EX-99.7(II)(C) 6 d256824dex997iic.txt AMENDED AND RESTATED AUTOMATIC REINSURANCE AGREEMENT (EXETER) AMENDED AND RESTATED AUTOMATIC REINSURANCE AGREEMENT Between METLIFE INVESTORS INSURANCE COMPANY and EXETER REASSURANCE COMPANY, LTD. AGREEMENT NO.15860 THIS REINSURANCE AGREEMENT (the "Agreement") is effective as of April 1, 2001 and amended and restated as of July 1, 2004 by and between METLIFE INVESTORS INSURANCE COMPANY ("Cedent"), a life insurance corporation organized and existing under the laws of Missouri and having it's principal place of business at Newport Beach, CA, and EXETER REASSURANCE COMPANY, LTD. ("Reinsurer"), a life insurance corporation organized and existing under the laws of Bermuda and having its principal place of business at Clarendon House, 2 Church Street, Hamilton HM DX, Bermuda. THE BACKGROUND OF THIS AGREEMENT is that the Reinsurer has heretofore assumed, as of the date hereof, quota share portions of certain ceded annuity contract liabilities on Riders, listed in the attached Schedules, (the "Reinsured Contract(s)") issued by MetLife Investors Insurance Company. THIS AGREEMENT provides for the indemnity cession of a portion of the ceded liabilities of the Cedents with respect to the Reinsured Contracts and binds the Cedent and the Reinsurer and their successors and permitted assignees, respectively. This Agreement shall not create any right or legal relation whatever between the Reinsurer and any Cedent or any insured, owner, annuitant, beneficiary or other party to any Reinsured Contract. THEREFORE, in consideration of the promises set forth in this Agreement, the parties agree as follows: Page 1 ARTICLE I SCOPE OF AGREEMENT A. This Agreement shall be effective as of April 1, 2001 (the "Effective Date") and amended and restated as of July 1, 2004 as described in Schedule A. While this Agreement continues in effect, the Cedent shall cede and the Reinsurer shall accept, as indemnity cessions hereunder, Reinsured Contracts that are issued by the Cedent on and after April 1, 2001. B. Guaranteed Minimum Death Benefit and Earnings Preservation Benefit 1. The indemnity cession shall be the share of the MNAR (defined in Article IV) that is generated, prior to the termination of the Reinsurer's liability (defined in Article II), by the Guaranteed Minimum Death Benefit ("GMDB") and Earnings Preservation Benefit ("EPB") provisions of the Reinsured Contracts, as specified in Schedule A. 2. This Agreement covers only the Cedent's contractual liability for reinsured claims paid under variable annuity contract forms specified in Schedule A. C. Guaranteed Minimum Income Benefit 1. The indemnity cession shall be the share of the IBNAR (defined in Article IV) that is generated prior to the termination of the Reinsurer's liability (defined in Article II), by the Guaranteed Minimum Income Benefit Rider (the "Income Program") provisions of the Reinsured Contracts, as specified in Schedule A. 2. This Agreement covers only the Cedent's contractual liability for reinsured claims that are realized upon annuitization under the contractual terms of the Income Program within the variable annuity contract forms specified in Schedule A. D. Guaranteed Withdrawal Benefit 1. The indemnity cession shall be the share of the WBNAR (defined in Article IV) that is generated prior to the termination of the Reinsurer's liability (defined in Article II), by the Guaranteed Withdrawal Benefit Rider (the "Withdrawal Program") provisions of the Reinsured Contracts, as specified in Schedule A. 2. This Agreement covers only the Cedent's contractual liability for reinsured claims paid under the variable annuity contract forms specified in Schedule A. E. There are no aggregate or individual claim limits applicable to the benefits ceded. Page 2 F. Spousal Continuances Spousal continuances will be covered under this Agreement to the extent provided by the insured contract. Page 3 ARTICLE II COMMENCEMENT AND TERMINATION OF LIABILITY A. On liabilities ceded under the terms of this Agreement, the liability of the Reinsurer shall commence simultaneously with that of the Cedent. B. The liability of the Reinsurer for all ceded liabilities under this Agreement may terminate in accordance with: 1. the Duration of Agreement provisions of this Agreement set forth in Article XX; 2. the termination provisions set forth within Article VI; 3. the Recapture Privileges set forth in Article IX. or 4. the coverage provided by the contract terminates. Page 4 ARTICLE III ERRORS AND OMISSIONS A. Any inadvertent errors or omissions on the part of one party occurring in connection with this Agreement or any transaction hereunder shall not relieve the other party from any liability to the first party that would have otherwise attached had such error or omission not occurred, provided that such error or omission is rectified as soon as practicable after discovery thereof. B. The Reinsurer assumes no liability under this Agreement for any damages, fines, penalties, costs or expenses, or portion thereof, levied on or assessed against the Cedent by any court or regulatory body on the basis of negligence, oppression, malice, fraud, fault, wrongdoing or bad faith by the Cedent in connection with any claim or for any act or omission that is not consistent with the generally accepted practices and standards of the life insurance industry applicable at the time of such act or omission, unless the Reinsurer shall have received notice of and concurred with the actions taken or not taken by the Cedent that led to the levy or assessment, in which case the Reinsurer shall pay, as its share of such levy or assessment, the proportional amount determined by the ratio of reinsurance held by the Reinsurer to the total limit of liability under the Reinsured Contracts. C. Each party will indemnify and hold the other party, its affiliates, directors, officers, employees and all other persons and entities acting on behalf of or under the control of any of them harmless from and against any and all claims, including reasonable attorneys fees and court costs, that result from any negligent, dishonest, malicious, fraudulent or criminal act or omission or arising out of or related to any incorrect representation, warranty or obligation of this Agreement or any failure or breach of this Agreement by the indemnifying party, its directors, officers, employees, other representatives or any other person or entity acting on behalf of or under the control of any of them. D. In no event shall any party to this Agreement be liable to any other party for punitive, indirect or consequential damages arising under this Agreement for any cause whatsoever, whether or not such party has been advised or could have foreseen the possibility of such damages. Page 5 ARTICLE IV NET AMOUNT AT RISK GMDB AND EPB ------------ A. The MNAR (Mortality Net Amount at Risk) for each variable annuity contract ceded hereunder shall be equal to the following: MNAR = VNAR + SCNAR + EEMNAR in which: VNAR (Variable Net Amount at Risk) = Maximum (a,b) multiplied by the Reinsurer's Percentage (defined in Schedule A) in which: a = (Contractual Death Benefit - Account Value) and b = 0 SCNAR (Surrender Charge Net Amount at Risk) = Surrender Charges multiplied by the Reinsurer's Percentage EEMNAR (Earnings Enhancement Mortality Net Amount at Risk) = x% * Maximum (a,b) multiplied by the Reinsurer's Percentage where: x% varies by issue age as described under the Death Benefits Ceded section of Schedule A a = (Contractual Death Benefit - Total Purchase Payments Not Withdrawn) b = 0 B. The death benefit and the surrender charges will be as described in the variable annuity contract forms specified in Schedule A. GMIB ---- C. The IBNAR (Income Benefit Net Amount at Risk) for each variable annuity contract ceded hereunder shall be equal to the following: IBNAR = Maximum [(IBB * (MAPR/SAPR) - Account Value), 0] * Reinsurer's Percentage where: . The INCOME BENEFIT BASE (IBB) is as defined in Schedule A . The MINIMUM ANNUITY PURCHASE RATE (MAPR) per $1000 is calculated Page 6 using the following assumptions: Mortality Table Annuity 2000 (Exhibit I) Age Setback 7 Years Mortality Improvement None Unisex Blend: Sex distinct only Interest Rate: 2.5% all years Expenses: None Premium Taxes: Applied by state of residence and market Age: Attained age on exercise date Frequency of payment Monthly Annuity form: 1. Individual Basis: Limited to a Life Annuity with a Period Certain. The number of years of Period Certain is as defined below: Age at Annuitization Period Certain Years -------------------- -------------------- Up to 79 10 80 9 81 8 82 7 83 6 84-85 5 2. Joint Basis: Limited to a Joint and 100% Survivor Annuity with 10- Year Period Certain . The SETTLEMENT ANNUITY PURCHASE RATE (SAPR) per $1000, which is used at time of annuitization for reinsurance claims settlement shall be equal to the fixed annuity purchase rate that the Cedent would provide to an annuitant in the same class. Annuity form: 1. Individual Basis: Limited to a Life Annuity with a Period Certain The number of years of Period Certain is as defined below: Age at Annuitization Period Certain Years -------------------- -------------------- Up to 79 10 80 9 81 8 82 7 83 6 84-85 5 Page 7 2. Joint Basis: Limited to a Joint and 100% Survivor Annuity with 10- Year Period Certain D. Premium taxes will be applied on a consistent basis between the MAPR and SAPR to calculate the IBNAR. E. The IBNAR for each contract ceded 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. GWB --- F. The WBNAR (Withdrawal Benefit Net Amount at Risk) for each variable annuity contract ceded hereunder shall be equal to the following: WBNAR = Maximum [(GWB Benefit Base - Account Value), 0] * Reinsurer's Percentage (defined in Schedule A). A claim is incurred when the Account Value equals zero and is paid out in installments equal to the GWB Annual Benefit Payment (defined in Schedule A) consistent with the reinsured contract. Page 8 ARTICLE V REINSURANCE PREMIUMS A. The Cedent shall pay the Reinsurer an Initial Reinsurance Premium equal to $5,422,942. B. The total Reinsurance Premium for the business ceded hereunder is the sum of the GMDB Reinsurance Premium, the EPB Reinsurance Premium, the GMIB Reinsurance Premium, and the GWB Reinsurance Premium, each of which is defined separately in this article. C. The Reinsurance Premium rates and structure described above are subject to change in accordance with the criteria described in Article XV. GMDB Reinsurance Premium ------------------------ D. The GMDB Reinsurance Premium rates are expressed in terms of basis points and are defined in Exhibit II. E. The Cedent shall calculate, for each premium class, the Reinsurer's Percentage of the average aggregate account value for the reporting month. This value shall be applied to the GMDB Reinsurance Premium rates per premium class on a 1/12th basis. EPB Reinsurance Premium ----------------------- F. The EPB Reinsurance Premium rates are expressed in terms of basis points, and are defined in Exhibit II. G. The Cedent shall calculate the Reinsurer's Percentage of the average aggregate account value for the reporting month. This value shall be applied to the annualized EPB reinsurance premium rates per premium class on a 1/12th basis. GMIB Reinsurance Premium ------------------------ H. The GMIB Reinsurance Premium rates are expressed in terms of basis points, as set forth in Exhibit II, and shall be calculated on an aggregate basis. I. The Cedent shall calculate, for each premium class, the Reinsurer's Percentage of the average aggregate IBB value for the reporting month. This value shall be applied to the annualized GMIB cession premium rates on a 1/12th basis. GWB Reinsurance Premium ----------------------- J. The GWB Reinsurance Premium rates are expressed in terms of basis points and are defined in Exhibit II. Page 9 K. The Cedent shall calculate the Reinsurer's Percentage of the Guaranteed Withdrawal Amount for the reporting month. This value shall be applied to the annualized GWB Reinsurance Premium rates per premium class on a 1/12th basis. Page 10 ARTICLE VI REINSURANCE ADMINISTRATION A. Within thirty (30) days after the end of each calendar month, the Cedent shall take all reasonable and appropriate steps to furnish the Reinsurer with a seriatim electronic report, as detailed in Schedule B, for each Reinsured Contract, valued as of the last day of that month. Failure to provide this information as required shall constitute a material breach within the scope of Article XX, Paragraph E. B. Additionally, within thirty (30) days after the end of each calendar month the Cedent shall furnish the Reinsurer with a separate Summary Statement containing the following: 1. Reinsurance Premiums due to the Reinsurer summarized separately for each premium class by GMDB, EPB, Income Program, and Withdrawal Program, as shown in Exhibit II; 2. benefit claim recoverables due to the Cedent in total and, if applicable, broken down by VNAR, SCNAR, and EEMNAR, Income Program, and Withdrawal Program; and 3. the month end date for the period covered by the Summary Statement. C. If the net balance is due to the Reinsurer, the Cedent shall remit the amount due with the Summary Statement, but no later than thirty (30) days after the month end date for the period covered by the Summary Statement. If the net balance is due to the Cedent, the Reinsurer shall remit the amount due to the Cedent within ten (10) days after receipt of the Summary Statement. D. The payment of Reinsurance Premiums is a condition precedent to the liability of the Reinsurer under this Agreement. In the event that the Cedent does not pay the Reinsurance Premiums in a timely manner, as defined below, the Reinsurer may exercise the following rights: 1. The Reinsurer shall charge interest if Reinsurance Premiums are not paid within thirty (30) 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 Treasury Bill, as published in The Wall Street Journal on the first business day in the month following the due date of the Reinsurance Premiums, plus one hundred (100) basis points. The method of calculation shall be simple interest (360-day year). 2. The Reinsurer may terminate this Agreement in the event that Reinsurance Premium payments are more than sixty (60) days past due after the due date, as described in Paragraph C of this Article, by giving Page 11 sixty (60) day written notice of termination to the Cedent. As of the close of the last day of this sixty-(60) day notice period, the Reinsurer's liability with respect to the ceded liabilities shall terminate. If all Reinsurance Premiums that are the subject of a sixty (60) day termination notice shall have been received by the Reinsurer within the time specified, the termination notice shall be deemed vacated and the Agreement shall remain in effect. E. The Cedent will provide annually a listing of all portfolios in which the sub-accounts of the underlying contracts are invested. The listing shall be provided by May 31 in each calendar year. Page 12 ARTICLE VII SETTLEMENT OF CLAIMS A. GMDB and EPB: The Reinsurer shall indemnify the Cedent under this Agreement only for benefit claims that the Cedent paid as contractually required under a Reinsured Contract with respect to deaths that occur on or after the Effective Date. GMIB: The Reinsurer shall indemnify the Cedent under this Agreement only for benefit claims that the Cedent paid as contractually required under a Reinsured Contract 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. GWB: The Reinsurer shall indemnify the Cedent under this Agreement only for benefit claims that the Cedent paid as contractually required under a Reinsured Contract under the terms of the Withdrawal Program on or after the Effective Date. B. In the event that the Cedent provides satisfactory proof of claim liability to the Reinsurer, benefit claim settlements made by a Cedent and accepted by the Reinsurer shall be unconditionally binding on the Reinsurer. The Cedent shall report all approved benefit claims in bordereau including cause of death, as available, in such format as may be agreed to from time to time. C. GMDB and EPB: Within thirty (30) days after the end of each calendar month, the Cedent shall notify the Reinsurer of the ceded contractual death benefit claims paid in respect of Reinsured Contracts in that month, based on the net amount at risk definition, set forth in Article IV, and the Reinsurer shall indemnify the Cedent as provided in Article VI for the ceded benefit claim liabilities. GMIB: Within thirty (30) days of the end of each calendar month, the Cedent shall notify the Reinsurer of the ceded contractual Income Program benefits paid in respect of Reinsured Contracts in that month, based on the IBNAR definition set forth in Article IV, and the Reinsurer shall indemnify the Cedent as provided in Article VI for the ceded benefits. GWB: Within thirty (30) days of the end of each calendar month, the Cedent shall notify the Reinsurer of the ceded contractual Withdrawal Program benefits paid in respect of Reinsured Contracts in that month, based on the WBNAR definition set forth in Article IV, and the Reinsurer shall indemnify the Cedent as provided in Article VI for the ceded benefits. D. In no event will the Reinsurer be liable for expense incurred in connection with a dispute or contest arising out of conflicting or any other claims of entitlement to Reinsured Contract proceeds or benefits. Page 13 E. Settlements hereunder by the Reinsurer shall be made in a lump sum regardless of the mode of payment made by the Cedent. Page 14 ARTICLE VIII RESERVES A. The Reinsurer shall hold and report in its statutory financial statements reserves (the "Reserves") with respect to liabilities ceded under this Agreement in amounts equal to or greater than those required by the state in which its statement is filed. B. If required by the Cedent, as a condition of securing ceded reinsurance statement credit for a Cedent with respect to Reinsured Contracts, the Reinsurer shall contractually require any subsequent reinsurers to hold and report in their statutory financial statements reserves in amounts equal to or greater than those that would have been required of the Reinsurer. Page 15 ARTICLE IX RECAPTURE PRIVILEGES A. The Cedent may recapture existing cessions in force in accordance with the following rules: 1. The Cedent shall notify the Reinsurer of its intention to recapture at least ninety (90) days prior to any recapture. 2. The Cedent may not recapture a cession unless this Agreement shall have been in force for fifteen (15) years, as measured from the Effective Date until the date of recapture. 3. The recapture shall apply to all cessions in force under this Agreement. 4. Recapture shall take place ratably over a thirty-six (36) month period (i.e., each month, the initial percentage reduces 2.78% times the initial percentage). The election to recapture shall be irrevocable. Page 16 ARTICLE X INSPECTION OF RECORDS A. The Reinsurer and the Cedent and their employees and authorized representatives, respectively, may audit, inspect and examine, during regular business hours, at the home office of the other party, provided that reasonable advance notice has been given, any and all books, records, statements, correspondence, reports, and their related documents or other documents that relate to Reinsured Contracts. B. The audited, inspected or examined party shall provide a reasonable work space for such audit, inspection or examination, cooperate fully and disclose the existence of and produce any and all necessary and reasonable materials requested by such auditors, investigators or examiners. Each party will bear its own audit expenses. C. All such information, including audit, inspection and examination reports and analyses, shall be kept confidential as provided herein. Page 17 ARTICLE XI INSOLVENCY A. In the event of the insolvency of the Cedent, any amount payable hereunder shall be paid by the Reinsurer pursuant to the terms of this Agreement will be made directly to the Cedent or its conservator, liquidator, receiver or statutory successor. The reinsurance will be payable by the Reinsurer on the basis of the liability of the Cedent under the Reinsured Contracts without diminution because of such insolvency. B. The conservator, liquidator, receiver or statutory successor of the Cedent will give the Reinsurer written notice of the pendency of a claim against the Cedent on any policy reinsured within a reasonable time after such claim is filed in the insolvency proceeding. C. During the pendency of any such claim, the Reinsurer may investigate such claim and interpose in the Cedent's name or in the name of the Cedent's conservator, liquidator, receiver or statutory successor, in the proceeding where such claim is to be adjudicated, any defense or defenses which the Reinsurer may deem available to the Cedent or its conservator, liquidator, receiver or statutory successor. The expense thus incurred by the Reinsurer will be chargeable, subject to court approval, against the Cedent as a part of the expense of liquidation to the extent of a proportionate share of the benefit that may accrue to the Cedent solely as a result of the defense undertaken by the Reinsurer. D. In the event of the Reinsurer's insolvency, as defined below, this Agreement will be terminated with respect to all cessions that occurred on or after the date of the insolvency. The liability of the Reinsurer hereunder shall continue with respect to cessions that occurred prior to the date of the insolvency and are subject to the payment of a Terminal Accounting and Settlement. E. Insolvency, for purposes of the preceding paragraph, is defined to be: 1. the filing of a voluntary petition for liquidation by or on behalf of the Reinsurer; 2. any assignment for the benefit of creditors; or 3. the appointment of a conservator, liquidator, receiver or statutory successor to conserve or administer the Reinsurer's properties or assets The effective date of such termination will be the date of the earliest of (1), (2) or (3). Page 18 ARTICLE XII NEGOTIATION A. Within ten (10) days after one of the parties shall have given to the other a first written notice of a specific dispute, each party shall designate an officer to seek a negotiated settlement. The designated officers shall promptly meet at an agreed location and negotiate in good faith. B. If the officers cannot resolve the dispute within thirty (30) days after their first meeting, either party may commence arbitration proceedings. The parties may, however, agree, at any time to forego or terminate negotiations and proceed immediately to arbitration or to extend negotiations for an additional time certain. C. All rights shall be reserved to each party pending a settlement of a dispute and no admissions, offers or other actions taken in such negotiations in efforts to effect a voluntary settlement of the disputed matter shall be admissible in any subsequent arbitration proceedings. Page 19 ARTICLE XIII ARBITRATION A. All disputes and differences between the parties will be decided by arbitration, regardless of the insolvency of either party, unless the liquidator, receiver or statutory successor is specifically exempted from an arbitration proceeding by applicable law. B. Either party may initiate arbitration by providing written notification to the other party that sets forth (a) a brief statement of the issue(s); (b) the failure of the parties to reach agreement; and (c) the date of the demand for arbitration. C. The arbitration panel shall consist of three arbitrators who must be impartial and each of whom must, at that time, either be accredited as an arbitrator by ARIAS-US or be an active or former officer of a life insurance or reinsurance companies other than the parties or their affiliates. D. Each party shall select an arbitrator within thirty (30) days from the date of the demand. If either party shall refuse or fail to appoint an arbitrator within the time allowed, the party that has appointed an arbitrator may notify the other party that, if it has not appointed its arbitrator within the following ten (10) days, the arbitrator will appoint an arbitrator on its behalf. The two (2) arbitrators shall select the third arbitrator, who must also be, at that time, accredited by ARIAS-US as an Umpire, within thirty (30) days of the appointment of the second arbitrator. If the two arbitrators fail to agree on the selection of the third arbitrator within the time allowed, the Umpire Selection Procedures of ARIAS-US, as in force at that time, shall be used to select the third arbitrator. E. The arbitrators shall interpret this Agreement as an honorable engagement rather than merely as a legal obligation and shall consider equitable principles as well as industry custom and practice regarding the applicable insurance and reinsurance business. The arbitrators are released from judicial formalities and shall not be bound by strict rules of procedure and evidence. F. The arbitrators shall determine all arbitration schedules and procedural rules and may, in their discretion, use applicable ARIAS-US forms and procedures. Organizational and other meetings will be held in New York, NY, unless the arbitrators shall otherwise provide. The arbitrators shall decide all matters by majority vote. G. The decisions of the arbitrators shall be final and binding on both parties. The arbitrators may, in their discretion, award costs and expenses as they deem appropriate, including but not limited to legal fees and interest. Judgment may be entered upon the final decisions of the arbitrators in any court of competent jurisdiction. The arbitrators may not award any exemplary or punitive damages. Page 20 H. Unless the arbitrators shall provide otherwise, each party will be responsible for (a) all fees and expenses charged by its respective counsel, accountants, actuaries and other representatives in connection with the arbitration and (b) one-half of the expenses of the arbitration, including the fees of the arbitrators. Page 21 ARTICLE XIV RIGHT TO OFFSET BALANCES DUE All moneys due either the Cedent or the Reinsurer under this Agreement shall be offset against each other, dollar for dollar, regardless of any insolvency of the other party. Page 22 ARTICLE XV CONTRACT AND PROGRAM CHANGES A. The Cedent shall give the Reinsurer thirty (30) days prior written notice, unless otherwise agreed to by the Cedent and the Reinsurer, of any accepted changes to the Reinsured Contracts relating to a Cedent's annuity product design and/or death benefit design, fees and charges, distribution systems and/or methods or addition of any riders to any Reinsured Contract forms. B. The Cedent shall provide to the Reinsurer a copy of each general communication that the Cedent sends to contract holders in any state. C. The Cedent shall simultaneously provide to the Reinsurer and any subsequent retrocessionaires, a copy of any notice of any proposed change in the investment options supporting Reinsured Contracts, and/or any other accepted changes to the Reinsured Contracts related to a Cedent's annuity product design and/or death benefit design, fees, charges, distributions systems and/or methods or additions of any riders to any Reinsured Contract forms. Page 23 ARTICLE XVI CONFIDENTIALITY A. Each party shall maintain the confidentiality of all information, including legally protected personal information pertaining to individuals, that is provided to it by the other party in connection with this Agreement; provided, however, that this obligation of confidentiality shall not apply (a) if and to the extent that disclosure is required by applicable law or any court, governmental agency or regulatory authority or by subpoena or discovery request in pending litigation; (b) if the information is or becomes available from public information (other than as a result of prior unauthorized disclosure by the disclosing party); (c) if the information is or was received from a third party not known by the disclosing party to be under a confidentiality obligation with regard to such information; or (d) if the information was in the possession of the disclosing party (having received such information on a non-confidential basis) other than by reason of the services performed pursuant to this Agreement; provided, further, that legally protected information shall not be disclosed or used in violation of applicable law. B. In the event that either party becomes legally compelled to disclose any such confidential information, such party will give prompt written notice of that fact to the other party so that such other party may seek an appropriate remedy to prevent such disclosure; provided, however, that this provision shall not apply to information that is or otherwise becomes available to the public or that was previously available to the public on a non-confidential basis. C. Information may be disclosed (duplicating is permitted for such disclosure) to a party's directors, officers, employees, agents, affiliates (excluding Reinsurance Group of America, Incorporated, as an affiliate of the Cedent) and external advisors and their directors, officers, employees, professional advisers, agents and rating agencies (collectively, the "Representatives") and all such Representatives shall be advised of the terms of this Agreement and each party shall be responsible for any breach of the terms of this Agreement by its Representatives. Page 24 ARTICLE XVII OTHER PROVISIONS A. Notice. Written notices under this Agreement shall be effective when delivered to any party at the address provided herein: 1. If to the Cedent: Lisa Kuklinski-Ramirez MetLife Investors Insurance Company C/O Metropolitan Life Insurance Company One Madison Avenue, Area 2H New York, NY 10010 Phone: (212)578-1121 Fax: (212)578-9451 2. If to the Reinsurer: Tony Bibbings, C.A., Agent Exeter Reassurance Company, Ltd. C/O Beacher Carlson Management, Ltd. Continental Building 25 Church Street P.O. Box HM 2461 Hamilton HM JX, Bermuda Either party may change its address by giving the other party written notice of its new address; provided, however, that any notice of a change of address shall be effective only upon receipt. B. Administrative Communications and Payment Remittances. Each party shall, by written notice to the other, designate offices and depositaries for the receipt of administrative communications and payment remittances. Administrative communications and payments remittances shall be deemed delivered only upon actual receipt by the designated office or depositary, respectively. C. Amendment and Non Waiver. Any change or modification of this Agreement shall be null and void unless made by amendment to the Agreement and signed by both parties. No waiver by either party of any default by the other party in the performance of any promise, term or condition of this Agreement shall be construed to be a waiver by such party of any other or subsequent default in performance of the same or any other promise, term or condition of this Agreement. No prior transactions or dealings between the parties shall be deemed to establish any custom or usage waiving or modifying any provision hereof. The failure of either party to enforce any part of this Agreement shall not constitute a waiver by such party of its right to do so, nor shall it be deemed to be an act of ratification or consent. D. Assignment. This Agreement shall be binding on the parties and their respective successors and permitted assignees. This Agreement may not be assigned by Page 25 either party without the written consent of the other, which consent shall not be unreasonably withheld. E. Reinsured Contract Assignments. The Cedent may, in its discretion and without the separate consent of the Reinsurer, accept a substitution of a majority-owned affiliate of Metropolitan Life Insurance Company in lieu of any Cedent as to any Reinsured Contract, whether by assumption reinsurance or otherwise, with the Reinsured Contract continuing in force unchanged, which substitution shall be binding on the Reinsurer. F. Severability. In the event that any provision or term of this Agreement shall be held invalid, illegal or unenforceable, all of the other provisions and terms shall remain in full force and effect to the extent that their continuance is practicable and consistent with the original intent of the parties. In addition, if provisions or terms are held invalid, illegal or unenforceable, the parties will attempt in good faith to renegotiate the Agreement to carry out its original intent. G. Survival. All provisions of this Agreement shall, to the extent necessary to carry out the purposes of this Agreement or to ascertain and enforce the parties' rights hereunder, survive its termination. H. Choice of Law, Forum and Consent to Service. This Agreement is subject to and is to be interpreted in accordance with the laws of the State of New York without regard to the New York choice of law rules. While the parties contemplate that all disputes will be decide through negotiation or arbitration as provided herein, in the event of any legal proceedings, the parties shall submit to the exclusive jurisdiction of courts of the State of New York and the United States of America located in the City of New York and shall abide by the final decision of such courts. Each party hereby designates the Commissioner of Insurance of the State of Missouri as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the other party arising out of the Agreement. Process accepted by the Commissioner on behalf of party shall be forwarded to that party at the address specified herein. I. Settlements. Claim settlements made by the Cedent in good faith, including compromises, shall be unconditionally binding on the Reinsurer. J. Payments. All reinsurance settlements and other payments will be effected through off-setting balances, electronic funds transfers or as the parties may otherwise agree to carry out the purposes of this Agreement. K. Currency. All financial transactions under this Agreement shall be made in U. S. dollars. L. Intermediaries. Each party represents that all negotiations relative to this Agreement and the transactions contemplated hereby, including any subsequent Assumption Reinsurance Agreement with respect to the Reinsured Contracts, have been carried out by the Cedent and the Reinsurer directly and without the intervention of any Page 26 person in such manner as to give rise to any valid claim by any other person for a finder's fee, brokerage commission or similar payment. M. Construction Rules. Each party represents that its has been represented by and relied on the advice of counsel of its choice in the negotiation and drafting of the Agreement. The parties affirm that their respective counsel have had a substantial role in the drafting and negotiation of this Agreement and, therefore, the rule of construction that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any Schedule attached hereto. N. Authority. Each party represents that it has full power and authority to enter into and to perform this Agreement and that the person signing this Agreement on its behalf has been properly authorized and empowered to do so. Each party further acknowledges that it has read this Agreement, understands it and agrees to be bound by it. O. Changes. In the event the Cedent's liability to make any payment is changed due to a modification or cancellation of a Reinsured Contract, Reinsurer's liability to make any such payment shall also be changed in the same manner and to the same extent. In the event that the amount of liability provided by a Reinsured Contract is increased or reduced because of a misstatement of age or sex, the reinsurance liability of the Reinsurer shall be increased or reduced by the same amount. Any adjustments for this reason shall be made without interest. P. Unreasonable Refusal of Agreement. Neither party, acting unreasonably, will withhold agreement to any discretionary action for the sole purpose of terminating this Agreement or otherwise frustrating its purpose. Q. Independent Contractor. The parties shall be deemed to be independent contractors, each with full control over its respective business affairs and operations. This Agreement shall not be construed as a partnership or joint venture and neither party hereto shall be liable for any obligations incurred by the other party except as expressly provided herein. R. Schedules, Exhibits and Captions. Schedules and Exhibits attached hereto are incorporated into this Agreement. Captions are provided for reference only. S. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument. T. The Cedent shall notify the Reinsurer in advance of entry into any amendment to the Reinsurance Agreement and, in the event that such amendment would materially change the ceded liabilities, the parties shall modify the provisions of this Agreement to restore the Reinsurer to its original position unless the parties shall agree otherwise. Page 27 ARTICLE XVIII ENTIRE AGREEMENT This Agreement, together with Schedules A and B, and Exhibits I and II supercedes all prior discussions and agreements between the parties and constitutes their sole and entire agreement with respect to Reinsured Contracts and there are no understandings between the parties other than as expressed herein. Page 28 ARTICLE XIX DAC TAX A. The parties will make a joint election, in accordance with Treas. Reg. 1.848- 2(g)(8), issued December 28, 1992, under (S) 848 of the Internal Revenue Code and the party with the net positive consideration under this Agreement will capitalize specified policy acquisition expenses with respect to this Agreement without regard to the general deductions limitations of (S) 848(c)(1) of the Code; 1. the election will take effect on the Effective Date and will remain in effect for all subsequent years that this Agreement remains in effect; and 2. each party shall attach a schedule to its federal income tax return for its first taxable year ending after the election becomes effective that identifies the agreements (including this Agreement) for which joint elections have been made under this Regulation. B. Pursuant to this joint election: 1. each party will exchange information pertaining to the amount of net consideration under this Agreement to assure consistency or as may otherwise be required by the Internal Revenue Service; 2. Cedent will submit its calculation of the "net consideration" as defined under the above referenced regulation to Reinsurer not later than May 1 for each and every tax year for which this Agreement is in effect; 3. Reinsurer may challenge such calculation within ten (10) working days of receipt of the Cedent's calculation; and 4. the parties will act in good faith to reach agreement as to the correct amount of net consideration whenever there is disagreement as to the amount of net consideration as determined under Treas. Reg. 1.848-2(f). C. Each party represents and warrants that it is subject to U. S. taxation under Subchapter L of Chapter 1 of the Code. Page 29 ARTICLE XX DURATION OF AGREEMENT A. Cessions may be made while this Agreement is in force. B. Either the Cedent of the Reinsurer may cancel this Agreement for future cessions upon ninety (90) days prior written notice. C. Except as otherwise provided herein, the Agreement shall be unlimited in duration but may be reduced or terminated for future cessions. D. This Agreement shall remain in force as provided herein until the termination of the Cedent's liability on the Reinsured Contracts. E. Either party may terminate this Agreement in the event that the other party is in material breach of the terms or conditions of this Agreement provided that the terminating party has notified the other party of the breach and the other party has not initiated the cure of such breach within thirty (30) days after such notice to be effectuated as promptly as possible. F. In the event that a Cedent shall terminate a Reinsurance Agreement for the cession of new annuity contract liabilities because, in its discretion, after a good faith effort, it was unable to obtain regulatory credit for reinsurance ceded to the Reinsurance Agreement, this Agreement shall continue in effect, on a run-off basis, for all annuity contract liabilities ceded by that Cedent prior to the Reinsurance Agreement termination date; provided, however, that the Cedent has made a good faith effort to obtain regulatory credit for reinsurance ceded to the Reinsurance Agreement. Page 30 ARTICLE XXI NON-ADMITTED REINSURANCE A. Security Requirement. In the event that the Cedent shall, at any time, -------------------- notify the Reinsurer of its determination that security for reinsurance recoverables hereunder is or may be necessary for the Cedent to obtain any associated regulatory statement credit for reinsurance ceded to this Agreement on account of the Reinsurer being neither admitted or accredited as a reinsurer, the Reinsurer shall establish a trust ("the Trust") in accordance with Section B of this Article or the Reinsurer shall provide a letter of credit (an "LOC") in accordance with Section C of this Article. B. Trust Agreement. --------------- 1. Except as may be provided in Section C of this Article, the Cedent and the Reinsurer shall enter in to a Trust Agreement that complies with regulations of the domiciliary state of the Cedent, establishing a Trust Account for the benefit of the Cedent to cover the recoverables and/or Statutory Reserves attributable to the Reinsured Policies. The Trustee shall be a bank, acceptable to each party, that is organized in the United States; that is regulated, supervised and examined by federal or state banking regulatory authorities; and that meets any other applicable regulatory financial condition standards. The bank shall not be a parent, subsidiary or affiliate of the Cedent or Reinsurer. 2. This Trust Agreement is intended to secure Annual Statement credit for reinsurance ceded by the Cedent to the Reinsurer in accordance with regulations of the domiciliary state of the Cedent and, in the event that the parties fail to enter into the Trust Agreement and fund the Trust Account, as provided herein, within five (5) working days after this Agreement shall have been signed by both parties, this Agreement, unless the parties otherwise provide, shall be null and void. 3. Assets having a value at least equal to 102% of the Statutory Reserves attributable to the Reinsured Policies shall be deposited into the Trust Account and maintained at all times until its dissolution. Assets deposited in the Trust Account shall be valued according to their current fair market value, as determined under the statutory accounting rules of the domiciliary state of the Cedent, and shall consist only of cash (United States legal tender) and such domiciliary state statutorily permitted investments that are not issued by a parent, subsidiary or affiliate of either party. 4. Prior to depositing assets with the Trustee, the Reinsurer shall execute assignments, endorsements in blank or transfer legal title to the Trustee of all shares, obligations or any other assets requiring assignment in order that the Cedent or the Trustee, upon direction of the Cedent, may, whenever, necessary, negotiate any such assets without consent or signature from the Reinsurer of an Page 31 other person or entity, other than the Trustee, in accordance with the terms of the Trust Agreement. 5. Assets in the Trust Account, established hereunder, may be withdrawn by the Cedent at any time, notwithstanding any other provisions of this Agreement, and shall be utilized and applied by the Cedent or any successor of the Company by operation of law, including without limitation any liquidator, rehabilitator, receiver or conservator of the Cedent, without diminution because of insolvency on the part of the Ceding Company or the Reinsurer, only for the following purposes: i. to reimburse the Cedent for the Reinsurer's share of premiums returned to the owners of the Policies on account of cancellations of such Policies; ii. to reimburse the Cedent for the Reinsurer's share of benefits claims paid by the Cedent under the terms and provisions of the Policies; iii. to fund an account with the Cedent in an amount at least equal to the ceded reinsurance deduction from the Cedents Policy liabilities hereunder, which amount shall include, but not be limited to, reserves for benefit claims incurred (including benefit claims incurred but not reported) iv. to pay any other amounts that the Cedent claims to be due hereunder 6. With the approval of the Cedent, the Reinsurer may withdraw from the Trust Account all or any part of the assets contained therein and transfer such assets to the Reinsurer; provided i. the Reinsurer shall, at the time of such withdrawal, replace the withdrawn assets with other qualified assets having a market value equal to the market value of the assets withdrawn so as to maintain the Trust Account at the required amount at all times; or ii. after such withdrawals and transfers, the market value of the Trust Account is not less than 102% of the required amount. The Cedent shall be the sole judge as to the application of this provision, but shall not unreasonably or arbitrarily withhold its approval. 7. The Cedent will return any amounts drawn on the LOC in excess of the actual amounts required for subparagraphs (i), (ii) and (iv) of paragraph 5 or, in the case of subparagraph (iii) of paragraph 5, any amounts that are subsequently determined not to be due. The Cedent will pay interest on amounts withdrawn in excess of the actual amount required under subparagraph (iii) of paragraph 5 at a rate equal to the "Prime Rate" published in The Wall Street Journal (currently the base rate on corporate loans posted by at least 75% of the nation's 30 largest banks), which rate shall be adjusted on the last day of each month; and 8. All of the foregoing provisions are to be applied without diminution because of insolvency on the part of either party. Page 32 C. Letters of Credit. ----------------- 1. The Reinsurer will provide an LOC that complies with regulations of the domiciliary state of the Cedent. 2. The Reinsurer shall be the LOC applicant. The Trustee shall be a bank, acceptable to each party, that is organized in the United States; that is regulated, supervised and examined by federal or state banking regulatory authorities; and that meets National Association of Insurance Commissioners-Securities Valuation Office standards for acceptable LOC issuance. The bank shall not be a parent, subsidiary or affiliate of the Cedent or Reinsurer. 3. The LOC may be drawn at any time, notwithstanding any other provisions herein and may be utilized by the Cedent or any successor by operation of law, including without limitation any liquidator, rehabilitator or receiver of the Cedent for the following purposes: i. to reimburse the Cedent for the Reinsurer's share of Policy premiums returned on account of cancellations; ii. to reimburse the Cedent for the Reinsurer's share of benefit claims paid by the Cedent under the terms and provisions of the Policies; iii. to fund an account with the Cedent in an amount at least equal to the ceded reinsurance deduction from the Cedents Policy liabilities hereunder, which amount shall include, but not be limited to, reserves for benefit claims incurred (including benefit claims incurred but not reported) iv. to pay any other amounts that the Cedent claims to be due hereunder 4. The Cedent will return any amounts drawn on the LOC in excess of the actual amounts required for subparagraphs (i), (ii) and (iv) of this paragraph or, in the case of subparagraph (iii) of this paragraph, any amounts that are subsequently determined not to be due. The Cedent will pay interest on amounts withdrawn in excess of the actual amount required under subparagraph (iii) at a rate equal to the "Prime Rate" published in The Wall Street Journal (currently the base rate on corporate loans posted by at least 75% of the nation's 30 largest banks), which rate shall be adjusted on the last day of each month; and (e) All of the foregoing provisions are to be applied without diminution because of insolvency on the part of either party. Page 33 ARTICLE XXII CEDENT REPRESENTATIONS AND WARRANTIES The Cedent represents and warrants, to the best of its knowledge, the following: 1. Corporate Status. The Cedent is duly licensed, qualified or admitted to do ---------------- business and is in good standing in all jurisdictions in which it is required to be so qualified, licensed or admitted to do business by the laws thereof. 2. Authority. The Cedent has the full corporate power and authority to carry --------- out and perform its undertakings and obligations under this Agreement. This Agreement has been duly and validly signed and delivered by the Cedent. The Cedent shall maintain in force all such legal and regulatory authorizations as may be reasonably necessary or appropriate for the performance of its obligations under this Agreement. 3. Other Reinsurance. The Cedent maintains the right to enter into other ----------------- reinsurance agreements affecting the Policies reinsured. However, the Cedent will maintain net for it's own account at least a 10% quota share of risk. 4. Tax Status. The Cedent represents and warrants that it is subject to U. S. ---------- taxation under Subchapter L of Chapter 1 of the Code. Page 34 ARTICLE XXIII REINSURER REPRESENTATIONS AND WARRANTIES The Reinsurer represents and warrants, to the best of its knowledge, the following: 1. Corporate Status. The Reinsurer is duly licensed, qualified or admitted to ---------------- do exempt insurance business and is in good standing in Hamilton, Bermuda. 2. Authority. The Reinsurer has the full corporate power and authority to --------- carry out and perform its undertakings and obligations under this Agreement. This Agreement has been duly and validly signed and delivered by the Reinsurer. The Reinsurer shall at maintain in force all such legal and regulatory authorizations as may be reasonably necessary or appropriate for the performance of its obligations under this Agreement. 3. License Status. The Reinsurer is not an authorized insurer or accredited -------------- reinsurer in Missouri. The Reinsurer shall notify the Ceding Company within five (5) days after the date of any change in its status. 4. Tax Status. The Reinsurer is subject to U.S. taxation under Subchapter L of ---------- Chapter 1 or Subpart F of Part II of Subchapter N or Chapter 1 of the Internal Revenue Code. Page 35 IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the date first above written. METLIFE INVESTORS INSURANCE COMPANY By: /s/ Richard C. Pearson -------------------------------- Title: Executive Vice President -------------------------------- EXETER REASSURANCE COMPANY, LTD. By: /s/ RBB -------------------------------- Title: President -------------------------------- Schedule A Plans of Reinsurance Schedule B Required Data and Suggested Layout Exhibit I 1994 Variable Annuity MGDB Mortality Tables Mortality Table - Income Program (Annuity 2000 Valuation) Projection Scale G Exhibit II Reinsurance Premiums Page 36 SCHEDULE A PLANS OF REINSURANCE A. Reinsurer's Percentage: Prior to July 1, 2004, 25% of the business described herein. Effective, July 1, 2004, 100% of the business described herein. B. Effective Date: April 1, 2001. C. Death Benefits Ceded: Guaranteed Minimum Death Benefits (GMDB) ---------------------------------------- . Principal Protection: Return of Premium - Added by amendment as of July 1, 2004. . Annual Step-Up Benefit: Maximum Anniversary Value to attained age 80; GMDB frozen thereafter. . Greater of 5% Index and Annual Step-Up: Greater maximum Anniversary Value to attained age 80 and 5% Rollup to attained age 80; GMDB frozen thereafter. Note: Withdrawals reduce the death benefit proportionately. Earnings Preservation Benefits (EPB) ------------------------------------ . Before the contract anniversary immediately prior to the owner's 81st birthday, the EPB is, 40% of (a) - (b) for issue ages 0-69 25% of (a) - (b) for issue ages 70-79, where (a) is the death benefit under the contract, and (b) is the total Purchase Payments not withdrawn. For purposes of calculating this value, partial withdrawals are first applied against earnings in the contract (Earnings are equal to the Account Value less Purchase Payments not withdrawn), and then against Purchase Payments not withdrawn. . On or after the contract anniversary immediately prior to the owner's 81st birthday, the EPB is, 40% of (a) - (b) for issue ages 0-69 25% of (a) - (b) for issue ages 70-79, where Page 37 SCHEDULE A PLANS OF REINSURANCE (PAGE 2 OF 4) (a) is the death benefit under the contract anniversary immediately prior to the owner's 81st birthday, increased by subsequent Purchase Payments and reduced proportionately by the percentage reduction in Account Value attributable to each subsequent partial withdrawal; and (b) is the total Purchase Payments not withdrawn. For purposes of calculating this value, partial withdrawals are first applied against earnings in the contract (Earnings are equal to the Account Value less Purchase Payments not withdrawn), and then against Purchase Payments not withdrawn. Gain = (a) - (b) as defined above. D. GMIB (Contractual Income Program Benefit) Ceded: Income Benefit Base (IBB) ------------------------- Version 1 - Greater of an Annual Ratchet to attained age 80 and a 6% Rollup to attained age 80; frozen thereafter. The IBB is reduced proportionately for withdrawals. Version 2 - Greater of an Annual Ratchet to attained age 80 and a 5% Rollup to attained age 80; frozen thereafter. The IBB is reduced proportionately for withdrawals. Waiting Period -------------- Contractholders can elect to annuitize under the Income Program thirty (30) days prior to their tenth (10th) or later contract anniversary and also under one of the life annuity forms stated in Article IV. 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 below under Paragraph E. Income Program Rider Election ----------------------------- The contractholder can only elect the Income Program Rider at issue. Once election is made, it is irrevocable. Income Program Rider Cancellation --------------------------------- The contractholder of the annuity can not cancel the Income Program rider at any time. Step-Up or Reset of IBB ----------------------- Not Available. Page 38 SCHEDULE A PLANS OF REINSURANCE (PAGE 3 OF 4) E. Guaranteed Withdrawal Benefit (GWB) Ceded GWB Benefit Base ---------------- . Benefit Base when account value reaches zero, paid out in equal installments . Initial Benefit Base = Initial Deposit x (1 + 5% Bonus Rate) . Additional deposits increase the Benefit Base . Withdrawals decrease the Benefit Base . Benefit Base may be reset at an optional reset date Guaranteed Withdrawal Amount ---------------------------- . Initial Guaranteed Withdrawal Amount = Initial Benefit Base . Additional Deposits may increase the Guaranteed Withdrawal Amount . Withdrawals do not decrease the Guaranteed Withdrawal Amount . Guaranteed Withdrawal Amount may be reset at an optional reset date GWB Annual Benefit Payment -------------------------- . The maximum income amount payable in a contract year. . Equal to GWB Benefit Base x 5% Page 39 SCHEDULE A PLANS OF REINSURANCE (PAGE 4 OF 4) F. Reinsured Contracts: METLIFE INVESTORS INSURANCE COMPANY Deferred Annuity Contracts -------------------------- VA Class Contract (Standard Contract, 7-year surrender charge schedule) XC Class Contract (Bonus Contract, 9-year surrender charge schedule) AA Class Contract (Standard Contract, 7-year surrender charge schedule, A. G. Edwards distribution) B Class Contract (Standard Contract, 7-year surrender charge schedule, Edward Jones distribution) L Class Contract (3-year surrender charge schedule) C Class Contract (No surrender charges) A Class Contract (Front-end load) Form Numbers ------------ 1. Death Benefit Rider (Greater of Annual Step-Up and 5% Annual Increase), Form 7016(11/00) 2. Death Benefit Rider (Annual Step-Up) Form 7017 (11/00) 3. Additional Death Benefit (EPB) Rider Form 7019 (11/00) 4. Guaranteed Minimum Income Benefit Form 7018 (11/00) 5. Guaranteed Minimum Income Benefit Form 7018-1 (03/03) 6. Guaranteed Withdrawal Benefit Form MLI-690-1 (7/04) 7. Death Benefit Rider (Principle Protection) Form 7015 (11/00) Page 40 SCHEDULE B 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) Page 41 SCHEDULE B 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 X% of Death Benefit less Net Purchase Payments Earnings Death Benefit less Net Purchase Payments Earnings CAP X% of Net Purchase Payments 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 GWB SECTION (if applicable) --------------------------- GWB Indicator Y = benefit elected, N = benefit not elected, C = rider cancelled GWB Election Date YYYYMMDD Total-GWB-Benefit-Base-Amt Total-GWB-Guar-Withdrl-Amt Total-GWB-Ann-Benefit-Pymnt Total-GWB-Rem-Ann-Bnft-Pymnt Tota-GWB-Rider-Charge GWB-Optn-Reset-Date 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 ceded percentage
Page 42 SCHEDULE B 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
Page 43 EXHIBIT I 1994 VARIABLE ANNUITY MGDB MORTALITY TABLE (APPLIED AGE LAST BIRTHDAY AT ATTAINED AGE) Attained Age Male Qx Female Qx ------------ -------- --------- 1 0 000587 0.000519 0.000433 0.000358 3 0.000350 0.000268 4 0.000293 0.000218 5 0.000274 0.000201 6 0.000263 0.000188 7 0.000248 0.000172 8 0.000234 0.000158 9 0.000231 0.000154 10 0.000239 0.000159 11 0.000256 0.000169 12 0.000284 0.000185 13 0.000327 0.000209 14 0.000380 0.000239 15 0.000435 0.000271 16 0.000486 0.000298 17 0.000526 0.000315 18 0.000558 0.000326 19 0.000586 0.000333 20 0.000613 0.000337 21 0.000642 0.000340 22 0.000677 0.000343 23 0.000717 0.000344 24 0.000760 0.000344 25 0.000803 0.000346 26 0.000842 0.000352 27 0.000876 0.000364 28 0.000907 0.000382 29 0.000935 0.000403 30 0.000959 0.000428 31 0.000981 0.000455 32 0.000997 0.000484 33 0.001003 0.000514 34 0.001005 0.000547 35 0.001013 0.000585 36 0.001037 0.000628 37 0.001082 0.000679 38 0.001146 0.000739 39 0.001225 0.000805 40 0.001317 0.000874 41 0.001424 0.000943 42 0.001540 0.001007 43 0.001662 0.001064 44 0.001796 0.001121 45 0.001952 0.001186 46 0.002141 0.001269 47 0.002366 0.001371 48 0.002618 0.001488 49 0.002900 0.001619 50 0.003223 0.001772 51 0.003598 0.001952 52 0.004019 0.002153 53 0.004472 0.002360 54 0.004969 0.002589 55 0.005543 0.002871 56 0.006226 0.003241 57 0.007025 0.003713 58 0.007916 0.004270 59 0.008907 0.004909 60 0.010029 0.005636 61 0.011312 0.006460 62 0.012781 0.007396 63 0.014431 0.008453 64 0.016241 0.009611 65 0.018191 0.010837 66 0.020259 0.012094 67 0.022398 0.013318 68 0.024581 0.014469 69 0.026869 0.015631 70 0.029363 0.016957 71 0.032169 0.018597 72 0.035268 0.020599 73 0.038558 0.022888 74 0.042106 0.025453 75 0.046121 0.028372 76 0.050813 0.031725 77 0.056327 0.035505 78 0.062629 0.039635 79 0.069595 0.044161 80 0.077114 0.049227 81 0.085075 0.054980 82 0.093273 0.061410 83 0.101578 0.068384 84 0.110252 0.075973 85 0.119764 0.084432 86 0.130583 0.094012 87 0.143012 0.104874 88 0.156969 0.116968 89 0.172199 0.130161 90 0.188517 0.144357 91 0.205742 0.159461 92 0.223978 0.175424 93 0.243533 0.192270 94 0.264171 0.210032 95 0.285199 0.228712 96 0.305931 0.248306 97 0.325849 0.268892 98 0.344977 0.290564 99 0.363757 0.313211 100 0.382606 0.336569 101 0.401942 0.360379 102 0.422569 0.385051 103 0.445282 0.411515 104 0.469115 0.439065 105 0.491923 0.465584 106 0.511560 0.488958 107 0.526441 0.507867 108 0.536732 0.522924 109 0.543602 0.534964 110 0.547664 0.543622 111 0.549540 0.548526 112 0.550000 0.550000 113 0.550000 0.550000 114 0.550000 0.550000 115 1.000000 1.000000 Page 44 EXHIBIT I MORTALITY TABLE - INCOME PROGRAM 2000 VALUATION (PER THOUSAND RATES) (APPLIES AT ATTAINED AGE) Age Male - qx's Female - qx's ----- ----------- ------------- 5 0.291 0.171 6 0.270 0.141 7 0.257 0.118 8 0.294 0.118 9 0.325 0.121 10 0.350 0.126 11 0.371 0.133 12 0.388 0.142 13 0.402 0.152 14 0.414 0.164 15 0.425 0.177 16 0.437 0.190 17 0.449 0.204 18 0.463 0.219 19 0.480 0.234 20 0.499 0.250 21 0.519 0.265 22 0.542 0.281 23 0.566 0.298 24 0.592 0.314 25 0.616 0.331 26 0.639 0.347 27 0.659 0.362 28 0.675 0.376 29 0.687 0.389 30 0.694 0.402 31 0.699 0.414 32 0.700 0.425 33 0.701 0.436 34 0.702 0.449 35 0.704 0.463 36 0.719 0.481 37 0.749 0.504 38 0.796 0.532 39 0.864 0.567 40 0.953 0.609 41 1.065 0.658 42 1.201 0.715 43 1.362 0.781 44 1.547 0.855 45 1.752 0.939 46 1.974 1.035 47 2.211 1.141 48 2.460 1.261 49 2.721 1.393 50 2.994 1.538 51 3.279 1.695 52 3.576 1.864 53 3.884 2.047 54 4.203 2.244 55 4.534 2.457 56 4.876 2.689 57 5.228 2.942 58 5.593 3.218 59 5.988 3.523 60 6.428 3.863 61 6.933 4.242 62 7.520 4.668 63 8.207 5.144 64 9.008 5.671 65 9.940 6.250 66 11.016 6.878 67 12.251 7.555 68 13.657 8.287 69 15.233 9.102 70 16.979 10.034 71 18.891 11.117 72 20.967 12.386 73 23.209 13.871 74 25.644 15.592 75 28.304 17.564 76 31.220 19.805 77 34.425 22.328 78 37.948 25.158 79 41.812 28.341 80 46.037 31.933 81 50.643 35.985 82 55.651 40.552 83 61.080 45.690 84 66.948 51.456 85 73.275 57.913 86 80.076 65.119 87 87.370 73.136 88 95.169 81.991 89 103.455 91.577 90 112.208 101.758 91 121.402 112.395 92 131.017 123.349 93 141.030 134.486 94 151.422 145.689 95 162.179 156.846 96 173.279 167.841 97 184.706 178.563 98 196.946 189.604 99 210.484 201.557 100 225.806 215.013 101 243.398 230.565 102 263.745 248.805 103 287.334 270.326 104 314.649 295.719 105 346.177 325.576 106 382.403 360.491 107 423.813 401.054 108 470.893 447.860 109 524.128 501.498 110 584.004 562.563 111 651.007 631.645 112 725.622 709.338 113 808.336 796.233 114 899.633 892.923 115 1000.000 1000.000 Page 45 EXHIBIT I PROJECTION SCALE G Age Male Female ----- ----- ------ 5 1.50% 1.50% 6 1.50% 1.50% 7 1.50% 1.50% 8 1.25% 1.40% 9 1.00% 1.30% 10 0.75% 1.20% 11 0.50% 1.10% 12 0.25% 1.00% 13 0.24% 0.90% 14 0.23% 0.80% 15 0.22% 0.70% 16 0.21% 0.60% 17 0.20% 0.50% 18 0.18% 0.50% 19 0.16% 0.50% 20 0.14% 0.50% 21 0.12% 0.50% 22 0.10% 0.50% 23 0.10% 0.55% 24 0.10% 0.60% 25 0.10% 0.65% 26 0.10% 0.70% 27 0.10% 0.75% 28 0.23% 0.85% 29 0.36% 0.95% 30 0.49% 1.05% 31 0.62% 1.15% 32 0.75% 1.25% 33 1.00% 1.45% 34 1.25% 1.65% 35 1.50% 1.85% 36 1.75% 2.05% 37 2.00% 2.25% 38 2.00% 2.25% 39 2.00% 2.25% 40 2.00% 2.25% 41 2.00% 2.25% 42 2.00% 2.25% 43 1.95% 2.20% 44 1.90% 2.15% 45 1.85% 2.10% 46 1.80% 2.05% 47 1.75% 2.00% 48 1.75% 2.00% 49 1.75% 2.00% 50 1.75% 2.00% 51 1.75% 2.00% 52 1.75% 2.00% 53 1.70% 1.95% 54 1.65% 1.90% 55 1.60% 1.85% 56 1.55% 1.80% 57 1.50% 1.75% 58 1.50% 1.75% 59 1.50% 1.75% 60 1.50% 1.75% 61 1.50% 1.75% 62 1.50% 1.75% 63 1.50% 1.75% 64 1.50% 1.75% 65 1.50% 1.75% 66 1.50% 1.75% 67 1.50% 1.75% 68 1.45% 1.75% 69 1.40% 1.75% 70 1.35% 1.75% 71 1.30% 1.75% 72 1.25% 1.75% 73 1.25% 1.70% 74 1.25% 1.65% 75 1.25% 1.60% 76 1.25% 1.55% 77 1.25% 1.50% 78 1.25% 1.50% 79 1.25% 1.50% 80 1.25% 1.50% 81 1.25% 1.50% 82 1.25% 1.50% 83 1.25% 1.50% 84 1.25% 1.50% 85 1.25% 1.50% 86 1.25% 1.50% 87 1.25% 1.50% 88 1.20% 1.45% 89 1.15% 1.40% 90 1.10% 1.35% 91 1.05% 1.30% 92 1.00% 1.25% 93 1.00% 1.25% 94 1.00% 1.25% 95 1.00% 1.25% 96 1.00% 1.25% 97 1.00% 1.25% 98 0.80% 1.00% 99 0.60% 0.75% 100 0.40% 0.50% 101 0.20% 0.25% 102 0.00% 0.00% 103 0.00% 0.00% 104 0.00% 0.00% 105 0.00% 0.00% 106 0.00% 0.00% 107 0.00% 0.00% 108 0.00% 0.00% 109 0.00% 0.00% 110 0.00% 0.00% 111 0.00% 0.00% 112 0.00% 0.00% 113 0.00% 0.00% 114 0.00% 0.00% 115 0.00% 0.00% Page 46 EXHIBIT II REINSURANCE PREMIUMS A. GMDB PROGRAM
REINSURANCE PREMIUM GMDB PROGRAM PRODUCTS COVERED (BASIS POINTS) --------------------------------- -------------------------------- ------------------- Principal Protection All Products 9.00 Annual Step-up to attained age 80 Class A, B & AA Products sold 10.00 prior to May 1, 2004 and All Other Products sold prior to May 1, 2003 Annual Step-up to attained age 80 Class A, B & AA Products sold 20.00 after April 30, 2004 and All Other Products sold after April 30, 2003 Max (Annual Step-Up, 5% Rollup) Class A, B & AA Products sold 25.00 to attained age 80 prior to May 1, 2004 and All Other Products sold prior to May 1, 2003 Max (Annual Step-Up, 5% Rollup) Class A, B & AA Products sold 35.00 to attained age 80 after April 30, 2004 and All Other Products sold after April 30, 2003 Earnings Preservation Benefit All Products 25.00
B. INCOME PROGRAM
REINSURANCE PREMIUM INCOME PROGRAM PRODUCTS COVERED (BASIS POINTS) --------------------------------- -------------------------------- ------------------- Income Program Rider All Products sold prior to 35.00 February 15, 2003 Income Program Rider All Products except Classes A, 45.00 B & AA sold after April 30, 2003 and for Class AA sold after April 30, 2004, if GMDB program is Annual Step or Max of Annual Step and Rollup Income Program Rider All other Products sold after 50.00 February 14, 2003
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