Exhibit 10.13.1

Execution Copy

LTC – GLICNY/UFLIC

SECOND AMENDMENT TO RETROCESSION AGREEMENT

THIS SECOND AMENDMENT TO RETROCESSION AGREEMENT dated as of December 17, 2008
(this “Amendment”), is made by and between GENWORTH LIFE INSURANCE COMPANY OF
NEW YORK (formerly GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK) an insurance
company organized under the laws of the State of New York (“Company”) and UNION
FIDELITY LIFE INSURANCE COMPANY, an insurance company organized under the laws
of the State of Illinois (“Reinsurer”).

RECITALS

WHEREAS, Company and Reinsurer entered into a Retrocession Agreement with
respect to certain long term care insurance policies reinsured by the Company,
dated as of April 15, 2004 (the “Agreement”); and

WHEREAS, Company and Reinsurer desire to amend, in the manner set forth in this
Amendment, the provisions of the Agreement;

NOW, THEREFORE, for and in consideration of the premises and the covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

AMENDMENTS

 

  1. Definitions. Unless otherwise defined herein, capitalized terms used herein
shall have the same meaning given to them in the Agreement, as amended hereby.

 

  2. Effective Date of Amendment. This Amendment shall be effective as of
January 1, 2008 (the “Effective Date”) as to all rights and obligations of the
parties affected thereby accruing under the Agreement.

 

  3. Sections 3.4, 7.6 and 17.11. Sections 3.4, 7.6 and 17.11 are amended by the
addition of the following sentence at the end of each:

“Company shall provide Reinsurer with copies of its routine and/or ongoing
evaluation of the Reinsured Policies including information pertaining to
customer service, operations and/or claims and including dashboards, scorecards
and/or other metrics, as provided to Company’s management, at the same
intervals, but in no event on less than a quarterly basis.”

 

  4. Section 3.1(a). Section 3.1(a) of the Agreement is amended by the addition
of the following language:

“The parties mutually agree to the service level agreements for Services
performed by Company as set forth in Schedule E-2, attached hereto and
incorporated herein (the “Company SLAs”). As used herein and in Schedule E-2,
the term “Services” shall have the same meaning as “Business Overhead Services,”
as that term is defined in the Agreement.

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The Company SLAs more fully describe many of the activities to be performed by
Company and the form of information and data to be provided by Company to
Reinsurer in providing the Services. However, not all Services, standards, and
service level agreements to be performed under the Agreement can be practicably
recited herein. Accordingly, nothing herein is intended to limit the scope of
Services set forth in the Agreement or to preclude the parties, by mutual
written agreement, from modifying, deleting or adding service level agreements
in the future consistent with the Services. In particular, but without
limitation, all provisions pertaining to “Standard for Service,” “Compliance
with Applicable Law” and the descriptions of “Services” remain in effect without
modification. Further, and for the avoidance of doubt, all Agreement provisions
remain in effect, and the parties intend for these Company SLAs to apply in
conjunction with the terms of the Agreement.”

 

  5. Section 6.1. Section 6.1 of the Agreement is hereby amended to replace all
references to “Schedule E” with “Amended and Restated Schedule E” dated
January 1, 2008 and by the addition of the following language:

“The payment of Service Charges by the Reinsurer to Company is also subject to
the terms of the Service Charge Withholds and Direct Reimbursements provisions
of the Amended and Restated Schedule E.”

 

  6. Schedule E. Schedule E to the Agreement – Expense Allowances – is hereby
deleted in its entirety and replaced by the attached “Amended and Restated
Schedule E” dated January 1, 2008.

 

  7. Schedule E-2. A new “Schedule E-2 – Service Level Agreements” is hereby
added to the Agreement immediately following Schedule E-1.

 

  8. Schedule F. Schedule F, “Part II – Monthly Settlement Report” Item 4.;
“Part III – Quarterly Settlement Report” Item 4.; and “Part IV – Annual
Settlement Report” Item 4, are deleted and replaced with:

 

  4. Expense Allowance:

 

A.       

  Policy Maintenance    $                        

B.        

  Claims    $                           Total Expense Commission (A+B)       $
                    

 

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  9. Ratification. Company and Reinsurer each hereby acknowledge and agree that,
except as expressly amended or modified by this Amendment, the terms and
provisions of the Agreement are ratified and confirmed and remain in full force
and effect.

 

  10. Execution in Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Amendment by facsimile shall be effective as delivery of a manually executed
counterpart of this Amendment.

 

  11. Severability. Any provision of this Amendment that is prohibited or
unenforceable in any jurisdiction shall, as to such provision and such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Amendment
or affecting the validity or enforceability of such provision in any other
jurisdiction.

 

  12. Amendments. This Amendment shall be subject to and may be entered into
only upon receipt of any required regulatory approvals.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.

 

GENWORTH LIFE INSURANCE COMPANY OF NEW YORK      UNION FIDELITY LIFE INSURANCE
COMPANY By:  

/s/ Kelly L. Groh

     By:  

/s/ Lakshman Shanmugan

Name:   Kelly L. Groh      Name:   Lakshman Shanmugan Title   Sr. Vice President
& CFO      Title   Vice President & Chief Financial Officer Date:   December 18,
2008      Date:   12/18/2008

 

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AMENDED AND RESTATED SCHEDULE E

January 1, 2008

EXPENSE ALLOWANCE

The Expense Allowance will be calculated monthly and billed to Reinsurer in the
next Monthly Settlement Report due to Reinsurer.

 

  1. Expense Allowance Calculation. The Expense Allowance equals the Monthly
Reinsured Policy Maintenance Reimbursement plus the Monthly Reinsured Claims
Reimbursement, calculated as follows:

 

  a. Monthly Reinsured Policy Maintenance Reimbursement for any given month
equals:

(Monthly Reinsured Policy Count for such month Multiplied by Policy Maintenance
Factor) Divided by 12

Monthly Reinsured Policy Count for the above calculation shall be calculated as
follows:

Beginning Monthly Policy Count: The number of Reinsured Policies in effect on
the first day of the applicable calendar month

Ending Monthly Policy Count: The number of Reinsured Policies in effect on the
last day of the applicable calendar month

Monthly Reinsured Policy Count: (Beginning Monthly Policy Count plus Ending
Monthly Policy Count) Divided by 2

 

  b. Monthly Reinsured Claims Reimbursement for any given month equals:

(Monthly Reinsured Claim Count for such month Multiplied by Claims Factor)
Divided by 12

Monthly Reinsured Claim Count for the above calculation shall be calculated as
follows:

Beginning Monthly Claim Count: The number of Open and Pending Claims in effect
on the first day of the applicable calendar month

Ending Monthly Claim Count: The number of Open and Pending Claims in effect on
the last day of the applicable calendar month

 

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Monthly Reinsured Claim Count: (Beginning Monthly Claim Count plus Ending
Monthly Claim Count) Divided by 2

 

  2. Policy Maintenance Factor. The “Policy Maintenance Factor” in effect as of
January 1, 2008, through December 31, 2008, is $29.54. Beginning on January 1,
2009, and thereafter on each anniversary of such date during the term of this
Agreement, the Policy Maintenance Factor in effect for the following
twelve-month period shall be adjusted to equal one hundred and two percent
(102%) of the Policy Maintenance Factor in effect for the immediately preceding
twelve-month period. (For example, the Policy Maintenance Factor in effect for
the twelve-month period commencing on January 1, 2009, shall equal $30.13, or
$29.54 Multiplied by 1.02, rounded to two decimal places.)

 

  3. Claims Factor. The “Claims Factor” in effect as of January 1, 2008, through
December 31, 2008, is $1,005.92. Beginning on January 1, 2009, and thereafter on
each anniversary of such date during the term of this Agreement, the Claims
Factor in effect for the following twelve-month period shall be adjusted to
equal one hundred and two percent (102%) of the Claims Factor in effect for the
immediately preceding twelve-month period. (For example, the Claims Factor in
effect for the twelve-month period commencing on January 1, 2009, shall equal
$1,026.04 or $1,005.92 Multiplied by 1.02, rounded to two decimal places.)

 

  4. Charges for Special Projects:

Special Projects are certain projects described below as “Additional Projects”
or “Requested Projects” (together, “Special Projects”) eligible for payment by
the Reinsurer pursuant to the Agreement. Costs and expenses for Additional
Projects or Requested Projects shall be paid by Reinsurer in accordance with the
provisions set forth herein. The costs and expenses for ordinary course system
maintenance and development projects are subsumed in the Expense Allowance
referenced in Section 1, above, and accordingly, the costs and expenses for such
items are not chargeable to the Reinsurer as a Special Project.

 

  a. Additional Projects. “Additional Projects” are operational or technology
changes required for the Reinsured Policies to maintain legal and regulatory
compliance with Applicable Law and the mandates of Governmental Authorities with
jurisdiction. With respect to Additional Projects, Company shall provide to
Reinsurer: (i) written documentation of the legal, regulatory or compliance
requirement for which the operational or technology change is being made, and
(ii) a good faith estimate of the associated costs and expenses for
implementation of such operational or technology change. Costs and expenses for
Additional Projects shall be billed to and paid by Reinsurer based upon the
proportionate share of in-force Reinsured Policies to the total number of
in-force Company long term care insurance policies during the period when the
charges are incurred. Costs and expenses for Additional Projects shall be
directly billed to and paid by Reinsurer, in accordance with the provisions set
forth herein, after such costs and expenses are incurred by Company, its
Subsidiaries or Affiliates.

 

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  b. Requested Projects. “Requested Projects” are projects or changes pertaining
to the Reinsured Policies for which the Reinsurer makes a specific written
request to Company and for which the parties reach a mutual written agreement
with respect to costs and expenses. The full amount of costs and expenses for
Requested Projects shall be directly billed to and paid by Reinsurer after such
costs and expenses are incurred by Company; provided, however, if
(a) Reinsurer’s requested project can be limited solely to the Reinsured
Policies and (b) Company expands the project to include policies other than the
Reinsured Policies then, in such instance, costs will be apportioned in the same
manner as for an Additional Project.

 

  5. Dispute Resolution. The parties shall (and shall cause their respective
designated representatives to) negotiate in good faith to resolve all
disagreements hereunder as promptly as practicable. Disputes which the parties
are unable to resolve, if any, shall be resolved in accordance with the
provisions of Article XV of the Agreement. Pending resolution of the dispute,
Reinsurer will pay the costs and expenses as outlined above. If the outcome of
the dispute resolution process is a determination that: (i) the project does not
constitute an Additional or Requested Project; or (ii) that Reinsurer’s
proportionate share of costs and expenses was lower than the amount charged by
Company, then Company shall, within thirty (30) days, reimburse Reinsurer, as
applicable, for amounts already paid for the ineligible project or the
differential in the costs and expenses previously paid by Reinsurer and the
lower proportionate share of costs and expenses, and in either case, with
interest at the rate set forth in Section 3.01(b) from the time of Reinsurer’s
payment until the date of reimbursement. Further, notwithstanding the provisions
of Section 15.4(f) of Article XV of the Agreement, and with respect to an
Additional or Requested Project only, the losing party in any arbitration shall
pay the prevailing party’s attorney’s fees and costs.

 

  6. Service Charge Withholds and Direct Reimbursements. The following Service
Charge Withholds and Direct Reimbursements provisions apply in the event of
Company’s failure to perform as set forth in the Amended and Restated Schedule
E-2:

 

  a. Service Charge Withhold for TAGGED Company SLA Deficiencies

 

  i. For TAGGED Company SLAs to be performed periodically on a frequency greater
than annually:

Upon a determination by the JMC that Company failed to meet a TAGGED Company SLA
timeliness or content standard as to a particular TAGGED Company SLA for two
consecutive reporting periods, then, until Cured, the Reinsurer may withhold the
Service Charge. Once Cured, the Reinsurer shall remit withheld Service Charges
with the next monthly Service Charge payment due.

 

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  ii. For TAGGED Company SLAs to be performed on an annual basis or upon the
occurrence of an ad hoc event including those set forth in Legal/Compliance
Services:

Upon a determination by the JMC that Company failed to meet a TAGGED Company SLA
timeliness or content standard as to a particular TAGGED Company SLA and that
Company failed to take the action or provide the content required by the SLA
within five (5) business days from the stated TAGGED Company SLA due date, then
the Reinsurer may withhold the next three monthly Service Charge payments. The
Reinsurer shall remit those withheld Service Charges with the next monthly
Service Charge payment due.

 

  b. Direct Reimbursements

 

  i. Subject to determination by the JMC, Company shall reimburse Reinsurer for
any amounts assessed to or incurred by the Reinsurer in fines, penalties,
assessments or other costs solely and directly related to Company’s failure to
perform a Company SLA. The Reinsurer shall take reasonable steps to defend,
resist and mitigate against the imposition of any fine, penalty, assessment or
other costs.

 

  ii. The Reinsurer may offset or otherwise withhold from Service Charges owed
to Company, the amounts determined by the JMC as having been assessed to or
incurred by the Reinsurer for which Company is responsible pursuant to this
Section.

 

  c. Administrative Matters

 

  i. The Reinsurer shall provide Company with prompt written notice if it
asserts a timeliness or content deficiency of a TAGGED Company SLA, or if it
believes a Direct Reimbursement is warranted, with a copy to the JMC. If the
parties agree that a deadline has been missed or that content is not adequate,
corrective action shall be promptly taken by the responsible Company functional
area.

 

  ii. The role of the JMC with respect to Direct Reimbursements or Service
Charge Withholds shall be: (1) to conduct a good faith review of an asserted
deficiency, taking into account whether a failure on the part of the Reinsurer
to provide necessary, complete or correct information to Company on a timely
basis contributed to the asserted deficiency; and (2) to determine whether a
deficiency has occurred and/or whether a Direct Reimbursement or Service Charge
Withhold is warranted. The JMC shall be provided with written notification of
any missed TAGGED Company SLAs and/or any Service Charge Withholds or Direct
Reimbursements being claimed and a meeting of the JMC shall be convened within
ten (10) business days from the date written notification is given. A majority
of all members of the JMC shall be considered a quorum and a simple majority of
the JMC members present shall be sufficient for a determination of whether or
not a deficiency occurred or whether or not a Direct Reimbursement or a Service
Charge Withhold is warranted. Disagreements not resolved by the JMC shall be
subject to the dispute resolution provisions set forth in Article XV of the
Agreement.

 

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  iii Except as set forth herein, no Direct Reimbursement shall be paid or
Service Charge may be withheld until the JMC has determined that a Direct
Reimbursement or withhold is warranted; provided, however, that the Reinsurer
shall be allowed to offset a Direct Reimbursement or withhold Service Charges in
accordance with the terms of this Service Charge Withholds and Direct
Reimbursements provision in advance of a determination by the JMC: (1) if a
meeting of the JMC is not convened in accordance with Section (c)(ii) hereof due
to the unavailability of Company’s JMC members and the Reinsurer has not agreed,
in its discretion, to an extension of the deadline to meet; (2) in the event of
a tie vote; and/or (3) during the pendency of the dispute resolution process.
Similarly, if Company is the prevailing party in an arbitration, the Reinsurer
shall pay Company interest pursuant to Section 7.7 of the Agreement from the
date the payment was originally due, if not withheld, until the date of payment.
Further, notwithstanding the provisions of Section 15.4(f) of Article XV of the
Agreement, and with respect to a Service Charge Withhold described in this
Section (c)(iii) only, the losing party in any arbitration shall pay the
prevailing party’s attorney’s fees and costs.

 

  iv. The Reinsurer shall provide Company with a detailed calculation of any
Service Charge Withholds under subsection A., above, or Direct Reimbursements
under subsection B., above, being made in a reporting period.

 

  v. “Cured” means that for a TAGGED Company SLA subject to a Service Charge
Withhold, Company has (1) provided all information required by the TAGGED
Company SLA (even though the required deadline(s) was/were missed) or remedied
the content deficiency(ies), as the case may be, for the reporting period(s) for
which the information was due, and (2) met all requirements of the TAGGED
Company SLA in the subsequent reporting period. The Reinsurer may agree in
writing or the JMC may determine that it is not necessary for Company to remedy
a deficiency which remains outstanding if fulfillment of the requirements of the
TAGGED Company SLA in the current reporting period is adequate for the purposes
of the Reinsurer.

 

  vi. “Service Charge” for the Long Term Care Retroceded Business means: The COH
Service Charge, as set forth in the Business Services Agreement, and the
Reinsured Policy Maintenance Reimbursement.

 

  vii. Nothing herein shall be interpreted to relieve Company of its obligation
to perform any Company SLA, including, but not limited to, while any matter is
under review by the JMC.

 

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  viii. Notwithstanding Section 7.7 of the Agreement, the Reinsurer shall not
owe any interest on any amount withheld under this Service Charge Withholds and
Direct Reimbursements provision, except as set forth in Section (c)(iii) above.

 

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SCHEDULE E-2

SERVICE LEVEL AGREEMENTS

In General

The following Company Service Level Agreements (“Company SLAs”) apply to all
Services performed by all functions and operations:

 

  (i) Perform Services accurately;

 

  (ii) Meet the timeliness standards enumerated for each Service. The deadlines
listed represent requirements in effect as of November 1, 2008. The Reinsurer
will provide Company with written notice of deadlines that routinely vary from
year to year (e.g. financial closings, annual statement, etc.) at least thirty
(30) days prior to the deadline. Other deadline changes may be made at the
direction of the Reinsurer with the consent of Company, which consent shall not
be unreasonably withheld. If a less-than-annual deadline falls on a non-business
day, the action required shall be due the next business day. If an annual
deadline falls on a non-business day, the action required shall be due the prior
business day;

 

  (iii) Answer questions from and provide information to Reinsurer’s staff
and/or representatives, as is reasonable;

 

  (iv) Provide audit support for Reinsurer’s personnel (including parent of
Reinsurer), independent auditors, and regulators by providing data, process
explanations, access to all personnel and answers to related questions, as is
reasonable;

 

  (v) Include within the Services, the applicable activities that would be
undertaken by Company if the business was not reinsured; and

 

  (vi) Perform Services with the same rigor and priority as Company uses to
conduct its own businesses not subject to the Agreement.

 

  (vii) In the event of failure of Company to perform in accordance with a
Company Service Level Agreement designated as “TAGGED” in this Schedule E-2
(“TAGGED GNA SLA”), a Service Charge Withhold will be made in accordance with
the provisions of the Amended and Restated Schedule E.

By Function

Services are shown below by functional area but performance of Services and the
Company SLAs is not limited by any such categorization. For example, if
responsibilities shift from one area to another or are jointly provided, the
Services and Company SLAs will continue to be performed, even if they are not in
the functional areas currently listed.

The following Company SLAs apply to all Services performed by all functions and
operations, regardless of where performed within the Company organization.

 

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Finance Services

Services include product financial support and analysis. Services include,
without limitation:

 

  (i) Prepare detailed Multi-Year Plans (SP1 and SII) and update to SII for OP
Plan for the Reinsurer per the GE GAAP fiscal calendar. Reinsurer to provide
historical financial information, templates and assumptions a minimum of three
weeks in advance of the deadline. Prepare SP and SII financial and business
information as reasonably requested by the Reinsurer and participate in SP and
SII business presentations; TAGGED

 

  (ii) Develop GAAP variance analysis for Reinsurer on a quarterly basis.
Analysis to be performed within one week upon receipt of financial information
from Reinsurer. Timeframe per the GE GAAP fiscal calendar; TAGGED

 

  (iii) Short range forecasts: Update quarterly OP Plan income forecast by
product for current quarter on a weekly basis for the last 6 weeks of the
quarter (including such items as claims, income and expenses.); TAGGED

 

  (iv) Provide Reinsurer support for non-investment related Rating Agency
requests (e.g. data for supplemental rating questionnaires) within thirty
(30) calendar days of Reinsurer request; TAGGED

 

  (v) Provide Reinsurer support for activities in compliance with Sarbanes-Oxley
reporting, including documentation and walkthrough’s of Company processes that
affect the Reinsured Policies;

 

  (vi) On a quarterly basis, calculate the Experience Refund estimate and
provide the calculation to Reinsurer within thirty (30) calendar days of the end
of the calendar quarter.

Actuarial Services

Services include general oversight of the in-force product performance analysis
and reviews. Reinsurer shall provide all pertinent assumptions to Company at
least two weeks in advance of the deadlines set forth below, except as noted.
Services required by subsequent minor revisions to assumptions requested by the
Reinsurer shall be completed by Company in no more than two business days unless
the Reinsurer consents to additional time, which consent shall not be
unreasonably withheld. Services include, without limitation:

 

  (i) Perform experience studies to be used for planning and Cash Flow Testing
purposes (e.g., mortality, lapse/termination and morbidity studies, etc.).
Mortality and morbidity studies will include Actual/Expected detail and
analysis. Studies to be delivered annually in August using experience through
the end of the first quarter; TAGGED

 

1 SP means Strategic Playbook formerly known as SI.

 

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  (ii) Provide projections and supporting documentation for annual Multi-Year
Plans (SP and SII) for the Reinsurer in coordination with Company’s Finance
department to meet the deadlines stated in Finance Services (i), above; TAGGED

 

  (iii) Deliver cash flow projections and models for Loss Recognition testing,
along with supporting documentation, to Reinsurer by May 1 of the following
year. Any changes in assumptions to be approved prior to calculation; TAGGED

 

  (iv) Provide projections for Cash Flow Testing (CFT) reflecting input from
Reinsurer’s Appointed Actuary, including but not limited to the following
components delivered by the indicated dates; ALL TAGGED

 

  a. Updated expense factors by November 1;

 

  b. 9/30 CFT interest rate scenarios by November 1;

 

  c. Reinsurer to provide 9/30 existing portfolio asset cash flow projections
and updated asset assumption recommendations to Company by December 1;

 

  d. 9/30 CFT base results & analysis by December 15;

 

  e. If the yield curve changes significantly (as determined by Reinsurer’s
appointed actuary) from the 9/30 CFT interest rate scenarios, Company will
provide 12/31 CFT interest rate scenarios by January 5;

 

  f. 12/31 CFT base results & analysis and paid claim data by January 21 if
Reinsurer provides its existing portfolio asset cash flow projections and
updated asset assumption recommendations to Company by January 15;

 

  g. 12/31 CFT sensitivity results & analysis by January 28;

 

  h. Asset model documentation, reserve factor data checking and support and
stochastic scenarios documentation for Actuarial Opinion Memorandum by
February 1;

 

  i. Level scenario Income Statement and Balance Sheet projection results and
reliance statements to support actuarial opinion by February 10;

 

  j. Actuarial asset adequacy modeling statements, actuarial reserve procedure
statements, actuarial reserve certifications by February 20.

 

  (v) Calculate quarterly GAAP, Statutory, and Tax reserves and deliver them to
Reinsurer within 6 calendar days of Reinsurer quarter close cash cutoff for GAAP
reserves (2008 due dates March 20, June 19, September 18, December 18), 15
calendar days of Reinsurer quarter close for Stat and Tax; TAGGED

 

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  (vi) Prepare applicable data and schedules within Reinsurer deadlines to meet
NAIC requirements for Reinsurer’s Annual Statement (Blue Book); TAGGED

 

  (vii) Provide quarterly supporting documentation for all reserves types (for
example, ALR, DLR, IBNR), on all bases (GAAP, Stat, Tax). Documentation includes
but is not limited to: calculations, policy counts, GAAP roll forwards, factor
book basis, Source of Earnings (SOE) report for case reserves, PolySystems VMF
Definition File & VMF Output File (or alternative Reserve Valuation Systems)
(GAAP & STAT) for both ALR and DLR reserve runs, and database data each quarter
within thirty (30) calendar days of the end of the calendar quarter; TAGGED

 

  (viii) Produce quarterly the Options Based Valuation report (“OBV”) within
seventy-five (75) calendar days of the end of the calendar quarter. TAGGED

Risk Management Services

Services include general oversight of the in-force product performance analysis
and reviews. Risk management services include, without limitation:

 

  (i) Perform and provide quarterly (and ad hoc, as needed when experience
warrants) analysis and reviews of in-force product performance (analysis to
include information from experience studies, mortality studies and
lapse/termination studies). Provide quarterly data extracts which include
morbidity, mortality and lapse information. All analysis is based on actual to
“expected”. Reinsurer acknowledges that Company “expected” equals original
pricing, unless otherwise agreed. (As of the Effective Date, this SLA is
performed by the risk management function);

 

  (ii) Conduct an annual in-force product performance analysis and business
review. Business to be valued at the end of the first quarter and provide and
present the business review by August 31 including morbidity, mortality and
lapse analysis. (As of the Effective Date, this SLA is performed by the
actuarial function);

 

  (iii) On an ongoing basis, identify and control business risks associated with
controllership, systems infrastructure and process management. Activities,
remediation steps, and results in these areas to be presented at annual business
reviews;

 

 

(iv)

Prepare and provide monthly claims data and metrics to be sent by the 15th of
each month for the previous month’s experience. (As of the Effective Date, this
SLA is performed by the claims function);

 

  (v)

Provide oversight and coordination of any claims, operations, risk or
reinsurance related audit conducted by Reinsurer to ensure a timely and thorough
completion of the audit. Oversight and coordination duties to include:
(1) coordination of resources for audit team; and (2) monitor and follow up on
open audit issues until closed within

 

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the timeframes agreed upon by the parties. The Reinsurer will provide at least
thirty days prior written notice of the scope of any such audit unless, in the
discretion of the Reinsurer circumstances require otherwise, in which case
reasonable advance notice shall be given. (As of the Effective Date, this SLA is
performed by the risk management function);

 

  (vi) Provide seriatim listing of in force exposures with coverage information
on a quarterly basis, to be sent to Reinsurer within thirty (30) calendar days
of the end of the calendar quarter. Files to include coverage information.
Prepare and provide quarterly reporting of claim data with coverage information,
to be sent within thirty (30) calendar days of the end of the calendar quarter
(As of the Effective Date, this SLA is performed by the actuarial function).
TAGGED

Legal/Compliance Services

Services include, without limitation:

 

(i) Legal/Litigation

Support, coordinate and manage litigation arising from and/or for the benefit of
the Reinsured Policies, including:

 

  a. Respond to all claims, regulatory or other litigation by assignment to
internal counsel promptly upon service or receipt and referral to outside
counsel, as appropriate, within time frames sufficient to protect the rights of
the Reinsurer;

 

  b. Manage and supervise litigation in coordination with outside counsel,
including:

 

  1. Provision of required records, access to witnesses, etc.

 

  2. Review of complaints, responsive pleadings, and other documents.

 

  c. Provide Reinsurer with quarterly reports (in a format and with information
reasonably requested by Reinsurer) of (1) litigation and (2) pre-litigation
decisions, settlements and other actions relating to disputes and/or complaints,
within one calendar month of the end of the period, as follows: TAGGED

 

Data Through

  

Report Due

March 31

   April 30

June 30

   July 31

September 30

   October 31

December 31

   January 31

 

  d.

Advise Reinsurer in writing within ten (10) business days of receipt by counsel
for Company, its subsidiaries or affiliates of written notice of any disputed
claim

 

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(including, litigation, arbitration or any other formal proceeding) related to
the subject matter of the Agreement and/or the Reinsured Policies which could
create an exposure to the Reinsurer of $500,000 or more. TAGGED

 

  e. Upon request of the Reinsurer, provide prompt written notice of the
intention to contest, compromise or litigate a claim with respect to a Reinsured
Policy along with copies of all pleadings and reports of investigation with
respect thereto, as set forth in the Agreement.

 

  f. As respects matters pertaining to the Agreement and/or the Reinsured
Policies, promptly advise the Reinsurer in writing of any investigation or
litigation the Reinsurer is required to report to GE according to the current GE
reporting criteria, a copy of which shall be provided by the Reinsurer.

 

(ii) Exceptions Reporting

On a quarterly basis, Company shall prepare a report that contains information
related to the following: i) any decision to make a payment to a Policyholder
where the payment is made outside of the terms and conditions of the Reinsured
Policies; and (ii) any extracontractual determinations that may create an
economic liability for Reinsurer. By way of example, the reported information
may include overpayments of benefits, administrative exceptions and policy
reinstatements outside the terms and conditions of the Reinsured Contracts or
Reinsured Policies. The report need not include information on payments made
under the Reinsured Policies or extracontractual determinations made in
accordance with the Long Term Care Claims Adjudication process and/or
Operational Guidelines; provided, however, that such information will be
available, upon request, during Reinsurer audits. Information to be sent to
Reinsurer with the quarterly legal report. TAGGED

 

(iii) Government Relations

Include the Agreement and the Reinsured Policies in all governmental relations
efforts undertaken by Company for its own businesses.

 

(iv) Product and Contracts Maintenance

Assure form and contract filings are completed timely and accurately, in
compliance with applicable federal and state laws and regulations. (As of the
Effective Date the metrics and process for this function are owned by the
Product Compliance area.)

 

  a. Update collateral materials annually, as needed;

 

  b. Provide Reinsurer with same form and contract filing metrics/dashboards as
provided to Company management, at the same intervals.

 

15

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(v) Compliance, Regulatory, Complaints, Privacy & Data Security

Administer all matters relating to the Reinsured Policies (including all systems
and processes used in the administration of the Reinsured Policies), and assure
compliance with all applicable statutory, regulatory, and Company internal
procedural requirements and standards. Report related information to the
Reinsurer, quarterly within four weeks of the end of the quarter unless
otherwise specified.

These requirements and reporting obligations include, without limitation:

 

  a. Statutory and regulatory requirements, matters, and administration.

 

  1. Report all regulatory compliance risks identified, the priorities assigned
to those compliance risks and the abatement plans.

 

  2. Report final agreements related to or determinations of regulatory actions,
fines, penalties, consent orders within ten (10) business days. TAGGED

 

  3. Provide available compliance related information, data, and metrics
requested by the Reinsurer from time to time.

 

  b. Regulatory filings and reporting to insurance departments and other
regulators

 

  1. Report all late or missed regulatory filings and/or reports within ten (10)
business days. TAGGED

 

  2. Report on applicable new and revised regulatory requirements implemented.

 

  c. Privacy and data security requirements of all applicable jurisdictions,
including all required GLB and HIPAA privacy notices as well as all necessary
federal and/or states’ mandated consumer, regulator, attorney general, and/or
credit reporting agency notices concerning situations potentially involving
breach of security and/or breach of private or sensitive information.

 

  •  

Report all privacy and data security potential and actual compromises or
breaches within ten (10) business days of Company’s discovery and confirmation
that a compromise or breach occurred. TAGGED

 

  d. Insurance department, attorney general or other regulatory inquiries,
investigations, audits, and complaints including market conduct examinations,
targeted examinations, financial examinations, and complaints received through
insurance departments.

 

  (i)

Provide written e-mail notice of all regulatory examinations, inquiries,
investigations, or audits (except for cases of routine handling of complaints
received through insurance departments). Address such e-mail notices to

 

16

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Reinsurer’s Compliance Leader within ten (10) business days of Company receiving
notice of such events and include a copy of the regulatory notice of the review
event. TAGGED

 

  (ii) For any such matter that results in findings or citations of violations,
concerns, advisements, and/or recommendations for corrective actions, within a
reasonable time after such findings/citations were received but in no case later
than six months, prepare and provide a report to the Reinsurer regarding the
actions taken to address, abate, improve and remediate said findings/citations.
TAGGED

 

  e. Statutory, regulatory, and Company internal guideline requirements relating
to complaints received through insurance departments and other regulators, and
received directly from policy owners, producers, and other consumers.

 

  (i) Report any upheld/justified regulatory, policy owner, consumer, and other
complaints within ten (10) business days of Company receiving notice of such
events. TAGGED

 

  (ii) Provide the Company Complaints Report, Trending Report, and Variable
Detail Report within ten (10) business days of the end of the quarter. TAGGED

 

  (iii) Report quarterly metrics regarding meeting regulatory complaints
handling requirements (timeliness, responsiveness in handling complaints
received through insurance departments). TAGGED

 

  f. Maintain and report to regulators all complaints and grievances data and
records pursuant to all statutory, regulatory, and Company internal guideline
requirements.

 

  g. Relevant replacement and exchange compliance and monitoring

 

  •  

Provide quarterly reports to the Reinsurer regarding replacements and exchanges.
TAGGED

 

  h. Maintain and adhere to a Code of Conduct/Ethics and Integrity Policies and
provide documentation of such to the Reinsurer upon request.

 

  i. Provide mandated, periodic and recurring associate training regarding
privacy, claims, AML and SAR, documents and records management and retention,
security awareness, integrity/Code of Ethics, and any other legally and Company
internally required training.

 

  j. OFAC and other applicable Watch Lists requirements

 

17

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  •  

Provide reports to the Reinsurer regarding OFAC and other Watch Lists confirmed
matches within ten (10) business days of Company receiving notice of the
confirmed matches. TAGGED

 

  k. Anti Money Laundering (AML), Suspicious Activities Reporting (SAR), Form
8300, and related requirements and procedures pursuant to the U.S.A. PATRIOT
Act, Bank Secrecy Act, and all other existing or forthcoming requirements.

 

  •  

As permitted under applicable laws and regulations, provide reports to the
Reinsurer regarding the filings of SARs and Form 8300s within ten (10) business
days of filing such reports. TAGGED

 

  l. Make mailings in the normal course of business to insureds and annuitants
according to standard business practices, including, among other things, the
periodic mailing of privacy notices and annuity and policy related notices.

 

18

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THIS AMENDMENT NO. 1 (this “Amendment”), dated as of November 3, 2004, to the
Retrocession Agreement, dated as of April 15, 2004 (the “Agreement”), by and
between GE CAPITAL LIFE ASSURANCE COMPANY of New York, an insurance company
organized under the laws of the State of New (the “Company”), and UNION FIDELITY
LIFE INSURANCE COMPANY, an insurance company organized under the laws of the
State of Illinois (the “Reinsurer”), is by and between the Company and the
Reinsurer.

RECITALS

WHEREAS, the Company and the Reinsurer entered into the Agreement pursuant to
which, effective January 1, 2004, the Company retroceded a block of long term
care insurance policies to the Reinsurer; and

WHEREAS, in recognition of the limited amount of time available to the Reinsurer
prior to the execution of the Agreement to verify the accuracy of the
calculation of the Experience Refund Baseline and to review the 2003 experience
on the Reinsured Policies, the parties to the Agreement, pursuant to footnote 1
to Schedule 1, agreed to update the values set forth in the Experience Refund
Baseline on Schedule I to the Agreement; and

WHEREAS, the Company and the Reinsurer have updated the values set forth in the
Experience Refund Baseline on Schedule I to the Agreement and now wish to amend
Schedule I and to make conforming changes to Section 8.1(a) of the Agreement,
each in the manner set forth in this Amendment; and

WHEREAS, General Electric Company, General Electric Capital Corporation, GEI,
Inc., GE Financial Assurance Holdings, Inc. and Genworth Financial Inc. are
parties to that certain Master Agreement, dated as of May 24, 2004 (the “Master
Agreement”), pursuant to which the parties thereto have agreed, inter alia, to
waive their respective rights to seek punitive and similar damages against each
other except as provided therein; and

WHEREAS, the Company and the Reinsurer wish to amend, in the manner set forth in
this Amendment, the provision of the Agreement governing the parties’ waiver of
their respective rights to seek punitive and similar damages against each other
so that such provision is consistent with the corresponding provision set forth
in the Master Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein, the Company and the Reinsurer agree as follows:

ARTICLE I

AMENDMENTS

 

1.1 Amendment to Section 8.1(a). The final paragraph of Section 8.l(a) of the
Agreement is hereby amended by deleting the first sentence of such paragraph and
the following sentence shall be substituted in its place: “The calculation of
investment income and the IMR income components of the actual pre-tax income for
2004-2006 shall be based on an assumed net annual yield of 5.91%, 5.85% and
5.81%, respectively.

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

1.2 Amendment to Section 15.1(c). Section 15.1 (c) of the Agreement is hereby
deleted in its entirety and the following Section 15.1 (c) shall be substituted
in its place:

 

  (c) In connection with any Dispute, the parties expressly waive and forego any
right to (i) special, indirect, incidental, punitive, consequential, exemplary,
statutorily-enhanced or similar damages in excess of compensatory damages
(provided that liability for any such damages with respect to a Third Party
Claim shall be considered direct damages), and (ii) trial by jury. For purposes
of this Section 15.1 (c), “Third Party Claim” means the assertion of any claim
or the commencement of any demand, action, claim, dispute, suit, countersuit,
arbitration, inquiry, proceeding or investigation, before any federal, state,
local, foreign or international Governmental Authority or any arbitration or
mediation tribunal, by any Person (including a Governmental Authority), unless
such Person: (i) in the case of the Company, is (a) General Electric Company or
(b) a subsidiary of General Electric Company other than (x) Genworth Financial,
Inc. (“Genworth”) or (y) a subsidiary of Genworth, and (ii) in the case of the
Reinsurer, is Genworth or a subsidiary of Genworth).

 

1.3 Amendment to Schedule I. Schedule I attached to the Agreement is hereby
deleted in its entirety and the Schedule I attached to this Amendment shall be
substituted in its place.

ARTICLE 11

MISCELLANEOUS

 

2.1 Headings. The headings contained in this Amendment are for reference
purposes only and shall not affect the meaning or interpretation of this
Amendment.

 

2.2 Confirmation of the Agreement. Except as amended by this Amendment, the
Agreement remains in full force and effect, without modification or amendment.

 

2.3 Governing Law. This Amendment will be construed, performed and enforced in
accordance with the laws of the State of Illinois without giving effect to its
principles or rules of conflict of laws thereof to the extent such principles or
rules would require or permit the application of the laws of another
jurisdiction.

 

2.4 Counterparts. This Amendment may be executed by the parties hereto in any
number of counterparts, and by each of the parties hereto in separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.

[Signatures on Next Page]

 

-2-

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.

 

UNION FIDELITY LIFE INSURANCE COMPANY By:  

/s/ Glenn L. Joppa

Name:   Glenn L. Joppa Title:   Assistant Secretary GE CAPITAL LIFE ASSURANCE
COMPANY OF NEW YORK By:  

/s/ Ward Bobitz

Name:   Ward Bobitz Title:   Vice President & Assistant Secretary

 

-3-

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SCHEDULE I

EXPERIENCE REFUND

 

LTC Experience

Refund - GECLA

                                                                               
               

6/21/2004

  

Net Yield -a)

   5.91 %   5.85 %   5.81 %   5.77 %   5.75 %   5.74 %   5.72 %   5.72 %   5.72
%   5.71 %   5.70 %   5.71 %   5.71 %   5.72 %   5.73 %   

 

a)      Calculated by taking Investment Income (net of Defaults & Impairments)
incl IMR amort and dividing by a 2 point avg of the sum of Total Ceded SAP
Reserves plus IMR

         

 

LTC Reinsurance Segment
Projection (in $1,000’s)

   2004     2005     2006     2007     2008     2009     2010    2011    2012   
2013    2014    2015    2016    2017    2018  

Premium Income

   62,903     65,162     63,989     60,872     57,736     54,594     51,408   
48,183    44,934    41,680    38,445    35,248    32,112    29,057    26,103  

Inv Inc on LTC Rsvs (Net of Defaults & Inv Exp)

   29,655     33,980     37,986     41,669     44,962     47,981     50,629   
53,111    55,352    57,249    58,842    60,268    61,384    62,198    62,677  

IMR Amortization for LTC Segment

   255     240     229     227     231     235     245    253    263    268   
282    306    330    367    393  

TOTAL REVENUE:

   92,814     99,381     102,203     102,768     102,928     102,809     102,282
   101,546    100,549    99,198    97,569    95,822    93,825    91,622   
89,173  

Paid Benefits

   25,296     30,828     35,201     38,786     41,594     43,674     45,748   
47,954    50,336    52,840    55,407    57,984    60,506    62,921    65,167  

Increase in Active Life Reserves

   57,269     54,960     52,141     48,950     45,466     41,724     37,642   
33,195    28,428    23,400    18,191    12,833    7,450    2,141    (3,102 )

Increase in Claim Reserves (incl IBNR)

   19,835     18,081     15,383     12,614     9,879     7,319     7,298   
7,761    8,383    8,806    9,032    9,067    8,878    8,495    7,901  

Loss Exp (Incl Rsv Change & LAE)

   1,510     793     751     700     644     587     604    636    675    708   
737    760    776    785    787  

Exp Allowances - Commissions

   7,767     7,839     7,553     7,048     6,551     6,064     5,589    5,109   
4,801    4,494    4,190    3,889    3,595    3,309    3,032  

Exp Allowances - Treaty (Claims Dept, PHS, Blue Sky)

   3,233     2,551     2,626     2,675     2,701     2,723     2,743    2,763   
2,788    2,812    2,837    2,860    2,880    2,895    2,906  

Exp Allowances - BSA Expenses (COH)

   1,090     1,040     1,004     968     930     892     853    813    772   
731    690    649    608    568    528  

Stop-loss, 10% Novation Costs & Ceding Commission

   1,970     1,222     551     (36 )   4,300                              

Impairments - 17bps

   716     856     984     1,101     1,205     1,298     1,376    1,449    1,515
   1,569    1,610    1,641    1,673    1,685    1,696                           
                                                         

TOTAL EXPENSES:

   118,686     118,169     116,194     112,805     113,268     104,281    
101,852    99,679    97,697    95,360    92,692    89,682    86,366    82,799   
78,913  

Pre-Tax Income 90% TLA

   (25,873 )   (18,788 )   (13,991 )   (10,038 )   (10,340 )   (1,472 )   429   
1,867    2,852    3,837    4,877    6,140    7,459    8,822    10,259  

10% Novation Segment Pre-Tax Profits

   —       —       —       —       —       (164 )   48    207    317    426   
542    682    829    980    1,140                                              
                                      

Pre-Tax Income = Experience Refund Baseline

   (25,873 )   (18,788 )   (13,991 )   (10,038 )   (10,340 )   (1,635 )   477   
2,074    3,169    4,263    5,418    6,822    8,288    9,803    11,399