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                                                                Exhibit 10.39

                              REINSURANCE AGREEMENT

                                     BETWEEN

                    COLUMBIA UNIVERSAL LIFE INSURANCE COMPANY

                                       AND

                         ALLSTATE LIFE INSURANCE COMPANY

                                    RECITALS

This Reinsurance Agreement (hereinafter "Agreement") is made and entered into by
and between COLUMBIA UNIVERSAL LIFE INSURANCE COMPANY, a life insurance company
domiciled in the State of Texas (hereinafter "Ceding Company") and ALLSTATE LIFE
INSURANCE COMPANY, a life insurance company domiciled in the State of Illinois
(hereinafter the "Reinsurer").

WHEREAS, the Ceding Company desires to cede to the Reinsurer, and the Reinsurer
desires to accept on a modified coinsurance basis 100% of the Ceding Company's
Net Ceded Liabilities (as defined in Article I, below) under certain life and
health insurance policies and certificates, as provided in this Agreement;

NOW THEREFORE, the Ceding Company and the Reinsurer mutually agree to reinsure
on the terms and conditions stated in this Agreement.

                                    ARTICLE I
                                   DEFINITIONS

Unless otherwise defined herein, as used in this Agreement the following terms
shall have the meanings ascribed to them below:

A.   "Annual Statement" shall mean the Ceding Company's Life and Accident and
     Health Companies 1999 Annual Statement for the General Account.

B.   "Code" shall mean the Internal Revenue Code of 1986, as amended.

C.   "Commission and Expense Allowance" shall have the meaning set forth in
     Exhibit B.

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D.   "Effective Date" shall mean the effective date of this Agreement, which
     shall be July 1, 2000.

E.   "Excluded Liabilities" shall mean (i) Extra-Contractual Obligations, and
     (ii) liabilities ceded by Ceding Company under Third-Party Reinsurance
     Agreements.

F.   "Extra-Contractual Obligations" shall mean all liabilities and obligations
     for consequential, extra-contractual, exemplary, punitive, special or
     similar damages or any other amounts due or alleged to be due (other than
     those arising under the express terms and conditions of the Policies) which
     arise from any real or alleged act, error or omission, whether or not
     intentional, in bad faith or otherwise, including without limitation, any
     act, error or omission relating to: (i) the marketing, underwriting,
     production, issuance, cancellation or administration of the Policies; (ii)
     the handling of claims in connection with the Policies; or (iii) the
     failure to pay or the delay in payment of benefits or claims, under or in
     connection with the Policies.

G.   "Interest Maintenance Reserve" shall mean the value which will be reported
     on the Ceding Company's Annual Statement Balance Sheet.

H.   "Invested Assets" shall mean the assets, including policy loans, held by
     the Ceding Company in an internally segmented investment portfolio for the
     Net Ceded Liabilities, as set forth in Article IV, Paragraph A.

I.   "Modified Coinsurance Reserve" shall mean the statutory reserves held by
     the Ceding Company with respect to the Policies. The statutory reserves
     will be determined by using the valuation procedures as prescribed or
     permitted by the Texas Department of Insurance for statutory financial
     statement filings.

J.   "Modified Coinsurance Reserve Adjustment" shall have the meaning set forth
     in Article V.

K.   "Net Benefits" shall mean the actual amounts paid or incurred by the Ceding
     Company with respect to the Policies for all surrenders, withdrawals (full
     and partial), death benefits, annuitizations, and payments on supplemental
     contracts, net of Excluded Liabilities.

L.   "Net Capital Gains" shall mean realized capital gains less realized capital
     losses from the sale or maturity on Invested Assets plus the unrealized
     capital gains less the unrealized capital losses from the change in
     statutory book value and admitted value on Invested Assets, minus the
     additions to (which may be positive or negative) and plus the amortization
     of (which may be positive or negative) the Interest Maintenance Reserve on

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     Invested Assets.

M.   "Net Ceded Liabilities" shall mean any and all liabilities of the Ceding
     Company arising under the Policies, but shall not include Excluded
     Liabilities.

N.   "Net Premiums" shall mean the premiums due the Ceding Company with respect
     to the Policies.

O.   "Policy or Policies" shall mean the insurance contracts defined in Exhibit
     A which are underwritten or reinsured by the Ceding Company. For the
     avoidance of doubt, "Policies" refers to all life insurance and health
     insurance policies and certificates which are in-force on the Effective
     Date or issued after the Effective Date, including (i) any supplemental
     agreements or benefits arising out of the Policies, (ii) premium deposit
     funds, (iii) policies, or portions thereof, recaptured by the Ceding
     Company under Third-Party Reinsurance Agreements, and (iv) policies
     reinsured by Ceding Company.

P.   "Reinsurance Settlement" shall have the meaning set forth in Article IV.

Q.   "Terminal Accounting and Settlement" shall have the meaning set forth in
     Article XIV.

R.   "Third-Party Reinsurance Agreements" shall mean any written reinsurance
     agreements under which Ceding Company has ceded liabilities with respect to
     the Policies, other than this Agreement.

                                   ARTICLE II
                              BASIS OF REINSURANCE

The Ceding Company agrees to cede and the Reinsurer agrees to accept Net Ceded
Liabilities. The reinsurance provided hereunder shall be on a 100% modified
coinsurance basis.

                                   ARTICLE III
             LIABILITY OF REINSURER; MODIFIED COINSURANCE PROVISIONS

A.   All of the Net Ceded Liabilities shall be reinsured pursuant to the terms
     of this Agreement as of the Effective Date.

B.   The liability of the Reinsurer with respect to Policies in force on the
     Effective Date will begin on the Effective Date. The liability of the
     Reinsurer with respect to any application received or any contract issued
     after the Effective Date and reinsured hereunder will begin simultaneously
     with that of the Ceding Company. The Reinsurer's liability with respect to
     any Policy will terminate on the date the Ceding Company's liability on
     such contract terminates or the date this Agreement is terminated,
     whichever is earlier.

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     However, termination of this Agreement will not terminate the Reinsurer's
     liability for Net Benefits prior to the date of termination. If any of the
     Policies are reduced or terminated by payment of a death benefit,
     withdrawal or surrender, the reinsurance will be reduced proportionately or
     terminated.

C.   The reinsurance provided under this Agreement is subject to the same
     limitations and conditions as set forth in the Policies.

D.   Ceding Company shall not make any changes after the Effective Date in the
     provisions and conditions of a Policy except with Reinsurer's prior written
     consent and/or to the extent that any change is required in the reasonable
     judgment of Ceding Company, under any law, rule or regulation. Reinsurer
     and Ceding Company shall fully cooperate with each other to effect any such
     changes in the provisions and conditions of a Policy in compliance with any
     applicable law, rule or regulation.

E.   Some of the Policies ceded under this Agreement provide that the Ceding
     Company may in its discretion, from time to time, as provided in the policy
     or contract, declare interest rates, cost of insurance rates, premium
     payments or other non-guaranteed elements that are or affect required
     premium payments or are used to determine policy or contract values. The
     Ceding Company agrees, while this Agreement is in effect, to set such
     discretionary interest rates, cost of insurance rates, premium rates or
     other non-guaranteed elements to be declared on the Policies and the
     effective dates thereof, taking into account the recommendations of the
     Reinsurer with respect thereto. After giving due consideration to
     Reinsurer's recommendations, Ceding Company may, in its discretion, either
     follow or reject such recommendations. The Ceding Company and Reinsurer
     agree to fully cooperate in obtaining any required regulatory approvals in
     connection with setting or changing such discretionary interest rates, cost
     of insurance rates, premium rates or other non-guaranteed elements.

F.   Ceding Company shall submit to Reinsurer for its approval, which approval
     shall not be unreasonably withheld, any proposed changes in its investment
     policy with respect to the Policies.

                                   ARTICLE IV
                            SETTLEMENT AND REPORTING

A.   On the Effective Date, the Ceding Company shall internally segment Invested
     Assets on behalf of the Reinsurer with a statutory book value equal to
     Items (a) and (b) less Items (c) and (d) below. In exchange, the Reinsurer
     shall accept the future results of the Net Ceded Liabilities and the
     Invested Assets.

     (a)  Liabilities related to the Net Ceded Liabilities determined as Total
          Liabilities less

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          Asset Valuation Reserve less Interest Maintenance Reserve, as
          currently included respectively in Annual Statement page 3, Lines 28,
          24.1 and 11.4.

     (b)  Allocation of Interest Maintenance Reserve related to Net Ceded
          Liabilities.

     (c)  Allocation of non-invested assets related to Net Ceded Liabilities
          determined as Total Assets less Cash and Invested Assets less
          Investment Income Due and Accrued, as currently included respectively
          in Annual Statement page 2, Lines 25, 11 and 17.

     (d)  Allocation of Investment Income Due and Accrued related to Net Ceded
          Liabilities.

B.   While this Agreement is in effect, a reinsurance settlement shall be
     payable between the Ceding Company and the Reinsurer at least each calendar
     quarter with respect to the Net Ceded Liabilities ("Reinsurance
     Settlement"). The Reinsurance Settlement shall be equal to Item (1) less
     the sum of Items (2) through (4) below.

     (1)  Earned Premiums ceded (defined consistent with the Annual Statement
          line items referenced in this subparagraph) to the Reinsurer by the
          Ceding Company under this Agreement, and as currently represented on
          Annual Statement page 4, Lines 1 through 3A before the adjustments
          needed to reflect this Agreement with respect to the Ceding Company.

     (2)  Commission and Expense Allowances calculated in accordance with
          Exhibit B.

     (3)  The Modified Coinsurance Reserve Adjustment as currently represented
          on Annual Statement page 4, Line 5A calculated in accordance with
          Article V.

     (4)  Incurred Benefits ceded (defined consistent with the Annual Statement
          line items referenced in this subparagraph) to the Reinsurer by the
          Ceding company under this Agreement, and as currently represented on
          Annual Statement page 4, Lines 8 through 16A and Line 28 before the
          adjustments needed to reflect this Agreement with respect to the
          Ceding Company.

     If the Reinsurance Settlement amount for the quarter is positive, the
     Ceding Company shall remit such amount within forty-five (45) days after
     the end of the calendar quarter. If the Reinsurance Settlement amount for
     the quarter is negative, the Reinsurer shall remit such amount to the
     Ceding Company within forty-five (45) days following the end of the
     calendar quarter.

C.   The Ceding Company will provide the Reinsurer with accounting reports no
     less frequently than quarterly within fifteen (15) business days after the
     end of each calendar quarter. These reports will contain sufficient
     information about the Policies to enable the Reinsurer to prepare its
     quarterly and annual financial reports.

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                                    ARTICLE V
                          QUARTERLY RESERVE ADJUSTMENTS

     While this Agreement is in effect, a Modified Coinsurance Reserve
     Adjustment with respect to the Policies shall be made at least quarterly
     and used in the calculation of the Reinsurance Settlement required under
     Article IV. The Modified Coinsurance Reserve Adjustment shall be equal to
     Item (a) less Items (b) and (c) below:

     (a)  The change in Modified Coinsurance Reserves defined consistent with
          Annual Statement page 4, Lines 17, 17A, 18 and 24.

     (b)  Net investment income on Invested Assets as currently included in
          Annual Statement page 4, Line 4 of the Ceding Company.

     (c)  Net Capital Gains on Invested Assets as currently included in Annual
          Statement page 4, Lines 4a, 32 and 36.

                                   ARTICLE VI
                                   TAX MATTERS

A.   On a basis no less frequent than quarterly, the Ceding Company and the
     Reinsurer shall settle the federal income tax consequences relating to the
     reinsurance of the Policies hereunder. Such settlement shall be determined
     by comparing (a) the Ceding Company's separate return tax liability (or
     refund), determined as set forth below and calculated prior to taking into
     account any settlement under this paragraph (the "Actual Tax Liability"),
     with (b) the Ceding Company's separate return tax liability (or refund)
     that would have been incurred if the Policies were written directly by the
     Reinsurer and the Invested Assets and related reserves were held by the
     Reinsurer (the "Pro Forma Tax Liability"). If the Actual Tax Liability
     exceeds the Pro Forma Tax Liability, the Reinsurer shall pay to the Ceding
     Company such amount (grossed-up to take into account the tax on such
     payment, determined at the highest federal corporate income tax rate); if
     the Actual Tax Liability is less than the Pro Forma Tax Liability, the
     Ceding Company shall pay to the Reinsurer such amount (grossed-up to take
     into account the tax on such payment, determined at the highest federal
     corporate income tax rate). For this purpose, the Actual Tax Liability
     shall be computed as follows: (i) if the Ceding Company is not a member of
     the same consolidated tax group as the Reinsurer, the Actual Tax Liability
     shall be determined as if the Ceding Company filed a separate federal
     income tax return and all the income on such return were taxed at the
     highest federal corporate income tax rate; (ii) if the Ceding Company is a
     member of the same consolidated tax group as the Reinsurer, the Actual Tax
     Liability of the Ceding Company shall be the amount of consolidated group's
     tax allocable to the Ceding Company under any tax sharing

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     agreements with members of the group. The Pro Forma Tax Liability shall be
     determined under similar principles.

B.   With respect to this Agreement, the Ceding Company and the Reinsurer hereby
     make the election as set forth in Exhibit C and as provided for in section
     1.848-2(g)(8) of the Treasury Regulations. Each of the parties hereto
     agrees to take such further actions as may be necessary to ensure the
     effectiveness of such election.

                                   ARTICLE VII
                                 RESERVE CREDIT

The Reinsurer shall, to the extent necessary, together with all its subsequent
retrocessionaires, establish adequate net reserves, and shall agree in good
faith to take any other steps necessary, pursuant to the requirements of Texas
or any other state or jurisdiction in which the Ceding Company is licensed or
accredited, for the Ceding Company to take statutory credit for reinsurance
ceded to an unadmitted, unauthorized or unaccredited reinsurer, up to the full
amount of the reserve that the Ceding Company would have established for the
Policies if it had retained the Policies.

                                  ARTICLE VIII
                                   OVERSIGHTS

The Reinsurer shall be bound as the Ceding Company is bound, and it is expressly
understood and agreed that if failure to reinsure or failure to comply with any
terms of this Agreement is shown to be unintentional and the result of
misunderstanding or oversight on the part of either the Ceding Company or the
Reinsurer, both the Ceding Company and the Reinsurer shall be restored to the
positions they would have occupied had such error or oversight not occurred.

                                   ARTICLE IX
                              INSPECTION OF RECORDS

The Ceding Company and the Reinsurer shall have the right, upon reasonable prior
notice and at any reasonable time, to examine at the office of the other, any
books, documents, reports or records which pertain in any way to the contracts
reinsured under this Agreement.

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                                    ARTICLE X
                                   INSOLVENCY

A.   The portion of any risk or obligation assumed by the Reinsurer, when such
     portion is ascertained, shall be payable on demand of the Ceding Company at
     the same time as the Ceding Company shall pay its net retained portion of
     such risk or obligation, and the reinsurance shall be payable by the
     Reinsurer on the basis of the liability of the Ceding Company under the
     Policies without diminution because of the insolvency of the Ceding
     Company. In the event of the insolvency of the Ceding Company and the
     appointment of a conservator, liquidator or statutory successor of the
     Ceding Company, such portion shall be payable to such conservator,
     liquidator or statutory successor immediately upon demand, on the basis of
     claims allowed against the Ceding Company by any court of competent
     jurisdiction or, by any conservator, liquidator or statutory successor of
     the Ceding Company having authority to allow such claims, without
     diminution because of such insolvency or because such conservator,
     liquidator or statutory successor has failed to pay all or a portion of any
     claims. Payments by the Reinsurer as above set forth shall be made directly
     to the Ceding Company or its conservator, liquidator or statutory
     successor.

B.   Further, in the event of the insolvency of the Ceding Company, the
     liquidator, receiver or statutory successor of the insolvent Ceding Company
     shall give written notice to the Reinsurer of the pendency of any
     obligation of the insolvent Ceding Company on any Net Ceded Liability,
     whereupon the Reinsurer may investigate such claim and interpose at its own
     expense, in the proceeding where such claim is to be adjudicated, any
     defense or defenses which it may deem available to the Ceding Company or
     its liquidator or statutory successor. The expense thus incurred by the
     Reinsurer shall be chargeable, subject to court approval, against the
     insolvent Ceding Company as part of the expenses of liquidation to the
     extent of a proportionate share of the benefit which may accrue to the
     Ceding Company solely as a result of the defense undertaken by the
     Reinsurer.

C.   In the event of the Reinsurer's insolvency, this treaty will terminate, and
     the Terminal Accounting and Settlement described in Article XIV will occur.
     Any payments due the Reinsurer from the Ceding Company pursuant to the
     terms of this Agreement will be made directly to the Reinsurer or its
     conservator, liquidator, receiver or statutory successor.

                                   ARTICLE XI
                                   ARBITRATION

Any dispute arising with respect to this Agreement which is not settled by
mutual agreement of the parties shall be referred to arbitration. Within twenty
(20) days from receipt of written notice from one party that an arbitrator has
been appointed, the other party shall also name an arbitrator. The two
arbitrators shall choose a third arbitrator within twenty (20) days following
the appointment of the second arbitrator, and shall forthwith notify the
contracting parties of such choice. Each arbitrator shall be a present or former
officer of a life insurance company or life reinsurance company and should have
no present or past affiliation with this Agreement or with either party. The
arbitrators shall consider this Agreement as an honorable engagement rather

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than merely as a legal obligation, and shall be relieved of all judicial
formalities; provided, however, the arbitration shall be governed pursuant to
the rules of the American Arbitration Association and the laws of Illinois. The
decision of the arbitrators shall be final and binding upon the parties hereto,
and may not be appealed to any court or other forum. The decision of the
arbitrators shall be handed down within forty-five (45) days of the date on
which the arbitration is concluded. Each party shall bear the expenses of its
own arbitrator and shall jointly and equally bear the expenses of the third
arbitrator and of the arbitration. Any such arbitration shall take place at the
Home Office of the Reinsurer, unless some other location is mutually agreed
upon.

                                   ARTICLE XII
                              PARTIES TO AGREEMENT

This Agreement is solely between the Ceding Company and the Reinsurer. The
acceptance of reinsurance hereunder shall not create any right or legal relation
whatever between the Reinsurer and any party in interest under any Policy.
Ceding Company shall be and remain solely liable to any insured, contract owner,
or beneficiary under any contract reinsured hereunder.

                                  ARTICLE XIII
                      DURATION OF AGREEMENT AND TERMINATION

A.   DURATION. This agreement will be effective as of the Effective Date, and
     will be unlimited as to its duration except as provided otherwise herein.

B.   TERMINATION OF REINSURER'S LIABILITY. The Reinsurer's liability with
     respect to a Net Ceded Liability will terminate on the earliest of: (1) the
     date such Net Ceded Liability is recaptured in accordance with paragraph C
     below; (2) the date the Ceding Company's liability on the underlying Policy
     is terminated; or (3) the date this Agreement is terminated pursuant to
     paragraph D of this Article XIII. Termination of the Reinsurer's liability
     is subject to payments in respect of such liability in accordance with the
     provisions of Article XIV.

C.   TERMINATION BY CEDING COMPANY. At any time after the occurrence (or
     nonoccurrence, as the case may be) of any of the following, the Ceding
     Company shall have the right, at its option, upon delivery of written
     notice to the Reinsurer, to terminate this Agreement and recapture any and
     all of the Net Ceded Liabilities:

     (1)  if the Reinsurer materially breaches any provision of this Agreement,
          which breach is not cured within sixty (60) days after receipt by the
          Reinsurer of notice thereof from the Ceding Company;

     (2)  if the Ceding Company provides thirty (30) days prior written notice
          to the reinsurer.

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D.   TERMINATION BY THE REINSURER. This Agreement may be terminated by the
     Reinsurer: (1) if the Ceding Company materially breaches this Agreement,
     which breach is not cured within sixty (60) days after receipt by the
     Ceding Company of written notice from the Reinsurer describing such breach;
     or (2) if the Ceding Company fails to pay any amounts due the Reinsurer
     pursuant to this Agreement within sixty (60) days following the end of any
     specified period, upon thirty (30) days prior written notice to the Ceding
     Company.

E.   TERMINATION FOR NEW BUSINESS. This Agreement may be terminated with respect
     to the reinsurance of new business by either party giving the other party
     ninety (90) days written notice of termination to the other party.

F.   SETTLEMENT. In the event of termination and recapture under paragraphs C or
     D of this Article XIII, there shall be a Terminal Accounting and Settlement
     pursuant to Article XIV of this Agreement.

                                   ARTICLE XIV
                       TERMINAL ACCOUNTING AND SETTLEMENT

A.   TERMINAL ACCOUNTING. In the event that this Agreement is terminated in
     accordance with paragraphs C or D of Article XIII above, a Terminal
     Accounting and Settlement will take place.

B.   DATE. The terminal accounting date will be the earliest of: (1) the
     effective date of termination pursuant to any notice of termination given
     under this Agreement, or (2) any other date mutually agreed to by the
     parties in writing.

C.   SETTLEMENT. The Terminal Accounting and Settlement will consist of the
     Reinsurance Settlement as provided in Article IV, computed as of the
     terminal accounting date as if this Agreement were still in effect. If the
     calculation of the Terminal Accounting and Settlement produces an amount
     owing to the Ceding Company, such amount will be paid by the Reinsurer to
     the Ceding Company within thirty (30) days from the date of termination. If
     the calculation of the Terminal Accounting and Settlement produces an
     amount owing to the Reinsurer, such amount will be paid by the Ceding
     Company to the Reinsurer within thirty (30) days from the date of
     termination.

D.   SUPPLEMENTARY ACCOUNTING AND SETTLEMENT. Within forty five (45) days after
     the end of the quarter following the Terminal Accounting and Settlement as
     provided above, a supplementary accounting will take place in accordance
     with Paragraph C above. Any amount owed to the Ceding Company or to the
     Reinsurer, as the case may be, by reason of such supplementary accounting
     will be paid promptly upon the completion thereof.

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                                   ARTICLE XV
                               GENERAL PROVISIONS

A.   ENTIRE AGREEMENT. This Agreement constitutes the entire contract between
     the Reinsurer and the Ceding Company with respect to the Policies. No
     variation, modification or changes to this Agreement shall be binding
     unless in writing and signed by an officer of each party.

B.   NOTICES. Any notice or communication given pursuant to this Agreement must
     be in writing and (1) delivered personally, (2) sent by facsimile
     transmission, (3) delivered by overnight express, or (4) sent by registered
     or certified mail, postage prepaid, as follows

     If to the Reinsurer:          Allstate Life Insurance Company
                                   3100 Sanders Rd.
                                   Northbrook, Illinois 60062
                                   Attn:  Steve Verney, Vice President, Finance
                                   Facsimile No.: (847) 326-5054

     If to the Ceding Company:     Columbia Universal Life Insurance Company
                                   11211 Taylor Draper Lane, Suite 200
                                   Austin, Texas 78759
                                   Attn: Zack G. Athens
                                   Facsimile No.: (512) 346-8757

     All notices and other communications required or permitted under the terms
     of this Agreement that are addressed as provided in this Article XV shall:
     (1) if delivered personally or by overnight express, be deemed given upon
     delivery; (2) if delivered by facsimile transmission, be deemed given when
     electronically confirmed; and (3) if sent by registered or certified mail,
     be deemed given when received. Any party from time to time may change its
     address for notice purposes by giving a similar notice specifying a new
     address, but no such notice shall be deemed to have been given until it is
     actually received by the party sought to be charged with the contents
     thereof.

C.   EXPENSES. Except as may be otherwise expressly provided in this Agreement,
     whether or not the transactions contemplated hereby are consummated, each
     of the parties hereto shall pay its own costs and expenses incident to
     preparing for, entering into and carrying out this Agreement and the
     consummation of the transactions contemplated hereby.

D.   COUNTERPARTS. This Agreement may be executed in one or more counterparts,
     each of which shall be deemed an original, but all of which shall
     constitute one and the same instrument and shall become effective when one
     or more counterparts have been signed by each of the parties and delivered
     to the other parties.

E.   NO THIRD PARTY BENEFICIARY. Except as otherwise provided herein, the terms
     and

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     provisions of this Agreement are intended solely for the benefit of the
     parties hereto, and their respective successors or permitted assigns, and
     it is not the intention of the parties to confer third-party beneficiary
     rights upon any other person, and no such rights shall be conferred upon
     any person or entity not a party to this Agreement.

F.   AMENDMENT. This Agreement may only be amended or modified by a written
     instrument executed on behalf of both parties hereto.

G.   ASSIGNMENT; BIND EFFECT. Neither this Agreement nor any of the rights,
     interests or obligations under this Agreement shall be assigned, in whole
     or in part, by any of the parties hereto without the prior written consent
     of the other party, which consent shall not be unreasonably withheld, and
     any such assignment that is attempted without such consent shall be null
     and void. Subject to the preceding sentence, this Agreement shall be
     binding upon, inure to the benefit of, and be enforceable by the parties
     and their respective successors and permitted assigns.

H.   INVALID PROVISIONS. If any provision of this Agreement is held to be
     illegal, invalid, or unenforceable under any present or future law, and if
     the rights or obligations of the parties hereto under this Agreement will
     not be materially and adversely affected thereby, (1) such provision shall
     be fully severable; (2) this Agreement shall be construed and enforced as
     if such illegal, invalid, or unenforceable provision had never comprised a
     part hereof; and (3) the remaining provisions of this Agreement shall
     remain in full force and effect and shall not be affected by the illegal,
     invalid, or unenforceable provision or by its severance herefrom.

I.   GOVERNING LAW. This Agreement shall be governed by and construed in
     accordance with the Laws of Illinois, regardless of the laws that might
     otherwise govern under applicable principles of conflicts of laws thereof.

J.   WAIVER. Any term or condition of this Agreement may be waived in writing at
     any time by the party that is entitled to the benefit thereof. A waiver on
     one occasion shall not be deemed to be a waiver of the same or any other
     breach or nonfulfillment on a future occasion. All remedies, either under
     the terms of this Agreement, or by law or otherwise afforded, shall be
     cumulative and not alternative, except as otherwise provided by law.

K.   HEADINGS, ETC. The headings used in this Agreement have been inserted for
     convenience and do not constitute matter to be construed or interpreted in
     connection with this Agreement. Unless the context of this Agreement
     otherwise requires, (1) words using the singular or plural number also
     include the plural or singular number, respectively; (2) the terms
     "HEREOF," "HEREIN," "HEREBY," "HERETO," "HEREUNDER," and derivative or
     similar words refer to this entire Agreement (including the exhibits
     hereto); (3) the term "ARTICLE" refers to the specified Article of this
     Agreement; (d) the term "EXHIBIT" refers to the specified Exhibit attached
     to this Agreement; and (e) the term "PARTY" means, on the one hand, the
     Ceding Company, and on the other hand, the Reinsurer.

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L.   OFFSET. Any debits or credits incurred after the Effective Date in favor of
     or against either the Ceding Company or the Reinsurer with respect to this
     Agreement are deemed mutual debits or credits, as the case may be, and
     shall be set off against each other dollar for dollar.

M.   COMPLIANCE WITH LAWS. The parties hereto shall at all times comply with all
     applicable laws in performing their obligations under this Agreement.

N.   ERRORS AND OVERSIGHTS. Each party to this Agreement will act reasonably in
     all matters within the terms of this Agreement. Clerical errors and
     oversights occasioned in good faith in carrying out this Agreement will not
     prejudice either party, and will be rectified promptly on an equitable
     basis.

IN WITNESS HEREOF, the parties to this Agreement have caused it to be duly
executed in duplicate by their respective officers on the dates shown below.

ALLSTATE LIFE INSURANCE COMPANY

By
  -------------------------------------

Title
     ----------------------------------

Date
    -----------------------------------

COLUMBIA UNIVERSAL LIFE INSURANCE COMPANY

By
  -------------------------------------

Title
     ----------------------------------

Date
    -----------------------------------

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                                    EXHIBIT A

                        POLICIES ELIGIBLE FOR REINSURANCE

Policies eligible for reinsurance under this Agreement are defined as all life
and health insurance policies and certificates assumed or issued by the Ceding
Company. For the avoidance of doubt, this Agreement is intended to include all
policies and certificates assumed or issued by the Ceding Company, EXCEPT FOR
policies covered under the Reinsurance Agreement between the parties dated June
30, 2000, under which Ceding Company's annuity and supplemental business is
reinsured on a 100% coinsurance basis.

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                                    EXHIBIT B
                        COMMISSION AND EXPENSE ALLOWANCE

     While this Agreement is in effect, with respect to the Policies, a
     Commission and Expense Allowance shall be made quarterly and used in the
     calculation of the Reinsurance Settlement required under Article IV of this
     Agreement. The Commission and Expense Allowance shall be equal to the sum
     of Items (a) through (d) less Item (e) below before the adjustments needed
     to reflect this Agreement on the Ceding Company:

     (a)  Commissions on premiums (direct business only), as currently
          represented on Annual Statement page 4, Line 20.

     (b)  Commissions and expense allowances on reinsurance assumed, as
          currently represented on Annual Statement page 4, Line 21.

     (c)  General insurance expenses, as currently represented on Annual
          Statement page 4, Line 22, less the expense allowance included in
          Exhibit B (c) of the Reinsurance Agreement between the parties dated
          June 30, 2000, under which Ceding Company's annuity and supplemental
          business is reinsured on a 100% coinsurance basis.

     (d)  Insurance taxes, licenses and fees, excluding federal income taxes, as
          currently represented on Annual Statement page 4, Line 23.

     (e)  Commissions and expense allowances under reinsurance ceded under
          Third-Party Reinsurance Agreements, as currently represented on Annual
          Statement page 4, Line 5.

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                                    EXHIBIT C
                                  TAX ELECTION

The Ceding Company and the Reinsurer hereby make an election pursuant to
Treasury Regulations Section 1.848-2(g)(8). This election shall be effective for
the tax year during which the Effective Date falls and all subsequent taxable
years for which this Agreement remains in effect. Unless otherwise indicated,
the terms used in this Exhibit are defined by reference to Treasury Regulations
Section 1.848-2 as in effect on the date hereof. As used below, the term "PARTY"
or "PARTIES" shall refer to the Ceding Company or the Reinsurer, or both, as
appropriate.

1.   The party with the Net Positive Consideration (as defined in Section 848 of
     the Code and related Treasury Regulations) with respect to the transactions
     contemplated under this Agreement for any taxable year covered by this
     election will capitalize specified policy acquisition expenses with respect
     to such transactions without regard to the general deductions limitation of
     Section 848(c)(1) of the Code.

2.   The parties agree to exchange information pertaining to the amount of Net
     Consideration (as defined in Section 848 of the Code and related Treasury
     Regulations) under this Agreement each year to ensure consistency or as is
     otherwise required by the Internal Revenue Service. The exchange of
     information each year will follow the procedures set forth below:

     (a)  By April 1 of each year, the Ceding Company will submit a schedule to
          the Reinsurer of its calculation of the Net Consideration for the
          preceding calendar year. This schedule of calculations will be
          accompanied by a statement signed by an authorized representative of
          the Ceding Company stating the amount of the Net Consideration the
          Ceding Company will report in its tax return for the preceding
          calendar year.

     (b)  Within thirty (30) days of the Reinsurer's receipt of the Ceding
          Company's calculation, the Reinsurer may contest such calculation by
          providing an alternative calculation to the Ceding Company in writing.
          If the Reinsurer does not notify the Ceding Company that it contests
          such calculation within said 30-day period, the calculation will be
          presumed correct and the Reinsurer shall also report the Net
          Consideration as determined by the Ceding Company in the Reinsurer's
          tax return for the preceding calendar year.

     (c)  If the Reinsurer provides an alternative calculation of the Net
          Consideration pursuant to clause (b), the parties will act in good
          faith to reach an agreement as to the correct amount of Net
          Consideration within thirty (30) days of the date the Ceding Company
          receives the alternative calculation from the Reinsurer. When the
          Ceding Company and the Reinsurer reach agreement on an amount of Net
          Consideration, each party shall report the applicable amount in their
          respective tax returns for the preceding calendar year.

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