EX-99.7(B)(IX) 10 b42578b2ex99-7bix.txt AUTOMATIC REINSURANCE AGREEMENT Exhibit 99.7(ix) AUTOMATIC REINSURANCE AGREEMENT between THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA (a corporation organized under the laws of the state of Delaware, having its principal place of business in Boston, Massachusetts; hereinafter referred to as the CEDING COMPANY) and AXA CORPORATE SOLUTIONS LIFE REINSURANCE COMPANY (a corporation organized under the laws of the state of Delaware, having its principal place of business in New York, New York; hereinafter referred to as the REINSURER) EFFECTIVE DATE OF THIS AGREEMENT: JULY 1, 2001 (hereinafter referred to as the EFFECTIVE DATE) AGREEMENT NO. 2001-48 TABLE OF CONTENTS PREAMBLE .............................................................................................. 1 Article I. Scope of Agreement............................................................................ 1 Article II. Commencement and Termination of Liability..................................................... 2 Article III. Oversights and Clerical Errors................................................................ 3 Article IV. Net Amount at Risk............................................................................ 4 Article V. Reinsurance Premiums.......................................................................... 6 Article VI. Reinsurance Administration.................................................................... 7 Article VII. Settlement of Claims.......................................................................... 9 Article VIII. Treaty Reserve................................................................................ 11 Article IX. Recapture Privileges.......................................................................... 12 Article X. Inspection of Records......................................................................... 13 Article XI. Insolvency.................................................................................... 14 Article XII. Negotiation................................................................................... 15 Article XIII. Arbitration................................................................................... 16 Article XIV. Right to Offset Balances Due.................................................................. 18 Article XV. Contract and Program Changes.................................................................. 19 Article XVI. Confidentiality............................................................................... 21 Article XVII. Other Provisions.............................................................................. 22 A. Notifications........................................................................ 22 B. Assignment........................................................................... 22 C. Severability......................................................................... 22 D. Currency............................................................................. 22 Article XVIII. Entire Agreement.............................................................................. 23 Article XIX. DAC Tax....................................................................................... 24 Article XX. Duration of Agreement......................................................................... 25 Article XXI. Execution of Agreement........................................................................ 26
SCHEDULES AND EXHIBITS Schedule A Plans of Reinsurance Schedule B Investment Funds Schedule C Required Data and Suggested Data Layout Exhibit I Mortality Table/Projection Scale G Exhibit II Benefit Limitation Rule Exhibit III Annuitization Rate And Exposure Determination Exhibit IV Confidentiality and Non-Disclosure Agreement Exhibit V Wiring Instructions PREAMBLE This Agreement is an indemnity reinsurance agreement solely between the CEDING COMPANY and the REINSURER. The acceptance of reinsurance hereunder shall not create any right or legal relation whatever between the REINSURER and the annuitant, owner, beneficiary or any other party under any contracts of the CEDING COMPANY which may be reinsured hereunder. The CEDING COMPANY shall be and remain solely liable to such parties under such contracts reinsured hereunder. All provisions of this Agreement are subject to the laws of the State of Delaware. ARTICLE I. SCOPE OF AGREEMENT A. On and after the EFFECTIVE DATE of this Agreement, the CEDING COMPANY shall automatically reinsure with the REINSURER and the REINSURER shall automatically accept, its share of the IBNAR (defined in Article IV), generated prior to termination of the REINSURER's liability (defined in Article II), by the Guaranteed Minimum Income Benefit (GMIB) provisions of the Guaranteed Retirement Income Program II (Income Program) within the variable annuity contracts issued by the CEDING COMPANY and reinsured hereunder (defined in Schedule A). B. The REINSURER's maximum aggregate IBNAR (defined in Article IV) liability incurred in any one calendar year shall not exceed the lesser of: 1. Eight Hundred (800) basis points of the REINSURER's Quota Share Percentage (defined in Schedule A) of the average aggregate IBB (defined in Schedule A) value inforce hereunder eligible to annuitize under the Income Program (i.e., those contracts past their waiting period, defined in Schedule A) over each respective calendar year of coverage. This average shall be calculated by way of a trapezoidal rule as shown in Exhibit II, and 2. The total liability amount generated once the annual annuitization rate reaches twenty-two and one-half percent (22.5%) during the calendar year of coverage. This annuitization rate calculation is described in Exhibit III. The annuitization rate will be monitored as described in Article VI, Paragraph D. C. The REINSURER's maximum IBNAR liability on any individual life reinsured hereunder shall be limited to one million dollars ($1,000,000) multiplied by the REINSURER's Quota Share Percentage. D. This Agreement covers only the CEDING COMPANY's contractual liability for claims that are realized upon annuitization under the contractual terms of the Income Program within the variable annuity contract forms specified in Schedule A and supported by investment funds specified in Schedule B and its Amendments, that were submitted to the REINSURER in accordance with the terms of this Agreement set forth in Article XV, Contract and Program Changes. Page 1 ARTICLE II. COMMENCEMENT AND TERMINATION OF LIABILITY A. On reinsurance ceded under the terms of this Agreement, the liability of the REINSURER shall commence simultaneously with that of the CEDING COMPANY. B. The liability of the REINSURER for all reinsured contracts under this Agreement may terminate in accordance with 1. the Duration of Agreement provisions of this Agreement set forth in Article XX, or 2. the termination provisions set forth within Article VI, Administration, or 3. the Recapture Privileges set forth in Article IX. C. For an individual contract, the liability of the REINSURER under this Agreement will terminate either in accordance with Paragraph B, above, or upon the earliest of the following occurrences defined in the contract(s) reinsured hereunder: 1. the date the owner elects to annuitize pursuant to other than the Income Program; 2. surrender or termination of the contract 3. full withdrawal, including 1035 exchanges and qualified transfers when the CEDING COMPANY terminates the contract and releases the proceeds to the contract owner, beneficiary, annuitant or new carrier; 4. the death of the owner or annuitant where such death triggers the payment of a contractual death benefit, except when spousal continuance has been elected during the new business term of this Agreement as defined in Article XX, Paragraph A. On spousal continuance election the REINSURER's liability will be terminated upon death of the spouse; 5. attainment of the maximum annuitization age or attained age 95, if earlier. D. Upon annuitization under the Income Program, the liability of the REINSURER shall terminate, subject to the payment of a benefit claim that may be due in accordance with the IBNAR calculation as set forth in Article IV. Page 2 ARTICLE III. OVERSIGHTS AND CLERICAL ERRORS A. Should either the CEDING COMPANY or the REINSURER fail to comply with any of the terms of this Agreement, and if this is shown to be unintentional and the result of a misunderstanding, oversight or clerical error on the part of either the CEDING COMPANY or the REINSURER, then this Agreement shall not be deemed abrogated thereby, but both companies shall be restored to the positions they would have occupied had no such oversight, misunderstanding or clerical error occurred. Such conditions are to be reported and corrected promptly after discovery. B. If the CEDING COMPANY or the REINSURER discovers that the CEDING COMPANY did not cede reinsurance on a contract it should have reinsured under this Agreement, the CEDING COMPANY will take prompt, reasonable and necessary steps to ensure that similar oversights do not recur. Then this Agreement shall not be deemed abrogated thereby, but both companies shall be restored to the positions they would have occupied had the CEDING COMPANY ceded such reinsurance at the original date. If the REINSURER receives no evidence that the CEDING COMPANY has taken action to remedy such a situation, the REINSURER reserves the right to limit its liability to reported contracts only. C. Any negligent or deliberate acts or omissions by the CEDING COMPANY regarding the insurance or reinsurance provided are the responsibility of the CEDING COMPANY and its liability insurer, if any, but not that of the REINSURER. The previous sentence does not negate the REINSURER's liability under Article VII, Settlement of Claims, of this Agreement. Page 3 ARTICLE IV. NET AMOUNT AT RISK A. The IBNAR (Income Benefit Net Amount at Risk) for each variable annuity contract reinsured hereunder shall be equal to the following: IBNAR = Maximum [( IBB * ( MAPR / SAPR ) - Account Value), 0] * REINSURER's Quota Share Percentage where: - The INCOME BENEFIT BASE (IBB) is as defined in Schedule A - The MINIMUM ANNUITY PURCHASE RATE (MAPR) per $1000 is calculated using the following assumptions: Mortality Table: 1983 IAM Valuation Table (see Exhibit I) Age Setback: None Mortality Improvement: Projection Scale G for 35 years (see Exhibit I) Unisex Blend: Montana: 25% male/75% female All other states: Sex distinct only Interest Rate: 2.5% all years Expenses: None Premium Taxes: Applied by state of residence and market Age: Attained age nearest birthday on exercise date Frequency of Payment: Monthly or quarterly or annually Annuity Form: Limited to a Life Annuity with a 10 Year Period Certain or Joint and Survivor Life Annuity with 20 Year Period Certain. For qualified plans: period certain to meet IRS requirement.
- The SETTLEMENT ANNUITY PURCHASE RATE (SAPR) per $1000, which is used at time of annuitization for reinsurance claims settlement, is calculated using the following assumptions: Mortality Table: 1983 IAM Basic Table (see Exhibit I) Age Setback: None Mortality Improvement: Projection Scale G until year of annuitization (see Exhibit I) Unisex Blend: Montana: 100% male All other states: Sex distinct only Interest Rate: The yield on the most recently auctioned 7-Year U.S. Treasury Security (i.e., "on-the-run"), as posted in the Wall Street Journal, at the beginning of the month in which annuitization occurs minus 35 Basis Points. That interest rate shall never be less than 1.5%. If there is
Page 4 ARTICLE IV, NET AMOUNT AT RISK (Continued) no recent 7-Year U.S. Treasury Security posted, then the linear interpolation of the 5-Year and 10-Year U. S. Treasury Security as posted by the Wall Street Journal will be used in lieu of the 7-Year rate. The 7-Year linear interpolated rate will be calculated using 60% of the 5-Year rate plus 40% of the 10-Year rate. Expenses: None Premium Taxes: Applied by state of residence and market Age: Attained age nearest birthday on exercise date Frequency of Payment: Monthly or quarterly or annually Annuity Form: Limited to a Life Annuity with a 10 Year Period Certain or Joint and Survivor Life Annuity with 20 Year Period Certain. For qualified plans: period certain to meet IRS requirement.
B. The actual annuity purchase rates offered by the CEDING COMPANY at time of annuitization under the Income Program may differ from those defined above. The annuity rates defined above are used for settlement of reinsurance claims only. C. Premium taxes will be applied on a consistent basis between the MAPR and SAPR to calculate the IBNAR. D. The IBNAR for each contract reinsured hereunder shall be calculated as of the last day of each calendar month prior to the termination of liability contingencies set forth in Article II. Page 5 ARTICLE V. REINSURANCE PREMIUMS A. The Reinsurance Premium is an asset-based reinsurance premium applied to the average aggregate IBB value for the reporting period multiplied by the REINSURER's Quota Share Percentage. The reporting period is monthly. B. The annualized reinsurance premiums are shown below and are expressed in terms of basis points. They shall be applied on a monthly basis by utilizing one-twelfth (1/12th) of the annualized rates.
Issue Reinsurance Premium Guaranteed Maximum Income Program Ages (Basis Points) (Basis Points) --------------- ----- ------------------- ------------------ Income Program Rider 0-75 41.5 135.0 Income Program Rider 76-85 15.5 50.5
The current reinsurance premium rate shall be in effect for a minimum of fifteen (15) years from the EFFECTIVE DATE of this Agreement. Thereafter, the reinsurance premium may be increased based on expected experience but not beyond the stated guaranteed maximum rates shown. C. The total Reinsurance Premium due and payable in the first month shall at least equal three thousand dollars ($3,000) for this Agreement, the complementary GMDB Agreement No. 2001-47, Agreement No. 2000-14, Agreement No. 2001-41 and Agreement No. 2001-41NY, combined. Thereafter, the minimum reinsurance premium that is due and payable shall increase by nine hundred dollars ($900) for each month after the first month until it reaches seven thousand five hundred dollars ($7,500), for the combined agreements, six months after the EFFECTIVE DATE. The total reinsurance premium that is due and payable for the combined agreements in any month thereafter shall at least equal seven thousand five hundred dollars ($7,500). D. The reinsurance rates and the premium structure described above are subject to change based on the criteria described in Article XV, Contract and Program Changes. Page 6 ARTICLE VI. REINSURANCE ADMINISTRATION A. The CEDING COMPANY acknowledges the importance of supplying timely and accurate data, as defined herein, to enable the REINSURER to manage effectively the risk associated with the products reinsured hereunder. Therefore, within thirty (30) days of the end of each calendar month, the CEDING COMPANY will take all necessary steps to furnish the REINSURER with a seriatim electronic report as detailed in Schedule C, for each contract specified in Schedule A, valued as of the last day of that month. B. Additionally, within thirty (30) days of the end of each calendar month, the CEDING COMPANY will furnish the REINSURER with a separate Summary Statement containing the following: 1. reinsurance premiums due to the REINSURER summarized separately for each Income Program premium class as shown in Article V; 2. benefit claim reimbursements under the contractual terms of the Income Program that are due to the CEDING COMPANY; 3. month end date for the period covered by the Summary Statement. C. Payments between the CEDING COMPANY and the REINSURER shall be paid net of any amount due and unpaid under this Agreement. If the net balance is due to the REINSURER, the amount due shall be remitted with the Summary Statement, but no later than thirty (30) days from the month end date for the period covered by the Summary Statement. If the net balance is due to the CEDING COMPANY, the REINSURER shall remit the amount to the CEDING COMPANY within ten (10) days of receipt of the Summary Statement. Wiring instructions are attached in Exhibit V. D. Furthermore, the REINSURER will use the summary data in Schedule C to calculate and monitor its maximum annual aggregate IBNAR liability, as described in Article I, Paragraph B, throughout the calendar year. Both the CEDING COMPANY and the REINSURER shall approximate the annuitization rate each calendar quarter during the year to determine if actual annuitization exceeds the maximum annuitization rate, specified in Article I, Paragraph B, on an annual basis. If the maximum annuitization rate is exceeded, the REINSURER will temporarily suspend the payment of Income Program claims until the end of the following calendar quarter or until such time that all data required for the calculation is available. The REINSURER will then determine whether a true-up of Income Program claims for the calendar year is required. It is the intent of both parties that the calculations described in this Paragraph D are mutually confirmed prior to initiation of any actions described herein. E. The payment of reinsurance premiums is a condition precedent to the liability of the REINSURER under this Agreement. In the event the CEDING COMPANY does not pay reinsurance premiums in a timely manner as defined below, the REINSURER may exercise the following rights: 1. The REINSURER reserves the right to charge interest if premiums are not paid within sixty (60) days of the due date, as defined in Paragraph C of this Article. The interest rate charged shall be based on the ninety-(90) day Federal Government Treasury Bill as first published by the Wall Street Journal in the month following the Page 7 ARTICLE VI, REINSURANCE ADMINISTRATION (Continued) due date of the reinsurance premiums plus fifty (50) basis points. The method of calculation shall be simple interest (360-day year). Interest will accrue from sixty (60) days following the due date shown on the Summary Statement. 2. The REINSURER will have the right to terminate this Agreement when premium payments are more than ninety (90) days past due the due date described in Paragraph C of this Article, by giving ninety (90) days written notice of termination to the CEDING COMPANY. As of the close of the last day of this ninety-(90) day notice period, the REINSURER's liability for all risks reinsured associated with the defaulted premiums under this Agreement will terminate. If all premiums in default are received within the ninety-(90) day time period, the Agreement will remain in effect. F. If claims are not paid within sixty (60) days of the REINSURER's receipt of satisfactory proof of claim liability, the CEDING COMPANY reserves the right to charge interest, based on the ninety (90) day Federal Government Treasury Bill as first published by the Wall Street Journal in the month following the due date shown on the Summary Statement plus fifty (50) basis points. The method of calculation shall be simple interest (360-day year). Interest will accrue from sixty (60) days following the due date shown on the Summary Statement. Page 8 ARTICLE VII. SETTLEMENT OF CLAIMS A. The claims that are eligible for reimbursement are only those that the CEDING COMPANY is contractually required to pay on or after the expiration of the waiting period and upon annuitization under the terms of the Income Program where such events occur, on the policies reinsured hereunder, on or after the EFFECTIVE DATE, subject to the liability limitations described in Article I. B. In the event the CEDING COMPANY provides satisfactory proof of claim liability to the REINSURER, claim settlements made by the CEDING COMPANY shall be unconditionally binding on the REINSURER. In every case of claim, copies of the proofs obtained by the CEDING COMPANY will be taken by the REINSURER as sufficient. C. Within thirty (30) days of the end of each calendar month, the CEDING COMPANY shall notify the REINSURER of the reinsured contractual Income Program benefits paid in that month, based on the IBNAR definition set forth in Article IV, and the REINSURER shall reimburse the CEDING COMPANY, as provided in Article VI, for the reinsured benefits. D. Settlements by the REINSURER shall be in a lump sum regardless of the mode of payment made by the CEDING COMPANY. E. With respect to Extra-Contractual Damages, in no event will the REINSURER participate in punitive or compensatory damages or statutory penalties which are awarded against the CEDING COMPANY as a result of an act, omission or course of conduct committed solely by the CEDING COMPANY in connection with the insurance reinsured under this Agreement. The parties recognize that circumstances may arise in which equity would require the REINSURER, to the extent permitted by law, to share proportionately in certain assessed situations in which the REINSURER was an active party and directed, consented to, or ratified the act, omission or course of conduct of the CEDING COMPANY which ultimately resulted in the assessment of the extra-contractual damages. In such situations, the REINSURER and the CEDING COMPANY shall share such damages so assessed in equitable proportions. For the purposes of this provision, the following definitions will apply: "Punitive Damages" are those damages awarded as a penalty, the amount of which is neither governed nor fixed by statute "Statutory Penalties" are those amounts awarded as a penalty, but fixed in amount by statute "Compensatory Damages" are those amounts awarded to compensate for the actual damages sustained and are not awarded as a penalty, nor fixed in amount by statute If the REINSURER declines to be party to the contest, compromise or litigation of a claim, it will pay its full share of the amount reinsured, as if there had been no contest, compromise or litigation. In addition, the REINSURER will pay its proportionate share of covered expenses incurred to the date it notifies the CEDING COMPANY that it declines to be a party to the contest, compromise or litigation of a claim. Page 9 ARTICLE VII, SETTLEMENT OF CLAIMS (Continued) F. In no event will the REINSURER be liable for expenses incurred in connection with a dispute or contest arising out of conflicting or any other claims of entitlement to policy proceeds or benefits, provided the REINSURER makes payment of the amount of reinsurance to the CEDING COMPANY, as described in the above paragraph. Page 10 ARTICLE VIII. TREATY RESERVE A. The reserves held by the REINSURER in its statutory financial statement will be greater than or equal to those required by the state where the statement is filed. B. It is the intention of both the REINSURER and the CEDING COMPANY that the CEDING COMPANY qualify for reinsurance credit in all States for reinsurance ceded hereunder. The REINSURER, at its sole cost and expense, shall do all that is necessary to comply with the insurance laws and regulations of all States in order to enable the CEDING COMPANY to take credit for the reinsurance ceded hereunder, including delivery of any reports required thereunder. Page 11 ARTICLE IX. RECAPTURE PRIVILEGES A. The CEDING COMPANY may recapture existing reinsurance in force in accordance with the following rules: B. The CEDING COMPANY will notify the REINSURER of its intent to recapture at least ninety (90) days prior to any recaptures. C. No recapture will be made unless reinsurance has been in force for fifteen (15) years, as measured from the EFFECTIVE DATE, or on some other date if mutually agreed to by both parties. D. The recapture shall apply to all the reinsurance in force under the Agreement. E. Recapture will only be available provided the total carryforward, upon release of treaty reserves, is in a positive position. The total carryforward is defined as the sum of the carryforwards of this Agreement and the complementary death benefits agreement, No. 2001-47, that reinsures the same variable annuity contracts specified in Schedule A. F. The carryforward for each Agreement is defined as the current period's reinsurance premium, minus all reinsurance claims paid under this Agreement for the current period, minus a two-and-one-half (2.5) basis point annual expense allowance applied against the average aggregate Account Value for the current period, minus the change in treaty reserves from the prior period to the current period, plus the prior period's carryforward. The monthly carryforward amount is accumulated at the ninety-(90) day Federal Government Treasury Bill rate as published in the Wall Street Journal on the first business day of the current period plus two percent (2%). Note: For purposes of calculating the carryforward, treaty reserves are defined as the minimum statutory reserves required of the REINSURER in the CEDING COMPANY's state of domicile. The CEDING COMPANY shall promptly notify the REINSURER of any change in its state of domicile. G. Upon election, recapture shall occur ratably over a thirty-six (36) month period (i.e., every month the initial quota share percentage reduces 2.78% times the initial quota share percentage). It is irrevocable once elected. H. The CEDING COMPANY and the REINSURER agree to exchange carryforward calculations each year-end to ensure ongoing agreement on the position of the carryforward. Page 12 ARTICLE X. INSPECTION OF RECORDS A. The REINSURER, or its duly appointed representatives, shall have the right at all reasonable times and for any reasonable purpose to inspect at the office of the CEDING COMPANY all records referring to reinsurance ceded to the REINSURER. B. Relating to the business reinsured hereunder, the CEDING COMPANY or its duly appointed representatives shall have the right at all reasonable times and for any reasonable purpose, to inspect at the office of the REINSURER all records referring to reinsurance ceded from the CEDING COMPANY. Page 13 ARTICLE XI. INSOLVENCY A. A party to this Agreement will be deemed insolvent when it: a. Applies for or consents to the appointment of a receiver, rehabilitator, conservator, liquidator or statutory successor ("Authorized Representative") of its properties or assets; or b. Is adjudicated as bankrupt or insolvent; or c. Files or consents to the filing of a petition in bankruptcy, seeks reorganization or an arrangement with creditors or takes advantage of any bankruptcy, dissolution, liquidation, or similar law or statute; or d. Becomes the subject of an order to rehabilitate or an order to liquidate as defined by the insurance code of the jurisdiction of the party's domicile. B. In the event of the insolvency of the CEDING COMPANY, all reinsurance will be payable on the basis of the liability of the CEDING COMPANY on the policies reinsured directly to the CEDING COMPANY or its Authorized Representative without diminution because of the insolvency of the CEDING COMPANY. C. In the event of insolvency of the CEDING COMPANY, the Authorized Representative will, within a reasonable time after the claim is filed in the insolvency proceeding, give written notice to the REINSURER of all pending claims against the CEDING COMPANY on any policies reinsured. While a claim is pending, the REINSURER may investigate such claim and interpose, at its own expense, in the proceedings where the claim is adjudicated, any defense or defenses which it may deem available to the CEDING COMPANY or its Authorized Representative. The expenses incurred by the REINSURER will 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 the 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 expenses will be apportioned in accordance with the terms of the Reinsurance Agreement as though such expense had been incurred by the CEDING COMPANY. D. Any debts or credits, matured or unmatured, liquidated or unliquidated, in favor of or against either the REINSURER or CEDING COMPANY with respect to this Agreement are deemed mutual debts or credits, as the case may be, and will be offset, and only the balance will be allowed or paid. However, in the event of liquidation, the REINSURER may offset against undisputed amounts which are due and payable to the CEDING COMPANY, only those undisputed amounts due the REINSURER which are not more than one hundred and eighty (180) days past due at the date of the court order of liquidation. E. In the event of insolvency of the REINSURER, the provisions of Article IX notwithstanding, the CEDING COMPANY may recapture immediately all ceded benefits upon written notice to the REINSURER, its liquidator, receiver or statutory successor. The CEDING COMPANY shall also have a claim on the REINSURER for any reinsurance credit amounts including reserves, unearned premiums and other amounts due the CEDING COMPANY on such reinsurance, at the date of recapture. Page 14 ARTICLE XII. NEGOTIATION A. Within ten (10) days after one of the parties has given the other the first written notification of a specific dispute, each party will appoint a designated officer to attempt to resolve the dispute. The officers will meet at a mutually agreeable location within thirty (30) days of the last appointment and as often as necessary, in order to gather and furnish the other with all appropriate and relevant information concerning the dispute. The officers will discuss the problem and will negotiate in good faith without the necessity of any formal arbitration proceedings. During the negotiation process, all reasonable requests made by one officer to the other for information will be honored. The designated officers will decide the specific format for such discussions. B. If the officers cannot resolve the dispute within thirty (30) days of their first meeting, the parties will agree to submit the dispute to formal arbitration, as set forth in Article XIII. However, the parties may agree in writing to extend the negotiation period for an additional thirty (30) days. Page 15 ARTICLE XIII. ARBITRATION A. It is the intention of the CEDING COMPANY and the REINSURER that the customs and practices of the insurance and reinsurance industry will be given full effect in the operation and interpretation of this Agreement. The parties agree to act in all things with the highest good faith. If after the negotiation required by Article XII, the REINSURER or the CEDING COMPANY cannot mutually resolve a dispute that arises out of or relates to this Agreement, the dispute will be decided through arbitration. The arbitrators will base their decision on the terms and conditions of this Agreement and, as necessary, on the customs and practices of the insurance and reinsurance industry rather than solely on a strict interpretation of the applicable law. The decision of the arbitrators shall be made within nine (9) months of the filing of the notice of intention to arbitrate, and the arbitrators shall agree to comply with this schedule before accepting appointment. However, this time limit may be extended by agreement of the parties or by the arbitrators if necessary. Once a decision is reached, there will be no appeal of their written decision, and any court having jurisdiction of the subject matter and the parties, may reduce that decision to judgement. Should the arbitrators be unable to reach a decision within nine (9) months of the filing of the notice of intention to arbitrate and should the parties further be unable to agree upon an extension of the time limit, then either party to this Agreement may commence litigation proceedings. B. To initiate arbitration, either the REINSURER or the CEDING COMPANY will notify the other party in writing of its desire to arbitrate, stating the nature of its dispute and the remedy sought. The party to which the notice is sent will respond to the notification in writing within ten (10) days of its receipt. C. There will be three arbitrators who will be current or former officers of life insurance or reinsurance companies other than the contracting companies or affiliates thereof. Each of the contracting companies will appoint one of the arbitrators within thirty (30) days from the date notification is received and these two arbitrators will select the third arbitrator within thirty (30) days from the date of appointment of the last arbitrator. If either party refuses or neglects to appoint an arbitrator within thirty (30) days of the date notification is received, the other party may appoint the second arbitrator. If the two arbitrators do not agree on a third arbitrator within thirty (30) days of the appointment of the last arbitrator, then the appointment of said arbitrator shall be left to the President of the American Arbitration Association. Once chosen, the arbitrators are empowered to decide all substantive and procedural issues by majority vote. D. It is agreed that each of the three arbitrators should be impartial regarding the dispute and should resolve the dispute on the basis described in Section A of this Article. E. The arbitration hearing will be held on the date fixed by the arbitrators in New York City. In no event will this date be later than three (3) months after the appointment of the third arbitrator. As soon as possible, the arbitrators will establish pre-arbitration procedures as warranted by the facts and issues of the particular case. At least ten (10) days prior to the arbitration hearing, each party will provide the other party and the arbitrators with a detailed statement of the facts and arguments they will present at the arbitration hearing. The arbitrators may consider any relevant evidence; they will give the evidence such weight as they deem it entitled to after consideration of any Page 16 ARTICLE XIII, ARBITRATION (Continued) objections raised concerning it. Each party may examine any witnesses who testify at the arbitration hearing. F. The cost of arbitration will be divided between the parties, unless the arbitrators decide otherwise. Page 17 ARTICLE XIV. RIGHT TO OFFSET BALANCES DUE The CEDING COMPANY and the REINSURER shall have, and may exercise at any time, the right to offset any balance or balances due one party to the other, its successors or assignees, against balances due to the other party under this Agreement or under any other Agreements or Contracts previously or subsequently entered into between the CEDING COMPANY and the REINSURER. This right of offset shall not be affected or diminished because of the insolvency of either party to this Agreement. Page 18 ARTICLE XV. CONTRACT AND PROGRAM CHANGES A. The CEDING COMPANY may amend, substitute, add or delete variable investment funds to the investment options supporting the annuity contract as described in the contract general provisions. No such change shall be made by the CEDING COMPANY without PRIOR notification to the REINSURER and without changes being declared effective by the Securities and Exchange Commission (SEC), if necessary. The REINSURER will approve or disapprove of the fund change within fifteen (15) working days of the date on which they receive notification. The CEDING COMPANY agrees to maintain at all times a satisfactory selection of core investment options with overall risk profile characteristics similar to those listed in Schedule B at inception of the Agreement. As long as this is the case, the REINSURER will approve such fund changes within fifteen (15) working days of receiving such notification. Should any such change result in a material change in the underlying risk, the REINSURER shall have the right to modify, for that product line only, any of the terms of this Agreement in order to restore, to the extent possible, the risk profile of the business reinsured hereunder to its original position when priced by the REINSURER. The REINSURER shall within fifteen (15) working days of the date on which notification was received, provide the CEDING COMPANY with notice of its intent to revise the terms of this Agreement. The CEDING COMPANY shall have the right to approve or disapprove of the changes proposed by the REINSURER. If both parties are not able to reach a mutually satisfactory agreement on revised terms, then notwithstanding Article IX, the CEDING COMPANY shall have the right of immediate termination of this Agreement for new and inforce business affected by the change. The CEDING COMPANY shall provide the REINSURER with written notification of its intent to terminate. The date of termination shall be the date that the revised terms would have become effective. B. The CEDING COMPANY shall also give the REINSURER ADVANCE notice of any other changes to any contract forms reinsured hereunder, such as the annuity product design and/or death benefit design, the fees and charges, or the addition of any riders. The REINSURER shall, within fifteen (15) working days of the date on which notification was received, provide the CEDING COMPANY with notice of its approval of such change or its intent to revise the terms of this Agreement. Should any such change affect new business to be reinsured under this Agreement and result in a material change in the underlying risk, the REINSURER shall have the right to modify, for that new business only, any of the terms of this Agreement in order to restore, to the extent possible, the risk profile of the business reinsured hereunder to its original position when priced by the REINSURER. The REINSURER shall, within fifteen (15) working days of the date on which notification was received, provide the CEDING COMPANY with notice of its intent to revise the terms of this Agreement. The CEDING COMPANY shall have the right to approve or disapprove of the changes proposed by the REINSURER. If both parties are not able to reach a mutually satisfactory agreement on revised terms, then the CEDING COMPANY shall have the right of immediate termination of this Agreement for new business only. The CEDING COMPANY shall Page 19 ARTICLE XV, CONTRACT AND PROGRAM CHANGES (Continued) provide the REINSURER with written notification of its intent to terminate. The date of termination shall be the date that the revised terms would have become effective. Should any such change affect inforce contracts reinsured under this Agreement and result in a material change in the underlying risk, the REINSURER shall have the right to modify, for that product line only, any of the terms of this Agreement in order to restore, to the extent possible, the risk profile of the business reinsured hereunder to its original position when priced by the REINSURER. The REINSURER shall, within fifteen (15) working days of the date on which notification was received, provide the CEDING COMPANY with notice of its intent to revise the terms of this Agreement. The CEDING COMPANY shall have the right to approve or disapprove of the changes proposed by the REINSURER. If both parties are not able to reach a mutually satisfactory agreement on revised terms, then notwithstanding Article IX, the CEDING COMPANY shall have the right of immediate termination of this Agreement for inforce business affected by said change only. The CEDING COMPANY shall provide the REINSURER with written notification of its intent to terminate. The date of termination shall be the date that the revised terms would have become effective. C. The above paragraphs notwithstanding, neither party, acting unreasonably, will withhold agreement to revised terms for the sole purpose of terminating this Agreement. D. The CEDING COMPANY agrees to provide the REINSURER with all contractholder communications produced by the CEDING COMPANY as though the REINSURER were a contractholder in the CEDING COMPANY's state of domicile. Page 20 ARTICLE XVI. CONFIDENTIALITY A. This Agreement incorporates the confidentiality agreement previously agreed to between the parties on December 1, 1998 (the "Confidentiality Agreement"), a copy of which is attached hereto as Exhibit IV. All matters with respect to this Agreement require the utmost good faith of both parties. Both the CEDING COMPANY and the REINSURER shall, in accordance with the terms of the Confidentiality Agreement, hold confidential and not disclose or make competitive use of any shared Confidential Information of the other party (as such term is defined in the Confidentiality Agreement), unless otherwise agreed to in writing, or unless the information otherwise becomes publicly available by means other than by either party or their agents, or unless the disclose is required for retrocession purposes, has been mandated by law, or is duly required by external auditors. B. The REINSURER will treat all personal policyholder information received from the CEDING COMPANY as confidential information and will use good faith efforts to keep such information private and secure, in accordance with the CEDING COMPANY's commitment to its policyholders and in accordance with federal and state privacy laws. The CEDING COMPANY recognizes that the REINSURER may need to share certain information with auditors, regulators and retrocessionaires in the normal course of conducting business. Page 21 ARTICLE XVII. OTHER PROVISIONS A. Notifications. Any notice or communication given pursuant to this Reinsurance Agreement must be in writing and either 1) delivered personally, 2) sent by facsimile or other similar transmission to a number specified in writing by the recipient, 3) delivered by overnight express, or 4) sent by Registered or Certified Mail, Postage Prepaid, Return Receipt Requested, as follows: If to CEDING COMPANY: The Manufacturers Life Insurance Company of North America 500 Boylston Street, Suite 400 Boston, MA 02116-3739 Attn: Chief Financial Officer If to REINSURER: AXA Corporate Solutions Life Reinsurance Company 17 State Street, 32nd Floor New York, New York 10004 Attn: Life Reinsurance Treaty Officer All notices and other communications required or permitted under this Reinsurance Agreement that are addressed as provided in this Section will 1) if delivered personally or by overnight express, be deemed given upon delivery; 2) if delivered by facsimile transmission or other similar transmission, be deemed given when electronically confirmed, and 3) if sent by Registered or Certified mail, be deemed given when marked Postage Prepaid by the sender's terminal. Any party from time-to-time may change its address, but no such notice of change will be deemed to have been given until it is actually received by the party sought to be charged with the contents thereof. B. Assignment. This Agreement shall be binding to the parties and their respective successors and permitted assignees. This Agreement may not be assigned by either party without the written consent of the other. Such consent shall not be unreasonably withheld. It is understood that the CEDING COMPANY, as of the writing of this Agreement, is contemplating an internal consolidation of its business that could result in the assignment of this Agreement to another entity within the CEDING COMPANY's corporate family. Said assignment shall be considered approved by the REINSURER. C. Severability. If any provision of this Agreement is determined to be invalid or unenforceable, such determination will not affect or impair the validity or the enforceability of the remaining provisions of this Agreement. If said provision is deemed material to other provisions contained within the agreement, both parties will negotiate in good faith to restore the agreement to a similar position prior to said provision being determined to be invalid or unenforceable. D. Currency. All financial transactions under this Agreement shall be made in U. S. dollars. Page 22 ARTICLE XVIII. ENTIRE AGREEMENT This Agreement shall constitute the entire Agreement between the parties with respect to business reinsured hereunder. There is no understanding between the parties other than as expressed in this Agreement and any change or modification to this Agreement shall be null and void unless made by Amendment or Addendum to the Agreement and signed by both parties. Page 23 ARTICLE XIX. DAC TAX TREASURY REGULATION SECTION 1.848-2(g)98) ELECTION The CEDING COMPANY and the REINSURER hereby agree to the following pursuant to Section 1.848-2(g)(8) of the Income Tax Regulations issued December 29, 1992, under Section 848 of the Internal Revenue Code 1986, as amended. This election shall be effective for the year this Agreement becomes effective and all subsequent taxable years for which this Agreement remains in effect. A. The term "party" will refer to either the CEDING COMPANY or the REINSURER as appropriate. B. The terms used in this Article are defined by reference to Treasury Regulations Section 1.848-2 in effect as of December 29, 1992. C. The party with the net positive consideration for this Agreement for each taxable year will capitalize specified policy acquisition expenses with respect to this Agreement without regard to the general deduction limitation of IRC Section 848(c)(1). D. Both parties agree to exchange information pertaining to the amount of net consideration under this Agreement each year to ensure consistency. The parties also agree to exchange information, which may be otherwise required by the IRS. E. The CEDING COMPANY will submit to the REINSURER by April 1st of each year, a schedule of its calculation of the net consideration for the preceding calendar year. This schedule will be accompanied by a statement signed by an officer of the CEDING COMPANY stating that the CEDING COMPANY will report such net consideration in its tax return for the preceding calendar year. F. The REINSURER may contest such calculation by providing an alternate calculation to the CEDING COMPANY in writing within thirty (30) days of the REINSURER's receipt of the CEDING COMPANY's calculation. If the REINSURER does not notify the CEDING COMPANY, the REINSURER will report the net consideration as determined by the CEDING COMPANY in the REINSURER's tax return for the previous calendar year. G. If the REINSURER contests the CEDING COMPANY's calculation of the net consideration, the parties will act in good faith to reach an agreement as to the correct amount within thirty (30) days of the date the REINSURER submits its alternate calculation. If the REINSURER and CEDING COMPANY reach agreement on an amount of net consideration, each party shall report such amount in their respective tax returns for the previous calendar year. Page 24 ARTICLE XX. DURATION OF AGREEMENT A. This Agreement shall be open for new business for a minimum of two (2) years as measured from the EFFECTIVE DATE, subject to a limit of one billion dollars ($1,000,000,000) of total new considerations to the CEDING COMPANY on the product(s) reinsured hereunder, divided by the REINSURER's Quota Share Percentage. Anytime on or after the second anniversary of this Agreement, or anytime on or after attainment of the limit on total new considerations described in this Paragraph, and upon ninety (90) days written notice, either the CEDING COMPANY or the REINSURER may cancel this Agreement for new business unilaterally or amend the terms of reinsurance for new business by mutual agreement. Additional purchase payments made after the close of this Agreement are covered hereunder for contracts issued during the period this Agreement was open for new business. B. This Agreement shall be unlimited as to its duration but may be reduced or terminated for new business as provided in this Article, above. C. The REINSURER provides the reinsurance coverage hereunder with the understanding that the CEDING COMPANY will not provide its distributors (e.g., wholesalers, producers, etc.) compensation that is different from that which is stated below. In the event that this proves to be otherwise, the REINSURER shall have the right to amend terms of this Agreement to return it to its original risk profile. Should this not be possible, the REINSURER may immediately terminate this Agreement for new and inforce business. Income Program Annuitization Commission Schedule: None Normal Annuitization Commission Schedule: None D. Commutation of term certain annuity payments or any other liquidity feature is unavailable to those individuals who annuitize under the Income Program. In the event that this proves to be otherwise, the REINSURER shall have the right to amend terms of this Agreement to return it to its original risk profile. Should this not be possible, the REINSURER may immediately terminate this reinsurance arrangement for new and inforce business. Page 25 ARTICLE XXI. EXECUTION OF AGREEMENT This Agreement may be executed by the parties in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts together shall constitute one and the same instrument. Each counterpart may consist of a number of copies hereof signed by less than both, but together signed by both of the parties hereto. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate by their duly authorized representatives as of the EFFECTIVE DATE. THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA By: _______________________________________________ Date:_______________________ David Libbey, Vice President & CFO Attest: _______________________________________________ Marc Costantini, Vice President AXA CORPORATE SOLUTIONS LIFE REINSURANCE COMPANY By: _______________________________________________ Date:_______________________ Michael W. Pado, President By: _______________________________________________ Dina Greenbaum, Assistant Vice President Attest: _______________________________________________ Julia Cornely, Assistant Vice President Page 26 SCHEDULE A PLANS OF REINSURANCE A. REINSURER's Quota Share Percentage: 100% B. Issue Dates: New Policies issued on or after July 1, 2001. Contractholders may, at their sole discretion, elect, revoke or make changes to their contract within sixty (60) days (hereinafter known as the 60-day window) of the contract issue date. The election or termination of any optional rider within the 60-day window will be retroactive to date of issue, and will be covered under this Agreement. All reinsurance premiums and claims will be trued up accordingly. The CEDING COMPANY will identify the policies covered under the 60-day window by submitting policyholder information on a separate data form. The CEDING COMPANY does not plan to market or develop a program highlighting this 60-day window. (Note: A maximum of 15% of contracts reported in any month will be covered under the 60-day window for contracts that have passed their statutory free-look period. There will be no limit for contracts that are still within their statutory free-look period.) C. GMIB (Contractual Income Program Benefit) Reinsured: Income Benefit Base (IBB) - For Issue Ages 0-75: Greater of an Annual Ratchet to attained age 81 and a 6% Rollup to attained age 85; frozen thereafter. - For Issue Ages 76-85: Greater of an Annual Ratchet to attained age 81 and a 4% Rollup to attained age 85; frozen thereafter. Note: The IBB is reduced proportionately for withdrawals. An annuitant change is allowed, as long as the new annuitant is the same age or younger than the original annuitant. The type of benefit (6% Rollup or 4% Rollup) is based on the original annuitant's age. Waiting Period Contractholders can elect to annuitize under the Income Program thirty (30) days following their tenth (10th) or later contract anniversary and also under one of the life annuity forms stated in Article IV. D. Product Features: Annuitization Annuitization under the Income Program means that the annuitant is receiving guaranteed fixed income payments based on the IBB and the MAPR under one of the life annuity forms shown within the MAPR calculation set forth in Article IV. SCHEDULE A PLANS OF REINSURANCE (Continued) Income Program Rider Election The contractholder can only elect the Income Program Rider at issue and during the 60-day window described in Paragraph B of this Schedule A. Once election is made, it is irrevocable (except within the contractual free look provisions of the contract). Income Program Rider Cancellation The contractholder of the annuity can not cancel the Income Program rider at any time (except within the contractual free look provisions of the contract). Step-Up or Reset of IBB Not Available. E. Spousal Continuances A Spousal Continuance occurs if the deceased owner's spouse is the beneficiary. The surviving spouse continues the contract, including any optional benefits such as GRIP II, as the new owner. In such a case, the GRIP II Income Benefit Base continues the same as it would for a change of annuitant, except the requirement that the annuitant be younger is waived for the spouse. Providing that the CEDING COMPANY can individually identify Spousal Continuances, as shown in Schedule C, the REINSURER will cover Spousal Continuances under this Agreement and will treat them as new issues to the extent that, at the time of continuance, this Agreement is open for new business as defined in Article XX, Paragraph A. F. Related Contracts: Venture and Venture III Variable Annuity policy forms specified below that elect the GRIP II rider specified below. Policy Forms VENTURE.001, VENTURE.001.94, VENTURE.001.98 VENTURE.003, VENTURE.003.98 VENTURE.004 VENTURE.005, VENTURE.005.98 VENTURE.100 (Consisting of: VENTURE.100.S01V00, VENTURE.100P01V00, VENTURE.100P02V00, VENTURE.100P03V00, VENTURE.100P04V00, VENTURE.100P05V00, VENTURE.100P06V00, VENTURE.100P07V00, VENTURE.100P08V001, VENTURE.100P09V00, VENTURE.100P10V00, VENTURE.100P11V001, VENTURE.100P12V00, VENTURE.100.T01V00 Grip II Rider Form BR003.00 BR003.00G SCHEDULE B INVESTMENT FUNDS
VARIABLE FUNDS ------------------------------------------------------------------------------------------------------------- AIM Jennison Brinson --- -------- ------- All Cap Growth Trust Capital Appreciation Trust Tactical Allocation Trust Aggressive Growth Trust Lord Abbett Munder ----------- ------ CGTC Mid Cap Value Trust Internet Technologies ---- Diversified Bond Trust Income & Value Trust Manufacturers Advisor Corporation PIMCO US Large Cap Value Trust --------------------------------- ----- Small Company Blend Trust Pacific Rim Emerging Markets Trust Global Bond Trust Money Market Trust Total Return Trust Quantitative Equity Trust Cohen & Steers Balanced Trust Putnam -------------- Quantitative Mid Cap Trust ------ Real Estate Securities Lifestyle Conservative 280 Trust Global Equity Lifestyle Moderate 460 Trust Mid Cap Opportunities Davis Selected Lifestyle Balanced 640 Trust -------------- Lifestyle Growth 820 Trust Financial Services Lifestyle Aggressive 1000 Trust Rowe Price -- Flem. Fundamental Value International Index Trust ------------------- Total Stock Market Index Trust International Stock Trust 500 Index Trust Dreyfus Mid Cap Index Trust Salomon ------- Small Cap Index Trust ------- All Cap Value Trust US Government Securities Trust Strategic Bond Trust Fidelity Merrill Lynch ------- ------------- Large Cap Growth Trust ML Basic Value Focus Trust SsgA Overseas Trust ML Special Value Focus Trust ---- Strategic Opportunities Trust ML Developing Capital Markets Trust Growth Trust SsgA ---- Founders MFS Growth Trust -------- --- International Small Cap Trust Strategic Growth Trust Capital Opportunities Trust T. Rowe Price Utilities Trust ------------------- Franklin Equity Income Trust -------- Blue Chip Growth Trust Emerging Small Company Trust Miller Ander. Sher. Science & Technology Trust ------------------- Small Company Value Trust Investco Value Trust Health Sciences Trust -------- High Yield Trust Telecommunications Trust Mid Cap Growth Trust Templeton --------- Janus International Value Trust ----- Dynamic Growth Trust Wellington ---------- Growth & Income Trust Investment Quality Bond Trust Mid Cap Stock Trust
FIXED FUNDS ----------- One Year DCA Twelve Month DCA Six Month SCHEDULE C REQUIRED DATA AND SUGGESTED DATA LAYOUT (Page 1 of 3)
FIELD DESCRIPTION COMMENTS Annuitant's ID: Last Name First Name Middle Name Sex M or F Date of Birth YYYYMMDD Social Security No./Social Insurance No. Joint Annuitant's ID: Last Name If Applicable First Name Middle Name Sex M or F Date of Birth YYYYMMDD Social Security No./Social Insurance No. Owner's ID: Last Name First Name Middle Name Sex M or F Date of Birth YYYYMMDD Social Security No./Social Insurance No. Joint Owner's ID: Last Name If Applicable First Name Middle Name Sex M or F Date of Birth YYYYMMDD Social Security No./Social Insurance No. Policy Number Policy Issue Date YYYYMMDD Policy Issue Status NI = True New Issue, SC = Spousal Continuance, EX = 1035 Exchange Tax Status Qualified (Q), or Non-qualified (N)
SCHEDULE C REQUIRED DATA AND SUGGESTED DATA LAYOUT (Page 2 of 3)
FIELD DESCRIPTION COMMENTS GMDB/EEB SECTION (If applicable) Mortality Risk Definition Indicator AV = VNAR; CV = VNAR + SCNAR Death Claim Trigger A = Annuitant, O = Owner, 1 = 1st to die, 2 = 2nd to die (e.g., A2 = payable upon death of second of joint annuitants) Current Ratchet Value If Applicable Current Reset Value If Applicable Current Rollup Value If Applicable Current Return of Premium Value If Applicable Minimum Guaranteed Death Benefit Contract Death Benefit Greater of Account Value and Minimum Guaranteed Death Benefit Effective Date of the Rider Account Value as of the Effective Date of the Rider Mortality Risk VNAR Max [Contractual Death Benefit - Account Value), 0] SCNAR Surrender Charge, if applicable EEMNAR T%(AV less Net Purchase Payments), if applicable Earnings AV less Net Purchase Payments Earnings Cap If Applicable Tax Percentage If Applicable GEM Rider Y = benefit elected, N = benefit not elected, NA = not applicable GMIB SECTION (If applicable) ---------------------------- GMIB Indicator Y = benefit elected, N = benefit not elected, NA = not applicable Income Benefit Elected 01 = option 1, 02 = option 2, etc. Expiration of Waiting Period YYYYMMDD GMIB Annuitization Date YYYYMMDD - actual date Most Recent GMIB Step-up/Reset Date YYYYMMDD, if applicable Cancellation Date YYYYMMDD, if applicable Pricing Cohort Indicator IBB Amount GMIB IBNAR Amount Calculated using an individual life annuity form with 10 years certain Treasury Rate Used in IBNAR calculation GMAB SECTION (If applicable) ---------------------------- GMAB Indicator Y = benefit elected, N = benefit not elected, NA = not applicable Accumulation Benefit Elected 01 = option 1, 02 = option 2, etc. Maturity Date YYYYMMDD Most Recent GMAB Step-up/Rollover Date YYYYMMDD, if applicable Cancellation Date YYYYMMDD, if applicable Pricing Cohort Indicator GMAB Guaranteed Value Current Value GMAB NAR Max [ (GMAB Guaranteed Value - Account Value) , 0] Account Value Current total value Surrender Charge If reinsured Cumulative Deposits Total premiums Cumulative Withdrawals Total withdrawals Net Purchase Payments Total premiums less total withdrawals (proportional adjustment) Deposits made in quarter of death dollar value Quota Share reinsured percentage
SCHEDULE C REQUIRED DATA AND SUGGESTED DATA LAYOUT (Page 3 of 3)
FIELD DESCRIPTION COMMENTS Funding Vehicle Values: ----------------------- "MorningStar" designations (US) Aggressive Growth Balanced Corporate Bond Government Bond Growth Growth and Income High Yield Bond International Bond International Stock Money Market Specialty Fund Fixed Account Dollar Cost Averaging Note: total of funding vehicles should equal account value. Termination Information: ------------------------- Termination Date YYYYMMDD, If applicable Reason for Termination Death (D), Annuitization (A), 1035 Exchange (X), GMIB Election (I), Other (O). Cause of Death If applicable. Use your Cause of Death code, and provide translation Summary Information: For reconciliation purposes (may be paper summary) -------------------- Total number of records Monthly aggregate information by GMIB Design, GMAB Design, and Pricing Cohort (if applicable) Total of each dollar field Monthly aggregate information by GMIB Design, GMAB Design, and Pricing Cohort (if applicable) Note: All values to nearest dollar
EXHIBIT I MORTALITY TABLE
--------------------------------------------------------------------------------------------------- 1983 BASIC PER THOUSAND RATES (APPLY AT ATTAINED AGE) --------------------------------------------------------------------------------------------------- MALE- FEMALE- MALE- FEMALE- MALE- FEMALE- AGE QX'S QX'S AGE QX'S QX'S AGE QX'S QX'S --------------------------------------------------------------------------------------------------- 5 0.419 0.216 51 4.923 2.240 97 243.467 220.718 6 0.389 0.178 52 5.347 2.461 98 260.817 234.558 7 0.370 0.149 53 5.776 2.696 99 279.877 249.383 8 0.391 0.149 54 6.212 2.944 100 301.007 265.794 9 0.409 0.151 55 6.660 3.212 101 324.568 284.392 10 0.424 0.157 56 7.121 3.501 102 350.918 305.779 11 0.438 0.163 57 7.599 3.813 103 380.419 330.556 12 0.450 0.172 58 8.100 4.154 104 413.429 359.322 13 0.461 0.183 59 8.647 4.534 105 450.309 392.682 14 0.472 0.194 60 9.264 4.963 106 491.419 431.234 15 0.483 0.209 61 9.981 5.453 107 537.118 475.581 16 0.496 0.223 62 10.822 6.014 108 587.766 526.324 17 0.509 0.238 63 11.811 6.656 109 643.723 584.064 18 0.524 0.254 64 12.960 7.370 110 705.349 649.402 19 0.542 0.271 65 14.279 8.151 111 773.004 722.940 20 0.561 0.289 66 15.777 8.989 112 847.048 805.278 21 0.583 0.307 67 17.463 9.876 113 927.840 897.018 22 0.607 0.326 68 19.349 10.812 114 963.920 948.509 23 0.633 0.346 69 21.440 11.837 115 1000.000 1000.000 24 0.662 0.367 70 23.746 12.997 25 0.691 0.388 71 26.274 14.339 26 0.722 0.409 72 29.034 15.910 27 0.752 0.430 73 32.039 17.756 28 0.782 0.450 74 35.327 19.899 29 0.812 0.470 75 38.940 22.363 30 0.843 0.490 76 42.923 25.171 31 0.873 0.511 77 47.319 28.343 32 0.904 0.532 78 52.168 31.908 33 0.937 0.554 79 57.506 35.920 34 0.973 0.579 80 63.362 40.439 35 1.019 0.606 81 69.768 45.528 36 1.076 0.638 82 76.757 51.246 37 1.147 0.674 83 84.342 57.654 38 1.238 0.718 84 92.478 64.818 39 1.351 0.768 85 101.097 72.798 40 1.490 0.824 86 110.136 81.659 41 1.658 0.890 87 119.530 91.464 42 1.859 0.963 88 129.240 102.241 43 2.096 1.047 89 139.327 113.879 44 2.366 1.140 90 149.874 126.228 45 2.666 1.247 91 160.970 139.141 46 2.992 1.368 92 172.699 152.469 47 3.343 1.507 93 185.143 166.069 48 3.714 1.666 94 198.374 179.816 49 4.104 1.841 95 212.460 193.587 50 4.508 2.033 96 227.468 207.261
EXHIBIT I MORTALITY TABLES (continued)
--------------------------------------------------------------------------------------------------- 1983 VALUATION PER THOUSAND RATES (APPLY AT ATTAINED AGE) --------------------------------------------------------------------------------------------------- MALE- FEMALE- MALE- FEMALE- MALE- FEMALE- AGE QX'S QX'S AGE QX'S QX'S AGE QX'S QX'S --------------------------------------------------------------------------------------------------- 5 0.377 0.194 51 4.431 2.016 97 219.120 198.646 6 0.350 0.160 52 4.812 2.215 98 234.735 211.102 7 0.333 0.134 53 5.198 2.426 99 251.889 224.445 8 0.352 0.134 54 5.591 2.650 100 270.906 239.215 9 0.368 0.136 55 5.994 2.891 101 292.111 255.953 10 0.382 0.141 56 6.409 3.151 102 315.826 275.201 11 0.394 0.147 57 6.839 3.432 103 342.377 297.500 12 0.405 0.155 58 7.290 3.739 104 372.086 323.390 13 0.415 0.165 59 7.782 4.081 105 405.278 353.414 14 0.425 0.175 60 8.338 4.467 106 442.277 388.111 15 0.435 0.188 61 8.983 4.908 107 483.406 428.023 16 0.446 0.201 62 9.740 5.413 108 528.989 473.692 17 0.458 0.214 63 10.630 5.990 109 579.351 525.658 18 0.472 0.229 64 11.664 6.633 110 634.814 584.462 19 0.488 0.244 65 12.851 7.336 111 695.704 650.646 20 0.505 0.260 66 14.199 8.090 112 762.343 724.750 21 0.525 0.276 67 15.717 8.888 113 835.056 807.316 22 0.546 0.293 68 17.414 9.731 114 914.167 898.885 23 0.570 0.311 69 19.296 10.653 115 1000.000 1000.000 24 0.596 0.330 70 21.371 11.697 25 0.622 0.349 71 23.647 12.905 26 0.650 0.368 72 26.131 14.319 27 0.677 0.387 73 28.835 15.980 28 0.704 0.405 74 31.794 17.909 29 0.731 0.423 75 35.046 20.127 30 0.759 0.441 76 38.631 22.654 31 0.786 0.460 77 42.587 25.509 32 0.814 0.479 78 46.951 28.717 33 0.843 0.499 79 51.755 32.328 34 0.876 0.521 80 57.026 36.395 35 0.917 0.545 81 62.791 40.975 36 0.968 0.574 82 69.081 46.121 37 1.032 0.607 83 75.908 51.889 38 1.114 0.646 84 83.230 58.336 39 1.216 0.691 85 90.987 65.518 40 1.341 0.742 86 99.122 73.493 41 1.492 0.801 87 107.577 82.318 42 1.673 0.867 88 116.316 92.017 43 1.886 0.942 89 125.394 102.491 44 2.129 1.026 90 134.887 113.605 45 2.399 1.122 91 144.873 125.227 46 2.693 1.231 92 155.429 137.222 47 3.009 1.356 93 166.629 149.462 48 3.343 1.499 94 178.537 161.834 49 3.694 1.657 95 191.214 174.228 50 4.057 1.830 96 204.721 186.535
EXHIBIT I (continued) PROJECTION SCALE G
Age Male Female Age Male Female Age Male Female ---------------------------------------------------------------------------------------------------------- 5 1.50% 1.50% 53 1.70% 1.95% 101 0.20% 0.25% 6 1.50% 1.50% 54 1.65% 1.90% 102 0.00% 0.00% 7 1.50% 1.50% 55 1.60% 1.85% 103 0.00% 0.00% 8 1.25% 1.40% 56 1.55% 1.80% 104 0.00% 0.00% 9 1.00% 1.30% 57 1.50% 1.75% 105 0.00% 0.00% 10 0.75% 1.20% 58 1.50% 1.75% 106 0.00% 0.00% 11 0.50% 1.10% 59 1.50% 1.75% 107 0.00% 0.00% 12 0.25% 1.00% 60 1.50% 1.75% 108 0.00% 0.00% 13 0.24% 0.90% 61 1.50% 1.75% 109 0.00% 0.00% 14 0.23% 0.80% 62 1.50% 1.75% 110 0.00% 0.00% 15 0.22% 0.70% 63 1.50% 1.75% 111 0.00% 0.00% 16 0.21% 0.60% 64 1.50% 1.75% 112 0.00% 0.00% 17 0.20% 0.50% 65 1.50% 1.75% 113 0.00% 0.00% 18 0.18% 0.50% 66 1.50% 1.75% 114 0.00% 0.00% 19 0.16% 0.50% 67 1.50% 1.75% 115 0.00% 0.00% 20 0.14% 0.50% 68 1.45% 1.75% 21 0.12% 0.50% 69 1.40% 1.75% 22 0.10% 0.50% 70 1.35% 1.75% 23 0.10% 0.55% 71 1.30% 1.75% 24 0.10% 0.60% 72 1.25% 1.75% 25 0.10% 0.65% 73 1.25% 1.70% 26 0.10% 0.70% 74 1.25% 1.65% 27 0.10% 0.75% 75 1.25% 1.60% 28 0.23% 0.85% 76 1.25% 1.55% 29 0.36% 0.95% 77 1.25% 1.50% 30 0.49% 1.05% 78 1.25% 1.50% 31 0.62% 1.15% 79 1.25% 1.50% 32 0.75% 1.25% 80 1.25% 1.50% 33 1.00% 1.45% 81 1.25% 1.50% 34 1.25% 1.65% 82 1.25% 1.50% 35 1.50% 1.85% 83 1.25% 1.50% 36 1.75% 2.05% 84 1.25% 1.50% 37 2.00% 2.25% 85 1.25% 1.50% 38 2.00% 2.25% 86 1.25% 1.50% 39 2.00% 2.25% 87 1.25% 1.50% 40 2.00% 2.25% 88 1.20% 1.45% 41 2.00% 2.25% 89 1.15% 1.40% 42 2.00% 2.25% 90 1.10% 1.35% 43 1.95% 2.20% 91 1.05% 1.30% 44 1.90% 2.15% 92 1.00% 1.25% 45 1.85% 2.10% 93 1.00% 1.25% 46 1.80% 2.05% 94 1.00% 1.25% 47 1.75% 2.00% 95 1.00% 1.25% 48 1.75% 2.00% 96 1.00% 1.25% 49 1.75% 2.00% 97 1.00% 1.25% 50 1.75% 2.00% 98 0.80% 1.00% 51 1.75% 2.00% 99 0.60% 0.75% 52 1.75% 2.00% 100 0.40% 0.50%
EXHIBIT II BENEFIT LIMITATION RULE TRAPEZOIDAL RULE Average Aggregate IBB Value inforce in calendar year Z equals: IBB( Jan ) B + ---------------- 24 IBB(Feb ) + IBB(Mar ) + IBB(Apr ) + IBB(May ) B B B B + ---------------------------------------------- 12 IBB(Jun ) + IBB(Jul ) + IBB(Aug ) + IBB(Sep ) B B B B + -------------------------------------------------- 12 IBB(Oct ) + IBB(Nov ) + IBB(Dec ) B B B + ---------------------------------- 12 IBB(Dec ) E ------------- 24 where IBB(Month(B) ) is equal to the beginning of month aggregate IBB value of the Related Contracts listed in Schedule A and IBB(Month(E) ) is equal to the end of month aggregate IBB value of the Related Contracts listed in Schedule A that are eligible to annuitize under the Income Program. Contracts eligible to annuitize under the Income Program are those contracts whose waiting period expired prior to calendar year Z and those contracts whose waiting period will expire during calendar year Z. For partial calendar years IBB(Month(B) ) for months prior to the EFFECTIVE DATE of this Reinsurance Agreement or for months subsequent to the termination of all business hereunder, should be set equal to zero. EXHIBIT III ANNUITIZATION RATE AND EXPOSURE DETERMINATION DEFINED VARIABLES W total IBB value for each reinsured contract, as of the contract's z anniversary in calendar year Z, which is eligible to annuitize under the Income Program (i.e., past their waiting period) by November 30th of year Z. N total IBB value for each reinsured contract, as of the contract's z anniversary in calendar year Z, which is eligible to annuitize under the Income Program during the month of December in year Z (i.e. not part of Wz ). T total IBB value, from cohort Wz , terminating within 30-days after the Wz contract's anniversary in year Z; total IBB value is measured as of the date of termination T total IBB value, from cohort Nz , terminating within 30-days after the Nz contract's anniversary in year Z; total IBB value is measured as of the date of termination Terminations are defined as follows: - Death of owner or annuitant resulting in payment of death benefit - Surrender of Contract and partial withdrawals - Annuitizations which are not under the Income Program - Attainment of maximum annuitization age or attained age 95, if earlier A (W ) total IBB value, as of the contract's anniversary in calendar year Z, z z from cohort Wz which annuitized under the Income Program rider during year Z A (N ) total IBB value, as of the contract's anniversary in calendar year Z, z z from cohort Nz which annuitized under the Income Program rider during year Z 1 1 1 Exposure = W - - T + - ( N + N ) - - T + T z z 2 W 2 Z Z -1 4 ( N N ) Z Z Z -1 A (W ) + A (N ) + A ( N ) Annuitization _ Rate = Z Z Z Z Z Z -1 Z ----------------------------------- Exposure Z Note: This formula only applies to contracts reinsured at the beginning of a calendar year. EXHIBIT IV CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT EXHIBIT V WIRING INSTRUCTIONS AXA CORPORATE SOLUTIONS LIFE REINSURANCE COMPANY'S TECHNICAL ACCOUNT Account held at: Chase Manhattan Bank, N.A. New York, NY 10019 Account Number: ABA# 021000021 Account # 323-095569 Premium & Loss Account THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA'S ACCOUNT Account held at: State Street Bank and Trust Co. Boston, MA Account Number: ABA# 011000028 Account # 50814086 MNA Transfer Account