EXHIBIT 10.1


 


AMENDMENT
NO. 1 TO REINSURANCE AGREEMENT


 


This
AMENDMENT NO. 1 TO REINSURANCE AGREEMENT, dated as of January 1, 2008, (“Amendment
No. 1”) is by and between AMERICAN HERITAGE LIFE INSURANCE COMPANY (“Ceding
Company”) and ALLSTATE LIFE INSURANCE COMPANY (“Reinsurer”).


 


WHEREAS,
Ceding Company and Reinsurer entered into that certain Reinsurance Agreement
effective December 31, 2004, (“Agreement”) whereby Reinsurer reinsures
100% of any and all liabilities of the Ceding Company under certain single
premium deferred annuities, except for certain excluded liabilities.


 


WHEREAS,
Ceding Company and Reinsurer now desire to amend the Agreement to also reinsure
disability insurance issued by the Ceding Company, as provided herein.


 


NOW,
THEREFORE, in consideration of the above stated premises and the promises and
the mutual agreements set forth herein, the parties hereto agree as follows:


 


1.               Subject to receipt of all
required regulatory approvals, this Amendment No. 1 shall be effective as
of 12:01 a.m. January 1, 2008 (“Amendment No. 1 Effective Date”).


 


2.               Exhibit A is hereby
replaced by the Exhibit A attached hereto.


 


3.               Article I, Paragraph F,
is hereby replaced by the following:


 


F.                                      “Net Benefits”
shall mean the actual amounts paid or incurred by the Ceding Company, less any
amounts payable to Ceding Company by another reinsurer with respect to the
Policies for all surrenders, withdrawals (full and partial), death benefits,
disability benefits, annuitizations, and payments on supplemental contracts, net
of Excluded Liabilities.


 


4.               Article I, Paragraph I,
is hereby replaced by the following:


 


I.                                         “Policy” or “Policies”
shall mean the policies and contracts described in Exhibit A which are
underwritten or reinsured by the Ceding Company.


 


5.               The following paragraph is
hereby added to Article V


 


Within
forty-five (45) days of the latter of the Amendment No. 1 Effective Date
or the date Ceding Company has received approval from all necessary regulatory
authorities for Amendment No. 1 (“Amendment No. 1 Settlement Date”),
assets consisting of cash and investments, accrued investment income,
uncollected or deferred premiums and agent balances, and amounts recoverable
from reinsurers net 


 

















 


of
unearned investment income, shall be transferred by Ceding Company to Reinsurer
with a market value amount calculated as of the Amendment No. 1 Effective
Date equal to the “Amendment No. 1 Net Statutory Liabilities” for the
Policies reinsured under this Amendment No. 1.


 


“Amendment
No. 1 Net Statutory Liabilities” is determined as “Total Liabilities” as
currently included in Annual Statement page 3, line 28 attributable to the
Policies ceded to Reinsurer under this Amendment No. 1.


 


Ceding
Company shall also pay to Reinsurer interest on such amount at the rate of four
percent (4%) per annum, simple rate, beginning on the Amendment No. 1
Effective Date and ending on the Amendment No. 1 Settlement Date.


 


6.               Article VI, Paragraph B
(c), is hereby replaced with the following:


 


(c)                      equals insurance taxes,
licenses and fees (including allocated taxes, licenses and fees, but excluding
income taxes) paid or incurred by Ceding Company with respect to the Policies.


 


7.               Article VI, Paragraph B
(f), is hereby replaced with the following:


 


(f)                        equals general insurance
expenses (including allocated expenses) paid or incurred by Ceding Company with
respect to the Policies.


 


8.               The following Article XVI
is hereby added to the Agreement:


 


ARTICLE XVI


RECAPTURE


 


1.               If a Policy reinsured under this Agreement
later fails to meet the definition of a “Policy” as specified in Exhibit A
and thereby becomes ineligible for reinsurance under this Agreement, the Policy
will be immediately recaptured by Ceding Company.


 


2.               Ceding Company shall notify
Reinsurer of any such recapture.


 


3.               Upon receiving notice of
recapture, Reinsurer shall pay to Ceding Company an amount equal to the Net
Statutory Liabilities associated with the recaptured Policy.  This amount will be determined as of the end
of the month following the date of recapture.


 


4.               Within ninety (90) days following the
recapture by Ceding Company of any business ceded to another reinsurer, Ceding
Company shall pay to Reinsurer assets with statutory book value equal to (a) x
[1+(b)(c)/365], where (a) through (c) are as defined below.


 


 


 


2

















 


(a)                                  equals Net Statutory
Liabilities attributable to the Policies recaptured.  The applicable portion of these items will be
calculated as of the end of the month following the date of recapture.


 


(b)                                 equals the annual rate of
interest based on Ceding Company’s general account statutory financial
statement as filed with the Florida Insurance Department as of the end of the
calendar year immediately preceding the date of recapture, calculated as (i) divided
by (ii) where:


 


(i)                                     The amount on Page 4,
line 3 (Net Investment Income).


 


(ii)                                  The mean assets
over the year calculated as the sum of Page 2, line 10 (Subtotals, cash
and invested assets) Current Year and Page 2, line 10 Prior Year, the
quantity divided by 2.


 


(c)                                  equals the number of days
between the end of the month following the date of recapture and the date when
payment is made.


 


9.                           Initially
capitalized terms not otherwise defined herein shall have the same meaning set
forth in the Agreement


 


Except
as expressly provided herein, all other terms, covenants, and conditions of the
Agreement shall remain in full force and effect.


 


IN
WITNESS WHEREOF, the Parties have caused this Amendment No. 1 to
Reinsurance Agreement to be duly executed by their respective officers on the
dates shown below.


 


 


	
  AMERICAN
  HERITAGE LIFE INSURANCE COMPANY

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Samuel H. Pilch

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Group
  Vice President

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  January 4,
  2008

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ALLSTATE
  LIFE INSURANCE COMPANY

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Samuel H. Pilch

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:
  

  	
  Group
  Vice President

  	
   

  
	
   

  	
   

  
	
  Date:  

  	
  January 4,
  2008

  	
   

  



 


 


3

















 


 


 


EXHIBIT A


ELIGIBLE AND INELIGIBLE POLICIES


 


1.               For the period 11:59 p.m.
December 31, 2004 up to, but not including, 12:01 am January 1, 2008,
“Policy” or “Policies” shall mean only single premium deferred annuities with
form number A — DO31(11.99) issued by the Ceding Company.


 


2.               For the period beginning on
12:01 a.m. January 1, 2008, “Policy” or “Policies” means all
individual disability policies regardless of form number and single premium
deferred annuities with form number A — DO31(11.99) issued by the Ceding
Company.  Provided, however, that all
credit and group disability policies and certificates issued by the Ceding
Company are specifically excluded from the definition of “Policy” or “Policies”.