22
23
Page 1
Addendum #1
to the
Self-Administered
Automatic Reinsurance Agreement
between
Citizens Insurance Company of America
Denver, Colorado
(hereinafter referred to as the "Ceding Company")
and
Business Men's Assurance Company
Kansas City, Missouri
(hereinafter referred to as the "Reinsurer")
Conditional Receipt Coverage
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 in such case shall be for
the amount of the conditional receipt claim less the Ceding Company's standard
retention on the policy applied for. In no event, however, shall Reinsurer's
liability on any one life, including previous reinsurances ceded to Reinsurer,
by the Ceding Company, exceed the automatic acceptance limits provided by the
Agreement to which this Addendum is attached.
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.
This Addendum is attached to and made a part of the Self-Administered Automatic
Reinsurance Agreement between the Ceding Company and Reinsurer effective July
1, 1993.
10.14-23
24
Page 2
In Witness Whereof, the said Citizens Insurance Company of America, Denver,
Colorado, and the said Business Men's Assurance Company have by their
respective officers executed and delivered this Addendum in duplicate.
Citizens Insurance Company of America
By: /s/ T Dollar
------------------------------
Title: President
---------------------------
Attest: /s/ Mark A. Oliver, VP Date: 7/21/92
---------------------- ----------------------------
Business Men's Assurance Company
By: /s/ John Walker
------------------------------
Title: Mgr Director
---------------------------
Attest: /s/ W.M. Crouch Date: 8/6/93
---------------------------- ----------------------------
10.14-24
25
Addendum #2
NONDISCLOSURE OF CONFIDENTIAL INFORMATION
During the course of business necessary under this agreement, CICA may reveal
to BMA certain confidential or proprietary information which includes but is
not limited to the following: various trade secrets, data processing methods,
marketing concepts, programs, formulas, patterns, devices, inventions,
processes, policy forms and identities of customers, sales agents, managing
agents, associates and employees of CICA. BMA 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. BNIA will also do all things
necessary to prevent any of its employees, representatives and agents from
disclosing any such information. BMA further agrees to use any confidential or
proprietary information of CICA solely for the purpose of reinsurance under
this agreement.
This Addendum is attached to and made a part of the Self-Administered Automatic
Reinsurance Agreement between the Ceding Company and Reinsurer effective July
1, 1993.
In Witness Whereof, the said Citizens Insurance Company of America, Denver,
Colorado, and the said Business Men's Assurance Company have by their
respective officers executed and delivered this Addendum in duplicate.
Citizens Insurance Company of America
By: /s/ T Dollar
------------------------------
Title: President
---------------------------
Attest: /s/ Mark A. Oliver, VP Date: 7/21/93
------------------------- ----------------------------
Business Men's Assurance Company
By: /s/ John Walker
------------------------------
Title: Mgr Director
---------------------------
Attest: /s/ W.M. Crouch Date: 8/6/93
------------------------- ----------------------------
10.14-25
26
AMENDMENT OF REINSURANCE AGREEMENT BETWEEN:
CITIZENS INSURANCE COMPANY OF AMERICA
(Ceding Company)
and
BUSINESS MEN'S ASSURANCE
(Assuming Company)
Agreement Number 045
Amendment Number 003
Effective Date: 07/01/93
Date of Execution: 08/06/93
Effective Date of Amendment: 12/31/93
Date of Amendment Execution: 02/22/94
Type of Amendment: To update treaty to comply with regulation 3-3-2.
Agreement Type: SAR
Underlying Risk: Ordinary Life
Statement of whether or not a Reinsurance Intermediary is involved in this
transaction: There is no Reinsurance Intermediary involved in this transaction.
Statement of whether agreement meets the conditions of Section
10-3-805(4)(a)(111), C.R.S.: This amendment does not meet the conditions of
Section 10-3-805(4)(a)(111), C.R.S.
Statement as to whether agreement transfers existing in-force business: This
amendment does not transfer in-force business.
10.14-26
27
Agreement No. 045
Agreement No. 003
ADDENDUM
to the Automatic Yearly Renewable Term Agreement
dated July 1, 1993
between
CITIZENS INSURANCE COMPANY OF AMERICA
Denver, Colorado
(hereinafter called the CEDING COMPANY)
and
BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA
Kansas City, Missouri
(hereinafter. called the BMA)
Purpose: To add verbiage to comply with Colorado State requirements.
1. All provisions of this reinsurance agreement other
than the arbitration provisions are subject to the
laws of the State of Colorado.
2. In the event of the insolvency of the CEDING COMPANY,
the arbitration provisions of this agreement shall
also be subject to the laws of the State of Colorado.
3. THE EFFECTIVE DATE shall be December 31, 1993.
Except as herein amended, the provisions of the said Reinsurance Agreement
shall remain unchanged.
IN WITNESS WHEREOF, this addendum is hereby executed in duplicate between the
parties concerned, and is duly signed by both parties respective officers as
follows:
CEDING COMPANY
/s/ R Dollar Pres.
----------------------- ---------
signature title
/s/ Mark Oliver VP
----------------------- ---------
signature title
10.14-27
28
BMA
/s/ John Walker Managing Director Reinsurance
- --------------- -----------------------------
signature title
Reinsurance
/s/ WM Crouch Administration Vice President
- ------------- -----------------------------
signature title
2/17/94
-----------------------------
date
10.14-28
29
AMENDMENT OF REINSURANCE AGREEMENT BETWEEN:
CITIZENS INSURANCE COMPANY OF AMERICA
(Ceding Company)
and
BUSINESS MEN'S ASSURANCE
(Assuming Company)
Agreement Number 045
Amendment Number 004
Effective Date: 07/01/93
Date of Execution: 08/06/93
Effective Date of Amendment: 1/l/95
Date of Amendment Execution: 2/9/95
Type of Amendment: Revision of Retention Schedule
Agreement Type: SAR
Underlying Risk: Ordinary Life
Statement of whether or not a Reinsurance Intermediary is involved in this
transaction: There is no Reinsurance Intermediary involved in this transaction.
Statement of whether agreement meets the conditions of Section
10-3-805(4)(a)(111), C.R.S.: This amendment does not meet the conditions of
Section 10-3-805(4)(a)(111), C.R.S.
Statement as to whether agreement transfers existing in-force business: This
amendment does not transfer in-force business.
10.14-29
30
CEDING COMPANY
/s/ R Dollar Vice Chairman
------------------ -------------
signature title
/s/ Mark A. Oliver Executive VP
------------------ -------------
signature title
2/9/95
------
date
BMA
/s/ John Walker Managing Director Reinsurance
- --------------- -----------------------------
signature title
Reinsurance
/s/ Bill Crouch Administration Vice President
- --------------- -----------------------------
signature title
February 3, 1995
-----------------------------
date
10.14-30
31
Amendment 5
ADDENDUM
to the Automatic Yearly Renewable Term Agreement
dated July 1, 1993
between
CITIZENS INSURANCE COMPANY OF AMERICA
Denver, Colorado
(hereinafter called the CEDING COMPANY)
and
BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA
Kansas City, Missouri
(hereinafter. called the BMA)
Purpose: To transfer reinsurance coverage on Harold E. Riley, and
Harold L. Hays to the July 1, 1993 reinsurance agreement on a
point-in-scale basis.
1. BMA shall continue reinsurance of the in-force
policies on Harold E. Riley, BMA #324-46-33, CEDING
COMPANY's #7202250248; and Harold L. Hays, BMA
#255-34-19, CEDING COMPANY'S #6301765401 under this
agreement on a point-in-scale basis.
2. THE EFFECTIVE DATE shall be January 1, 1995.
Except as herein amended, the provisions of the said Reinsurance Agreement
shall remain unchanged.
IN WITNESS WHEREOF, this addendum is hereby executed in duplicate between the
parties concerned, and is duly signed by both parties respective officers as
follows:
CEDING COMPANY
/s/ R Dollar Vice Chairman
----------------------- ---------------
signature title
/s/ Mark A. Oliver EVP
----------------------- ---------------
signature title
Oct. 5, 1995
---------------
date
/s/ Albert F. Rodriguez Senior Vice President/Reinsurance
- ----------------------- ---------------------------------
signature title
Vice President
/s/ James N. Reinsurance Actuary
- ----------------------- ---------------------------------
signature title
September 28, 1995
---------------------------------
date
10.14-31
32
ADDENDUM
to the Automatic YRT Agreement
dated July 1, 1993
between
CITIZENS INSURANCE COMPANY OF AMERICA
Denver, Colorado
(hereinafter called the CEDING COMPANY)
and
BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA
Kansas City, Missouri
(hereinafter. called the BMA)
Purpose: To include the Entire Contract provision.
1. The Agreement, Amendments, and Addenda to the
Agreement shall constitute the entire agreement
between the parties with respect to business being
reinsured there under and that there are no
understandings between the parties other than as
expressed in this Agreement, Amendments, or Addenda
to the Agreement.
2. Any change or modification of this Agreement shall be
null and void unless made by addendum to the
Agreement and signed by both parties.
3. THE EFFECTIVE DATE shall be May 17, 1995.
Except as herein amended, the provisions of the said Reinsurance Agreement
shall remain unchanged.
IN WITNESS WHEREOF, this addendum is hereby executed in duplicate between the
parties concerned, and is duly signed by both parties respective officers as
follows:
CEDING COMPANY
/s/ R Dollar Vice Chairman
-------------------- -----------------
signature title
/s/ Mark Oliver EVP
-------------------- -----------------
signature title
12/20/95
-----------------
date
BMA
/s/ Albert F. Rodriguez Senior Vice President/Reinsurance
- ----------------------- ---------------------------------
signature title
Vice President
/s/ James N. Reinsurance Actuary
- ----------------------- ---------------------------------
signature title
12/13/95
---------------------------------
date
10.14-32
33
ADDENDUM
to the Automatic YRT Agreement
dated July 1, 1993
between
CITIZENS INSURANCE COMPANY OF AMERICA
Denver, Colorado
(hereinafter called the CEDING COMPANY)
and
BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA
Kansas City, Missouri
(hereinafter. called the BMA)
Purpose: To up-date the International Underwriting Guidelines for this
agreement.
1. The attached underwriting guidelines shall replace
the current guidelines marked APPENDIX I.
2. THE EFFECTIVE DATE shall be April 1, 1996.
Except as herein amended, the provisions of the said Reinsurance Agreement
shall remain unchanged.
IN WITNESS WHEREOF, this addendum is hereby executed in duplicate between the
parties concerned, and is duly signed by both parties respective officers as
follows:
CEDING COMPANY
/s/ R Dollar Vice Chairman
-------------------- -----------------
signature title
/s/ Mark Oliver Exec VP
-------------------- -----------------
signature title
6/5/96
-----------------
date
BMA
/s/ Albert F. Rodriguez Senior Vice President/Reinsurance
- ----------------------- ---------------------------------
signature title
Vice President
/s/ James N. Reinsurance Actuary
- ----------------------- ---------------------------------
signature title
5/29/96
---------------------------------
date
10.14-33
34
ADDENDUM
to the Automatic YRT Agreement
dated July 1, 1993
between
CITIZENS LIFE INSURANCE COMPANY OF AMERICA
Denver, Colorado
(hereinafter called the CEDING COMPANY)
and
BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA
Kansas City, Missouri
(hereinafter called the BMA)
Purpose: To include a list of foreign countries from which business
will be reinsured under this agreement.
1. BMA will reinsure business from the following list:
Foreign National Business
FOREIGN STANDARD RATE
Australia Greenland Netherlands Spain
Austria Grenada New Zealand Sweden
Bahamas Guam Norway Switzerland
Barbados Hong Kong Panama Tobago
Belgium Iceland Poland Trinidad
Bermuda Ireland Portugal United Kingdom
Costa Rica Italy Puerto Rico Venezuela
Denmark Japan St. Vincent & Virgin Islands
Dominican Republic Lichtenstein the Grenadines
Finland Luxembourg Saint Lucia
France Mexico Samoa
Germany Netherlands Antilles Singapore
115% FOREIGN STD. RATE
-----------------------
Argentina Chile Jamaica
Brazil Ecuado
2. THE EFFECTIVE DATE Shall be January 1, 1995
Except as herein amended, the provisions of the said Reinsurance Agreement
shall remain unchanged.
IN WITNESS WHEREOF, this addendum is hereby executed in duplicate between the
parties concerned, and is duly signed by both parties respective officers as
follows:
10.14-34
35
APPENDIX I
(Approved 3/15/96 by H.E.R.) Effective 4/1/96
CITIZENS'
INTERNATIONAL GUIDELINES
1. Must be in U.S. Currency, and checks from U.S. banks only.
2. Minimum issue amount is $50,000, except ages 66 to 75 where minimum
issue is $10,000 and the maximum is $25,000.
3. We will keep our full retention on each risk. (In force coverage and
current application combined.)
4. Amounts over 4 times our retention (including prior coverage) will be
sent to Reinsurer on a Facultative basis.
5. Application and Medical Papers must be written in English or Spanish.
6. Supplemental benefits will be offered only on rider forms that contain
special protective exceptions.
7. We will not consider applications on:
a) Political or Military figures or their families.
b) Private pilots or crew members without an extra rate or an
aviation exclusion.
c) Children. under the age of 18 for an amount exceeding $150,000
(includes in force and applied for).
d) Applicant over age 65, except for special plans offered to age
75 with S25,000 maximum.
e) Applicants with coronary artery disease or insulin dependent
diabetic.
f) Will not issue with rating over Table Six.
8. We will use appointed examiners or, when available, Embassy Affiliated
doctors for all medical examinations. (See attached Medical
Requirements per age and amount.)
9. Consumer Reports required on face amounts of $150,000 or more, except
in Colombia, where it is required for all amounts.
10. Require APS on all children under the age of 5.
11. All questions on Part I and Part II of application must be answered,
even if medical exam (Part III) has same question.
10.14-35
36
(Approved 3/15/96 by H.E.R.)
INTERNATIONAL REQUIREMENTS
1. Inspection Report. Only Home Office approved commercial investigative
firms are to be used. Required on face amount of $150,000 or more
including prior coverage still in force with this Company.
2. Medical Requirements:
A. Medical History Application Only
ISSUE AGES AMOUNT APPLIED FOR
---------- ------------------
0 through 39 Up to $150,000
B. Medical Examination, Urinalysis, Dried Blood Spot Profile
ISSUE AGES AMOUNT APPLIED FOR
---------- ------------------
18 through 34 US $150,001 to US $500,000
35 through 40 US $150,001 to US $250,000
41 through 60 US $50,000 to US $100,000
61 through 65 Up to US $50,000
C. Medical Examination, Urinalysis, Dried Blood Spot Profile, 12
Lead ECG
ISSUE AGES AMOUNT APPLIED FOR
---------- ------------------
18 through 34 $500,001 and over
35 through 40 $250,001 and over
41 through 60 $100,001 and over
61 through 65 $50,001 and over
66 through 75 Any Amount
3. Attending Physicians Statements: Required on all children Age
5 and under. Other APS's may be required by Underwriting.
10.14-36
37
ADDITIONAL REQUIREMENTS
FOR
ESTATE PLANNING - BUSINESS INSURANCE
ALL AGES - $250,001 and UP:
1. Applicant must have annual income of at least $50,000.
2. Inspection Report required on all applicants of a business regardless
of their position in the Company.
3. Inspection Report and Financial Statement required on sole proprietor
and partnerships.
4. Key Men Insurance, where the owner is the business, a Financial
Statement of the business or company is required.
NOTICE TO UNDERWRITER
We do not limit our Agents on submitting over $250,001, and we do not
advise Agents of this. We just want to carefully underwrite those
cases, and unless the above information is provided, we would offer
only $250,000 or less. This is a decision made by Harold Riley, as
most cases over $250,000 have been problem cases at claim time. If a
problem occurs in future on these procedures, refer to Harold Riley.
10.14-37
38
GUIDELINES ON VARIOUS LIMITS
EFFECTIVE 4/l/96
(WPPDOCF #1)
I. NON-MEDICAL LIMITS
INTERNATIONAL MARKET
Issue Ages Amounts
---------- -------
0 through 39 Up to $150,000
II. BASIC LIFE COVERAGE LIMITS
Age Minimum Maximum
--- ------- -------
0-1 50,000 150,000
18-75 250,000 500,000
See Special Requirements on amounts $250,001 & Up
III. WAIVER OF PREMIUM LIMITS
INTERNATIONAL MARKET
Same as Basic Life Coverage
Limit for each plan.
IV. ACCIDENTAL DEATH LIMITS
INTERNATIONAL MARKET
Equal to face amount of Basic
Life Benefit not to exceed
150,000 on each person for all
policies with all companies.
V. RETURN OF PREMIUM LIMITS
INTERNATIONAL MARKET
Same as Basic Benefit limit.
VI. SUBSTANDARD LIMITS
INTERNATIONAL MARKET
Table Ratings-Table 6 (250%)
or less
Flat Extra Ratings-No limit.
10.14-38
39
INTERNATIONAL AVIATION COVERAGE
1. For pilots or crew members of regularly scheduled airlines, the extra
rate will be $2.40 per thousand.
2. For private pilots - non-commercial not for hire - the rate will be as
follows:
Annual at Flying Time: 150/hrs/less 150 to 250 hrs More than 250 hrs.
------------ -------------- ------------------
Age of Pilot Any age 27/hr 27/more 27/less 27/more
--------------- ------------------
Rate/Thousand: $3.50 $3.50 $2.40 $3.50 $3.00
3. For commercial pilots who transport cargo, there is no fixed rate.
These will be considered on an individual basil The rate will be
determined by the cargo.
If any aviation activity does not meet above rules then issue with in
Aviation Exclusion Rider Attached to policy.
4. Supplemental Benefits:
Waiver of Premium - NOT allowed
Accidental Death - Allowed - ADB Riders
Contain language excluding aviation coverage.
5. Pilots participating in crop dusting will be declined coverage.
6. Helicopter pilots will be granted coverage, with Aviation Exclusion
attached to policy.
10.14-39
40
ADDENDUM
to the Automatic Yearly Renewable Term Agreement
dated July 1, 1993
between
CITIZENS INSURANCE COMPANY OF AMERICA
Denver, Colorado
(hereinafter called the CEDING COMPANY)
and
BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA
Kansas City, Missouri
(hereinafter. called the BMA)
Purpose: To increase the automatic binding limit.
1. The automatic binding limit shown in Exhibit III,
Paragraph 2, Item #a.3., shall be amended to read as
follows:
Domestic Risks: 30% of 500,000 in excess of
the company's 75,000 retention.
International Risks: 30% of 500,000 in excess
of the company's 75,000 retention.
2. THE EFFECTIVE DATE shall be May 1, 1998.
Except as herein amended, the provisions of the said Reinsurance Agreement
shall remain unchanged.
IN WITNESS WHEREOF, this addendum is hereby executed in duplicate between the
parties concerned, and is duly signed by both parties respective officers as
follows:
CEDING COMPANY
/s/ M Bul VP New Business
-------------------- -------------------
signature title
/s/ R Dollar Vice Chair
-------------------- -------------------
signature title
7/22/98
-------------------
date
BMA
/s/ Albert F. Rodriguez Senior Vice President/Reinsurance
- ----------------------- ---------------------------------
signature title
Vice President
/s/ James N. Reinsurance Actuary
- ----------------------- ---------------------------------
signature title
July 6, 1998
---------------------------------
date
10.14-40