EX-99.G 7 pl-cede2prureinsurance.htm PL CEDES TO PRU AGREEMENT

AUTOMATIC
YEARLY RENEWABLE TERM REINSURANCE AGREEMENT

EFFECTIVE December 1, 2004

PRUCO LIFE INSURANCE COMPANY
(hereinafter referred to as "THE COMPANY")

213 Washington Street
Newark, NJ 07102

And

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
(hereinafter referred to as "THE REINSURER")

751 Broad Street
Newark, New Jersey 07102-2992

Table of Contents

1. PARTIES TO THE AGREEMENT.............................................................................. 4

2. EFFECTIVE DATE OF THE AGREEMENT....................................................................... 4

3. SCOPE OF THE AGREEMENT................................................................................ 4

4. DURATION OF THE AGREEMENT............................................................................. 4

5. BASIS OF REINSURANCE.................................................................................. 4

6. AUTOMATIC REINSURANCE TERMS........................................................................... 5

7. COMMENCEMENT OF REINSURANCE COVERAGE.................................................................. 5

8. REINSURANCE PREMIUM RATES............................................................................. 5
a. ......LIFE REINSURANCE................................................................................. 5
b. RATES NOT GUARANTEED............................................................................. 5

9. PAYMENT OF REINSURANCE PREMIUMS........................................................................ 5
a........PREMIUM DUE...................................................................................... 5
b. FAILURE TO PAY PREMIUMS.......................................................................... 6
c. PREMIUM ADJUSTMENT............................................................................... 6

10. PREMIUM TAX REIMBURSEMENT............................................................................ 6

11. DAC TAX AGREEMENT.................................................................................... 6

12. REPORTS.............................................................................................. 7

13. RESERVES FOR REINSURANCE.............................................................................. 7

14. CLAIMS........................................................................................... 7
a. AMOUNT AND PAYMENT OF BENEFITS................................................................... 7
b. LIVING NEEDS BENEFITS............................................................................ 7
c. CLAIM INTEREST................................................................................... 7
d. CLAIM EXPENSES................................................................................... 7
e. EXTRACONTRACTUAL DAMAGES......................................................................... 8

15.......MISREPRESENTATION AND MISSTATEMENT............................................................... 8

16. POLICY CHANGES....................................................................................... 8

a. CONVERSIONS...................................................................................... 8
b. INCREASES........................................................................................ 8
c. REDUCTION OR TERMINATION......................................................................... 9
d. PLAN CHANGES..................................................................................... 9
e. DEATH BENEFIT OPTION CHANGES..................................................................... 9
f. REDUCED PAID-UP INSURANCE........................................................................ 9
g. FULLY PAID-UP INSURANCE.......................................................................... 9
h. EXTENDED TERM INSURANCE.......................................................................... 9
i. OPTION TO EXCHANGE INSUREDS...................................................................... 9
j. ADD-ON LIVES..................................................................................... 9

17.......RECAPTURE........................................................................................ 9

18.......REINSTATEMENTS................................................................................... 10

19.......ERRORS AND OMISSIONS............................................................................. 10

20.......INSOLVENCY....................................................................................... 10

21.......ARBITRATION...................................................................................... 11
a. GENERAL.......................................................................................... 11
b. NOTICE........................................................................................... 11
c. PROCEDURE........................................................................................ 11
d. COSTS............................................................................................ 11

22.......GOOD FAITH....................................................................................... 11

23.......REPRESENTATIONS AND WARRANTIES................................................................... 12

24.......MEDICAL INFORMATION BUREAU....................................................................... 12

25.......GOVERNING LAW.................................................................................... 12

26.......CURRENCY......................................................................................... 13

27. ASSIGNMENT........................................................................................... 13

28. ACCESS TO RECORDS.................................................................................... 13

29. SEVERABILITY......................................................................................... 13

30. OFFSET............................................................................................... 13

31. NOTICES............................................................................................... 13

ATTACHMENTS:

SCHEDULE A - REINSURANCE COVERAGE

SCHEDULE B - AUTOMATIC AND FACULTATIVE REINSURANCE PREMIUMS

SCHEDULE C - MONTHLY BILLING AND ACCOUNTING SUMMARY, POLICY EXHIBIT SUMMARY, AND QUARTERLY RESERVE SUMMARY

AUTOMATIC YEARLY RENEWABLE TERM REINSURANCE AGREEMENT

1. PARTIES TO THE AGREEMENT

This Agreement is solely between THE REINSURER and THE COMPANY, a life insurance company domiciled in Arizona. There is no
third party beneficiary to this Agreement. Reinsurance under this Agreement will not create any right or legal relationship
between THE REINSURER and any other person, for example, any insured, policyowner, agent, beneficiary, or assignee.

The terms of this Agreement are binding upon the parties, their representatives, successors, and assigns. The parties to
this Agreement are bound by ongoing and continuing obligations and liabilities for the duration of this Agreement.

2. EFFECTIVE DATE OF THE AGREEMENT

This Agreement will incept on the date hereof, to be effective as of 12:00 A.M., December 1, 2004 ("Effective Date").

3. SCOPE OF THE AGREEMENT

The text of this Agreement and all Exhibits, Schedules and Amendments are considered to be the entire agreement between the
parties. There are no other understandings or agreements between the parties regarding the policies reinsured other than as
expressed in this Agreement. The parties may make changes or additions to this Agreement, but they will not be considered
to be in effect unless they are made by means of a written amendment that has been signed and dated by both parties.

4. DURATION OF THE AGREEMENT

The duration of this Agreement will be unlimited. However, either party may terminate the Agreement for new business at any
time by giving the other a 90-day prior written notice. THE REINSURER will continue to accept new reinsurance during the
90-day period.

In addition, this Agreement may be terminated immediately for the acceptance of new reinsurance by either party if one of
the parties materially breaches this Agreement or becomes insolvent.

Existing reinsurance will not be affected by the termination of this Agreement with respect to new reinsurance. Existing
reinsurance will remain in force until the termination or expiry of the underlying policies on which the reinsurance is
based and THE REINSURER fulfills all of its obligations under this Agreement, provided that THE COMPANY continues to pay
reinsurance premiums as described in Section 9. However, existing reinsurance may be terminated in accordance with the
recapture provision described in Section 17.

5. BASIS OF REINSURANCE

Reinsurance under this Agreement will be on the Yearly Renewable Term basis on the portion of each policy that is reinsured
as described in Schedule A. The reinsurance will be on a "Benefits Paid" basis. For purposes of this Agreement, Benefits
Paid means death benefits paid by THE COMPANY on or after the Effective Date, even if the death of the insured took place
prior to the Effective Date. For example, for a policy with a date of death prior to the Effective Date and for which THE
COMPANY paid the claim on or after the Effective Date, THE REINSURER will be liable for its share of the benefit.

6. AUTOMATIC REINSURANCE

THE REINSURER agrees to automatically accept contractual risks on the life insurance policies shown in Schedule A.

7. COMMENCEMENT OF REINSURANCE COVERAGE

Commencement of THE REINSURER's reinsurance coverage on any policy or Pre-issue Risk under this Agreement is described as
follows. THE REINSURER's reinsurance coverage for any policy with a policy effective date on or after the Effective Date
will begin simultaneously with THE COMPANY's contractual liability for the policy reinsured. THE REINSURER's reinsurance
coverage for any policy with a policy effective date prior to the Effective Date will begin on the Effective Date. In
either instance, no coverage will begin prior to the Effective Date. Reinsurance coverage for all policies that are ceded
under this Agreement will end simultaneously with THE COMPANY's contractual liability for the policy reinsured. In
addition, THE REINSURER will be liable for benefits related to any Pre-issue Risk. For purposes of this Agreement,
Pre-issue Risk refers to coverage provided by THE COMPANY under any Limited Insurance Agreement, temporary insurance
agreement or conditional receipt or other similar agreement or receipt.

8. REINSURANCE PREMIUM RATES

a. LIFE REINSURANCE. Reinsurance premiums per $1,000 are shown in Schedule B. The mode of payment will be monthly. Each
monthly premium will be calculated using (1) the issue age of the insured under the policy, (2) the duration since
issuance of the policy and (3) the current underwriting classification. The duration since issue will be measured in
whole years. Any fractional portion of a year since issue will be ignored.

b. RATES NOT GUARANTEED. THE REINSURER reserves the right to change the rates at any time. If THE REINSURER changes the
rates, it will give THE COMPANY a 90-day prior written notice of the change. Any change applies only to reinsurance
premiums due after the expiration of the notice period.

THE REINSURER further agrees that THE COMPANY's right of recapture under Section 17 of this Agreement will be triggered
if THE COMPANY deems a rate change unacceptable.

9. PAYMENT OF REINSURANCE PREMIUMS

a. PREMIUM DUE. For each policy reinsured under this Agreement, reinsurance premiums are payable on a calendar month
basis. On or around the fifth business day of each calendar month, THE COMPANY will calculate the amount of premiums
payable for that month. Within 20 days of such time, THE COMPANY will send to THE REINSURER a statement of account
for that period along with payment of the full balance due. Also, there will be a supplemental reinsurance premium.
The supplemental reinsurance premium is shown in Schedule B and is due on the Effective Date. On any payment date,
monies payable between THE REINSURER and THE COMPANY under this Agreement may be netted to determine the payment due.
This offset will apply regardless of the insolvency of either party as described in Section 20, to the extent
permitted by law. If the statement of account shows a balance due THE COMPANY, THE REINSURER will remit that amount
to THE COMPANY within 30 days of receipt of the statement of account. If the reinsurance premium cannot be determined
on an exact basis by the dates described below, such payments will be paid in accordance with a mutually agreed upon
formula which will approximate the actual payments.

b. FAILURE TO PAY PREMIUMS. If reinsurance premiums are 90 days past due, for reasons other than those due to error or
omission as defined below in Section 19, the premiums will be considered in default and THE REINSURER may terminate
the reinsurance by providing a 30-day prior written notice, provided payment is not received within that 30-day
period. THE REINSURER will have no further liability as of the termination date for benefits applicable to periods
for which premium is not paid. THE COMPANY will be liable for the prorated reinsurance premiums to the termination
date.

THE COMPANY may reinstate reinsurance terminated for non-payment of balances due at any time within 60 days following
the date of termination. However, THE REINSURER will have no liability for claims paid by THE COMPANY between the
termination date and the reinstatement date.

c. PREMIUM ADJUSTMENT. If THE COMPANY overpays a reinsurance premium and THE REINSURER accepts the overpayment, THE
REINSURER's acceptance will not constitute or create a reinsurance liability or increase any existing reinsurance
liability. Instead, THE REINSURER will be liable to THE COMPANY for a credit in the amount of the overpayment. If a
reinsured policy terminates, THE REINSURER will not refund the portion of the premium for the period from the date of
the termination of the policy to the date to which the reinsurance premium has been paid.

10. PREMIUM TAX REIMBURSEMENT

See Schedule B.

11. DAC TAX AGREEMENT

THE COMPANY and THE REINSURER, herein collectively called the "Parties", or singularly the "Party", hereby enter into an
election under Treasury Regulations Section 1.848-2(g) (8) as promulgated under the Internal Revenue Code, as found in Title
26 of the United States Code, hereinafter referred to as the Regulations and the IRC. Both parties agree to make the
election contemplated by this Section 11 by timely attaching to their U.S. tax returns the schedule contemplated by Section
1.848-2(g)(8)(ii) of the Regulations. Furthermore, the parties agree to the following:

a. For each taxable year under this Agreement, the party with the net positive consideration, as defined in the Regulations,
will capitalize specified policy acquisition expenses with respect to this Agreement without regard to the general
deductions limitation of Section 848 (c) (1);

b. THE COMPANY and THE REINSURER agree to exchange information pertaining to the net consideration under this Agreement each
year to insure consistency or as otherwise required by the U.S. Internal Revenue Service;

c. THE COMPANY will submit to THE REINSURER by May 1 of each year its calculation of the net consideration for the preceding
calendar year.

d. THE REINSURER may contest such calculation by providing an alternative calculation to THE COMPANY in writing within 30 days
of THE REINSURER's receipt of THE COMPANY's calculation. If THE REINSURER does not so notify THE COMPANY, THE REINSURER
will report the net consideration as determined by THE COMPANY in THE REINSURER's tax return for the previous calendar
year;

e. If THE REINSURER contests THE COMPANY's calculation of the net consideration, the parties will act in good faith to reach an
agreement as to the correct amount within 30 days of the date THE REINSURER submits its alternative calculation. If THE
COMPANY and THE REINSURER do not reach agreement on the net amount of consideration within such 30-day period, then the
net amount of consideration for such year shall be determined by an independent accounting firm acceptable to both THE
COMPANY and THE REINSURER within 20 days after the expiration of such 30-day period.

f. THE COMPANY and THE REINSURER agree that this election shall first be effective for the 2004 calendar tax year and will be
effective for all subsequent taxable years for which this Agreement remains in effect.

THE REINSURER and THE COMPANY represent and warrant that they are subject to U.S. taxation under either Subchapter L of
Chapter 1, or Subpart F of Subchapter N of Chapter 1 of the IRC of 1986, as amended.

12. REPORTS

The reporting period is shown in Schedule A. For each reporting period, THE COMPANY will submit to THE REINSURER a billing
and accounting summary similar to that shown in Schedule C. In addition, within 15 business days after the end of each
calendar year, THE COMPANY will submit a policy exhibit summary similar to that shown in Schedule C.

13. RESERVES FOR REINSURANCE

As a result of reinsurance premiums being paid on a monthly mode on a calendar month basis, there will be no reinsurance
reserve.

14. CLAIMS

a. AMOUNT AND PAYMENT OF BENEFITS. THE REINSURER will reimburse THE COMPANY for death claims paid by THE COMPANY with respect
to the policies reinsured under this Agreement. The amount of the reimbursement will be equal to the percentage of the
claims paid by THE COMPANY, where such percentage is the portion of the policy reinsured as shown in Schedule A. The
death claims reimbursed under this Agreement will be determined from the death claims paid by the THE COMPANY on or
after the Effective Date.

b. LIVING NEEDS BENEFITS. Living Needs Benefit claims will be administered in the same way as death claims.

c. CLAIM INTEREST. THE REINSURER will pay its share of any interest reported by THE COMPANY on any claim payment made by THE
COMPANY in accordance with its usual claim payment procedures.

d. CLAIM EXPENSES. THE REINSURER will pay its share of the unusual expense of adjudicating contestable claims. THE REINSURER
will not reimburse THE COMPANY for the routine expenses and compensation of officers and employees of the COMPANY. In
addition, except as stated in the previous sentence, if THE REINSURER has chosen to participate in a contest, THE
REINSURER will pay its share of the unusual expense of THE COMPANY of adjudicating contestable claims, which expense was
incurred by THE COMPANY, including investigation expenses and compensation expenses charged by THE COMPANY's Special
Investigation Unit. Such Special Investigation Unit expenses will not increase more than 5% per year of the current
hourly rate ($39 for 2004) of contestable claim investigation. The term "unusual expense" shall mean all expenses
associated with the contestable claim other than the THE COMPANY's normal and customary claim administration expenses
that are commonly incurred with the normal and customary settlement of non-contestable claims. Notwithstanding the
above, THE REINSURER will not be liable for any unusual expenses for any period of time after THE REINSURER chooses not
to participate in a contested, compromised or litigated claim. THE REINSURER will not be liable for any portion of
unusual expenses for any period of time after THE REINSURER has notified THE COMPANY of its decision not to participate
in a contested, compromised or litigated claim. THE REINSURER will not reimburse expenses incurred by THE COMPANY in
connection with a dispute or contest arising out of conflicting claims of entitlement to policy proceeds or benefits.

e. EXTRACONTRACTUAL DAMAGES. THE REINSURER will participate in statutory, punitive or compensatory damages, paid by THE
COMPANY in connection with the policies reinsured under this Agreement. In addition, THE REINSURER will pay its share
of statutory penalties paid by THE COMPANY in connection with the policies reinsured under this Agreement.

For purposes of this provision, the following definitions will apply:

"Punitive Damages" are those damages awarded as a penalty, the amounts of which are not governed or fixed by statute;

"Statutory Penalties" are those amounts that are awarded as a penalty, but are fixed in amount by statute;

"Compensatory Damages" are those amounts awarded to compensate for actual damages sustained, and are not awarded as a
penalty, nor fixed in amount by statute.

15. MISREPRESENTATION AND MISSTATEMENT

If there is an adjustment to the policy benefit in a policy reinsured under this Agreement, as a result of a
misrepresentation or misstatement of age or sex, then a corresponding adjustment to the reinsurance benefit will be made.

16. POLICY CHANGES

If a reinsured policy is changed as described below, a corresponding change will be made in the reinsurance for that
policy.

a. CONVERSIONS. If a reinsured term policy is converted to a permanent plan of insurance that is currently reinsured under
this Agreement as defined in Schedule A, then reinsurance of such policy under this Agreement shall be continued. The
amount of reinsurance on the permanent plan may be different than the amount of reinsurance under the term policy and
will be adjusted as appropriate as of the effective date of the conversion.

If a reinsured term policy is converted to a permanent plan of insurance that is not currently reinsured under this
Agreement as defined in Schedule A, then the reinsurance under this Agreement will cease as of the effective date of the
conversion.

b. INCREASES. If the amount of insurance under a reinsured policy is increased, then the amount of reinsurance under this
Agreement will be adjusted as of the effective date of the increase.

c. REDUCTION OR TERMINATION. If the amount of insurance on a reinsured policy is reduced, the reinsurance will be reduced
proportionately as of the effective date of the reduction.

If a reinsured policy is terminated, the reinsurance will cease on the date of such termination.

d. PLAN CHANGES. If a reinsured policy is changed to another plan of insurance that is not currently reinsured under this
Agreement as defined in Schedule A, then the reinsurance under this Agreement will cease as of the effective date of
the change.

If a policy that is not reinsured under this Agreement is changed to a policy of the type that is reinsured under this
Agreement as defined in Schedule A, then reinsurance will commence as of the policy date of the new policy.

e. DEATH BENEFIT OPTION CHANGES. If the death benefit option under a reinsured policy is changed and the face amount of
insurance is either increased or decreased, the net amount at risk reinsured under this Agreement after the change will
be adjusted as appropriate.

f. REDUCED PAID-UP INSURANCE. If any policy reinsured under this Agreement is changed to Reduced Paid-Up Insurance, the net
amount at risk reinsured will be adjusted as appropriate and reinsurance will be continued in accordance with the
provisions of the underlying policy. Reinsurance payments for the adjusted policy will be calculated using (1) the
issue age of the original policy, (2) the duration since issuance of the original policy and (3) the underwriting
classification immediately prior to the change to Reduced Paid-Up Insurance.

g. FULLY PAID-UP INSURANCE. If any policy reinsured under this Agreement is changed to Fully Paid-Up Insurance, the net amount
at risk reinsured will be adjusted as appropriate and reinsurance will be continued in accordance with the provisions of
the underlying policy. Reinsurance payments for the adjusted policy will be calculated using (1) the issue age of the
original policy, (2) the duration since issuance of the original policy and (3) the underwriting classification
immediately prior to the change to Fully Paid-Up Insurance.

h. EXTENDED TERM INSURANCE. If any policy reinsured under this Agreement is changed to Extended Term Insurance, the net amount
at risk reinsured will be adjusted as appropriate and reinsurance will be continued in accordance with the provisions of
the underlying policy. Reinsurance payments for the adjusted policy will be calculated using (1) the issue age of the
original policy, (2) the duration since issuance of the original policy and (3) the underwriting classification
immediately prior to the change to Extended Term Insurance.

i. OPTION TO EXCHANGE INSUREDS. Policies issued as a result of the 'Option to Exchange Insureds' provision are covered under
this Agreement.

j. ADD-ON LIVES. Policies issued to add-on lives are covered under this Agreement.

17. RECAPTURE

At any time during the term of the Agreement, THE COMPANY may elect to recapture in full the coverage reinsured under this
Agreement following the occurrence of any of the following events:

(1) Non-payment of reinsurance claims that are not in dispute and that are seventy days past due from THE REINSURER.
(2) THE REINSURER is deemed insolvent as described in Section 20.

If THE COMPANY elects to recapture the risks ceded to THE REINSURER under this Agreement as stated above, it will do so by
giving written notice to THE REINSURER. Upon the delivery of such notice, all of the risks previously ceded under each of
the policies subject to this Agreement shall be recaptured, effective as of the date specified in THE COMPANY's notice. If
THE COMPANY does not specify in the written notice the date that such recapture is to be effective, then the recapture shall
be effective immediately upon THE REINSURER's receipt of the notice.

If a policy is recaptured, THE REINSURER will pay THE COMPANY the unearned reinsurance premium within 30 days following the
date of recapture. THE REINSURER shall not be liable, under this Agreement, for any claims paid after the date of
recapture. In addition, THE REINSURER will pay THE COMPANY an amount equal to the percentage of the death claims in course
of settlement and claims incurred but not yet reported as of the date of the recapture, where such percentage is the portion
of the policy reinsured as shown in Schedule A.

18. REINSTATEMENTS

If THE COMPANY reinstates a policy that was originally reinsured under this Agreement, then THE REINSURER's reinsurance for
the policy shall be reinstated.

19. ERRORS AND OMISSIONS

If either THE REINSURER or THE COMPANY fails to comply with any of the terms of this Agreement and it is shown that the
failure was unintentional or the result of a misunderstanding or an administrative oversight on the part of either party,
this Agreement will remain in effect. If the failure to comply changes the operation or effect of this Agreement, both
parties will be put back to the positions they would have occupied if the failure to comply had not occurred.

20. INSOLVENCY

For the purpose of this Agreement, THE COMPANY or THE REINSURER shall be deemed "insolvent" if one or more of the following
occurs:

a. A court-appointed receiver, trustee, custodian, conservator, liquidator, government official or similar officer takes
possession of the property or assets of either THE COMPANY or THE REINSURER; or

b. Either THE COMPANY or THE REINSURER is placed in receivership, rehabilitation, liquidation, conservation, bankruptcy or
similar status pursuant to the laws of any state or of the United States; or

c. Either THE COMPANY or THE REINSURER becomes subject to an order to rehabilitate or an order to liquidate as defined by the
insurance code of the jurisdiction of the domicile of THE COMPANY or THE REINSURER, as the case may be.

The reinsurance under this Agreement is payable by THE REINSURER on the basis of the liability of THE COMPANY without
diminution because of the insolvency of THE COMPANY unless under this Agreement THE REINSURER assumes the liability for the
reinsurance as of the same effective date. THE REINSURER shall make payment directly to THE COMPANY or to its statutory
successor by whatever name called for the purpose of liquidating or rehabilitating the business of THE COMPANY unless either
this Agreement or the policies reinsured required THE REINSURER to make payment to the payees under the policies reinsured
in the event THE COMPANY becomes insolvent, or THE REINSURER with the consent of the direct insured assumes the policy
obligations of the ceding insurer to the payees under the policies reinsured in substitution for the obligations of THE
COMPANY to those payees.

In the event THE REINSURER is deemed insolvent, THE REINSURER will be bound by any legal directions imposed by its
liquidator, conservator, or statutory successor. However, and if not in conflict with such legal directions, THE COMPANY
shall have the right to cancel this Agreement with respect to occurrences taking place on or after the date THE REINSURER
first evidences insolvency. Such right to cancel shall be exercised by providing THE REINSURER (or its liquidator,
conservator, receiver or statutory successor) with a written notice of THE COMPANY's intent to recapture ceded business. If
THE COMPANY exercises such right to cancel and recapture ceded business, such election shall be in lieu of any premature
recapture fee. Upon such election, THE COMPANY shall be under no obligation to THE REINSURER, its liquidator, receiver or
statutory successor.

21. ARBITRATION

a. GENERAL. All disputes and differences under this Agreement that cannot be amicably agreed upon by the parties shall be
decided by arbitration. The arbitrators will have the authority to interpret this Agreement and, in doing so, will
consider the customs and practices of the life insurance and life reinsurance industry. The arbitrators will consider
this Agreement as an honorable engagement rather than merely a legal obligation, and they are relieved of all judicial
formalities and may abstain from following the strict rules of law. The arbitration shall take place within the United
States.

b. NOTICE. To initiate arbitration, one of the parties will notify the other, in writing, of its desire to arbitrate. The
notice will state the nature of the dispute and the desired remedies. The party to which the notice is sent will
respond to the notification in writing within 10 days of receipt of the notice. At that time, the responding party will
state any additional dispute it may have regarding the subject of arbitration.

c. PROCEDURE. Arbitration will be heard before a panel of three disinterested arbitrators. The arbitrators will be current or
former executive officers or employees of life insurance or reinsurance companies; however, these companies will not be
either party or any of their reinsurers or affiliates. Each party will appoint one arbitrator. Notice of the
appointment of these arbitrators will be given by each party to the other party within 30 days of the date of mailing of
the notification initiating the arbitration. These two arbitrators will, as soon as possible, but no longer than 45
days after the date of the mailing of the notification initiating the arbitration, then select the third arbitrator.

Should either party fail to appoint an arbitrator or should the two initial arbitrators be unable to agree on the choice
of a third arbitrator, each arbitrator will nominate three candidates, two of whom the other will decline, and the
decision will be made by drawing lots on the final selection. Once chosen, the three arbitrators will have the
authority to decide all substantive and procedural issues by a majority vote. The arbitration hearing will be held on
the date fixed by the arbitrators at a location agreed upon by the parties. The arbitrators will issue a written
decision from which there will be no appeal. Either party may reduce this decision to a judgment before any court that
has jurisdiction of the subject of the arbitration.

d. COSTS. Each party will pay the fees of its own attorneys, the arbitrator appointed by that party, and all other expenses
connected with the presentation of its own case. The two parties will share equally the cost of the third arbitrator.

22. GOOD FAITH

Each party agrees that all matters with respect to this Agreement require its utmost good faith.

23. REPRESENTATIONS AND WARRANTIES

THE COMPANY represents and warrants to THE REINSURER that it is solvent in all jurisdictions in which it does business or is
licensed. THE REINSURER represents and warrants to THE COMPANY that it is solvent on a statutory basis in all states in
which it does business or is licensed. Each party agrees to promptly notify the other if it is subsequently financially
impaired. Each party affirms that it has and will continue to disclose all matters material to this Agreement and each
cession. Examples of such matters are a material change in underwriting or issue practices or philosophy, or a change in
each party's ultimate ownership or control.

THE COMPANY represents and warrants the following:

a. It is a corporation duly organized, existing and in good standing under the laws of Arizona.
b. It is empowered under applicable laws and by its charter and bylaws to enter into and perform the duties contemplated in
this Agreement.
c. It has taken all requisite corporate proceedings to authorize it to enter into and perform the duties contemplated in this
Agreement.
d. It has obtained any and all regulatory approvals as may be required for THE COMPANY to cede the Policies covered hereunder.
e. It will take no unauthorized action that would encourage the policyholders whose policies are reinsured under this Agreement
to surrender, reduce or otherwise terminate their existing coverages either through direct or indirect acts, including
but not limited to, a plan of internal replacement, without the consent of THE REINSURER.
f. THE COMPANY acknowledges that THE REINSURER is entering into this Agreement in reliance upon these representations and
warranties of THE COMPANY.

THE REINSURER represents and warrants the following:

a. It is a corporation duly organized, existing and in good standing under the laws of New Jersey.
b. It is empowered under applicable laws and by its charter and bylaws to enter into and perform the duties contemplated in
this Agreement.
c. It has taken all requisite corporate proceedings to authorize it to enter into and perform the duties contemplated in this
Agreement.
d. It has obtained any and all regulatory approvals as may be required for THE REINSURER to provide the reinsurance covered
hereunder.
e. THE REINSURER acknowledges that THE COMPANY is entering into this Agreement in reliance upon these representations and
warranties of THE REINSURER.

24. MEDICAL INFORMATION BUREAU

THE REINSURER is required to strictly adhere to the Medical Information Bureau Rules, and THE COMPANY agrees to abide by
these Rules, as amended from time to time. THE COMPANY will not submit a preliminary notice, application for reinsurance,
or reinsurance cession to THE REINSURER unless THE COMPANY has a signed, currently required Medical Information Bureau
authorization.

25. GOVERNING LAW

This Agreement shall be governed by the laws of Arizona without giving effect to the principles of conflicts of laws thereof.

26. CURRENCY

All payments and reporting by both parties under this Agreement will be made in United States dollars.

27. ASSIGNMENT

This Agreement is not assignable by either party except by the consent of the other. This Agreement shall not be
bifurcated, partially assigned, or partially assumed without the consent of the other party.

28. ACCESS TO RECORDS

THE REINSURER and THE COMPANY, or their duly authorized representatives, will have the right to inspect original papers,
records, and all documents relating to the business reinsured under this Agreement including underwriting, claims
processing, and administration. Such access will be provided during regular business hours at the office of the inspected
party.

29. SEVERABILITY

If any provision of this Agreement is determined to be invalid or unenforceable, such determination will not impair or
affect the validity or the enforceability of the remaining provisions of this Agreement.

30. OFFSET

Any debts or credits, in favor of or against either THE REINSURER or THE COMPANY with respect to this Agreement are deemed
mutual debts or credits and may be offset, and only the balance will be allowed or paid.

The right of offset will not be affected or diminished because of the insolvency of either party.

31. NOTICES

All notices and other communications under this Agreement will be effective when received and sufficient if given in writing
and delivered by confirmed facsimile transmission, by certified or registered mail, or by an overnight delivery service of
general commercial use (such as UPS, Federal Express or Airborne), addressed to the attention of the applicable party
described as follows:

a. NOTICES SENT TO THE COMPANY

Phillip J. Grigg
Pruco Life Insurance Company
213 Washington Street
Newark, NJ 07102-2992

b. NOTICES SENT TO THE REINSURER

Nancy Davis
The Prudential Insurance Company of America
213 Washington Street
Newark, NJ 07102-2992

In witness of the above, THE COMPANY and THE REINSURER have by their respective officers executed and delivered this Agreement in
duplicate on the dates indicated below, with an effective date of December 1, 2004.

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PRUCO LIFE INSURANCE COMPANY THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
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By:________________________________ By:________________________________
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Title:_______________________________ Title:_______________________________
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Date:_______________________________ Date:_______________________________
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Witnessed Witnessed
By:_________________________ By:_________________________
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Date:_______________________________ Date:_______________________________
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