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Yearly Renewable Term Reinsurance Agreement

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Title:

Yearly Renewable Term Reinsurance Agreement

Entities:

Life Investors Variable Life Account a

Date:

2003

Size:

41KB total

Price:

$46

ID:

#2517716

► Business ► Insurance ► Reinsurance ► Term ► Renewable ► Yearly Renewable Term Reinsurance Agreements

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Reinsurance Treaty dated April 1, 2001 with the Lincoln National Life
Insurance Company and Amendments Thereto

YEARLY RENEWABLE TERM
REINSURANCE AGREEMENT

Effective as February 1, 1998,

Between

LIFE INVESTORS INSURANCE COMPANY OF AMERICA
of
Cedar Rapids, Iowa,

Referred to in this Agreement as Life Investors, and

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
of
Fort Wayne, Indiana,

Referred to in this Agreement as Lincoln.

TABLE OF CONTENTS


Reinsurance Coverage		1
Automatic Reinsurance		1
Facultative Reinsurance		2
Continuations		3
Terms of Reinsurance		4
Payments by Life Investors		5
Payments by Lincoln		5
Reinsurance Administration		6
Settlement of Claims		6
Reinstatements		8
Reductions in Insurance		8
Increases in Policy Net Amount at Risk		8
Changes in Retention		8
Assignment of Reinsurance		10
Material Changes		10
Errors		10
Audits of Records and Procedures		11
Arbitration		11
Insolvency of Life Investors		11
Offset		12
Parties to the Agreement		12
Commencement and Termination		13
Entire Agreement		13
Deferred Acquisition Cost Tax Election		14
Definitions		14
Execution		16
	LIFE BENEFITS SCHEDULE	18
	ADMINISTRATION SCHEDULE	20
	PREMIUM SCHEDULE	24
	ARBITRATION SCHEDULE	26
	WAIVER OF PREMIUM BENEFIT ADDENDUM	28
	LAST SURVIVOR ADDENDUM	31
	FIRST-T0-DIE ADDENDUM	33
	POLICY SPLIT ADDENDUM	35


Reinsurance Coverage	A.	Life Investors agrees to cede, and Lincoln agrees to accept, reinsurance of the Policies specified in the Life Benefits Schedule. (The term Policies and certain other terms used in this Agreement are defined in the Definitions article.)
	B	The death benefits provided by the Policies are reinsured. Supplemental benefits are reinsured if and as specified in applicable Addenda.
	C	Life Investors agrees to either
			(1)	cede reinsurance of a Policy to Lincoln as Automatic Reinsurance;
			(2)	submit the Policy to Lincoln for consideration as Facultative Reinsurance; or
			(3)	cede reinsurance of a Policy as a Continuation.

Automatic Reinsurance	A.	Life Investors agrees to cede the Reinsurance Amount of a Policy as Automatic Reinsurance if the following conditions are met:
			(1)	It retains its Retention on the insured life when the Policy is issued;
			(2)	It underwrites and issues the Policy in accordance with its normal individual life insurance underwriting rules and practices previously disclosed to Lincoln;
			(3)	The sum of (a) and (b) does not exceed the sum of its Retention and the Automatic Limit, where (a) equals the amount of individual life insurance issued by Life Investors then in force on the insured life, or in the case of individual life insurance with increasing death benefits, the Ultimate Amount of such policies, and (b) equals the amount of life insurance currently being applied for from Life Investors, or in the case of individual life insurance with increasing death benefits, the Ultimate Amount;
			(4)	The sum of (a) and (b) does not exceed the Participation Limit, where (a) equals the mount of Individual life insurance then in force on the insured life in all companies, or in the case of individual life insurance with increasing death benefits, the Ultimate Amount of such policies, and (b) equals the amount currently applied for on the insured life from all companies, or in the case of individual life insurance with increasing death benefits, the Ultimate Amounts;
			(5)	It has not submitted a facultative application to Lincoln or any other insurance or reinsurance company for reinsurance of the current application; and
			(6)	The Policy is not a Continuation.

Facultative Reinsurance	A.	Life Investors agrees to submit Policies not satisfying the conditions for Automatic Reinsurance, and Policies which it does not wish to cede as Automatic Reinsurance, for consideration by Lincoln as Facultative Reinsurance. Life Investors may also submit for consideration as Facultative Reinsurance any individual life insurance issued on a Policy form that is not specified in the Life

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		Benefits Schedule provided reinsurance terms and conditions are established and agreed upon by means of the Facultative Reinsurance application process.
	B.	An application for Facultative Reinsurance shall be made in the manner set forth in the Administration Schedule. Copies of all information which Life Investors has pertaining to the insurability of the proposed insured, including written summaries of any such information which cannot be copied, shall accompany the application.
	C.	Upon receipt of an application, Lincoln agrees to promptly examine the underwriting information and communicate
			(1)	an offer to reinsure the Policy as applied for;
			(2)	an offer to reinsure the Policy other than as applied for;
			(3)	an offer to reinsure the Policy subject to the satisfaction of additional underwriting requirements;
			(4)	a request for additional underwriting information; or
			(5)	its unwillingness to make an offer to reinsure the Policy.
	D.	To accept an offer to reinsure made by Lincoln, Life Investors agrees to (1) satisfy any conditions stated in the offer to reinsure and (2) follow the procedure for placing reinsurance into effect as specified in the Administration Schedule.
	E.	Life Investors agrees to inform Lincoln immediately of any additional information pertaining to the insurability of a proposed insured which is brought to Life Investors attention before the completion of the procedures for accepting Lincolns offer to reinsure. Upon its receipt of such information, Lincoln may withdraw or modify its earlier offer to reinsure.
	F.	The terms of an offer to reinsure shall supersede the terms of this Agreement to the extent of any conflicts between the parties. Otherwise, reinsurance of a Policy ceded as Facultative Reinsurance shall be in accordance with the terms of this Agreement.

Continuations	A.	If Life Investors issues a Continuation of a Policy within its normal continuation rules and practices, it agrees to reinsure the Continuation with Lincoln. Reinsurance shall continue (1) under the reinsurance agreement between Life Investors and Lincoln which provides reinsurance of the Policy form of the Continuation or (2) under this Agreement if there is no such agreement.
	B.	A Policy which is a Continuation of a Policy that was not previously reinsured with Lincoln may only be reinsured under this Agreement with the written consent of Lincoln and the original reinsurer.
	C.	If the original Policy was ceded to Lincoln as Facultative Reinsurance and Life Investors approves an increase in the face amount of the Continuation based upon receipt of any new information pertaining to the insurability of the proposed insured, Life Investors agrees to submit the Continuation to Lincoln for consideration as Facultative Reinsurance. In such case, Lincoln shall only be bound to reinsure the Continuation in accordance with its offer to reinsure the Continuation.

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	D.	Reinsurance as issue of the Continuation shall not exceed the Reinsured Net Amount at Risk of the original Policy immediately prior to the issuance of the Continuation.
	E.	Premiums payable for reinsurance of a Continuation shall be calculated using the rate schedule applicable to the Policy form of the Continuation as specified in the Premium Schedule. If there is no rate schedule applicable to the Policy form of the Continuation, reinsurance premiums shall be payable using the rate schedule applicable to the original Policy.
	F.	If the Continuation results in a change in the life status of the insured risk from a single-insured plan to a joint or multiple-insured plan, Lincoln must consent to the Continuation.

Terms of Reinsurance	A.	The plan of reinsurance shall be yearly renewable term reinsurance of the Reinsured Net Amount at Risk of a Policy.
	B.	Reinsurance of a Policy shall commence on the Policy date, except (1) in the case of Facultative Reinsurance, reinsurance shall commence on the Policy date only if Lincolns offer to reinsure is the best offer of reinsurance received by Life Investors as determined by Life Investors published reinsurance placement rules in effect as of such date, and (2) if a premium receipt is issued by Life Investors in connection with an application for the Policy, reinsurance shall commence prior to the Policy date only if and as specified in a Premium Receipt Addendum.
	C.	Life Investors agrees not to use Lincolns name in connection with the sale of the Policies.
	D.	In no event shall reinsurance under this Agreement be in force with respect to a Policy unless the issuance and delivery of the Policy is in compliance with the laws of all applicable jurisdictions and Life Investors corporate charter.
	E.	Life Investors agrees to maintain reinsurance of a Policy in force in accordance with the terms of this Agreement for as long as its Policy remains in force.

Payments by Life Investors	A.	Life Investors agrees to pay Lincoln premiums for reinsurance of a Policy equal to the appropriate rate specified in the Premium Schedule times the Reinsured Net Amount at Risk of the Policy.
	B.	The Premium Schedule specified other monetary amounts which Life Investors agrees to take into account when calculating the amount due Lincoln.
	C.	Reinsurance premiums shall be due and payable as specified in the Administration Schedule.
	D.	The payment of reinsurance premiums shall be a condition precedent to the liability of Lincoln under this Agreement. If reinsurance premiums are not paid when due, Lincoln may give Life Investors thirty (30) days written notice of its intent to terminate reinsurance because of Life Investors failure to pay reinsurance premiums. Reinsurance of all Policies having reinsurance premiums in arrears shall terminate as of the date to which reinsurance premiums had previously been paid unless all premiums in arrears are paid before

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		the end of the thirty (30) day notice period. If reinsurance on any Policy terminates because of Life Investors failure to pay reinsurance premiums, reinsurance of Policies with premiums subsequently becoming due shall automatically terminate as of the date on which new reinsurance premiums become due.
	E.	So that Lincoln need not maintain deficiency reserves in connection with reinsurance premiums payable pursuant to this Agreement, the premium rates specified in the Premium Schedule shall only be guaranteed for one (1) Policy year. Nevertheless, Lincoln shall anticipate continuing to accept reinsurance on the basis of such rates for all Policies originally ceded pursuant to such rates.

Payments by Lincoln	A.	Lincoln agrees to pay Life Investors the Reinsured net Amount at Risk of any claim paid by Life Investors pursuant to a Policy in accordance with the Settlement of Claims article.
	B.	Lincoln agrees to pay the Claims Ratio of any expenses incurred in connection with Policy claims except as set forth in the Settlement of Claims article.
	C.	The Premium Schedule specifies other monetary amounts that Lincoln agrees to pay Life Investors pursuant to this Agreement.

Reinsurance Administration		The methods for placing reinsurance into effect, for paying reinsurance premiums, and for notifying Lincoln of Policy lapses, reinstatements, reductions, Continuations, increases in the Reinsured net Amount at Risk; and of other changes affecting reinsurance shall be specified in the Administration Schedule.
Settlement of Clams	A.	Life Investors agrees to give Lincoln prompt written notice of its receipt of any claim on a Policy and to keep Lincoln informed of any legal proceedings or settlement negations in connection with a claim. Copies of written materials relating to such claim, legal proceedings or negotiation shall be furnished to Lincoln upon request.
	B.	Life Investors obligation to provide notice of a claim on a Policy shall not be construed as a condition precedent to Lincolns obligation to pay the claim. Life Investors failure to provide notice shall be considered a breach of a promise which may entitle Lincoln to damages.
	C.	Life Investors agrees to act in accord with its standard practices applicable to all claims in enforcing the terms and conditions of the Policies and with respect to the administration, negotiation, payment, denial or settlement of any claim or legal proceeding.
	D.	Lincoln agrees to accept the good faith decision of Life Investors in payment or settlement of any claim for which Lincoln has received the required notice. Lincoln agrees to pay Life Investors the Reinsured net Amount at Risk on which reinsurance premiums have been computed upon receiving proper evidence that Life Investors

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	has paid a Policy Claim. Payment of the Reinsured net Amount at Risk on account of death shall be made in one lump sum.
E.	Lincolns liability shall include indemnification of the Claims Ratio of any expenses incurred by Life Investors in defending or investigating a Policy claim with the exception of
		1)	salaries of employees or other internal expenses of Life Investors;
		2)	routine investigative or administrative expenses;
		3)	expenses incurred in connection with a dispute arising out of conflicting claims of entitlement to proceeds of a Policy that Life Investors admits are payable;
		4)	any gratuitous payments made by Life Investors; and
		5)	any punitive damages awarded against Life Investors, and expenses incurred in connection with such damages, that are based on the acts or omissions of Life Investors or its agents.

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