EX-99.G 7 plandausaagreement.htm PL AND AUSA AGREEMENT

AUTOMATIC AND FACULTATIVE YEARLY RENEWABLE TERM
REINSURANCE AGREEMENT

1. PARTIES TO THE AGREEMENT

This Agreement is solely between AUSA and PRUCO, a life insurance company domiciled in the State of Arizona. There is no
third party beneficiary to this Agreement. Reinsurance under this Agreement will not create any right or legal relationship
between AUSA and any other person, for example, any insured, policyowner, agent, beneficiary, or assignee. PRUCO agrees
that it will not make AUSA a party to any litigation between any such third party and PRUCO. PRUCO will not use or disclose
AUSA's name with regard to PRUCO's agreements or transactions with these third parties unless AUSA gives prior written
approval for the use or disclosure of its name or unless PRUCO is compelled by law to do so.

The terms of this Agreement are binding upon the parties, their representatives, successors, and assigns. The parties to
this Agreement are bound by ongoing and continuing obligations and liabilities until the later of (1) when this Agreement
terminates and (2) when the underlying policies are no longer in force. This Agreement shall not be bifurcated, partially
assigned, or partially assumed.

2. EFFECTIVE DATE OF THE AGREEMENT

This Agreement will be effective as of 12:01 A.M., January 1, 2000, and will cover policies effective on and after that date.

3. SCOPE OF THE AGREEMENT

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

4. DURATION OF THE AGREEMENT

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

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

Existing reinsurance will not be affected by the termination of this Agreement with respect to new reinsurance. Existing
reinsurance will remain in force until the termination or expiry of the underlying policies on which the reinsurance is
based as long as PRUCO continues to pay reinsurance premiums as described in Section 12. However, existing reinsurance may
be terminated in accordance with the recapture provision described in Section 20.

5. BASIS OF REINSURANCE

Reinsurance under this Agreement will be on the Yearly Renewable Term basis for the net amount at risk on the portion of
each policy that is reinsured as described in Schedule A.

6. AUTOMATIC REINSURANCE TERMS

AUSA agrees to automatically accept contractual risks on the life insurance plans shown in Schedule A, subject to the
following requirements:

a. CONVENTIONAL UNDERWRITING. Automatic reinsurance applies only to insurance applications underwritten by PRUCO according to
PRUCO's conventional underwriting and issue practices. Upon request, PRUCO shall provide AUSA with a copy of its
current underwriting and issue practices and guidelines.

In the event of significant changes in underwriting practices in the industry, it may be appropriate for PRUCO or AUSA
to request of the other party changes in the underwriting requirements. The party requesting the change must provide a
120-day advance written notice to the other party before the effective date of such change. Recognition of reinsurance
premium rates related to these changes must be determined within the 120-day period. If the underwriting change or rate
change is unacceptable to either party, this Agreement may be unilaterally terminated for acceptance of new business
with a 90-day written termination notice to the other party.

b. RESIDENCE. To be eligible for automatic reinsurance, each insured must either be a resident of the United States or Canada
at the time of issue or be a resident of another country that meets PRUCO's special underwriting requirements pertaining
to foreign residence.

c. OCCUPATION. To be eligible for automatic reinsurance, the insured must not be employed in an occupation as shown in the
Occupation Exclusion List in Schedule A.

d. AUTOMATIC PORTION REINSURED. For any policy reinsured under automatic reinsurance, the portion reinsured is shown in
Schedule A.

e. RETENTION. PRUCO will retain, and not otherwise reinsure, an amount of insurance on each life equal to its retention shown
in Schedule A.

f. AUTOMATIC ACCEPTANCE LIMIT. For any policy to be reinsured under automatic reinsurance, the face amount shall not exceed
the Automatic Acceptance Limit as shown in Schedule A.

g. JUMBO LIMIT. For any policy to be reinsured under automatic reinsurance, the total amount of insurance in force and applied
for in all companies shall not exceed the Jumbo Limit as shown in Schedule A.

h. MINIMUM CESSION. The minimum amount of reinsurance per cession that AUSA will accept is shown in Schedule A.

i. FACULTATIVE QUOTES. The risk shall not have been submitted on a facultative basis to AUSA or any other reinsurer.

7. AUTOMATIC REINSURANCE NOTICE PROCEDURE

After the policy has been paid for and delivered, PRUCO will submit all relevant individual policy information, as defined
in Schedule C, in its next statement to AUSA.

8. FACULTATIVE OBLIGATORY REINSURANCE

When a policy does not qualify for automatic reinsurance because (1) the Automatic Acceptance Limit is exceeded, (2) the
Jumbo Limit is exceeded or (3) the applicant is employed in an occupation included in the Occupation Exclusion List in
Schedule A, PRUCO may make a request to reserve capacity through facultative obligatory reinsurance by contacting AUSA by
facsimile. The request will include the name of the insured, date of birth, ceding company, amount applied for and amount
inforce. If PRUCO reserves capacity and the policy is issued, PRUCO must submit a form substantially similar to the
"Notification of Reinsurance" form shown in Schedule F.

9. FACULTATIVE REINSURANCE

PRUCO may apply for facultative reinsurance with AUSA on a risk if the automatic reinsurance terms are not met or if the
terms are met and it prefers to apply for facultative reinsurance. To obtain a facultative reinsurance quote, PRUCO must
submit the following:

a. A form substantially similar to the "Application for Reinsurance" form shown in Schedule E.

b. Copies of the original insurance application, medical examiner's reports, financial information, and all other papers and
information obtained by PRUCO regarding the insurability of the risk.

After receipt of PRUCO's application, AUSA will promptly examine the material and notify PRUCO either of the terms and
conditions of AUSA's offer for facultative reinsurance or that no offer will be made. AUSA's offer expires 120 days after
the offer is made unless the written offer specifically states otherwise. If PRUCO accepts AUSA's offer, then PRUCO will
make a dated notation of its acceptance in its underwriting file and mail as soon as possible a formal reinsurance cession
to AUSA using a form substantially similar to the Notification of Reinsurance form shown in Schedule F. If PRUCO does not
accept AUSA's offer, then PRUCO will notify AUSA in writing as soon as possible.

10. COMMENCEMENT OF REINSURANCE COVERAGE

Commencement of AUSA's reinsurance coverage on any policy or pre-issue risk under this Agreement is described below:

a. AUTOMATIC REINSURANCE. AUSA's reinsurance coverage for any policy that is ceded automatically under this Agreement will
begin and end simultaneously with PRUCO's contractual liability for the policy reinsured.

In addition, AUSA will be liable for benefits paid under PRUCO's conditional receipt or temporary insurance agreement if
all of the conditions for automatic reinsurance coverage under Section 6 of this Agreement are met. AUSA's liability
under PRUCO's conditional receipt or temporary insurance agreement is limited to the lesser of (1) AUSA's reinsured
portion of the face amount of the policy and (2) $200,000.

b. FACULTATIVE OBLIGATORY REINSURANCE. AUSA's reinsurance coverage for any policy that is ceded under the terms of facultative
obligatory reinsurance in this Agreement will begin when (1) PRUCO accepts AUSA's offer by making a dated notation of
its acceptance in its underwriting file and mailing the "Notification of Reinsurance" form to AUSA and (2) the policy
has been issued.

In addition, AUSA will be liable for benefits paid under PRUCO's conditional receipt or temporary insurance agreement if
the conditions for automatic reinsurance stated in Section 6a, b, e, h, and i of this Agreement are met. AUSA's
liability under PRUCO's conditional receipt or temporary insurance agreement will be limited to the portion of
$1,000,000 that is derived as the amount of capacity reserved by PRUCO from AUSA divided by the total amount of capacity
reserved by PRUCO from all reinsurers.

c. FACULTATIVE REINSURANCE. AUSA's reinsurance coverage for any policy that is ceded facultatively under this Agreement shall
begin when (1) PRUCO accepts AUSA's offer by making a dated notation of its acceptance in its underwriting file and
mailing the "Notification of Reinsurance" form to AUSA and (2) the policy has been issued.

In addition, AUSA will be liable for benefits paid under PRUCO's conditional receipt or temporary insurance agreement.
AUSA's liability under PRUCO's conditional receipt or temporary insurance agreement will be limited to the portion of
$1,000,000 that is derived as the amount of capacity reserved by PRUCO from AUSA divided by the total amount of capacity
reserved by PRUCO from all reinsurers.

d. PRE-ISSUE COVERAGE. The pre-issue coverage for benefits paid under PRUCO's conditional receipt or temporary insurance
agreement will be effective once all initial medical exams and tests have been completed. The pre-issue liability
applies only once on any given life at one time no matter how many conditional receipts or temporary insurance
agreements are in effect. After a policy has been issued, no reinsurance benefits are payable under this pre-issue
coverage provision.

11. REINSURANCE PREMIUM RATES

a. LIFE REINSURANCE. The reinsurance premiums per $1000 are shown in Schedule B. Reinsurance premiums for renewals are
calculated using (1) the issue ages, (2) the duration since issuance and (3) the current underwriting classification.

b. RATES NOT GUARANTEED. The reinsurance premium rates are not guaranteed. AUSA reserves the right to change the rates at any
time. If AUSA changes the rates, it will give PRUCO a 90-day prior written notice of the change. Any change applies
only to reinsurance premiums due after the expiration of the notice period.

12. PAYMENT OF REINSURANCE PREMIUMS

a. PREMIUM DUE. For each policy reinsured under this Agreement, reinsurance premiums are payable annually in advance. These
premiums are due on the issue date and each subsequent policy anniversary. Within 30 days after the close of each
reporting period, PRUCO will send AUSA a statement of account for that period along with payment of the full balance
due. On any payment date, monies payable between AUSA and PRUCO under this Agreement may be netted to determine the
payment due. This offset will apply regardless of the insolvency of either party as described in Section 23. If the
statement of account shows a balance due PRUCO, AUSA will remit that amount to PRUCO within 30 days of receipt of the
statement of account. All financial transactions under this Agreement will be in United States dollars. If the
reinsurance premium amounts cannot be determined on an exact basis by the dates described below, such payments will be
paid in accordance with a mutually agreed upon formula which will approximate the actual payments. Adjustments will
then be made to reflect actual amounts when such information is available.

b. FAILURE TO PAY PREMIUMS. If reinsurance premiums are 90 days past due, for reasons other than those due to error or
omission as defined below in Section 22, the premiums will be considered in default and AUSA may terminate the
reinsurance by providing a 30-day prior written notice, provided payment is not received within that 30-day period.
AUSA will have no further liability as of the termination date. PRUCO will be liable for the prorated reinsurance
premiums to the termination date. PRUCO agrees that it will not force termination under the provisions of this
paragraph solely to avoid the recapture requirements or to transfer the block of business reinsured to another reinsurer.

c. At the end of this 30-day period, AUSA's liability will automatically terminate for all reinsurance on which balances remain
due and unpaid, including reinsurance on which balances became due and unpaid during and after the 30-day notice period.

Subject to Article 21, PRUCO may reinstate reinsurance terminated for non-payment of balances due at any time within 60
days following the date of termination. However, AUSA will have no liability for claims incurred between the
termination date and the reinstatement date.

d. PREMIUM ADJUSTMENT. If PRUCO overpays a reinsurance premium and AUSA accepts the overpayment, AUSA's acceptance will not
constitute or create a reinsurance liability or increase in any existing reinsurance liability. Instead, AUSA will be
liable to PRUCO for a credit in the amount of the overpayment. If a reinsured policy terminates, AUSA will refund the
excess reinsurance premium. This refund will be on a prorated basis without interest from the date of termination of
the policy to the date to which a reinsurance premium has been paid.

13. PREMIUM TAX REIMBURSEMENT

See Schedule B.

14. DAC TAX AGREEMENT

PRUCO and AUSA, herein collectively called the "Parties", or singularly the "Party", hereby enter into an election under
Treasury Regulations Section 1.848-2(g) (8) whereby:

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

PRUCO and AUSA agree to exchange information pertaining to the net consideration under this Agreement each year to insure
consistency or as otherwise required by the Internal Revenue Service;

PRUCO will submit to AUSA by May 1 of each year its calculation of the net consideration for the preceding calendar year.

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

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

PRUCO and AUSA agree that this election shall first be effective for the 2000 calendar tax year and will be effective for
all subsequent taxable years for which this Agreement remains in effect.

AUSA and PRUCO represent and warrant that they are subject to U.S. taxation under either Subchapter L of Chapter 1, or
Subpart F of Subchapter N of Chapter 1 of the Internal Revenue Code of 1986, as amended.

15. REPORTS

The reporting period is shown in Schedule A. For each reporting period, PRUCO will submit reports to AUSA with information
that is substantially similar to the information displayed in Schedule C.

In addition, the reports will include a billing and accounting summary and a policy exhibit summary similar to the reports
shown in Schedule D.

Within 15 business days after the end of each calendar year, PRUCO will submit a reserve credit summary similar to that
shown in Schedule D. PRUCO will also submit this reserve credit summary within 10 business days after the end of each other
calendar quarter.

16. RESERVES FOR REINSURANCE

See Schedule A.

17. CLAIMS

a. NOTICE. PRUCO will notify AUSA as soon as reasonably possible after PRUCO receives a claim for a policy reinsured under
this Agreement. After PRUCO has received all proper claim proofs and paid the claim, PRUCO will send AUSA an itemized
statement of the benefits paid by PRUCO and all relevant information with respect to the claim including the claim
proofs. However, claim proofs will not be required by AUSA if AUSA's net amount at risk is less than or equal to
$50,000 and PRUCO has paid the claim in full. In such cases, PRUCO will provide AUSA with the cause of death.

b. AMOUNT AND PAYMENT OF BENEFITS. As soon as AUSA receives proper claim notice and any required proof of the claim, AUSA will
promptly pay the reinsurance benefits due PRUCO. PRUCO's contractual liability for claims is binding on AUSA. The
maximum benefit payable to PRUCO under each reinsured policy is the amount specifically reinsured with AUSA.

c. CLAIM SETTLEMENTS. PRUCO will use its standard claim practices and guidelines in the adjudication of all claims on
policies reinsured under this Agreement. Until such time as PRUCO has systems capability to administer the right of
AUSA to opt out of contested claims, claim settlements made by PRUCO, including compromises, shall be unconditionally
binding on AUSA. AUSA will share in any reduced amount in proportion to its share of the liability.

d. CLAIM EXPENSES. AUSA will pay its share of reasonable investigation and legal expenses connected with the litigation or
settlement of policy claims. AUSA will also pay its share of any interest paid by PRUCO on any claim payment. However,
claim expenses do not include routine claim and administration expenses, including PRUCO's home office expenses. Also,
expenses incurred in connection with a dispute or contest arising out of conflicting claims of entitlement to policy
proceeds or benefits that PRUCO admits are payable are not a claim expense under this Agreement.

e. EXTRACONTRACTUAL DAMAGES. In no event will AUSA participate in punitive or compensatory damages which are awarded against
PRUCO as a result of an act, omission or course of conduct committed by PRUCO in connection with the insurance under
this Agreement. AUSA will, however, pay its share of statutory penalties awarded against PRUCO in connection with the
insurance reinsured under this Agreement. The parties recognize that circumstances may arise in which equity would
require AUSA, to the extent permitted by law, to share proportionately in certain assessed damages. Such circumstances
are difficult to define in advance, but generally would be those situations in which AUSA was an active party and in
writing either directed, consented to, or ratified the act, omission, or course of conduct of PRUCO which ultimately
results in the assessment of punitive and/or compensatory damages. In such situations, PRUCO and AUSA would share such
damages assessed in equitable proportions.

Routine expenses incurred in the normal settlement of uncontested claims and the salary of an officer or employee of
PRUCO are excluded from this provision. For purposes of the provision, the following definitions will apply:

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

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

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

18. MISREPRESENTATION, SUICIDE, AND MISSTATEMENT

If either a misrepresentation on an application or a death of an insured by suicide results in the return of policy premiums
by PRUCO under the policy rather than payment of policy benefits, AUSA will refund all of the reinsurance premiums paid for
that policy to PRUCO. If there is an adjustment for a misrepresentation or misstatement of age or sex, a corresponding
adjustment to the reinsurance benefit will be made.

19. POLICY CHANGES

a. NOTICE. If a reinsured policy is changed as described below, a corresponding change will be made in the reinsurance for
that policy. PRUCO will notify AUSA of the change in PRUCO's next report as stated in Section 15.

b. INCREASES. If a request for an increase in the amount of insurance is made for a reinsured policy and the insured meets
PRUCO's underwriting requirements and PRUCO approves the increase under the policy, then the amount of reinsurance under
this Agreement will be adjusted as of the effective date of the increase.

If a request for an increase is made for a reinsured policy and the insured meets PRUCO's underwriting requirements and
a new policy is issued for the higher amount, then reinsurance under the old policy will cease as of the effective date
of the change, and reinsurance under the new policy will commence as of the policy date of the new policy.

If a request for an increase in a reinsured policy is granted without the insured meeting PRUCO's underwriting
requirements, then reinsurance on the increase will not be allowed.

If a request for an increase does not meet all of the terms of automatic reinsurance, then PRUCO may apply for
facultative obligatory reinsurance or facultative reinsurance as stated in Section 8 and Section 9, respectively.

If a reinsured policy is increased as a result of a conversion from term insurance and the increase is granted without
both insureds meeting PRUCO's underwriting requirements, then reinsurance will cease as of the effective date of the
change.

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

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

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

If a policy that is not reinsured under this Agreement is changed to a plan that is reinsured under this Agreement as
defined in Schedule A and the insured has met PRUCO's underwriting requirements for the plan change, then reinsurance
will commence as of the policy date of the new plan.

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

f. POLICY SPLIT. If a reinsured policy is split into two separate policies as a result of an event specified in the Divorce
and Tax Law Change Rider, then reinsurance will cease as of the effective date of the change.

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

20. RECAPTURE

At any time during the term of the Agreement, PRUCO may elect to recapture in full the coverage reinsured under this
Agreement following the occurrence of either of the following events: (1) a "Risk Trigger Event" as defined in Schedule A
of this Agreement; or (2) a Plan Change as described in Section 19 d. above.

In addition, after the twentieth policy anniversary, PRUCO may elect to recapture all or an appropriate portion of the
coverage reinsured under this Agreement to reflect increases in the maximum retention limits for PRUCO and all of its
affiliates, collectively, subsequent to the date of policy issue. These maximum retention limits as of the effective date
of this Agreement are equal to the amounts shown in the Automatic Acceptance Limits table shown in Schedule A. The portion
of the coverage that may be recaptured would be directly related to the increase in the limits. To illustrate, if the
maximum retention limits are increased by 100%, then the portion that may be recaptured from all reinsurers of the policies
reinsured under this Agreement would be equal to 100% of the portion of each reinsured policy that is retained by PRUCO.
Furthermore, the portion that may be recaptured from AUSA would be determined as AUSA's prorata share of the total portion
reinsured with all reinsurers.

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

If a policy is recaptured, AUSA will pay PRUCO the unearned reinsurance premium as of the date of recapture. AUSA shall not
be liable, under this Agreement, for any claims incurred after the date of recapture.

21. REINSTATEMENTS

a. AUTOMATIC REINSTATEMENT. If PRUCO reinstates a policy that was originally ceded to AUSA as either automatic
reinsurance or facultative obligatory reinsurance using conventional underwriting practices, AUSA's reinsurance for
the policy shall be reinstated.

b. FACULTATIVE REINSTATEMENT. If PRUCO has been requested to reinstate a policy that was originally ceded to AUSA as
facultative reinsurance and the reinstatement is processed under PRUCO's Long Form Reinstatement Process, then PRUCO
will re-submit the appropriate evidence for the case to AUSA for underwriting approval before the reinsurance can be
reinstated.

c. PREMIUM ADJUSTMENT. Reinsurance premiums for the interval during which the policy was lapsed will be paid to AUSA on
a YRT basis by PRUCO.

22. ERRORS AND OMISSIONS

If either AUSA or PRUCO fails to comply with any of the terms of this Agreement and it is shown that the failure was
unintentional or the result of a misunderstanding or an administrative oversight on the part of either party, this Agreement
will remain in effect. If the failure to comply changes the operation or effect of this Agreement, both parties will be put
back to the positions they would have occupied if the failure to comply had not occurred. This section will not apply to
any facultative submission until PRUCO has mailed the Notification of Reinsurance form to AUSA.

23. INSOLVENCY

For the purpose of this Agreement, PRUCO or AUSA shall be deemed "insolvent" if it does one or more of the following:

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

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

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

In the event that PRUCO is deemed insolvent, all reinsurance claims payable hereunder shall be payable by AUSA on the basis
of PRUCO's liability under the policies reinsured without diminution because of the insolvency of PRUCO. Such claims shall
be payable by AUSA directly to PRUCO, its liquidator or statutory successor. It is understood, however, that in the event
of such insolvency, the liquidator or receiver or statutory successor of PRUCO shall give written notice to AUSA of the
pendency of a claim against AUSA on a risk reinsured hereunder within a reasonable time after such claim is filed in the
insolvency proceeding. Such notice shall indicate the policy reinsured and whether the claim could involve a possible
liability on the part of AUSA. Failure to give such notice shall not excuse the obligation of AUSA unless it is
substantially prejudiced thereby. During the pendency of such claim, AUSA may investigate such claim and interpose, at its
own expense, in the proceeding where such claim is to be adjudicated, any defense or defenses it may deem available to
PRUCO, its liquidator, receiver or statutory successor. It is further understood that the expense thus incurred by AUSA
shall be chargeable, subject to court approval, against PRUCO as part of the expense of liquidation to the extent of a
proportionate share of the benefit which may accrue to PRUCO solely as a result of the defense undertaken by AUSA.

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

24. ARBITRATION

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

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

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

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

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

25. GOOD FAITH; FINANCIAL SOLVENCY

Each party agrees that all matters with respect to this Agreement require its utmost good faith. Each party or its
representatives has the right at any reasonable time to inspect the other's records relating to this Agreement.

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

AUSA represents and warrants to PRUCO that AUSA is a licensed or accredited reinsurer under the applicable laws and
regulations of Arizona and that AUSA satisfies each of the current, applicable legal and regulatory requirements in Arizona
necessary to fully entitle PRUCO to take the maximum permissible credit for the risks ceded under this Agreement on each of
its statutory financial statements. AUSA acknowledges that PRUCO is entering into this Agreement in reliance upon this and
other representations and warranties of AUSA, and AUSA agrees that, except as provided in the immediately following
paragraph, PRUCO's right of recapture under Section 20 of this Agreement will be triggered if, at any point in the future
during the term of this Agreement, this representation and warranty is no longer true and correct.

If at any point in the future during the term of this Agreement, AUSA's representation and warranty in the immediately
preceding paragraph is no longer true and correct, PRUCO's right of recapture in Section 20 of this Agreement will be
triggered unless AUSA elects to, and does, provide, on a timely basis, additional security in the form of a trust structure,
letter of credit, or other security acceptable to PRUCO. To avoid PRUCO's right of recapture being triggered, any such
additional security must in form and substance satisfy all of the then current, applicable legal and regulatory requirements
in Arizona so as to fully entitle PRUCO to take the maximum permissible credit for the risks ceded under this Agreement on
each of its statutory financial statements. To be considered furnished "on a timely basis," the additional security must be
in place and in effect prior to the date legally required to enable PRUCO to avoid any period of time during which credit
may not lawfully continue to be taken on each of PRUCO's statutory financial statements. If AUSA elects to furnish
additional security in the form of one or more letters of credit, to avoid PRUCO's right of recapture under Section 20 of
this Agreement, any such letter of credit must meet the additional requirements set forth in Section 11 of Schedule A
attached hereto.

26. MEDICAL INFORMATION BUREAU

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

27. GOVERNING LAW

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

28. ASSIGNMENT

This Agreement is not assignable by either party except by the express written consent of the other.

In witness of the above, PRUCO and AUSA have by their respective officers executed and delivered this Agreement in duplicate on the
dates indicated below, with an effective date of January 1, 2000.

----------------------------------------------------------- --------------------------------------------------------

PRUCO LIFE INSURANCE COMPANY AUSA LIFE INSURANCE COMPANY
----------------------------------------------------------- --------------------------------------------------------
----------------------------------------------------------- --------------------------------------------------------

By:_/s/_______________________________ By:_/s/_____________________________
----------------------------------------------------------- --------------------------------------------------------
----------------------------------------------------------- --------------------------------------------------------

Title:_______________________________ Title:_____________________________
----------------------------------------------------------- --------------------------------------------------------
----------------------------------------------------------- --------------------------------------------------------

Date:_______________________________ Date:_____________________________
----------------------------------------------------------- --------------------------------------------------------

----------------------------------------------------------- --------------------------------------------------------

By:__/s/______________________________ By:__/s/____________________________
----------------------------------------------------------- --------------------------------------------------------
----------------------------------------------------------- --------------------------------------------------------

Date:_______________________________ Date:_____________________________
----------------------------------------------------------- --------------------------------------------------------

SCHEDULE A

REINSURANCE COVERAGE
---------------------------------------------------------------------------------------------------------------------------------------

1. PLANS REINSURED:

This Agreement covers the following plans:

o SVUL II Policies issued by PRUCO (Form Number SVUL-2000 and all state variations)

2. AUTOMATIC PORTION REINSURED:

US/Canadian Residents

AUSA will automatically reinsure an amount equal to 20% of the net amount at risk related to the face amount of insurance.

The net amount of risk is determined as of the issue date and each subsequent policy anniversary and is defined as the death
benefit minus the contract fund.

Non US/Canadian Residents

AUSA will automatically reinsure an amount equal to 10% of the net amount at risk related to the face amount of insurance.

3. AUTOMATIC RETENTION LIMIT:

PRUCO will retain at least 10% of each policy. For U.S. and Canadian residents, PRUCO may cede up to 70% of each policy on
a first-dollar quota share basis to other reinsurers. For residents of other countries, PRUCO may cede up to 80% of each
policy on a first-dollar quarter share basis to other reinsurers.

4. AUTOMATIC ACCEPTANCE LIMIT:

For any policy to be reinsured under automatic reinsurance, the face amount will not exceed the amounts in the following
tables:

US/Canadian Residents - No Foreign Travel

--------------------------- -- --------------------------------
Rating Class of Higher Rated
Life
--------------------------- --------------------------------
--------------------------- ------------------ ----------------
Issue Age of Older Insured Pref. Best - Class E - H
Class D
--------------------------- ------------------ ----------------
----------- --------------- ------------------ ----------------
Ages: 18 - 65 $50,000,000 $40,000,000
--------------- ------------------ ----------------
----------- --------------- ------------------ ----------------
66 - 70 $40,000,000 $20,000,000
--------------- ------------------ ----------------
----------- --------------- ------------------ ----------------
71 - 75 $30,000,000 $15,000,000
----------- --------------- ------------------ ----------------
----------- --------------- ------------------ ----------------
76 - 80 $15,000,000 $10,000,000
----------- --------------- ------------------ ----------------
----------- --------------- ------------------ ----------------
81 - 85 $ 5,000,000 $ 2,500,000
----------- --------------- ------------------ ----------------
----------- --------------- ------------------ ----------------
86 - 90 $ 2,500,000 $ 1,000,000
----------- --------------- ------------------ ----------------

---------------------------------------------------------------------------------------------------------------------------------------
If both lives exceed Class H, there will be no automatic acceptance limit.

If one life is ratable over Class H, then the following individual policy limits for the lesser impaired life's mortality
classification apply:

--------------------------- ------------------ ------------------
Issue Age of Lesser
Impaired Life Pref. Best - Class E - H
Class D
--------------------------- ------------------ ------------------
----------- --------------- ------------------ ------------------
Ages: 18 - 65 $30,000,000 $20,000,000
--------------- ------------------ ------------------
----------- --------------- ------------------ ------------------
66 - 70 $25,000,000 $15,000,000
--------------- ------------------ ------------------
----------- --------------- ------------------ ------------------
71 - 75 $20,000,000 $10,000,000
----------- --------------- ------------------ ------------------
----------- --------------- ------------------ ------------------
76 - 77 $10,000,000 $ 5,000,000
----------- --------------- ------------------ ------------------
----------- --------------- ------------------ ------------------
78 - 80 $ 5,000,000 $ 2,500,000
----------- --------------- ------------------ ------------------
----------- --------------- ------------------ ------------------
81 - 85 $ 2,500,000 None
----------- --------------- ------------------ ------------------
----------- --------------- ------------------ ------------------
86+ $ 1,000,000 None
----------- --------------- ------------------ ------------------

US/Canadian Residents - Foreign Travel

--------------------- -- --- --------------------------------------------------
Rating Class of Higher Rated Life
--------------------- ---
--------------------- --------------------- ------------------- ---------------
Pref. Best - Class C Class D - E Greater than
Class E
--------------------- --------------------- ------------------- ---------------
----------- --------- --------------------- ------------------- ---------------
Ages: 18 - 70 $10,000,000 $ 7,500,000 None
--------- --------------------- ------------------- ---------------
----------- --------- --------------------- ------------------- ---------------
71 - 75 $ 7,500,000 $ 5,000,000 None
----------- --------- --------------------- ------------------- ---------------
----------- --------- --------------------- ------------------- ---------------
76+ None None None
----------- --------- --------------------- ------------------- ---------------

Non US/Canadian Residents

--------------------- -- --- --------------------------------------------------
Rating Class of Higher Rated Life
--------------------- -- --------------------------------------------------
--------------------- --------------------- ------------------- ---------------
Pref. Best - Class C Class D - E Greater than
Class E
--------------------- --------------------- ------------------- ---------------
----------- --------- --------------------- ------------------- ---------------
Ages: 18 - 70 $20,000,000 $15,000,000 None
--------- --------------------- ------------------- ---------------
----------- --------- --------------------- ------------------- ---------------
71 - 75 $15,000,000 $10,000,000 None
----------- --------- --------------------- ------------------- ---------------
----------- --------- --------------------- ------------------- ---------------
76+ None None None
----------- --------- --------------------- ------------------- ---------------

5. JUMBO LIMIT:

For any policy to be reinsured under automatic reinsurance, the total amount of insurance in force and applied for in all
companies will not exceed the following amounts:

US/Canadian Residents- No Foreign Travel

$75,000,000 for all ages and rating classes.

US/Canadian Residents - Foreign Travel

$35,000,000 for issue ages through age 75 and rating classes through class E. $0 for issue ages over 75 or
rating classes higher than E.

Non US/Canadian Residents

$35,000,000 for issue ages through age 75 and rating classes through class E. $0 for issue ages over 75 or
rating classes higher than E.

6. OCCUPATION EXCLUSION LIST FOR AUTOMATIC REINSURANCE

o Entertainers
o High Profile Athletes

7. REPORTING PERIOD:

The reporting period will be monthly.

8. MINIMUM CESSION:

The minimum amount per cession that can be reinsured with AUSA is $50,000.

9. RESERVES FOR REINSURANCE:

The reinsurance reserve is the one-year term reserve on the portion of each policy reinsured. This reserve will be
calculated using 1980 CSO ultimate mortality and 4 ½ % interest.

10. RISK TRIGGER EVENT:

A "Risk Trigger Event" means that any of the following has occurred:

(1) AUSA does not have statutory surplus of at least $300 million, except that if AUSA elects to, and does, provide additional
security in accordance with the requirements of the last paragraph of this Section 10, no Risk Trigger Event will be
deemed to have occurred;

(2) AUSA's representation and warranty contained in Section 25 of this Agreement (dealing with licensure/accreditation status
and related matters) is no longer true and correct, except that if AUSA elects to, and does, provide additional security
in accordance with the requirements of the last paragraph of Section 25 of this Agreement, no Risk Trigger Event will be
deemed to have occurred; or

(3) AUSA no longer has in effect a Qualified Rating (as defined below) from at least one of the Major Rating Agencies that is at
least as high as the minimum levels shown in the following chart:

------------------------------------ -----------------------------------
Major Rating Agency Minimum Applicable Rating:
==================================== ===================================
Fitch IBCA, Duff & Phelps A rating of "A-" or higher.
------------------------------------ -----------------------------------
------------------------------------ -----------------------------------
Moody Investor Services, Inc. A rating of "A3" or higher.
------------------------------------ -----------------------------------
------------------------------------ -----------------------------------
Standard & Poors Corporation A rating of "A-" or higher.
------------------------------------ -----------------------------------

"Qualified Rating" shall mean the issuance of an insurance company long-term, financial strength rating from one or more of
the Major Rating Agencies that remains in effect, that has not been suspended or withdrawn, and that was issued as a result
of the full interactive ratings review process (including interviews with senior management) by the Major Rating Agency in
question. (Use of the modifiers "Q" or "Pi" by S&P or any similar indication that a rating is a "qualified" or "limited"
rating by any other of the Major Rating Agencies means that the rating does not constitute a "Qualified Rating" for purposes
of this Agreement.)

If at any point in the future during the term of this Agreement, AUSA's statutory surplus falls below the amount specified
in clause (1) above, then PRUCO's right of recapture in Section 20 of this Agreement will be triggered unless AUSA elects
to, and does, provide, on a timely basis, additional security in the form of a letter of credit that meets the requirements
set forth in the next Section of this Schedule A.

11. LETTER OF CREDIT PROVISIONS:

a. Under the circumstances described in the last paragraph of Section 25 of this Agreement or under the circumstances described
in the last paragraph of Section 10 of this Schedule A, AUSA may apply for, provide to PRUCO, and maintain during the
entire term of this Agreement, one or more letters of credit with respect to all the amounts recoverable from AUSA under
this Agreement (collectively, the "Letters of Credit") so as to avoid triggering PRUCO's right of recapture under
Section 20. If AUSA elects to do so, each of the Letters of Credit must individually satisfy the requirements of
subsections b., c. and d. below and all of the Letters of Credit collectively must satisfy the requirements of
subsections e. and f. below. In addition, each Letter of Credit individually and all of the Letters of Credit
collectively must satisfy any other applicable legal or regulatory requirement of Arizona that must be complied with in
order to ensure that PRUCO is entitled to take the maximum credit for the risks ceded under this Agreement on its
statutory financial statements.

b. Each of the Letters of Credit must: (I) be an original and signed by an authorized official of the issuing bank or an
authorized official of the confirming bank (in the case of a confirmation meeting the requirements of this Section);
(II) contain an issuance date and contain an expiry date that is no earlier than one calendar year from the issuance
date; (III) be issued or confirmed by a "Qualified Bank" (as defined in subsection 30c. below); (IV) be issued on behalf
of AUSA as the "Applicant" and include such indication in a boxed area that states it is "For Internal Identification
Purposes Only" (or similar words to that effect) and that does not affect the terms of the Letter of Credit or the
bank's obligations thereunder; (V) be issued to PRUCO as "Beneficiary" and expressly indicate in the body of the Letter
of Credit that the definition of the "Beneficiary" under the Letter of Credit includes any successor by operation of law
of PRUCO, including, without limitation, any liquidator, rehabilitator, receiver, or conservator for PRUCO; (VI) be
issued, presentable and payable at an office of the issuing or confirming bank within the United States; (VII) be "clean
and unconditional" (meaning that the Letter of Credit makes no reference to any other agreement, document or entity and
provides that the Beneficiary need only draw a sight draft under the Letter of Credit or confirmation and present it to
promptly obtain funds and that no other document need be presented); (VIII) contain a statement that it is not subject
to any agreement, condition or qualification outside the Letter of Credit itself; (IX) contain a statement to the effect
that the obligation of the issuing bank under the Letter of Credit is an individual obligation of such bank and is in no
way contingent upon reimbursement with respect thereto; (X) be irrevocable and contain an "evergreen clause" (meaning
that the letter of credit or confirmation cannot be revoked prior to its expiry date and that it will automatically
renew prior to the occurrence of the expiry date unless written notice sent by U.S. registered mail has been delivered
to PRUCO as Beneficiary at the notice address stipulated in subsection d. of this Section 30 not less than 30 days prior
to the expiry date); (XI) state that it is subject to and governed by the laws of the State of Arizona and the 1993
Revision of the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce
(Publication 500) and that, in the event of any conflict, the laws of the State of Arizona will control; and (XII)
contain a provision for an extension of time, of not less than 30 days after resumption of business, to draw against the
Letter of Credit in the event that one or more of the occurrences described in article 17 of Publication 500 occurs.

c. As used in subsection b. of this Section 11, the term "Qualified Bank" shall mean a bank or trust company that: (I) is
organized and existing, or in the case of a branch or agency office of a foreign banking organization is licensed, under
the laws of the United States or any state thereof; (II) is regulated, supervised and examined by United States Federal
or state authorities having regulatory authority over banks and trust companies; (III) is determined by the Securities
Valuation Office of the National Association of Insurance Commissioners to meet such standards of financial condition
and standing as are considered necessary and appropriate to regulate the quality of banks and trust companies whose
letters of credit will be acceptable to insurance regulatory authorities; (IV) is not a foreign branch office of a bank
or trust company organized and existing in the United States; and (V) is not a parent, subsidiary or affiliate of PRUCO
or AUSA.

d. Each Letter of Credit must indicate that notices of non-renewal will be sent to the following address, or such other address
as may be indicated in a notice sent by PRUCO to the issuing or confirming bank:

Chief Actuary
PRUCO Life Insurance Company
213 Washington Street
Newark, New Jersey 07102-2992

e. All of the Letters of Credit must, in the aggregate, provide for a maximum amount that can be drawn thereunder of a sum that
is at least as great as PRUCO has indicated will be required under this Agreement and all other related reinsurance
agreements between or AUSA and PRUCO or any affiliate of PRUCO. Each year around December 1, PRUCO will indicate to
AUSA the aggregate coverage amount needed under all of the Letters of Credit as well as any other information necessary
for AUSA to provide PRUCO the required Letters of Credit prior to December 31. The cost for all Letters of Credit
furnished and maintained under this Agreement will be borne solely by AUSA.

f. AUSA and PRUCO agree that any or all of the Letters of Credit provided by AUSA pursuant to the provisions of this Agreement
may be drawn upon in full or in part at any time, notwithstanding any other provisions in this Agreement, and may be
utilized by PRUCO or any successor by operation of law of PRUCO including, without limitation, any liquidator,
rehabilitator, receiver or conservator of PRUCO for any of the following purposes:

i. to reimburse PRUCO for AUSA's share of premiums returned to the owners of policies reinsured under the reinsurance agreement
on account of cancellations of such policies;

ii. to reimburse PRUCO for AUSA's share of benefits or losses paid by PRUCO under the terms and provisions of the policies
reinsured under this Agreement;

iii. to fund an account with PRUCO in an amount at least equal to the deduction, for reinsurance ceded, from PRUCO's liabilities
for policies ceded under this Agreement. Such amount shall include, but not be limited to, amounts for policy
reserves, reserves for claims and losses incurred (including losses incurred but not reported), loss adjustment
expenses, and unearned premiums; and

iv. to pay any other amounts PRUCO claims are due under this Agreement:

All of the foregoing will be applied without diminution because of insolvency on the part of PRUCO or AUSA.

g. AUSA further acknowledges and agrees that PRUCO or any successor by operation of law of PRUCO including, without limitation,
any liquidator, rehabilitator, receiver or conservator of PRUCO may draw upon any or all of the Letters of Credit in
full or in part in the event that: (I) a notice of cancellation or non-renewal has been issued by the issuing or
confirming bank under any of the Letters of Credit and AUSA has not obtained one or more replacement letters of credit
that satisfy all of the applicable requirements of this Section 11 by that date which is ten days prior to the earliest
expiry date of the Letter of Credit or Letters of Credit as to which notice of cancellation or non-renewal has been
sent; or (II) the maximum amount that may be drawn under any of the Letters of Credit has been reduced or PRUCO has
communicated to AUSA in accordance with the provisions of subsection e. of this Section 11 a need to increase the
aggregate amount available under all of the Letters of Credit and AUSA has not obtained one or more replacement Letters
of Credit or one or more additional Letters of Credit so that all issued and outstanding Letters of Credit that will
remain in effect provide for coverage in an amount sufficient to meet the requirements of subsection e. of this Section
11.

SCHEDULE B

AUTOMATIC AND FACULTATIVE REINSURANCE PREMIUMS
---------------------------------------------------------------------------------------------------------------------------------------

1. STANDARD ANNUAL REINSURANCE PREMIUMS

The standard annual reinsurance premiums per $1,000 of net amount at risk for (1) all cessions of automatic reinsurance and
facultative obligatory reinsurance and (2) all cessions of facultative reinsurance in the amount of $2 million or less will
be the frasierized values of the product of the single life rates in the table attached to this Schedule B and the following
factors:

==================== =============================================
Rating Class Factor
-------------------- ---------------------------------------------
1 .315
-------------------- ---------------------------------------------
-------------------- ---------------------------------------------
2 .384
-------------------- ---------------------------------------------
-------------------- ---------------------------------------------
3 .495
-------------------- ---------------------------------------------
-------------------- ---------------------------------------------
4 .628
-------------------- ---------------------------------------------
-------------------- ---------------------------------------------
5 1.025
-------------------- ---------------------------------------------
-------------------- ---------------------------------------------
6 1.285
==================== =============================================

---------------------------------------------------------------------------------------------------------------------------------------
The standard annual reinsurance premiums per $1,000 for cessions of facultative reinsurance in excess of $2 million will be
the frasierized values of the product of the single life rates in the table attached to this Schedule B and the following
factors:

================================================================
Term Policies in Level Premium Period and Conversion Policies
at Similar Durations
-------------------- -------------------------------------------
Rating Class Factor
-------------------- -------------------------------------------
1 .394
-------------------- -------------------------------------------
-------------------- -------------------------------------------
2 .480
-------------------- -------------------------------------------
-------------------- -------------------------------------------
3 .619
-------------------- -------------------------------------------
-------------------- -------------------------------------------
4 .785
-------------------- -------------------------------------------
-------------------- -------------------------------------------
5 1.281
-------------------- -------------------------------------------
-------------------- -------------------------------------------
6 1.606
==================== ===========================================

The frasierized method is described as follows:

Definition of Terms:

(a) Qx,n = single life rate per thousand in duration n for an insured whose policy was issued at issue age x

(b) Qx,y,n = joint last survivor rate per thousand in duration n for two insureds whose policy was issued at
issue ages x and y

Step 1

Calculate qx,n for each insured for durations 1 to n.

qx,n = Qx,n divided by 1000.

Step 2

Calculate px,n for each insured for durations (n-1) and n.

px,n = (1-qx,1) x (1-qx,2) x (1-qx,n).

Step 3

Calculate px,y,n for durations (n-1) and n.

px,y,n = px,n + py,n - ((px,n) x (py,n))

Step 4

Calculate qx,y,n for duration n. Let px,y,0 = 1.

qx,y,n = 1 - px,y,n
px,y,n-1

Step 5

Qx,y,n = 1000 x qx,y,n

A minimum premium of $0.13 per $1000 will be applied.

2. SUBSTANDARD ANNUAL REINSURANCE PREMIUMS

Substandard extra premiums are available on classes 4 and 6 (Non-Smoker and Smoker). For substandard issues, the
substandard reinsurance premium (plus any flat extra) is payable for 20 years. After this period, the base reinsurance
premium (plus any flat extra) is payable until the end of the premium paying period.

The annual reinsurance premiums per $1,000 for substandard issues will be the product of the annual single life base
reinsurance premiums per $1,000 and the factor for the appropriate rating class. These are the single life substandard
rates prior to frasierization. These rates are capped at $1,000 per $1,000. The minimum after frasierization is $0.13 per
$1,000.

The factors are as follows:

-------------- ---------- -------------- ----------
Rating Class Rating Class Factor
Factor
-------------- ---------- -------------- ----------
-------------- ---------- -------------- ----------
A 1.40 K 10.00
-------------- ---------- -------------- ----------
-------------- ---------- -------------- ----------
B 1.65 L 12.50
-------------- ---------- -------------- ----------
-------------- ---------- -------------- ----------
C 1.90 M 15.00
-------------- ---------- -------------- ----------
-------------- ---------- -------------- ----------
D 2.25 N 17.50
-------------- ---------- -------------- ----------
-------------- ---------- -------------- ----------
E 2.75 O 20.00
-------------- ---------- -------------- ----------
-------------- ---------- -------------- ----------
F 3.25 P 25.00
-------------- ---------- -------------- ----------
-------------- ---------- -------------- ----------
G 3.75 Q 30.00
-------------- ---------- -------------- ----------
-------------- ---------- -------------- ----------
H 4.50 R 40.00
-------------- ---------- -------------- ----------
-------------- ---------- -------------- ----------
I 5.00 S 50.00
-------------- ---------- -------------- ----------
-------------- ---------- -------------- ----------
J 7.50 T 50.00
-------------- ---------- -------------- ----------

3. FLAT EXTRA REINSURANCE PREMIUMS

Each single life flat extra premium will be converted to PRUCO's flat extra premium for survivorship insurance.

The flat extra reinsurance premium will be the product of PRUCO's flat extra for survivorship insurance and the factors in
the following table:

======================================================
Permanent Flat Extra Premiums (i.e., for more
than 5 years duration)
------------------------------------------------------
First year .25
----------------------------- ------------------------
----------------------------- ------------------------
Renewal year .90
============================= ========================

==============================================================
Temporary Flat Extra Premiums (i.e., for 5 years
duration or less)
--------------------------------------------------------------
All years .90
=================================== ==========================

4. AGE BASIS

Age Last Birthday.

5. PREMIUM TAXES

Premium taxes are not reimbursed.