Exhibit 10.10

 

 

Critical Illness

Reinsurance Agreement

 

between

 

US Alliance Life and Security Company

Topeka, Kansas

(hereinafter referred to as the “Company”)

 

and

 

Unified Life Insurance Company

Dallas, Texas

(hereinafter referred to as the “Reinsurer”)

 

 

Effective September 1, 2016 

 

 

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US Alliance Life and Security

Draft Reinsurance Agreement

 

TABLE OF CONTENTS

 

   

Page

Article 1

PREAMBLE 

4

 

1.1 Parties to the Agreement

   

1.2 Compliance

   

1.3 Construction

   

1.4 Entire Agreement

   

1.5 Severability

   

1.6 Office of Foreign Assets Control

 

Article 2

BASIS OF INSURANCE 

6

Article 3

LIABILITY 

7

Article 4

REINSURANCE PREMIUM 

8

 

4.1 Payment of Premium

   

4.2 Failure to Pay Premium

   

4.3 Late Payment of Premium

   

4.4 Change in Premium Rates

   

4.5 Foreign Account Tax Compliance Act

 

Article 5

SETTLEMENT OF CLAIMS 

10

 

5.1 Notice

   

5.2 Liability and Payment

   

5.3 Contested Claims

   

5.4 Extra Contractual Damages

   

5.5 Misstatement

 

Article 6

GENERAL PROVISIONS 

12

 

6.1 Currency

   

6.2 Premium Tax

   

6.3 Inspection of Records

   

6.4 Reinstatement

   

6.5 Expenses

   

6.6 Original Conditions

   

6.7 Lapse or Termination of a Reinsured Policy

   

6.8 Company Data

   

6.9 Reserves and Financial Reporting

   

6.10 Administration

 

 

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Draft Reinsurance Agreement

 

   

Page

Article 7

INSOLVENCY 

14

 

7.1 Definition of Insolvency

   

7.2 Insolvency of the Company

 

Article 8

DISPUTE RESOLUTION 

15

Article 9

CONFIDENTIALITY 

16

Article 10

ERRORS AND OMISSIONS

17

Article 11

OFFSET 

18

Article 12

DAC TAX 

19

Article 13

COMMENCEMENT AND TERMINATION

20

Article 14

EXECUTION 

21

     

Schedule A

REINSURANCE COVERAGE 

22

Schedule B

REINSURANCE RATES AND ALLOWANCES

24

Schedule C

REPORTS 

30

Schedule D

UNDERWRITING 

38

 

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US Alliance Life and Security

Draft Reinsurance Agreement

 

Article 1

PREAMBLE

 

1.1   Parties to the Agreement

This is an agreement for indemnity reinsurance (the "Agreement") solely between
US Alliance Life and Security Company, of Topeka, Kansas (the "Company") and
Unified Life Insurance Company, of Texas (the “Reinsurer"), each, a “Party” and
collectively, the “Parties”.

 

The acceptance of risks under this Agreement shall create no right or legal
relation whatsoever between the Reinsurer and the insured, owner, or beneficiary
of any insurance policy or other contract of the Company.

 

This Agreement shall be binding upon the Company and the Reinsurer and their
respective successors and assigns.

 

1.2

Compliance

The Company represents that, to the best of its knowledge, it is in compliance
with all state and federal laws applicable to the business reinsured under this
Agreement. The Company further represents that it has reviewed the applicable
reinsured business for any compliance related issues, in contemplation of and in
preparation for, this Agreement. In the event that the Company is found to be in
non-compliance with any law material to this Agreement, this Agreement shall
remain in effect and the Company shall indemnify the Reinsurer for any direct
loss the Reinsurer suffers as a result of the non-compliance, and shall
immediately seek to remedy the non-compliance.

 

1.3   Construction

This Agreement shall be construed in accordance with the laws of the State of
Kansas.

 

1.4   Entire Agreement

This Agreement shall constitute the entire agreement between the Parties with
respect to the business reinsured hereunder. There are no understandings between
the Parties other than as expressed in this Agreement and any change or
modification of this Agreement shall be null and void unless made by amendment
to this Agreement and signed by both Parties.

 

1.5   Severability

The invalidity or unenforceability of any one or more phrases, sentences,
clauses or sections of this Agreement shall not affect the validity or
enforceability of any of the remainder of this Agreement.

 

1.6   Office of Foreign Assets Control (OFAC)

The Parties represent that they are using, and shall use commercially reasonable
efforts to continue to be in compliance with all applicable economic sanction
laws. Neither Party shall be deemed to provide cover or be liable to pay any
claim or provide any benefit hereunder to the extent that the provision of such
cover, payment of such claim or provision of such benefit would expose that
Party to any sanction, prohibition or restriction under United Nations
resolutions or the trade or economic sanctions, laws or regulations of the
European Union, United Kingdom, Canada or United States of America (the “Laws”).
Whenever coverage provided by this Agreement would be in violation of any such
economic or trade sanctions such coverage shall be null and void. Neither Party
shall be required to take any action under this Agreement that would violate
said Laws, including, but not limited to, making any payments in violation of
the Laws.

 

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Draft Reinsurance Agreement

 

Should either Party discover or otherwise become aware that a reinsurance
transaction has been entered into or a payment (including beneficiary payments)
has been made in violation of the Laws, the Party who first becomes aware of the
violation of the Laws shall notify the other Party, and the Parties shall
cooperate in order to take all necessary corrective actions.

 

The Parties agree that such reinsurance transaction shall be null, void and of
no effect from its inception, to the same extent as if the reinsurance
transaction had never been entered into. In such event, each Party shall be
restored to the position it would have occupied if the violation had not
occurred, including the return of any payments received, unless prohibited by
law.

 

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Draft Reinsurance Agreement

 

Article 2

BASIS OF INSURANCE

 

On or after 12:01 A.M. Central Standard Time on the Effective Date of this
Agreement, whenever the Company issues a policy providing insurance within the
limits permitted by the Underwriting Guidelines of the Company as described in
Schedule D and the Company retains its maximum limit of retention as shown in
Schedule A, the Company shall cede and the Reinsurer shall automatically accept
reinsurance in amounts not exceeding the amounts in Schedule A, provided that
the policy has not been offered on a facultative basis to any reinsurer,
including the Reinsurer.

 

This Agreement shall apply to policies issued on citizens or permanent residents
of the United States who are domiciled within the United States.

 

The reinsurance coverage shall be issued in accordance with the policy forms,
underwriting manual, claims administration procedures, rates and guidelines
agreed to by the Reinsurer and the Company at the time this Agreement was
entered into and more particularly referenced in Schedule D. Any deviation from
these materials shall require prior written approval by the Reinsurer.

 

The Company may not reinsure the amount it has retained on the business covered
under this Agreement on any basis without the Reinsurer’s written consent, which
consent may be withheld for any reason.

 

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Draft Reinsurance Agreement

 

Article 3

LIABILITY

 

The liability of the Reinsurer shall begin and end with the liability of the
Company. Reinsurance shall be inforce and binding on the Reinsurer as long as
the issuance of insurance by the Company constitutes the doing of business in a
jurisdiction in which the Company is properly licensed and the reinsurance
premiums continue to be paid when due while the insurance remains inforce.

 

The liability of the Reinsurer shall be determined in accordance with the
Company’s policy issued in connection with the coverage giving rise to
reinsurance. The Company shall send to the Reinsurer a copy of each policy form
requiring reinsurance and no reinsurance on any policy shall be effective until
the policy forms for the benefits reinsured are approved in writing by the
Reinsurer and are in the possession of the Reinsurer.

 

The Company affirms that its retention schedule, underwriting guidelines, issue
rules, premium rates, policy forms and claims guidelines applicable to the
reinsured policies and in use as of the Effective Date, have been
offered,supplied and approved by the Reinsurer.

 

The Company shall promptly notify the Reinsurer in writing of any proposed
changes in its operating guidelines, underwriting guidelines, claims guidelines
or policy forms. This Agreement shall not extend to policies issued pursuant to
changes to the underwriting guidelines or policy forms unless the Reinsurer has
consented in writing to accept policies subject to such changes or claims
adjudicated pursuant to changes to the claims guidelines.

 

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Draft Reinsurance Agreement

 

Article 4

REINSURANCE PREMIUM

4.1

Payment of Premium

Reinsurance premiums are due and payable monthly. The Company shall calculate
the amount of reinsurance premium due and, within thirty (30) days after the
close of the month for which reinsurance is in effect, shall send the Reinsurer
a statement that contains the information shown in Schedule C, showing
reinsurance premiums due for that period. If an amount is due the Reinsurer, the
Company shall remit that amount together with the statement. If an amount is due
the Company, the Reinsurer shall remit that amount within thirty (30) days of
receipt of the statement.

 

4.2

Failure to Pay Premium

The payment of reinsurance premiums shall be a condition precedent to the
liability of the Reinsurer for reinsurance covered by this Agreement. In the
event that reinsurance premiums are not paid when due, the Reinsurer shall have
the right to terminate the reinsurance under all policies having reinsurance
premiums in arrears. If the Reinsurer elects to exercise its right of
termination, it shall give the Company thirty (30) days written notice of its
intention to terminate said reinsurance. If all reinsurance premiums in arrears,
including any which may become in arrears during the thirty day period, are not
paid before the expiration of said period, the Reinsurer shall be relieved of
all liability. Policies on which reinsurance premiums subsequently fall due
shall automatically terminate if reinsurance premiums are not paid. Terminated
reinsurance may be reinstated, subject to written approval by the Reinsurer,
within sixty (60) days of the date of termination upon payment of all
reinsurance premiums in arrears. The Reinsurer shall have no liability for any
claims incurred between the date of termination and the date of the
reinstatement of the reinsurance. The right to terminate reinsurance shall not
prejudice the Reinsurer's right to collect premiums for the period reinsurance
was in force prior to the expiration of the thirty (30) day notice.

 

4.3

Late Payment of Premium

In the event that any premium payment is delinquent, the Reinsurer reserves the
right to charge the Company an interest penalty equal to two (2) percentage
points plus the quarterly U.S. Treasury Bill rate in effect on the date the
premium payment becomes thirty (30) days delinquent.

 

4.4   Change In Premium Rates

If the Company changes premium rates on in force business, the Reinsurer shall
share proportionately in these rate changes. The Company shall notify the
Reinsurer of any such change not less than sixty (60) days prior to its
effective date.

 

The Reinsurer shall not modify any expense allowances on business reinsured
under this Agreement unless, in the reasonable judgment of the Reinsurer, the
experience justifies a rate increase of at least ten percent (10%) and, after
such notification by the Reinsurer, the Company fails to file for and make a
good faith effort to obtain such an increase.

 

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Draft Reinsurance Agreement

 

If the Reinsurer intends to modify the expense allowances in the manner stated
above, the Reinsurer shall give the Company sixty (60) days written notice of
the need for a rate increase. If the Company does not respond within the notice
period, or if the Company decides not to file for the required rate increase,
the Reinsurer may change the expense allowances by giving thirty (30) days prior
written notice to the Company.

 

The Reinsurer shall not modify rates as set forth in Schedule B for inforce
business unless, in the reasonable judgment of the Reinsurer, the experience
justifies a rate increase of at least twenty five percent (25%) and, after such
notification by the Reinsurer, the Company fails to file for and make a good
faith effort to obtain such an increase.

 

If the Reinsurer intends to modify the rates in the manner stated above, the
Reinsurer shall give the Company sixty (60) days written notice of the need for
a rate increase. If the Company does not respond within the notice period, or if
the Company decides not to file for the required rate increase, the Reinsurer
may change the reinsurance premiums by giving thirty (30) days prior written
notice to the Company.

 

In the case of either a reinsurance premium increase when the Company's premiums
are not changing or an allowance decrease, the Company may recapture the
business from the Reinsurer based upon original pricing assumptions and
reserves.

 

Any such changes shall be incorporated into this Agreement by amendment.

 

It is the intent of both Parties to this Agreement that the Reinsurer shall
review experience on a periodic basis and may provide recommendations to the
Company with respect to the need for any rate increases on the policies
reinsured, although the Company reserves the authority to decide both the amount
and timing of any rate increases to their customers.

 

4.5   Foreign Account Tax Compliance Act (FATCA)          

The Parties agree to provide to each other all information necessary to comply
with the Foreign Account Tax Compliance Act (“FATCA”) consistent with Sections
1471 – 1474 of the U.S. Internal Revenue Code and any Treasury Regulations, or
other guidance issued pursuant thereto, including, without limitation,
applicable Forms W-9 or W-8BEN-E, as the case may be, and any information
necessary for a Party to enter into an agreement described in Section 1471(b) of
the U.S. Internal Revenue Code and to comply with the terms of that agreement or
to comply with the terms of any inter-governmental agreements between the U.S.
and any other jurisdictions relating to FATCA.

 

Applicable United States tax forms, allowing the other Party to conclude that no
FATCA withholding is required, shall be provided within thirty (30) days after
execution of this Agreement, if not already so provided. Also, either Party
shall provide updated forms or any such other information within thirty (30)
days of:

 

■ written request by the other Party; or

■

learning that any such information previously provided has become obsolete or
inaccurate.

 

Each Party to this Agreement acknowledges and agrees that if it fails to supply
such information within the time period stated above, it may be subject to a 30%
U.S. withholding tax imposed on payments subject to such withholding under
FATCA, to be withheld and paid to the U.S. Internal Revenue Service by the other
Party.

 

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Draft Reinsurance Agreement

 

Article 5

SETTLEMENT OF CLAIMS

 

5.1   Notice

Claims covered under this Agreement include only claims which occur under
policies reinsured under this Agreement, and any additional riders specified in
Schedule A which are provided by the underlying policy and are reinsured under
this Agreement.

 

The Company shall notify the Reinsurer, as soon as possible, after it receives a
claim on a policy reinsured under this Agreement. When requested by the
Reinsurer, the Company shall provide the Reinsurer with copies of all proofs of
loss, underwriting papers, investigation reports and a statement showing the
amount paid on the claim by the Company, plus any information the Reinsurer may
request. The Reinsurer shall not be liable for any claim(s) submitted more than
one (1) year after said claim is first reported to the Company.

 

5.2

Liability and Payment

Whenever a claim is made on a policy reinsured under this Agreement, and in
accordance with the underlying policy provisions, the Reinsurer shall consider
its liability to the Company to be for the amount of reinsurance for that policy
as determined in Schedule A.

 

The Reinsurer reserves the right to request documentation for any claim when
deemed appropriate, and to conduct periodic audits to review claims
documentation. Nothing herein shall in any manner limit or restrict the
Reinsurer's right to audit under this Agreement.

 

Nothing herein shall require the Reinsurer to pay any claim that is not properly
payable under the terms of the underlying policy or this Agreement.

 

The Reinsurer shall have no liability for ex gratia payments.

 

5.3   Contested Claims

The Company shall notify the Reinsurer of its intention to contest or settle a
contestedclaim that exceeds fifty thousand dollars ($50,000). Unless agreed
otherwise, all contestable claims shall be routinely investigated. If the
Reinsurer chooses not to participate in a contested claim, it shall pay its full
amount of reinsurance liability on such claim and shall thereby be relieved of
all future liability with respect to such contested claim.

 

If the Reinsurer joins the Company in a contest or settlement of a contested
claim, the Reinsurer shall participate in the same proportion that the amount at
risk reinsured with the Reinsurer bears to the total amount at risk to the
Company on the claim and shall share in the reduction in liability in the same
proportion.

 

5.4   Extra Contractual Damages

The Reinsurer shall not participate in punitive or compensatory damages or
statutory penalties that are awarded against the Company as a result of an act,
omission or course of conduct committed by the Company, its agents, or
representatives in connection with claims covered under this Agreement.

 

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Draft Reinsurance Agreement

 

For purposes of this Article, the following definitions shall apply:

■

“Punitive Damages” are those damages awarded as a penalty, the amount of which
is neither governed nor fixed by statute.

■ “Compensatory Damages” are those amounts awarded to compensate for the actual
damages sustained, and are not awarded as a penalty nor fixed in amount by
statute. ■ “Statutory penalties” are those amounts awarded as a penalty, but are
fixed in amount by statute.

 

5.5   Misstatement In the event of an increase or decrease in the amount of the
Company's liability on a policy reinsured hereunder because of a misstatement of
age, sex, or other risk classification, which is established in the course of
investigating the claim, the Company and the Reinsurer shall share in the change
in amount in proportion to its respective net liability prior to the change. The
reinsurance premium for all policy years shall be recalculated on the basis of
the adjusted amount using premiums and reserves at the correct risk
classification, and the adjustment for the difference in reinsurance premiums
shall be made without interest.

 

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Draft Reinsurance Agreement

 

Article 6

GENERAL PROVISIONS

 

6.1

Currency

All payments under this Agreement shall be made in United States currency.

 

6.2   Premium Tax

The Reinsurer shall not reimburse the Company for premium taxes on reinsurance
premiums other than through the allowances shown in Schedule B.2.

 

6.3   Inspection of Records 

The Reinsurer, or its duly authorized representatives, may inspect at the office
of the Company the original papers and any and all books or documents relating
to or affecting reinsurance under this Agreement. The Company agrees to provide
such access to records, at the discretion of the Reinsurer, by submitting
complete copies of files to the Reinsurer or providing access to such files
during regular business hours at the office of the inspected Party.

 

6.4    Reinstatement

If a policy that has lapsed or surrendered is reinstated in accordance with its
terms and in accordance with Company rules and procedures, the Reinsurer shall,
upon notification of reinstatement, reinstate the pre-existing reinsurance
coverage. All reinstatements must occur within sixty (60) days of the end of the
grace period. Upon reinstatement of the reinsurance coverage, the Company shall
pay the reinsurance premiums which would have accrued had the policy not lapsed,
together with interest at the same rate as the Company receives under its
policy.

 

6.5   Expenses

The Reinsurer shall have no liability for medical examinations, inspection fees,
attending physicians’ statements and other charges incurred in connection with
the issuance of the Company’s policy. The Reinsurer is not liable for any
commissions or expenses incurred by the Company with respect to this Agreement,
except for those expenses reimbursed through the allowances in Schedule B.

 

6.6   Original Conditions

All reinsurance ceded hereunder shall be subject in all respects to the same
clauses, rates, terms, and conditions as the reinsured policy but, nevertheless
subject to the terms and conditions of this Agreement. 

 

6.7   Lapse or Termination of a Reinsured Policy

In the event of the lapse or termination of a policy reinsured under this
Agreement, reinsurance shall be terminated for that policy.

 

6.8   Company Data

The Company agrees to keep the Reinsurer informed of the identity and terms of
the policies reinsured under this Agreement, as well as any special programs
affecting reinsurance hereunder, by sending copies of the application forms,
policy forms, supplementary agreements, rate books, plan codes and all other
materials relevant to coverages reinsured.

Further, the Company agrees to send to the Reinsurer copies of all underwriting
manuals or criteria, requirements, and retention schedules affecting reinsurance
ceded and to keep the Reinsurer fully informed by sending all subsequent changes
of said materials.

 

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6.9   Reserves and Financial Reporting

The Company and the Reinsurer agree to hold all reserves on the policies
reinsured under this Agreement in accordance with statutory requirements and
sound actuarial principles.

 

The Company and the Reinsurer agree to provide each other with adequate data to
enable each of them to meet their valuation and financial reporting
requirements, as well as to monitor and evaluate the experience of the policies
reinsured under this Agreement.

 

6.10  Administration

The Company and the Reinsurer agree that core risk management functions such as
actuarial, underwriting, administration, and claims, shall be conducted by
employees of the Company unless otherwise specified in this Agreement or unless
both Parties to this Agreement agree in writing to transferring one or more of
these functions to another party.

 

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Article 7

INSOLVENCY

 

7.1   Definition of Insolvency

A Party to this Agreement shall be deemed to be insolvent when it:

1.

applies for or consents to the appointment of a receiver, rehabilitator,
conservator, liquidator, or statutory successor of its properties or assets; or

2.

is adjudicated as bankrupt or insolvent; or

3.

files or consents to the filing of a petition in bankruptcy, seeks
reorganization or an arrangement with creditors or takes advantage of any
bankruptcy, dissolution, liquidation or similar law or statute; or

4.

becomes the subject of an order to rehabilitate or an order to liquidate as
defined by the insurance code of the jurisdiction of the Party’s domicile.

 

7.2 Insolvency of the Company

In the event of insolvency of the Company, all payments normally made to it by
the Reinsurer shall be payable directly to the liquidator, receiver or statutory
successor of the Company on the basis of the liability of the Company under the
policies reinsured without diminution because of insolvency of the Company.

 

In the event of insolvency of the Company, the liquidator, receiver or statutory
successor shall give the Reinsurer written notice of the pendency of a claim on
a policy reinsured within a reasonable time after the claim is filed in the
solvency proceeding. During the pendency of the claim, the Reinsurer may
investigate the claim, and in a proceeding where the claim is to be adjudicated,
the Reinsurer may, at the Reinsurer's own expense, interpose in the name of the
Company (its liquidator, receiver or statutory successor) any defense or
defenses which the Reinsurer may deem available to the Company or its
liquidator, receiver or statutory successor. 

 

The expense thus incurred by the Reinsurer shall be chargeable, subject to court
approval, against the Company as part of the expense of liquidation to the
extent of a proportionate share of the amount of reinsurance that may accrue to
the Company solely as a result of the defense undertaken by the Reinsurer.

 

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Article 8

DISPUTE RESOLUTION

 

8.1   Initial Dispute Process 

In the event of a dispute arising out of or relating to this Agreement, the
parties agree to the following process of dispute resolution.  Within thirty
(30) days of Company or Reinsurer first giving the other party written
notification of a specific dispute, each party will appoint a designated company
officer or representative to attempt to resolve the dispute.  The officers or
representatives will meet at a mutually agreeable location as soon as possible
and as often as necessary, in order to discuss and informally resolve the
dispute.  The officers or representatives will discuss the problem and will
negotiate in good faith without the necessity of a formal arbitration
proceeding.  During the negotiation process, all reasonable requests made by one
officer or representative to the other for information will be honored.  The
designated officers will decide the specific format for such discussions.  All
such discussions and information exchanges shall be considered strictly
confidential, and shall not be disclosed, disseminated, or admissible for any
purpose.

 

8.2   Mediation 

If the officers or representatives cannot resolve the dispute within thirty (30)
days of their initial meeting, the dispute will be submitted to informal,
nonbinding, mediation.  The mediation shall be held in Topeka or Overland Park,
Kansas, within ninety (90) days following the date after one party has first
given the other party written notice of the dispute.  The mediator shall be
selected by agreement of the parties from the list of neutrals maintained by
Judicial Arbitration and Mediation Services (“JAMS”), and barring such
agreement, such mediator shall be appointed by JAMS.  The parties may be
represented by counsel at the mediation, and an authorized officer of the
parties, who has full authority to resolve the dispute, must attend the
mediation in person.  All statements made at mediation shall remain strictly
confidential.

 

8.3   Survival of Article

This Article shall survive termination of this Agreement.

 

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Article 9

CONFIDENTIALITY

 

The Company and the Reinsurer agree that Customer and Proprietary Information
shall be treated as confidential. Customer Information includes, but is not
limited to, medical, financial, and other personal information about proposed,
current, and former policy owners, insureds, applicants, and beneficiaries of
policies issued by the Company. Proprietary Information includes, but is not
limited to, business plans and trade secrets, mortality and lapse studies,
underwriting manuals and guidelines, applications and contract forms and the
specific terms and conditions of this Agreement.

 

Customer and Proprietary Information shall not include information that:

  1. is or becomes available to the general public through no fault of the Party
receiving the Customer and Proprietary Information (the “Recipient”);  

2.

.is independently developed by the Recipient;

 

3.

.is acquired by the Recipient from a third party not covered by a
confidentiality agreement; or

 

4.

.is disclosed under a court order, law or regulation.

 

The Parties shall not disclose such information to any other parties unless
agreed to in writing, except as necessary for retrocession purposes, as
requested by external auditors, as required by court order, or as required or
allowed by law or regulation.

 

The Company acknowledges that the Reinsurer can aggregate data with other
companies reinsured with the Reinsurer as long as the data cannot be identified
as belonging to the Company.

 

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Article 10

ERRORS AND OMISSIONS

 

If through unintentional error, oversight, omission, or misunderstanding
(collectively referred to as “errors”), the Reinsurer or the Company fails to
comply with the terms of this Agreement and if, upon discovery of the error by
either Party, the other Party is promptly notified, each thereupon shall be
restored to the position it would have occupied if the error had not occurred,
including interest.

 

If it is not possible to restore each Party to the position it would have
occupied if the error had not occurred, the Parties shall endeavor in good faith
to promptly resolve the situation in a manner that is fair and reasonable, and
most closely approximates the intent of the Parties as evidenced by this
Agreement.

 

However, the Reinsurer shall not provide reinsurance for policies that do not
satisfy the parameters of this Agreement, nor shall the Reinsurer be responsible
for negligent or deliberate acts or for repetitive errors in administration by
the Company. If either Party discovers that the Company has failed to cede
reinsurance as provided in this Agreement, or failed to comply with its
reporting requirements, the Reinsurer may require the Company to audit its
records for similar errors and to take actions necessary to avoid similar errors
in the future.

 

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Article 11

OFFSET 

 

Any debts or credits, in favor of or against either the Reinsurer or the Company
with respect to this Agreement, are deemed mutual debts or credits and shall be
offset and only the balance shall be allowed or paid.

 

The right of offset shall not be affected or diminished because of the
insolvency of the other Party.

 

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Article 12

DAC TAX 

 

The Parties to this Agreement agree to the following provisions pursuant to
Section 1.848-2(g)(8) of the Income Tax Regulations effective December 29, 1992,
under Section 848 of the Internal Revenue Code of 1986, as amended:

 

 

1.

The term “Party” shall refer to either the Company or the Reinsurer as
appropriate.

 

 

2.

The terms used in this Article are defined by reference to Regulation Section
1.848-2 in effect as of December 29, 1992.

 

 

3.

The Party with the net positive consideration for this Agreement for each
taxable year shall capitalize specified policy acquisition expense with respect
to this Agreement without regard to the general deductions limitation of Section
848(c)(1).

 

 

4.

The Company and the Reinsurer agree to exchange information pertaining to the
amount of the net consideration under this Agreement each year to ensure
consistency or as otherwise required by the Internal Revenue Service.

 

 

5.

The Company shall submit a schedule to the Reinsurer by June 1 of each year of
its calculation of the net consideration for the preceding calendar year. This
schedule of calculations shall be accompanied by a statement signed by an
officer of the Company stating that the Company shall report such net
consideration in its tax return for the preceding calendar year.

 

 

6.

The Reinsurer may contest such calculation by providing an alternative
calculation to the Company in writing within thirty (30) days of the Reinsurer’s
receipt of the Company’s calculation. If the Reinsurer does not so notify the
Company, the Reinsurer shall report the net consideration as determined by the
Company in the Reinsurer’s tax return for the previous calendar year.

 

 

7.

If the Reinsurer contests the Company’s calculation of the net consideration,
the Parties shall act in good faith to reach an agreement as to the correct
amount within thirty (30) days of the date the Reinsurer submits its alternative
calculation. If the Company and the Reinsurer reach agreement on an amount of
net consideration, each Party shall report such amount in their respective tax
returns for the previous calendar year.

 

 

8.

Both the Company and the Reinsurer represent and warrant that they are subject
to United States taxation under either Subchapter L or Subpart F of Part III of
Subchapter N of the Internal Revenue Code of 1986, as amended.

 

Page 19 of 38

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US Alliance Life and Security

Draft Reinsurance Agreement

 

Article 13

COMMENCEMENT AND TERMINATION

 

This Agreement shall be effective for the period beginning at 12:01a.m. Eastern
Standard Time September 1, 2016 (the “Effective Date”). It is a continuous
agreement, subject to ninety (90) days notice of cancellation for new business
at any time. Such notice of cancellation shall be sent by registered or
certified mail. The Reinsurer shall continue to accept new business during the
ninety (90) day notice period and to remain liable for all inforce business
reinsured under this Agreement until the natural expiration or expiry of said
business, subject to the terms and conditions set forth below.

 

This Agreement may be terminated by either Party at any time, for breach of the
terms and conditions of this Agreement, by giving the other Party not less than
thirty (30) days prior written notice by certified mail.

 

The Reinsurer’s right to terminate reinsurance pursuant to this Article shall be
without prejudice to its right to collect reinsurance premiums for the period
that reinsurance was in force prior to the expiration of the notice period.

 

The Reinsurer shall have the option of immediately terminating this Agreement
for new business, upon the occurrence of any of the following events:

 

1. .the Company is placed upon a “watch list” by its domiciliary insurance
regulators;

2.

.the regulatory authority of any jurisdiction in which the Company is authorized
to do business revokes the Company’s right to continue conducting business in
that jurisdiction for financial reasons;

3.

.an order appointing a receiver, conservator or trustee for management of the
Company is entered or a proceeding is commenced for rehabilitation, liquidation,
supervision or conservation of the Party;

4.

.any transaction that results in twenty percent (20%) or more of the voting
stock of the Company being owned or controlled by a person or entity other than
(a) the owner of the Company as of the date of this Agreement or (b) an entity
that, as of the date of this Agreement, is a parent, affiliate or subsidiary of
such owner;

5.

.the Company deviates from the agreed upon underwriting or claims guidelines
without the prior written approval of the Reinsurer. The Reinsurer shall have no
liability for any business quoted on a basis deviating from the agreed upon
underwriting guidelines in which case the Reinsurer’s liability shall not attach
to any business quoted on that basis; or

6.

.the Company outsources its claims handling and/or underwriting procedures and
practices to a Third Party Administrator, or makes a change in an existing Third
Party Administrator, without the Reinsurer’s prior written approval.

 

Page 20 of 38

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US Alliance Life and Security

Draft Reinsurance Agreement

 

Article 14

EXECUTION

 

This Agreement is effective as of September 1, 2016 and applies to eligible
policies issued on or after such date. This Agreement has been made in duplicate
and is hereby executed by both Parties.

 

Unless otherwise agreed to in writing, this Agreement must be fully executed by
both Parties within sixty (60) days of each other in order for this Agreement to
become effective.

 

US ALLIANCE LIFE AND SECURITY COMPANY By:    DRAFT      (signature)        
 (print or type name)      Title:   Date:   Place:   Attest:        (signature)
Title:      

UNIFIED LIFE INSURANCE COMPANY

By:    DRAFT      (signature)          (print or type name)     Title:   Date:  
Place:   Attest:        (signature)        Title:  

 

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US Alliance Life and Security

Draft Reinsurance Agreement

 

Schedule A

REINSURANCE COVERAGE 

 

A.1 Plans Reinsured

The following plans and riders are reinsured under this Agreement:

Critical Illness Policy Form # To be added

 

Minor state variations of these plans and the associated application forms shall
be reinsured on the same terms as the original reinsured plan provided the
Company notifies the Reinsurer in writing within sixty (60) days of the
Company’s issuing coverage with such variations. Notification must include the
written details of the variation or the variation may be highlighted on a copy
of the application form or policy.

 

Major state variations may have a significant impact on the pricing of the
reinsured plans. Prior to reinsurance coverage being effective for such a
modified plan, the Company and the Reinsurer must be in agreement on the need
for a price adjustment and the scope of such adjustment.

 

Major state variations include, but are not limited to:

1.

changes to the application form such as modifying the look back period or
eliminating or significantly revising application questions thereby resulting in
a modification of the original intent of the reinsured plan; or,

2.

changes to the Critical Illness Insured Conditions reinsured under this
Agreement, or modifications to the definitions, diagnostic criteria, or
exclusions applicable to such Critical Illness Insured Conditions.

 

A.2 Reinsurer’s Liability

With respect to the policies reinsured, the Reinsurer agrees to accept its share
of the liability arising from coverages provided under such policies. The
liability of the Reinsurer shall be limited to a thirty-three percent (33%)
Quota Share of all benefits covered under the reinsured policy forms and riders.

 

A.3 Company’s Retention

The Company agrees to retain, net for its own account, a Quota Share of not less
than thirty- three percent (34%) of the total original liability arising from
the issued coverages.

 

A.4 Benefits Reinsured

The following benefits shall be reinsured under this Agreement:

 

Plan A:       Invasive Cancer 100%

Partial Benefit Cancer 25%

 

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US Alliance Life and Security

Draft Reinsurance Agreement

 

Plan B:       Invasive Cancer 100%

Partial Benefit Cancer 25%

Heart Attack 100%

Stroke 100%

Kidney Failure 100%

Major Organ Transplant 100%

Coronary Artery Bypass Grafting 25%

Angioplasty 25%

 

Plan C:       Invasive Cancer 100%

Partial Benefit Cancer 25%

Heart Attack 100%

Stroke 100%

Kidney Failure 100%

Major Organ Transplant 100%

Coronary Artery Bypass Grafting 25%

Angioplasty 25%

Aortic Surgery 25%

Benign Brain Tumor 100%

Blindness 100%

Coma 100%

Deafness 100%

Paralysis 100%

Severe Burns 100%

Heart Valve Repair 25%

 

The reinsurance benefit amount for automatic reinsurance is the quota share
percentage specified above for automatic reinsurance multiplied by the face
amount of the policy.

 

If any partial benefits are paid, the face of amount of the policy shall be
reduced accordingly for purposes of calculating the reinsurance benefit amount
and reinsurance premium.

 

Page 23 of 38

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US Alliance Life and Security

Draft Reinsurance Agreement

 

Schedule B

REINSURANCE RATES AND ALLOWANCES

 

B.1 Reinsurance Premium

Reinsurance premiums are the Gross Premium Rates per thousand of benefit
reinsured multiplied by the reinsured benefit amount at the attained age for
each insured. If a partial benefit has been paid, reinsurance premiums are based
on the reduced reinsured benefit amount. The rates are shown in Table B.3. In
the event that state variations necessitate a premium adjustment, the Reinsurer
shall share proportionately in the adjusted rates.

 

B.2 Allowances

The Reinsurer shall pay to the Company the Reinsurer’s quota share of actual
commissions paid up to the following allowances:

 

 

First Year

Renewal Years

Commission Allowance (actual up to)

75%

15%

Other Allowance

14%

14%

Total Allowances

89%

29%

 

B.3 Rate Table

Premium Rates per $1,000 Face Amount

 

     

Benefit Plan A

  Age    

Non Smoker

   

Smoker

       

Male

   

Female

   

Male

   

Female

  18     $ 4.19     $ 4.62     $ 8.42     $ 7.71   19     $ 4.41     $ 4.86    
$ 8.92     $ 8.14   20     $ 4.64     $ 5.10     $ 9.42     $ 8.58   21     $
4.87     $ 5.34     $ 9.92     $ 9.02   22     $ 5.09     $ 5.58     $ 10.42    
$ 9.45   23     $ 5.32     $ 5.83     $ 10.92     $ 9.89   24     $ 5.54     $
6.07     $ 11.42     $ 10.32   25     $ 5.77     $ 6.31     $ 11.92     $ 10.76
  26     $ 6.06     $ 6.59     $ 12.57     $ 11.29   27     $ 6.35     $ 6.87  
  $ 13.22     $ 11.82   28     $ 6.64     $ 7.15     $ 13.87     $ 12.35   29  
  $ 6.93     $ 7.43     $ 14.52     $ 12.88   30     $ 7.22     $ 7.71     $
15.17     $ 13.41   31     $ 7.59     $ 8.03     $ 16.02     $ 14.07   32     $
7.95     $ 8.36     $ 16.87     $ 14.72   33     $ 8.32     $ 8.68     $ 17.72  
  $ 15.38  

 

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US Alliance Life and Security

Draft Reinsurance Agreement

 

Age

   

Non Smoker

   

Smoker

       

Male

   

Female

   

Male

   

Female

  34     $ 8.68     $ 9.01     $ 18.57     $ 16.03   35     $ 9.05     $ 9.33  
  $ 19.42     $ 16.69   36     $ 9.53     $ 9.68     $ 20.55     $ 17.47   37  
  $ 10.00     $ 10.04     $ 21.68     $ 18.25   38     $ 10.48     $ 10.39     $
22.80     $ 19.03   39     $ 10.95     $ 10.75     $ 23.93     $ 19.81   40    
$ 11.43     $ 11.10     $ 25.06     $ 20.59   41     $ 12.03     $ 11.46     $
26.51     $ 21.51   42     $ 12.64     $ 11.82     $ 27.97     $ 22.43   43    
$ 13.24     $ 12.19     $ 29.42     $ 23.34   44     $ 13.85     $ 12.55     $
30.88     $ 24.26   45     $ 14.45     $ 12.91     $ 32.33     $ 25.18   46    
$ 15.17     $ 13.25     $ 34.14     $ 26.18   47     $ 15.89     $ 13.60     $
35.94     $ 27.18   48     $ 16.62     $ 13.94     $ 37.75     $ 28.17   49    
$ 17.34     $ 14.29     $ 39.55     $ 29.17   50     $ 18.06     $ 14.63     $
41.36     $ 30.17   51     $ 18.82     $ 14.95     $ 43.34     $ 31.16   52    
$ 19.58     $ 15.27     $ 45.32     $ 32.15   53     $ 20.33     $ 15.59     $
47.30     $ 33.15   54     $ 21.09     $ 15.91     $ 49.28     $ 34.14   55    
$ 21.85     $ 16.23     $ 51.26     $ 35.13   56     $ 22.54     $ 16.51     $
53.09     $ 36.01   57     $ 23.23     $ 16.79     $ 54.92     $ 36.89   58    
$ 23.92     $ 17.07     $ 56.76     $ 37.77   59     $ 24.61     $ 17.35     $
58.59     $ 38.65   60     $ 25.30     $ 17.63     $ 60.42     $ 39.53   61    
$ 25.66     $ 17.73     $ 61.29     $ 39.80   62     $ 26.02     $ 17.83     $
62.16     $ 40.06   63     $ 26.38     $ 17.92     $ 63.02     $ 40.33   64    
$ 26.74     $ 18.02     $ 63.89     $ 40.59   65     $ 27.10     $ 18.12     $
64.76     $ 40.86   66     $ 28.25     $ 18.77     $ 66.98     $ 41.99   67    
$ 29.40     $ 19.41     $ 69.20     $ 43.12   68     $ 30.55     $ 20.06     $
71.41     $ 44.24   69     $ 31.70     $ 20.70     $ 73.63     $ 45.37   70    
$ 32.85     $ 21.35     $ 75.85     $ 46.50  

 

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US Alliance Life and Security

Draft Reinsurance Agreement

 

 

   

Benefit Plan B

  Age    

Non Smoker

   

Smoker

       

Male

   

Female

   

Male

   

Female

  18     $ 9.21     $ 8.02     $ 18.04     $ 13.10   19     $ 9.73     $ 8.45  
  $ 19.11     $ 13.84   20     $ 10.25     $ 8.88     $ 20.19     $ 14.58   21  
  $ 10.77     $ 9.31     $ 21.27     $ 15.32   22     $ 11.29     $ 9.74     $
22.34     $ 16.06   23     $ 11.82     $ 10.17     $ 23.42     $ 16.81   24    
$ 12.34     $ 10.60     $ 24.49     $ 17.55   25     $ 12.86     $ 11.03     $
25.57     $ 18.29   26     $ 13.52     $ 11.54     $ 26.94     $ 19.19   27    
$ 14.17     $ 12.05     $ 28.31     $ 20.09   28     $ 14.83     $ 12.57     $
29.69     $ 21.00   29     $ 15.48     $ 13.08     $ 31.06     $ 21.90   30    
$ 16.14     $ 13.59     $ 32.43     $ 22.80   31     $ 16.96     $ 14.18     $
34.20     $ 23.90   32     $ 17.78     $ 14.77     $ 35.96     $ 25.00   33    
$ 18.61     $ 15.37     $ 37.73     $ 26.09   34     $ 19.43     $ 15.96     $
39.49     $ 27.19   35     $ 20.25     $ 16.55     $ 41.26     $ 28.29   36    
$ 21.28     $ 17.24     $ 43.50     $ 29.62   37     $ 22.31     $ 17.92     $
45.74     $ 30.95   38     $ 23.33     $ 18.61     $ 47.97     $ 32.29   39    
$ 24.36     $ 19.29     $ 50.21     $ 33.62   40     $ 25.39     $ 19.98     $
52.45     $ 34.95   41     $ 26.66     $ 20.75     $ 55.24     $ 36.53   42    
$ 27.94     $ 21.52     $ 58.04     $ 38.11   43     $ 29.21     $ 22.29     $
60.83     $ 39.70   44     $ 30.49     $ 23.06     $ 63.63     $ 41.28   45    
$ 31.76     $ 23.83     $ 66.42     $ 42.86   46     $ 33.15     $ 24.62     $
69.51     $ 44.57   47     $ 34.53     $ 25.40     $ 72.60     $ 46.27   48    
$ 35.92     $ 26.19     $ 75.68     $ 47.98   49     $ 37.30     $ 26.97     $
78.77     $ 49.68   50     $ 38.69     $ 27.76     $ 81.86     $ 51.39   51    
$ 40.22     $ 28.57     $ 85.25     $ 53.17   52     $ 41.75     $ 29.39     $
88.63     $ 54.95   53     $ 43.29     $ 30.20     $ 92.02     $ 56.72  

 

Page 26 of 38

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US Alliance Life and Security

Draft Reinsurance Agreement

 

 

   

Benefit Plan B

  Age    

Female

   

Male

       

Non Smoker

   

Smoker

   

Non Smoker

   

Smoker

  54     $ 44.82     $ 31.02     $ 95.40     $ 58.50   55     $ 46.35     $
31.83     $ 98.79     $ 60.28   56     $ 47.74     $ 32.65     $ 101.95     $
62.01   57     $ 49.13     $ 33.46     $ 105.11     $ 63.74   58     $ 50.53    
$ 34.28     $ 108.27     $ 65.47   59     $ 51.92     $ 35.09     $ 111.43     $
67.20   60     $ 53.31     $ 35.91     $ 114.59     $ 68.93   61     $ 54.19    
$ 36.48     $ 116.42     $ 69.93   62     $ 55.07     $ 37.05     $ 118.25     $
70.93   63     $ 55.94     $ 37.61     $ 120.09     $ 71.94   64     $ 56.82    
$ 38.18     $ 121.92     $ 72.94   65     $ 57.70     $ 38.75     $ 123.75     $
73.94   66     $ 60.37     $ 40.60     $ 128.70     $ 76.92   67     $ 63.05    
$ 42.45     $ 133.66     $ 79.91   68     $ 65.72     $ 44.29     $ 138.61     $
82.89   69     $ 68.40     $ 46.14     $ 143.57     $ 85.88   70     $ 71.07    
$ 47.99     $ 148.52     $ 88.86  

 

 

 

 

   

Benefit Plan C

  Age    

Female

   

Male

       

Non Smoker

   

Smoker

   

Non Smoker

   

Smoker

  18     $ 11.09     $ 9.53     $ 20.25     $ 14.77   19     $ 11.64     $ 9.99
    $ 21.37     $ 15.55   20     $ 12.19     $ 10.46     $ 22.50     $ 16.33  
21     $ 12.74     $ 10.93     $ 23.63     $ 17.11   22     $ 13.29     $ 11.39
    $ 24.75     $ 17.89   23     $ 13.85     $ 11.86     $ 25.88     $ 18.68  
24     $ 14.40     $ 12.32     $ 27.00     $ 19.46   25     $ 14.95     $ 12.79
    $ 28.13     $ 20.24   26     $ 15.66     $ 13.35     $ 29.58     $ 21.20  
27     $ 16.37     $ 13.91     $ 31.04     $ 22.17   28     $ 17.07     $ 14.47
    $ 32.49     $ 23.13   29     $ 17.78     $ 15.03     $ 33.95     $ 24.10  
30     $ 18.49     $ 15.59     $ 35.40     $ 25.06   31     $ 19.38     $ 16.25
    $ 37.26     $ 26.23  

 

Page 27 of 38

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US Alliance Life and Security

Draft Reinsurance Agreement

 

 

   

Benefit Plan C

  Age    

Non Smoker

   

Smoker

       

Male

   

Female

   

Male

   

Female

  32     $ 20.27     $ 16.90     $ 39.12     $ 27.40   33     $ 21.17     $
17.56     $ 40.98     $ 28.57   34     $ 22.06     $ 18.21     $ 42.84     $
29.74   35     $ 22.95     $ 18.87     $ 44.70     $ 30.91   36     $ 24.07    
$ 19.63     $ 47.06     $ 32.33   37     $ 25.19     $ 20.39     $ 49.42     $
33.75   38     $ 26.32     $ 21.16     $ 51.78     $ 35.16   39     $ 27.44    
$ 21.92     $ 54.14     $ 36.58   40     $ 28.56     $ 22.68     $ 56.50     $
38.00   41     $ 29.96     $ 23.56     $ 59.47     $ 39.70   42     $ 31.36    
$ 24.43     $ 62.44     $ 41.40   43     $ 32.76     $ 25.31     $ 65.40     $
43.09   44     $ 34.16     $ 26.18     $ 68.37     $ 44.79   45     $ 35.56    
$ 27.06     $ 71.34     $ 46.49   46     $ 37.05     $ 27.90     $ 74.58     $
48.26   47     $ 38.54     $ 28.73     $ 77.82     $ 50.03   48     $ 40.02    
$ 29.57     $ 81.07     $ 51.81   49     $ 41.51     $ 30.40     $ 84.31     $
53.58   50     $ 43.00     $ 31.24     $ 87.55     $ 55.35   51     $ 44.66    
$ 32.13     $ 91.20     $ 57.22   52     $ 46.31     $ 33.01     $ 94.85     $
59.10   53     $ 47.97     $ 33.90     $ 98.49     $ 60.97   54     $ 49.62    
$ 34.78     $ 102.14     $ 62.85   55     $ 51.28     $ 35.67     $ 105.79     $
64.72   56     $ 52.85     $ 36.59     $ 109.25     $ 66.58   57     $ 54.42    
$ 37.50     $ 112.71     $ 68.43   58     $ 55.98     $ 38.42     $ 116.17     $
70.29   59     $ 57.55     $ 39.33     $ 119.63     $ 72.14   60     $ 59.12    
$ 40.25     $ 123.09     $ 74.00   61     $ 60.24     $ 40.92     $ 125.20     $
75.11   62     $ 61.35     $ 41.59     $ 127.30     $ 76.21   63     $ 62.47    
$ 42.25     $ 129.41     $ 77.32   64     $ 63.58     $ 42.92     $ 131.51     $
78.42   65     $ 64.70     $ 43.59     $ 133.62     $ 79.53   66     $ 67.45    
$ 45.48     $ 138.78     $ 82.59   67     $ 70.20     $ 47.37     $ 143.95     $
85.65  

 

Page 28 of 38

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US Alliance Life and Security

Draft Reinsurance Agreement

 

 

   

Benefit Plan C

  Age    

Non Smoker

   

Non Smoker

       

Male

   

Male

   

Male

   

Male

  68     $ 72.96     $ 49.25     $ 149.11     $ 88.72   69     $ 75.71     $
51.14     $ 154.28     $ 91.78   70     $ 78.46     $ 53.03     $ 159.44     $
94.84  

 

Page 29 of 38

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US Alliance Life and Security

Draft Reinsurance Agreement

 

Schedule C

REPORTS

 

C.1 Monthly Reporting

The Company shall provide information on a monthly basis to the Reinsurer as
follows:

 

Report for Month / Year

 

Number of New Policies Issued

 

Number of Policies In force End of Month

     

Paid Premium– Policy Year 1

 

Paid Premium– Policy Years 2+

 

(Please attach detailed premium calculation)

 

TOTAL PREMIUM 

 

Allowance

 

     Policy Year 1

 

 Policy Years 2+

 

TOTAL ALLOWANCE

 

TOTAL CLAIMS

 

NET TO REINSURER

 

NET TO COMPANY

 

 

C.2 Quarterly Reporting

On a quarterly basis, the Company shall provide financial data to the Reinsurer
by Agreement number and policy form number series, both on 100% and ceded bases.
The Company shall report the credits and adjustments, including reserve credit,
resulting from the policies reinsured under this Agreement that are reflected in
its statutory financial statements, and also for each calendar year for U.S.
federal income tax reporting.

 

The Company shall report statutory reinsurance credits for:

■

active life reserves;

■ IBNR; ■ other.

The Company shall report in force data by policy form as follows:

■

number of individual policies in-force calendar end-of quarter;

■

number of individual policies issued calendar year-to-date;

■

annualized premium in-force calendar end-of-quarter;

■

annualized premium of new business issued calendar year-to-date;

■

number of new claims reported calendar year-to-date;

■

number of pending claims.

 

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US Alliance Life and Security

Draft Reinsurance Agreement

 

C.3 Reporting

Reporting formats for Policy Detail, Transactions and Paid Claims follow.

 

Page 31 of 38

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US Alliance Life and Security

Draft Reinsurance Agreement

 

Critical Illness Policy Detail

 

Include Active Policies On for Current Month

 

Field Name

Data Type

Business Description

Company Number

Numeric

Reinsurer Generated Company Number

Treaty Number

Alpha/numeric

Reinsurer Generated Treaty ID

Deal Number

Numeric

Reinsurer Internal Tracking Number per deal

Reinsurance Coverage Code

Alpha

C (Coinsurance)

Quota Share

Numeric

33%

Underwriting Basis

 

SI

Coverage Type

Alpha/numeric

Individual

Valuation Date

Date format

Date of valuation provided to Reinsurer

Policy Number

Alpha/numeric

Assigned by insurer to match claim to exposure; should be unique to each person
and contract

Unique Insured Identifier

Alpha/numeric

If insured is identified by other than Social Security; this value cannot be
policy number since it's not a unique value

Insured Last Name

Alpha

Last name of insured

Insured First Name

Alpha

First name of insured

Insured Middle Initial

Alpha

Middle initial.

Gender

Alpha

M=Male, F=Female, U=unknown

Smoker Status

Alpha

Smoker, non-smoker; need data dictionary

Birth Date

Date format

Birth Date

Policy Issue Date

Date format

Effective date of the current policy

Policy Effective Date

(If different than policy issue date)

Date format

Effective date of the current policy

Policy Issue Age

Numeric

Age of insured at time of policy issue

Residence State

Alpha

State Codes

Policy Issue State

Alpha

State Codes

Resident Zip Code

Numeric

Zip Code of current residence

Policy Issue Zip Code

Numeric

Zip Code of policy issue

Married vs. Single

Alpha

M=Married, S=Single, D=Domestic Partner, H=Household, per IRS definition,
U=Unknown

Auto/Fac Code

Alpha

N=None, A=Auto, F=Fac

Plan Code

Alpha/numeric

Plan A, Plan B, Plan C

 

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Policy Forms

Alpha/numeric

Provide plan and rider code mapping to policy forms

Policy Status

Alpha

A=Active, I=Inactive, R=Reinstated, L=Lapsed,
T=Terminated

Policy Status Effective Date

Date format

Date which corresponds to the policy holder's status

Premium Paid to Date

Date format

Calendar year to date premium collected; reset on January 1

Premium Mode

Alpha

A=Annual, S=Semiannual, Q=Quarterly, B=Bimonthly, M=Monthly

Original Annual Premium

Numeric

Annual premium at issue

Current Annual Premium

Numeric

Current Annual Premium amount

Annual Reinsurance Premium

Numeric

Annual premium paid to Reinsurer

Commissionable Annual Premium

Numeric

 

Unearned Premium Balance

Numeric

Reserves – Need to be split out

Due Premium Balance

Numeric

Reserves - Need to be split out

Advanced Premium Balance

Numeric

Reserves - Need to be split out

Stat Active Life Reserve

Numeric

Reserves - Need to be split out

Face Value Amount of Policy

Numeric

Initial policy benefit

Ceded Amount

Numeric

Dollar amount ceded to Reinsurer

 

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Critical Illness Transactions

 

Include Billing and Policy Changes for Current Month

 

Field Name

Data Type

Business Description

Company Number

Numeric

Reinsurer Generated Company Number

Treaty Number

Alpha/numeric

Reinsurer Generated Treaty ID

Deal Number

Numeric

Reinsurer Internal Tracking Number per deal

Plan Code

Alpha/numeric

Plan A, Plan B, Plan C

Policy Forms

Alpha/numeric

Provide plan and rider code mapping to policy forms

Valuation Date

Date format

Date of valuation provided to Reinsurer

Policy Number

Alpha/numeric

Assigned by insurer to match claim to exposure; should be unique to each person
and contract

Unique Insured Identifier

Alpha/numeric

If insured is identified by other than Social Security; this value cannot be
policy number since it's not a unique value

Transaction Pay Date

Date format

Date of payment

Premium Paid From Date

Date format

The first day of the billing cycle

Premium Paid To Date

Date format

The last day in the billing cycle

First Year/Renewal

 

Indicate if premium is for first year or renewal.
F= first year, R = renewal

Paid Premium

Numeric

 

Paid Commissionable Premium

Numeric

The dollar amount of premium paid which is eligible for commission

Paid Commission

Numeric

The dollar amount of commission paid

Commission Factor

Numeric

Percentage of commissionable premium to be paid as commission

Commission Factor Maximum

Numeric

Maximum percentage reimbursed by Reinsurer

Commission Split Percent

Numeric

Other factors applied to commission calculation such as agent split

Policy Duration

Numeric

The length of time in years the policy has been inforce

Payment Mode

Alpha

Annual, Monthly, Quarterly, etc. (need data dictionary)

Payment Method

Alpha

If used in rating. Direct billed, automatic payment, etc. (need data dictionary)

Policy Issue Date

Date format

Policy Issue/Effective Date

Face Value Amount of Policy

Numeric

 

 

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Ceded Amount

Numeric

The dollar amount ceded to the reinsurer

First month Reinsurance Premium

Numeric

The premium amount for the first month the policy is in force

Premium Mode

Alpha

A=Annual, S=Semiannual, Q=Quarterly, B=Bimonthly, M=Monthly

Modal Rating Factor (Treaty Premium Factor)

Numeric

The rate which when multiplied by the face amt equals the modal premium. (Quota
share)

Current Annual Premium

Numeric

Current Annual Premium amount

Allowance

Numeric

 

Reinsurance Premium Due

Numeric

Modal billing premium – amount paid at each payment period depending on Premium
Mode

Billing Date

Date format

The date of the billing statement

Insured Last Name

Alpha

Last name of insured

Insured First Name

Alpha

First name of insured

Insured Middle Initial

Alpha

Middle initial.

Gender

Alpha

M=Male, F=Female, U=unknown

Birth Date

Date format

Birth Date

Policy Issue State

Alpha

State Codes

Smoker Status

Alpha

Smoker, non-smoker 
S=Smoker
N=Non-Smoker
U=Unknown

Need data dictionary

Transaction Type

Alpha

NEW = New Policy
REN = Renewal
DTH = Death
LAP = Lapse
Need data dictionary

 

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Draft Reinsurance Agreement

 

Critical Illness Paid Claims Listing

 

Include Claims for Active Polices for Current Month

 

Field Name

Data Type

Business Description

Company Number

Numeric

Reinsurer Generated Company Number

Treaty Number

Alpha/numeric

Reinsurer Generated Treaty ID

Deal Number

Numeric

Reinsurer Internal Tracking Number per deal

Claimant Type

Alpha

Primary

Valuation Date

Date format

Date of valuation provided to Reinsurer

Policy Number

Alpha/numeric

Assigned by insurer to match claim to exposure; should be unique to each person
and contract

Unique Insured Identifier

Alpha/numeric

If insured is identified by other than Social Security; this value cannot be
policy number since it's not a unique value

Claim Number

Alpha/numeric

The number identifying the insured's claim

Line/Subclaim Number

Alpha/numeric

Individual actions taken under a larger claim number

Plan Code

Alpha/numeric

Plan A, Plan B, Plan C

Policy Forms

Alpha/numeric

Please provide plan and rider code mapping to policy forms

Claim Status Code

Alpha

Paid, outstanding, void, etc.
A = Abdn
O = Outstanding
P = Paid
S = Stop
V = Void
Need data dictionary

Claim Status Date

Date format

The date corresponding to the claim status code

Original Incurred Claim Date

Date format

The date the claim first submitted

Reported Date

Date format

The date which the claim was reported

Paid Date

Date format

The date which the claim was paid

Benefit Component

Alpha/numeric

Trigger Paid

Diagnosis 1

Alpha/numeric

ICD-10

Diagnosis 2

Alpha/numeric

ICD-10

Diagnosis 3

Alpha/numeric

ICD-10

 

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Diagnosis 4

Alpha/numeric

ICD-10

DRG

Alpha/numeric

Diagnosis-Related Group

Procedure Code

Alpha/numeric

CPT4, HCPC or Revenue Code.

Reason for Denial

Alpha

If claim status =Denied, why was claim denied

Diagnosis Date

Date format

 

Coverage Type

Alpha/numeric

To differentiate between coverage (i.e. individual, individual worksite, group)

Insured Last Name

Alpha

Last name of insured

Insured First Name

Alpha

First name of insured

Insured Middle Initial

Alpha

Middle initial. OFAC requirement

Benefit Percentage Paid

 

If it's a cardiac claim that is only paid at 25% for bypass vs. 100% for heart
attack, Reinsurer needs to know the level of payment issued

Benefit Percentage Requested

 

If it's a cardiac claim that is only paid at 25% for bypass vs. 100% for heart
attack, Reinsurer needs to know the level of payment issued

Face Value Amount of Policy

Numeric

Initial Policy benefit

Ceded Amount

Numeric

The dollar amount ceded to Reinsurer

 

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Draft Reinsurance Agreement

 

Schedule D

UNDERWRITING 

 

With respect to the policies reinsured, the Company agrees to underwrite all
policies in accordance with the underwriting requirements stated below:

 

Application Form #CI-App 9/16

 

The entire application shall be completed by every applicant regardless of plan
selected. The grid below lists which plans are available to an applicant based
on the questions he/she answers “yes” to.

 

Application Question

Available Plan

4a

None

4b

A

4c

None

4d

None

4e

None

4f

A

4g

A

4h

None

4i

None

4j

A and B

4k

A

4l

None

4m

A

4n

None

5a

A

5b

None

5c

A

5d

A

6a

None

6b

None

6c

None

6d

None

7

None

8a

None

8b

None

 

A pharmaceutical scan shall be done on all applicants for insurance. The Company
shall use the Reinsurer’s “Drug Database 20161020.xlsx” to determine insurable
medications.

 

 

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