Exhibit 10.3  EXECUTION
COPY   INDEMNITY
REINSURANCE AGREEMENT   between   MARQUETTE
NATIONAL LIFE INSURANCE COMPANY  (Ceding Company)   and   COMMONWEALTH
ANNUITY AND LIFE INSURANCE COMPANY  (Reinsurer)  Effective as of April 1, 2009


TABLE OF
CONTENTS  PageARTICLE
  IDEFINITION OF
  TERMS
  1Section 1.1.
  Definitions
  1Section 1.2.
  Construction
  9Section 1.3.
  Headings
  9ARTICLE
  IIBASIS OF
  COINSURANCE
  9Section 2.1.
  Coinsurance
  9Section 2.2.
  Duration of Coinsurance;
  Recapture
  9Section 2.3.
  Parties to Coinsurance
  10ARTICLE
  IIICLOSING AND CONSIDERATION
  10Section 3.1.
  Settlement Amount
  10ARTICLE IVCOOPERATION
  BETWEEN THE CEDING COMPANY AND THE REINSURER FOLLOWING THE COINSURANCE
  EFFECTIVE DATE
  12Section 4.1.
  Ceding Company Service
  Period
  12Section 4.2.
  Premium Payments,
  Negotiation of Checks
  12Section 4.3.
  Reserves
  12Section 4.4.
  Reserve Credits
  12Section 4.5.
  Premium Taxes
  12Section 4.6.
  Payments Relating to
  Commissions
  13Section 4.7.
  Guaranty Fund Assessments
  13Section 4.8.
  Reports
  13Section 4.9.
  Monthly Settlement
  13Section 4.10.
  Audit
  14Section 4.11.
  Non-Guaranteed Elements
  14ARTICLE VUNDERTAKINGS
  OF CEDING COMPANY FOLLOWING THE COINSURANCE EFFECTIVE DATE
  15Section 5.1.
  Cooperation
  15ARTICLE VIINDEMNIFICATION
  15Section 6.1.
  Indemnification by the
  Ceding Company
  15Section 6.2.
  Indemnification by the
  Reinsurer
  16Section 6.3.
  Indemnification and
  Arbitration Procedures
  17Section 6.4.
  Cooperation
  17Section 6.5.
  Payment in Full for Losses
  17  i


ARTICLE VIIINSOLVENCY
  17Section 7.1.
  Payment of Benefits under
  an Insolvency
  17Section 7.2.
  Required Notice of and
  Defense against Claims
  18ARTICLE VIIIARBITRATION
  18Section 8.1.
  Agreement to Arbitrate
  18Section 8.2.
  Method
  18Section 8.3.
  Power of Arbitrators
  19Section 8.4.
  Arbitration Fees and
  Expenses; Decision
  19ARTICLE IXGENERAL
  PROVISIONS
  20Section 9.1.
  Notices
  20Section 9.2.
  Confidentiality
  20Section 9.3.
  Misunderstandings and
  Oversights
  20Section 9.4.
  Reinstatements
  20Section 9.5.
  Entire Agreement
  20Section 9.6.
  Waivers and Amendments
  20Section 9.7.
  No Third Party
  Beneficiaries
  20Section 9.8.
  Binding Effect; No
  Assignment
  21Section 9.9.
  Governing Law
  21Section 9.10.
  Counterparts
  21Section 9.11.
  Severability
  21Section 9.12.
  Exhibits and Schedules
  21Section 9.13.
  Election Statement
  21Section 9.14.
  Additional Tax Provisions
  22Section 9.15.
  Set Off
  22SCHEDULE 3.1
  SETTLEMENT AMOUNTSCHEDULE 4.6
  PAYMENTS RELATING TO
  COMMISSIONSSCHEDULE 4.9
  MONTHLY SETTLEMENT REPORTSEXHIBIT A
  POLICY FORMS AND PLAN
  CODES, SUM OF ALL RESERVE ITEMSEXHIBIT B
  STATUTORY RESERVES AND
  LIABILITIES BY POLICYEXHIBIT C
  TRANSFERRED ASSETS  ii


INDEMNITY
REINSURANCE AGREEMENT  THIS INDEMNITY REINSURANCE
AGREEMENT(the Agreement),
effective as of April 1, 2009, is made and entered into by and between MARQUETTE NATIONAL LIFE INSURANCE COMPANY,
a Texas stock life and health insurance company (the Ceding Company) and COMMONWEALTH ANNUITY AND LIFE INSURANCE COMPANY,
a Massachusetts stock life insurance company (the Reinsurer).  WHEREAS, the Ceding Company has issued or assumed
certain life insurance and annuity Policies, which are identified by policy
form number and/or plan code on Exhibit Aattached hereto; and  WHEREAS, the Ceding Company, together with certain
of its Affiliates named therein, and the Reinsurer have entered into
(i) that certain Master Agreement dated November 26, 2008, as amended
by Amendment Number 1 to Master Agreement, dated April 24, 2009 (the Amendment), with FAFLIC (collectively,
the Master Agreement) and
(ii) that certain Joinder Agreement, dated January 9, 2009, with
FAFLIC (the Joinder Agreement),
pursuant to which, among other things, the Ceding Company and the Reinsurer
have mutually agreed to enter into this Agreement pursuant to which the Ceding
Company shall cede, and the Reinsurer shall indemnity reinsure, the Insurance
Liabilities on a one hundred percent (100%) coinsurance basis on the terms and
conditions stated herein.  NOW, THEREFORE, in consideration of the mutual
promises and covenants set forth herein and in the Master Agreement and Joinder
Agreement, and in reliance upon the representations, warranties, conditions and
covenants contained herein and therein, and intending to be legally bound
hereby, the Ceding Company and the Reinsurer hereby agree as follows:  ARTICLE I  DEFINITION
OF TERMS  Section 1.1. Definitions. Capitalized
terms used in this Agreement, but not otherwise defined in this Article I,
shall have the meaning given thereto in the Master Agreement. The following
capitalized words and terms shall have the following meanings when used in this
Agreement:  (a)Affiliate has the meaning ascribed
thereto in the Master Agreement.  (b)Agreement has the meaning set forth in
the Preamble.  (c)Amendment has the meaning set forth in
the second recital hereof.  (d)Applicable Law has the meaning
ascribed thereto in the Master Agreement.  (e)Approved Designee has the meaning
ascribed thereto in the Services Agreement.  1


(f)Books and
Records has the meaning ascribed thereto in the Master
Agreement.  (g)Business Day has the meaning ascribed
thereto in the Master Agreement.  (h)Ceding Company has the meaning set
forth in the Preamble.  (i)Ceding Company Caused Extra Contractual Liabilities
means all Extra Contractual Liabilities that are not Reinsurer Caused Extra
Contractual Liabilities or Reinsurer Covered Extra Contractual Liabilities.  (j)Ceding Company Indemnified Parties has
the meaning set forth in Section 6.2.  (k)Ceding Company Service Period means
the period commencing on the Closing Date and ending on the Transition Date.  (l)Closing has the meaning ascribed
thereto in the Master Agreement.  (m)Closing Date has the meaning ascribed
thereto in the Master Agreement.  (n)Closing Date Ceding Commission means
the Closing Date Ceding Commission determined with respect to the Ceding
Company pursuant to the Master Agreement. The Closing Date Ceding Commission
shall be credited to the Ceding Company as a reduction in the Settlement Amount
that would otherwise be payable by the Ceding Company to the Reinsurer at
Closing under Section 2.2 of the Master Agreement and Section 3.1
of this Agreement.  (o)Closing Fee has the meaning ascribed
thereto in the Amendment.  (p)Code means the Internal Revenue Code
of 1986, as amended.  (q)Coinsurance Effective Date means 12:01
a.m. (New York time) on the first calendar day of the calendar month in which
the Closing occurs.  (r)Conversion Services has the meaning
ascribed thereto in the Services Agreement.  (s)Cost of Capital means the cost of a
capital decrease resulting from the establishment of an Interest Maintenance
Reserve liability calculated as follows:  The product of (i) the average of the amounts
of the Interest Maintenance Reserve liability (a) as of the first day of
each calendar year (except in the case of the year in which the Coinsurance
Effective Date occurs, which shall be as of the last day of the calendar
quarter preceding the Coinsurance Effective Date) and (b) as of the last
day of each calendar year, multiplied by (ii) an annual, simple interest
rate  2


equal to 5% (pro-rated for the year in which the
Coinsurance Effective Date occurs) (in this manner, the Cost of Capital is
amortized in accordance with the Ceding Companys Interest Maintenance Reserve
amortization schedule as reported in its statutory annual financial statement
dated as of and for the period ended December 31, 2008 over a period of
ten (10) years).  (t)Dispute Notice has the meaning set
forth in Section 3.1(d).  (u)ECL Cap means an amount not to exceed
in the aggregate $10,000,000 in respect of Losses sustained or incurred by, or
asserted against, (x) the Ceding Company Indemnified Parties in respect of
Reinsurer Covered Extra Contractual Liabilities, (y) those other Ceding
Company Indemnified Parties in respect of Reinsurer Covered Extra Contractual
Liabilities under each of the other Coinsurance Agreements (as defined in
the Master Agreement), entered into by the Reinsurer or FAFLIC, as the case may
be, and Affiliates of the Ceding Company of even date herewith, and
(z) the Reinsurer or FAFLIC, as the case may be, in respect of Reinsurer
Covered Extra Contractual Liabilities hereunder and under such other
Coinsurance Agreements identified in clause (y), taken as a whole. For the
avoidance of doubt, any payment made by either the Reinsurer or FAFLIC, as the
case may be, (i) in respect of Reinsurer Covered Extra Contractual
Liabilities under any other such Coinsurance Agreement shall be applied
against the ECL Cap under this Agreement as if such payment had been made
hereunder, and (ii) under clauses (x), (y) or (z) of this
definition shall be applied against the ECL Cap only one time and shall not be
counted as a payment made pursuant to more than one such clause.  (v)Excluded Liabilities means any claim,
obligation or liability arising under, in connection with, or with respect to,
the Policies:  (i)for Premium Taxes, including
any litigation or expenses concerning Premium Taxes, to the extent arising with
respect to premiums collected on the Policies attributable to all periods
before the Coinsurance Effective Date, and/or to the extent based upon
assessments relating to all periods prior to the Coinsurance Effective Date;  (ii)(x) in connection with
participation by the Ceding Company, whether voluntary or involuntary, in any
guaranty fund or other residual market mechanism established or governed by any
state or jurisdiction to the extent arising with respect to premiums
attributable to all periods prior to the Coinsurance Effective Date and/or
(y) to the extent based upon regulatory fines or assessments relating to
events which initially occurred or commenced prior to the Transition Date (provided,
that such liability or other obligation will not be an Excluded Liability if it
arose out of any act or omission of the Ceding Company or its Affiliate that
occurred (or in the case of an omission, failed to occur) on or after the
Closing Date and was made at the written or express direction or request of the
Reinsurer or its designees);  (iii)for Ceding Company Caused
Extra Contractual Liabilities;  3


(iv)for escheat liabilities
arising in respect of all periods prior to the Coinsurance Effective Date;  (v)for all Producer Payments;  (vi)relating to disputes,
litigation, investigations by Governmental Authorities, arbitrations or legal
proceedings arising out of acts or omissions of the Ceding Company or its
Affiliates that occurred prior to the Closing Date in connection with the
Policies, solely to the extent such liabilities are not Extra Contractual
Liabilities;  (vii)for all premiums, payments,
fees or other consideration or amounts due at any time with respect to
Reinsurance Coverage;  (viii)or portions of the Policies,
in each case, to the extent reinsured or purported by the Ceding Company to be
reinsured under Reinsurance Coverage, whether or not such coverage is collected
or collectible;  (ix)for any payment to the
Internal Revenue Service or any other Person resulting from or attributable to
any act or omission of the Ceding Company (including errors of product design,
language, or administration, or inaccurate or incomplete data maintained in
Books and Records) resulting in non-compliance of any Policy with the
requirements of the Code to the extent such act or omission was not made at the
written or express direction or request of the Reinsurer or its designees;  (x)incurred by the Ceding
Company in connection with a breach, or other failure to perform, by the Ceding
Company of the terms of any acquisition agreement pursuant to which any of the
Policies were originally acquired by the Ceding Company, except as such breach
or failure to perform results from acts or omissions by the Ceding Company made
at the written or express direction or request of the Reinsurer or its
designees;  (xi)arising from the remediation
processes in the States of Wisconsin and New York, respectively;  (xii)arising from any errors or
omissions made by the Ceding Company, its Affiliates or designees in
calculating, paying, documenting or administering any surrender charges on
annuity contracts included among the Policies, including those errors that
arose in respect of surrender charges in the State of Utah; and  (xiii)solely to the extent arising
from changes that are made by the Ceding Company to the non-guaranteed elements
under the Policies without the prior written consent of the Reinsurer other
than such changes that are required by Applicable Law.  4


Excluded
Liabilities shall not include any gross liabilities and obligations incurred by
the Ceding Company to the extent attributable to acts, errors or omissions of
the Reinsurer or its designees in connection with the Reinsurers or its
designees (x) exercise of contractual rights and privileges of the Ceding
Company under the Policies pursuant to the Transaction Agreements, including
pursuant to Sections 2.1(a) and 4.11 hereof or
(y) performance of Required Services after the Transition Date. In no
event shall the term designees as used in this paragraph or in Section 6.2(d)(i) include
the Ceding Company, its Affiliates or their designees.  (w)Extra Contractual Liabilities means
all liabilities, obligations and other losses (including lost profits) incurred
or arising at any time under or relating to any Policy that are not covered by,
or that are in excess of, the contractual benefits arising under the express
terms and conditions of such Policies, whether to Policyholders, Producers,
Governmental Authorities or any other Person, which liabilities and obligations
or losses shall include any liability for fines, penalties, forfeitures, excess
or penalty interest, punitive, exemplary, special or any other form of extra
contractual damages relating to the Policies, and attorneys fees and expenses
awarded, and which arise from any act, error or omission of a party or its
designees, whether or not intentional, negligent, in bad faith or otherwise,
including any act, error or omission of a party or its designees relating to
(i) the marketing, underwriting, production, issuance, cancellation or
administration of the Policies, (ii) the investigation, defense, trial,
settlement or handling of claims, benefits or payments arising out of or
relating to the Policies, or (iii) the failure to pay or the delay in
payment, or errors in calculating or administering the payment, of benefits,
claims or any other amounts due or alleged to be due under or in connection
with the Policies.  (x)Final Settlement Amount has the
meaning set forth in Section 3.1(b).  (y)Final Settlement Date has the meaning
set forth in Section 3.1(e).  (z)Governmental Authority has the meaning
ascribed thereto in the Master Agreement.  (aa)Independent
Accountant means Deloitte & Touche LLP; provided,
that if such accounting firm is either unable or unwilling to accept such
engagement, the Ceding Company and the Reinsurer shall jointly request the
American Arbitration Association to appoint, within ten (10) Business Days
from the date of such request, an internationally recognized firm of public
accountants independent of both the Ceding Company and the Reinsurer to serve
as Independent Accountant.  (bb)Insurance
Liabilities means all claims, obligations, indemnities, losses
or liabilities (and no others) arising under, in connection with, or with
respect to, the Policies (other than, in all cases, Excluded Liabilities):  (i)prior to or after the
Coinsurance Effective Date under the express terms of the Policies, including
(x) any right to purchase additional coverage and obligations arising
under legal or regulatory requirements, (y) any loss settlements within
Policy limits, and (z) all such liabilities relating to actions, suits or
claims instituted at or after the Coinsurance Effective Date by a Person;  5


(ii)for Reinsurer Caused Extra
Contractual Liabilities and Reinsurer Covered Extra Contractual Liabilities,
subject to the limitations contained in Section 6.2;  (iii)for all Premium Taxes,
including any litigation expenses (but only if initiated by or at the request
of Reinsurer) concerning Premium Taxes, to the extent arising with respect to
premiums on the Policies attributable to periods on or after the Coinsurance
Effective Date, and/or to the extent based upon assessments relating to all
periods on or after the Coinsurance Effective Date;  (iv)(x) in connection with
participation by the Ceding Company, whether voluntary or involuntary, in any
guaranty fund or other residual market mechanism established or governed by any
state or jurisdiction to the extent arising with respect to premiums on the
Policies attributable to periods on or after the Coinsurance Effective Date
and/or (y) to the extent based upon regulatory fines or assessments
relating to periods on or after (A) the Closing Date, but only to the
extent such regulatory fines or assessments arose out of any act or omission of
the Ceding Company or its Affiliate that occurred (or in the case of an
omission, failed to occur) on or after the Closing Date and was made at the
written or express direction or request of the Reinsurer or its designees, or
(B) the Transition Date;  (v)for all out-of-pocket loss
adjustment expenses incurred from and after the Transition Date by the Ceding
Company with respect to the Policies (other than in connection with the Ceding
Companys participation in such expenses under the Services Agreement);  (vi)for escheat liabilities for
checks issued by the Reinsurer on or after the Coinsurance Effective Date; and  (vii)for amounts payable on or
after the Coinsurance Effective Date for returns or refunds of premiums under
the Policies.  (cc)Interim Services has the meaning
ascribed thereto in the Services Agreement.  (dd)Joinder Agreement has the meaning
ascribed thereto in the second recital hereof.  (ee)Loss or Losses has the meaning ascribed thereto in the Master
Agreement.  (ff)Master Agreement has the meaning set
forth in the second recital hereof.  (gg)Ongoing Services has the meaning
ascribed thereto in the Services Agreement.  6


(hh)Permitted Transactions has the meaning
ascribed thereto in the Master Agreement.  (ii)Person has the meaning ascribed
thereto in the Master Agreement.  (jj)Policies means each of those insurance
policy contracts and/or annuity contracts issued or assumed by the Ceding
Company (i) prior to 12:01 a.m. (New York time) on the Coinsurance
Effective Date and that are identified by policy form number and/or plan code
on Exhibit A attached
hereto and that are in effect on the Coinsurance Effective Date or
(ii) that are reinstated in, or otherwise the subject of, a Permitted
Transaction. Policies shall not include any insurance policy contracts and/or
annuity forms (including any net retained liabilities of the Ceding Company
thereunder) in respect of which the Ceding Company has ceded all or a portion
of the liabilities thereunder to Wilton Reassurance Company pursuant to the
Wilton Re Agreements.  (kk)Policyholder
has the meaning ascribed thereto in the Master Agreement.  (ll)Premium Taxes means the taxes,
assessments, and fees imposed on premiums relating to the Policies by any
state, local, or municipal taxing authority together with any related interest,
penalties and additional amounts imposed by any taxing authority with respect
thereto, including retaliatory taxes.  (mm)Producer has the meaning ascribed
thereto in the Master Agreement.  (nn)Producer Agreement means any written,
oral or other agreement or contract between the Ceding Company and any
Producer, or among or between Producers, including any assignments of
compensation thereunder, and relating to the solicitation, sale, marketing,
production or servicing of any of the Policies.  (oo)Producer Payments has the meaning
ascribed thereto in the Master Agreement.  (pp)Recapture Fee
has the meaning ascribed thereto in the Amendment.  (qq)Reconciliation
Amount has the meaning set forth in Section 3.1(c).  (rr)Regulation
has the meaning set forth in Section 9.13.  (ss)Reinsurance Coverage means all
contracts, agreements and treaties of reinsurance between the Ceding Company
and any Third Party Reinsurer that are in force and effect as of the
Coinsurance Effective Date and cover risks associated with the Policies or any
portions thereof.  (tt)Reinsurer has the meaning set forth in
the Preamble.  (uu)Reinsurer Caused
Extra Contractual Liabilities has the meaning set forth in Section 6.2(d).  7


(vv)         Reinsurer Covered
Extra Contractual Liabilities has the meaning set forth in Section 6.2(e)
(subject to the limitations therefor in Section 6.2).  (ww)Reinsurer Indemnified Parties has the
meaning set forth in Section 6.1.  (xx)Required Services has the meaning
ascribed thereto in the Services Agreement.  (yy)SAP
means the statutory accounting practices and procedures required or permitted
by the insurance regulatory authority in the Ceding Companys state of
domicile, consistently applied throughout the specified period and in the
immediately prior comparable period.  (zz)Services
Agreement means the services agreement entered into among the
Ceding Company, several Affiliates of the Ceding Company and the Reinsurer of
even date herewith.  (aaa)Settlement
Amount means the amount of the initial reinsurance premium
payment to be made at Closing by the Ceding Company to the Reinsurer in
consideration of the reinsurance of the Policies under this Agreement, which
shall be in an amount calculated pursuant to Schedule
3.1 attached hereto.  (bbb)Statutory
Reserves and Liabilities means the sum of all of the reserve
items (including reserve items for claims incurred but not reported and claims
in the course of settlement) maintained by the Ceding Company for the Policies,
net of Reinsurance Coverage, as set forth in Exhibit A
attached hereto. Exhibit B
attached hereto sets forth the Statutory Reserves and Liabilities by Policy as
of the Coinsurance Effective Date, as such schedule may be adjusted pursuant to
Section 3.1 of this Agreement.  (ccc)Third Party Reinsurer has the meaning
ascribed thereto in the Master Agreement.  (ddd)Transaction
Documents means this Agreement, the Master Agreement and the
Services Agreement.  (eee)Transferred
Assets means the cash, cash equivalents and other assets
transferred as part of the Settlement Amount and as set forth on Exhibit C attached hereto. Such
Transferred Assets shall be valued as of the Closing Date according to the
mechanics set forth on Exhibit C.  (fff)Transition
Date has the meaning ascribed thereto in the Services
Agreement.  (ggg)Wilton Re Agreements has the meaning
ascribed thereto in the Amendment.  8


Section 1.2. Construction. For the
purposes of this Agreement, (i) words (including capitalized terms defined
herein) in the singular shall be held to include the plural and vice versa and
words (including capitalized terms defined herein) of one gender shall be held
to include the other gender as the context requires; (ii) the terms
hereof, herein and herewith and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement as a whole (including
all of the Schedules) and not to any particular provision of this Agreement,
and Article, Section, paragraph and Schedule references are to the Articles,
Sections, paragraphs and Schedules to this Agreement, unless otherwise
specified; (iii) the word including and words of similar import when
used in this Agreement shall mean including, without limitation;
(iv) all references to any period of days shall be deemed to be to the
relevant number of calendar days unless otherwise specified; and (v) all
references herein to $ or Dollars shall refer to United States dollars,
unless otherwise specified.  Section 1.3. Headings. The
Article and Section headings contained in this Agreement are inserted
for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.  ARTICLE II  BASIS OF
COINSURANCE  Section 2.1. Coinsurance.  (a)Subject to the terms and
conditions of this Agreement, effective as of the Coinsurance Effective Date,
the Ceding Company hereby cedes to the Reinsurer, and the Reinsurer hereby
accepts and reinsures on a one hundred percent (100%) coinsurance basis, the
Insurance Liabilities. The Ceding Company and the Reinsurer mutually agree
that, as between the parties, on and after the Coinsurance Effective Date, the
Reinsurer shall be entitled to exercise all contractual rights and privileges
of the Ceding Company under the Policies in accordance with the terms,
provisions and conditions of such Policies.  (b)In no event shall such
coinsurance with respect to a particular Policy be in force and binding unless
such underlying Policy as issued or assumed by the Ceding Company is in full
force and binding as of the Coinsurance Effective Date or is the subject of a
Permitted Transaction following the Coinsurance Effective Date.  (c)With respect to each of the
Policies, the amount of coinsurance hereunder shall be maintained in force
without reduction so long as the Policy remains in full force without
reduction. If there is a reduction with respect to a Policy, the Reinsurers
liability with respect thereto shall be equally reduced. All coinsurance for
which the Reinsurer is liable hereunder shall be subject to the same rates,
terms, conditions, limitations and restrictions as are contained in the Policy.  Section 2.2. Duration
of Coinsurance; Recapture. The coinsurance provided under this Agreement
shall remain continuously in force. The Policies are not eligible for recapture
by the Ceding Company.  9


Section 2.3. Parties
to Coinsurance. Article II of this Agreement provides for
indemnity reinsurance solely between the Ceding Company and the Reinsurer. The
acceptance of reinsurance under this Article II shall not create
any right or legal relation between the Reinsurer and any Policyholder,
insured, claimant or beneficiary under a Policy, and the Ceding Company shall
be and remain solely liable to such Policyholder under the Policy.  ARTICLE III  CLOSING AND
CONSIDERATION  Section 3.1. Settlement
Amount.  (a)On the Closing Date, the
Ceding Company agrees to pay the Reinsurer an amount, in the form of
Transferred Assets as designated and valued as of the Closing Date pursuant to
the mechanics set forth on Exhibit C,
equal to the difference between an estimate of: (i) Statutory Reserves and
Liabilities, minus (ii) due and deferred premiums on the Policies as of
the Coinsurance Effective Date, minus (iii) policy loans outstanding on
the Policies as of the Coinsurance Effective Date (net of any accrued and
unearned policy loan interest on such policy loans), minus (iv) the
Closing Date Ceding Commission as set forth on Schedule 3.1 attached hereto, plus (v) the portion of the
Closing Fee due and payable by the Ceding Company to the Reinsurer, as
reflected on Schedule H to the Amendment (collectively, the Settlement Amount). The Settlement
Amount plus interest accrued thereon, as contemplated in Section 2.1 of
the Master Agreement, shall be remitted by the Ceding Company to the Reinsurer
to an account(s) designated in writing by the Reinsurer. Items (i) through
(iii) of this Section 3.1(a) shall reflect the amounts
reported by the Ceding Company as of the quarter-ended immediately preceding
the Closing Date.  (b)The parties agree to make
adjustments to Exhibit A andExhibit B attached hereto and to the
Settlement Amount following Closing, based upon (i) Statutory Reserves and
Liabilities for (x) any Policies or Policy claims improperly or
inadvertently omitted or miscalculated in determining the Settlement Amount or
(y) any Policies that were or are the subject of Permitted Transactions
and that were omitted from the calculation of the Settlement Amount as of the
Coinsurance Effective Date, (ii) adjustments to the Closing Date Ceding
Commission pursuant to Section 2.2(d) of the Master Agreement, and
(iii) actual amounts as reported by the Ceding Company as of the
Coinsurance Effective Date for items (i) through (iii) in Section 3.1(a) (such
adjusted amount, the Final Settlement
Amount); provided, however, that any such
adjustments made pursuant to clause (i)(x) will require the prompt prior
written consent of the Reinsurer, which consent shall not be unreasonably
withheld, but no such adjustment will be made pursuant to clause
(i)(x) unless the Ceding Company has notified the Reinsurer in writing of
such adjustment prior to the ninetieth (90th) day following the Closing Date.  (c)The Final Settlement Amount
will be calculated by the Ceding Company and reported to the Reinsurer prior to
the one hundred twentieth (120th) day following the Closing Date, and if such
difference between the Final Settlement Amount and the Settlement Amount (such
difference, the Reconciliation Amount)
is (i) a positive number, then the Ceding Company shall pay such
Reconciliation Amount to the Reinsurer by wire transfer of  10


immediately
available funds or (ii) a negative number, then the absolute value of such
negative number, as the Reconciliation Amount, shall be paid by the Reinsurer
to the Ceding Company by wire transfer of immediately available funds.  (d)The Reinsurer shall have ten
(10) Business Days to review the Ceding Companys calculations of the
Final Settlement Amount and the Reconciliation Amount and provide written
notice to the Ceding Company of any dispute regarding the Ceding Companys
calculation of such amounts (a Dispute
Notice). The Ceding Company and the Reinsurer shall cooperate
in good faith to resolve such dispute as promptly as practicable and, upon such
resolution, make any adjustments to the calculation of any amount(s) contained
in the Ceding Companys calculations of the Final Settlement Amount and the
Reconciliation Amount with the agreement of the Ceding Company and the
Reinsurer. If the Ceding Company and the Reinsurer are unable to resolve any
such dispute within twenty (20) Business Days (or such longer period as the
Ceding Company and the Reinsurer shall mutually agree in writing) of the
Reinsurers delivery of such Dispute Notice, such dispute shall be resolved by
the Independent Accounting Firm, and such determination by the Independent
Accounting Firm shall be final and binding on the parties; provided that
the Reinsurer and the Ceding Company shall submit to the Independent Accounting
Firm statements with respect to their respective positions on disputed issues
and will cooperate with the Independent Accounting Firm by promptly providing
any requested information. Any expenses relating to the engagement of the
Independent Accounting Firm in respect of its services pursuant to this Section 3.1(d) shall
be shared fifty percent (50%) by the Reinsurer and fifty percent (50%) by the
Ceding Company. The Independent Accounting Firm shall be instructed to use
reasonable best efforts to perform its services within thirty (30) Business
Days of submission by the Reinsurer and the Ceding Company of their respective
statements with respect to the disputes and, in any case, as promptly as
practicable after such submission. If no Dispute Notice is timely delivered by
the Reinsurer, the Ceding Companys calculations of the Final Settlement Amount
and the Reconciliation Amount shall be determinative. If a Dispute Notice is
timely delivered by the Reinsurer, the amounts determined pursuant to the
resolution of such dispute in accordance with this Section 3.1(d),
shall be the Final Settlement Amount and Reconciliation Amount.  (e)With respect to each
adjustment which shall enter into the calculation of the Final Settlement
Amount and the Reconciliation Amount, interest shall accrue thereon at an
annual rate equal to the Three-Month London Interbank Offering Rate (LIBOR) as
published in the Money Rate Section (or any successor section) of The Wall
Street Journal (or any successor publication) on the (A) Closing Date,
with respect to adjustments made other than pursuant to clause (b)(i)(y) above,
and (B) effective date of a Permitted Transaction with respect to
adjustments made pursuant to clause (b)(i)(y) above. Such interest shall
accrue from the Closing Date (or the effective date of the Permitted
Transaction, as the case may be) to the date the Reconciliation Amount is paid,
which payment date shall be the fifth (5th) Business Day following the later of (i) the
receipt by the Reinsurer of calculation of the Final Settlement Amount and
Reconciliation Amount, and (ii) the resolution of any dispute in respect
of the calculation of the Final Settlement Amount and/or the Reconciliation
Amount (the Final Settlement Date).  11


ARTICLE IV  COOPERATION
BETWEEN THE CEDING COMPANY AND 
THE REINSURER FOLLOWING THE COINSURANCE EFFECTIVE DATE  Section 4.1. Ceding Company Service Period.
During the Ceding Company Service Period, the Ceding Company shall provide, or
cause to be provided, Interim Services, Conversion Services and Ongoing
Services in accordance with the Services Agreement. On and after the Transition
Date, the Reinsurer shall provide, or cause to be provided, Required Services
under the terms and conditions of the Services Agreement.  Section 4.2. Premium Payments, Negotiation
of Checks. (i) On and after the Coinsurance Effective Date, all
premium payments, conversion charges and other consideration under the Policies
received by the Ceding Company shall be the sole property of the Reinsurer, and
(ii) any premium payment, conversion charge and other consideration
received by the Ceding Company, to the extent such premium payment, conversion
charge and other consideration covers periods on or after the Coinsurance
Effective Date, shall be remitted in accordance with the Services Agreement.  Section 4.3. Reserves. The Reinsurer
agrees that, on and after the Coinsurance Effective Date, it will establish and
maintain all statutory reserves and liabilities as may be required under the
terms of the Policies, SAP and Applicable Law.  Section 4.4. Reserve Credits. If, as of
the end of any calendar quarter following the Coinsurance Effective Date, the
Ceding Company becomes unable to take full reserve credit with respect to all
the reinsurance provided under this Agreement by the Reinsurer of the Policies
for whatever reason, the Reinsurer will implement, prior to the date on which
the Ceding Company is required by Applicable Law to file its quarterly
statutory financial statement as of and for the period ended on such calendar
quarter end-date with its domiciliary insurance regulatory authority,
alternative arrangements in accordance with Applicable Law in order to ensure
that the Ceding Company is permitted to take such reserve credit on the Ceding
Companys statutory financial statements.  Section 4.5. Premium Taxes. The Ceding
Company shall be liable for all Premium Taxes on premiums received in
connection with the Policies prior to the Coinsurance Effective Date and shall
remain liable for payment of Premium Taxes on premiums received under the
Policies. The Reinsurer shall pay to the Ceding Company a provision for Premium
Taxes incurred in connection with premiums received under the Policies on or
after the Coinsurance Effective Date. The provision for Premium Taxes to be
paid by the Reinsurer pursuant to the immediately preceding sentence shall be
two and one-half percent (2.5%) of premiums collected as ceded under this
Agreement (as such percentage may be changed annually on a prospective basis by
the mutual agreement of the parties to reflect actual experience, which
agreement by each party shall not be unreasonably withheld, delayed or
conditioned), as calculated on a quarterly basis, and shall be paid by the
Reinsurer to the Ceding Company as part of the monthly and annual settlements
that occur under this Agreement.  12


Section 4.6. Payments Relating to
Commissions. The Reinsurer shall pay to the Ceding Company those payments
set forth on Schedule 4.6, which
shall be reflected in the monthly settlement report prepared and delivered
pursuant to Section 4.9.  Section 4.7. Guaranty Fund Assessments.  (a)Ceding
Company-Paid Assessments. In the event the Ceding Company is required
to pay an assessment in respect of the Policies to any insurance guaranty,
insolvency or other similar fund maintained by any jurisdiction and such
assessment is based on premiums collected or policies in full force in any
period on or after the Coinsurance Effective Date, the portion, if any, of such
assessment that relates to such Policies shall be reimbursed by the Reinsurer
to the extent that no Premium Tax offsets are available for use by the Ceding
Company. Such reimbursement shall be included in the monthly and annual
settlements that occur under this Agreement.  (b)Reinsurer-Paid
Assessments. In the event the Reinsurer is required to pay an
assessment in respect of the Policies to any insurance guaranty, insolvency or
other similar fund maintained by any jurisdiction and such assessment is based
on premiums collected or policies in force in any period prior to the
Coinsurance Effective Date, the portion, if any, of such assessment that
relates to such Policies shall be reimbursed by the Ceding Company to the
extent that no Premium Tax offsets are available for use by the Reinsurer.  Section 4.8. Reports. The parties hereto
acknowledge and agree that the regularity and reliability of information
concerning the Policies is critically important to each such party. In
connection therewith, each of the Ceding Company and the Reinsurer agrees to,
and agrees to cause their respective designees to, comply with its respective
reporting obligations as set forth in this Agreement and the Services Agreement
within the time periods contemplated herein and therein.  Section 4.9. Monthly Settlement.  (a)The Ceding Company shall
provide the Reinsurer with a monthly settlement report, no later than the
thirtieth (30th) day following
the end of each calendar month, with delivery thereof commencing in the month
following the month in which the Coinsurance Effective Date occurs (including
in such first report the period since the Coinsurance Effective Date). Such
monthly settlement report shall be in the form specified in Schedule 4.9 attached hereto.  (b)In the event that such
monthly settlement report reflects a net amount owed by the Ceding Company to
Reinsurer pursuant to the terms of this Agreement, then the Ceding Company
shall also make a wire payment in immediately available funds of such net
amount to the account(s) designated therefor in writing by the Reinsurer
no later than the tenth (10th) Business Day following Reinsurers receipt of such monthly settlement
report, except to the extent that the Reinsurer notifies the Ceding Company in
writing prior to the expiration of such ten (10) Business Day period of
its good faith belief that the report is inaccurate, in which case the parties
shall cooperate with each other to resolve the disagreement. In the event that
a monthly settlement report reflects a net amount owed by Reinsurer to the
Ceding Company  13


pursuant
to the terms of this Agreement, Reinsurer shall make a wire payment in
immediately available funds of such net amount to the Ceding Company no later
than the tenth (10th) Business Day
following Reinsurers receipt of such monthly settlement report, except to the
extent that the Reinsurer notifies the Ceding Company prior to the expiration
of such ten (10) Business Day period of its good faith belief that the
report is inaccurate, in which case the parties shall cooperate with each other
to resolve the disagreement. In the event of any such dispute, the party owing
any amount pursuant to such monthly settlement report shall pay such amount in
full no later than the fifth (5th) Business Day following settlement of such dispute.
Any delinquent amounts payable under this clause (b) shall accrue interest
from the date such payment was originally due until the date such payment is
made, such interest to accrue at an annual rate equal to the Three-Month London
Interbank Offering Rate (LIBOR) as published in the Money Rate Section (or
any successor section) of The Wall Street Journal, Eastern Edition (or any
successor publication) as determined on the date such payment was originally due.  (c)Pursuant to the terms of the
Services Agreement, from and after the Transition Date, the Reinsurer shall be
responsible for, among other things, the direct payment to Policyholders or
their beneficiaries, as applicable, of all death, annuity and other contractual
benefits constituting Insurance Liabilities under the Policies. Any such
payment by the Reinsurer shall satisfy, on a dollar-for-dollar basis, the
Reinsurers obligations to the Ceding Company in respect thereof under this
Agreement.  Section 4.10. Audit.
Each party shall have the right to audit on an annual basis, at its sole
expense, at the office of the other during regular business hours and upon
reasonable prior written notice, all records and procedures relating to the
Policies.  Section 4.11. Non-Guaranteed
Elements.  (a)For the period beginning on
the Closing Date and continuing up to and including the Transition Date, the
Ceding Company shall make such changes to the non-guaranteed elements under the
Policies as are requested in writing by the Reinsurer or its designees. The
Ceding Company shall make no changes to such non-guaranteed elements except
those requested in writing by the Reinsurer or its designees, or as otherwise
may be required by Applicable Law.  (b)For all periods following
the Transition Date, the Ceding Company acknowledges and agrees that
(i) the Reinsurer and its designees have sole discretion to make changes
to the non-guaranteed elements of the Policies to the extent that such changes
are in accordance with the terms of the Policies and Applicable Law, and
(ii) it shall not make any such changes to such non-guaranteed elements
except those requested in writing by the Reinsurer or as otherwise may be
required by Applicable Law.  14


ARTICLE V  UNDERTAKINGS
OF CEDING COMPANY FOLLOWING THE
COINSURANCE EFFECTIVE DATE  Section 5.1. Cooperation. The Ceding
Company agrees to provide all reasonable assistance to the Reinsurer and its
designees in the transfer to the Reinsurer of the obligation to provide
Required Services pursuant to the Services Agreement in connection with the
Policies, including responding to questions from the Reinsurer and its
designees in the conversion of computer records and files to the systems of the
Reinsurer. The Ceding Company will do all things reasonable and necessary to
permit the Reinsurer and its designees to exercise and assert all rights of the
Ceding Company as contemplated herein and will fully cooperate with the
Reinsurer and its designees in such exercise and assertion.  ARTICLE VI  INDEMNIFICATION  Section 6.1. Indemnification by the Ceding
Company. From and after the Closing Date, the Ceding Company shall
indemnify and defend the Reinsurer, its Approved Designees and its Affiliates, and
their respective officers, employees, directors, controlling persons,
Affiliates, agents, representatives and assigns (the Reinsurer Indemnified Parties)
against, and hold each of them harmless from all Losses sustained or incurred
by, or asserted against, the Reinsurer Indemnified Parties which arise out of:  (a)any Excluded Liabilities;  (b)any breach or nonfulfillment
by the Ceding Company of, or any failure by the Ceding Company to perform, any
of the covenants, terms or conditions of, or any of its duties or obligations
under, this Agreement;  (c)any action or inaction of
the Ceding Company or its designees under or with respect to any of the
Policies that is not indemnifiable by the Reinsurer pursuant to Section 6.2;  (d)or relate to or are in
connection with the Wilton Re Agreements;  (e)the amount of the Cost of
Capital for any Interest Maintenance Reserve that the Reinsurer becomes
obligated to establish under SAP as a liability as of the Coinsurance Effective
Date or as of the Closing Date on its statutory financial statements solely as
a result of the reinsurance by the Reinsurer of the Insurance Liabilities
contemplated by this Agreement, the amount of such Interest Maintenance Reserve
(if any) being determined by reference to the schedule to be provided by the
Ceding Company to the Reinsurer as promptly as practicable following the
determination thereof; and  (f)any enforcement of this
indemnity.  15


Section 6.2. Indemnification by the Reinsurer.
From and after the Closing Date, the Reinsurer shall indemnify and defend the
Ceding Company and its Affiliates, its Approved Designees, and their respective
officers, employees, designees, directors, controlling persons, Affiliates,
agents, representatives and assigns (the Ceding
Company Indemnified Parties)against, and hold each of
them harmless from, all Losses sustained or incurred by, or asserted against,
the Ceding Company Indemnified Parties which arise out of:  (a)any Insurance Liabilities;  (b)any breach or nonfulfillment
by the Reinsurer of, or any failure by the Reinsurer to perform, any of the
covenants, terms or conditions of or any of its duties or obligations under
this Agreement;  (c)any action or inaction of
the Reinsurer or its designees under or with respect to any of the Policies;  (d)any Extra Contractual
Liabilities and any related attorneys fees and expenses that are based upon,
relate to or arise solely out of any act, error or omission of (i) the
Reinsurer or any of its officers, directors, designees, agents or employees,
whether intentional or otherwise, which occurred after the Closing Date
(including in connection with the Reinsurers or its designees
(x) exercise of contractual rights and privileges of the Ceding Company
under the Policies pursuant to the Transaction Agreements, including pursuant
to Sections 2.1(a) and 4.11 of this Agreement, and
(y) performance of Required Services under the Services Agreement after
the Transition Date), except to the extent such act, error or omission was made
at the written or express direction or request of the Ceding Company or its
designees, and (ii) the Ceding Company or any of its officers, directors,
designees, agents or employees that occurred (or, in the case of an omission,
failed to occur) on or after the Closing Date and was made at the written or
express direction or request of the Reinsurer or its designees (Reinsurer Caused Extra Contractual Liabilities);  (e)Extra Contractual
Liabilities and any related attorneys fees and expenses that are based upon,
relate to or arise solely out of any act, error or omission of the Ceding
Company or any of its officers, directors, designees, agents or employees,
whether intentional or otherwise, with respect to the Policies (other than
those acts, errors or omissions covered by Section 6.2(d)(ii)), in
respect of which relief is first sought by the aggrieved Person from the Ceding
Company, the Reinsurer or any of their respective Affiliates or designees after
April 24, 2014 (Reinsurer Covered
Extra Contractual Liabilities); and  (f)any enforcement of this
indemnity.  Notwithstanding
anything to the contrary herein, in no event shall the Reinsurer be obligated
to indemnify the Ceding Company Indemnified Parties for Losses arising in
respect of any Reinsurer Covered Extra Contractual Liabilities pursuant to Section 6.2(e) that
exceed, individually or in the aggregate, the ECL Cap.  In
addition, the Ceding Company agrees, and agrees to cause each other Ceding
Company Indemnified Party, to use commercially reasonable efforts to seek
recoveries under all applicable insurance or reinsurance policies or other
indemnity, contribution or similar agreements in  16


respect
of any Losses arising in respect of Reinsurer Covered Extra Contractual
Liabilities. In the event that any Ceding Company Indemnified Party is able to
make any actual recovery under any such insurance or other agreement, the
Reinsurer shall not have any liability to the Ceding Company hereunder for such
amount and, in the event that the Reinsurer has already made an indemnification
payment to the Ceding Company Indemnified Parties for such amount, the Ceding
Company shall reimburse Reinsurer for such payments to the extent any Ceding
Company Indemnified Parties received reimbursement under such insurance or
other agreement. Payments made by the Reinsurer but later reimbursed by any
Ceding Company Indemnified Party pursuant to the immediately preceding sentence
shall not be applied against the ECL Cap.  Section 6.3. Indemnification
and Arbitration Procedures. The arbitration procedures under Article VIII
of this Agreement shall apply to indemnity claims and disputes arising under
this Agreement, and are incorporated herein by reference. The rights and
obligations of the parties respecting indemnification under this Agreement
shall be subject to the limitations described in Article VIII of
this Agreement.  Section 6.4. Cooperation.
Each party agrees that it will cooperate fully with the other party in the
satisfactory settlement of any and all claims, insofar as possible.  Section 6.5. Payment in Full for Losses.
To the extent a Reinsurer Indemnified Party or a Ceding Company Indemnified
Party receives indemnification in full for a Loss under any Transaction
Agreement, such party shall not be entitled to further indemnification under
the same or any other Transaction Agreement.  ARTICLE VII  INSOLVENCY  Section 7.1. Payment of Benefits under an
Insolvency. The obligations of the Reinsurer under this Agreement shall be
without diminution or in any way affected or diminished 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, receiver or statutory
successor of the Ceding Company while coinsurance is in effect as to any
Policy, all coinsurance made, ceded, renewed or otherwise becoming effective
under this Agreement shall be payable directly to such conservator, liquidator,
receiver or statutory successor immediately upon demand, with reasonable
provision for verification, on the basis of claims allowed against the Ceding
Company by any court of competent jurisdiction or by any conservator,
liquidator, receiver or statutory successor of the Ceding Company having
authority to allow such claims, without diminution because of such insolvency
or because such conservator, liquidator, receiver or statutory successor has
failed to pay all or a portion of any claims, except where (x) this Agreement
specifies another payee of such reinsurance in the event of the insolvency of
the Ceding Company or (y) the Reinsurer, with the consent of the direct
insured or insureds, has assumed such policy obligations of the Ceding Company
as direct obligations of the Reinsurer to the payees under such Policies and in
substitution for the obligations of the Ceding Company to such payees.  17


Section 7.2. Required Notice of and Defense
against Claims. In the event of the insolvency of the Ceding Company while coinsurance
as to any Policy is in effect under this Agreement, the conservator,
liquidator, receiver or statutory successor of the Ceding Company shall give
the Reinsurer written notice of the pendency of a claim against the Ceding
Company on a Policy within a reasonable time after such claim is filed in the
insolvency proceeding. During the pendency of any such claim, the Reinsurer may,
at its own expense, investigate such claim and interpose, at its own expense,
in the proceeding where such claim is to be adjudicated, any defense or
defenses which the Reinsurer may deem available to the Ceding Company or its
conservator, liquidator, receiver or statutory successor. The expense thus
incurred by the Reinsurer shall be payable, subject to court approval, out of
the estate of the Ceding Company as a part of the expense of conservation or
liquidation to the extent of a proportionate share of the benefit which may
accrue to the Ceding Company in conservation or liquidation solely as a result
of the defense undertaken by the Reinsurer. Where two or more reinsurers are
involved in the same claim and a majority in interest elects to interpose the defense
to such claim, the expense shall be apportioned in accordance with the terms of
this Agreement as though such expense had been incurred by the insolvent Ceding
Company.  ARTICLE VIII  ARBITRATION  Section 8.1. Agreement to Arbitrate. It is the
intention of the parties that customs and usages of the business of life
insurance or reinsurance and annuities shall be given full effect in the
interpretation of this Agreement. All disputes between the Reinsurer and the
Ceding Company arising out of this Agreement (other than disputes arising with
respect to the formation and validity of this Agreement) on which an amicable
understanding cannot be reached shall be decided exclusively by arbitration
between the parties at a location to be mutually agreed upon between the
parties or as designated by the arbitrators if agreement as to a location
cannot be reached by the parties. Notwithstanding any other provision of this Article VIII,
if either the Reinsurer or the Ceding Company seeks, consents to, or acquiesces
in the appointment of or otherwise becomes subject to any trustee, receiver,
liquidator, statutory successor or conservator (including any state insurance
regulatory agency or authority acting in such a capacity), the other party
shall not be obligated to resolve any claim, dispute or cause of action under
this Agreement by arbitration except as may be required by Applicable Law.
Notwithstanding any other provision of this Article VIII, nothing
contained in this Agreement shall require arbitration of any issue for which
equitable or injunctive relief, including specific performance, is the sole
remedy sought.  Section 8.2. Method. The parties intend this Article VIII
to be enforceable in accordance with the Federal Arbitration Act (9 U.S.C. Section 1,
et seq.), including any amendments to that Act which are subsequently adopted,
notwithstanding any other choice of law provision set forth in this Agreement.
In the event that either party refuses to submit to arbitration as required
herein, the other party may request a United States Federal District Court to
compel arbitration in accordance with the Federal Arbitration Act. Both parties
consent to the jurisdiction of such court to enforce this article and to
confirm and enforce the performance of any award of the arbitrators.
Arbitration shall be conducted before a three-person arbitration panel
appointed as follows: to initiate arbitration, either party shall notify the
other in writing in  18


the manner set forth in this Agreement for sending notices
to the parties of its desire to arbitrate, stating the nature of the dispute
and the remedy sought, and designating an arbitrator. The party to which the
notice is sent shall respond in writing no later than the thirtieth (30th) day following its receipt of such notice. If the second party fails to
respond within the time period set forth in this Section 8.2, or
fails to designate its arbitrator in its response, the party initiating
arbitration shall appoint a second arbitrator. The two arbitrators shall select
an umpire no later than the thirtieth (30th) day
following the designation of the second arbitrator. If they are unable to agree
upon the selection of the umpire on or prior to the thirtieth (30th) day following the appointment of the second arbitrator, the parties
shall appoint the umpire pursuant to the ARIAS-US Umpire Selection Procedure.
The arbitrators and umpire shall be either present or former executive officers
of life insurance or reinsurance companies, be certified to act as arbitrators
or umpires by ARIAS-US, shall not be under the control of either party and
shall have no financial interest in the outcome of the arbitration and shall
have no conflict of interest with any party hereto (or its Affiliates) or the
subject matter of the arbitration.  Section 8.3. Power of Arbitrators. The
arbitrators shall have the power to determine all procedural rules for the
conduct of the arbitration, including the production and inspection of
documents, the examination of witnesses and any other matter relating to the
conduct of the arbitration. The arbitrators and the umpire shall interpret this
Agreement as an honorable engagement and not merely as a legal obligation
between the parties. They shall reach their decision from the standpoint of
equity and the customs and practices of the life insurance or reinsurance
industry with a view to effecting the general purposes of this Agreement and
may abstain from following the strict rules of law; provided, however,
that (i) the arbitrators shall have no authority to award equitable relief
or punitive damages against or in favor of either party (except to reimburse a
party for extra-contractual or punitive damages that either the Ceding Company
or the Reinsurer has paid or is legally obligated to pay to third parties), and
(ii) nothing contained in this Article VIII is intended to
limit the dispute resolution mechanics for (x) calculations made pursuant to Section 3.1
or Exhibit C (which disputes
shall be resolved pursuant to the procedures set forth in Section 3.1
or Exhibit C, as applicable),
or (y) Section 9.13.  Section 8.4. Arbitration Fees and Expenses; Decision.
Unless the arbitration panel orders otherwise, each party shall pay: (1) the
fees and expenses of its own arbitrator; and (2) an equal share of the
fees and expenses of the umpire and the other expenses of the arbitration. Each
party shall pay its own legal fees in connection with the arbitration, unless
the arbitrators award legal fees and expenses of the prevailing party as part
of any award. Except as otherwise specifically provided herein, the arbitration
shall be conducted in accordance with the procedures of the American
Arbitration Association. The decision of the arbitrators shall be made in
writing and final and binding upon both of the parties. Judgment may be entered
upon the final decision of the arbitrators in any court having jurisdiction.
The arbitration will be conducted on a confidential basis, except to the extent
otherwise required by Applicable Law, and no matters discussed or disclosed by
any party at the arbitration, or any decision or award of the arbitrators, will
be admitted into evidence or otherwise disclosed or used before any court or
other legal, regulatory or administrative body, authority or forum for any
purpose except as and to the extent necessary for entry of final judgment on
the award of the arbitrators in any court having jurisdiction.  19


ARTICLE IX  GENERAL PROVISIONS  Section 9.1. Notices. Any and all notices and
other communications required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given when (i) received by
the receiving party if mailed by United States registered or certified mail,
return receipt requested, (ii) received by the receiving party if mailed
by United States overnight express mail, (iii) sent by facsimile or
telecopy machine, followed by confirmation mailed by United States first-class
mail or overnight express mail or (iv) delivered in person to the parties
at the addresses set forth in the Master Agreement.  Section 9.2. Confidentiality. Each of the
parties shall maintain the confidentiality of all information related to the
Policies and all other information denominated as confidential by the other
party provided to it in connection with this Agreement to the extent required
by and subject to all of the terms and provisions of Section 11.7 of the
Master Agreement.  Section 9.3. Misunderstandings and Oversights.
If any failure to pay amounts due or to perform any other act required of
either party under this Agreement is shown to be unintentional and caused by
misunderstanding, oversight or clerical error, then this Agreement shall not be
deemed in breach thereby, provided, that such failure is promptly
corrected by the party that caused such failure, which correction restores the
other party to the position it would have occupied (including provision for the
time value of money) had the misunderstanding, oversight or clerical error not
occurred.  Section 9.4. Reinstatements. If a Policy that
was reduced, terminated, or lapsed is reinstated in a Permitted Transaction,
the reinsurance for such Policy under this Agreement will be reinstated
automatically to the amount that would have been in force if the Policy had not
been reduced, terminated or lapsed.  Section 9.5. Entire Agreement. This Agreement
supersedes all prior discussions and agreements between the parties with
respect to the subject matter of this Agreement, and this Agreement, the Master
Agreement, the Joinder Agreement and the Services Agreement, including the
Schedules and Exhibits attached hereto and thereto, constitute the sole and
entire agreement between the parties hereto with respect to the subject matter
hereof, and supersedes all prior discussions and agreements between the parties
with respect to the subject matter hereof, which are merged with and into this
Agreement.  Section 9.6. Waivers and Amendments. Any term
or condition of this Agreement may be waived at any time by the party that is
entitled to the benefit thereof. Such waiver must be in writing and must be
executed by an executive officer of such party. A waiver on one occasion will
not be deemed to be a waiver of the same or any other term or condition on a
future occasion. This Agreement may be modified or amended only by a writing
duly executed by an executive officer of the Ceding Company and the Reinsurer,
respectively.  Section 9.7. No Third Party Beneficiaries. The
terms and provisions of this Agreement constitute an indemnity reinsurance
agreement solely between the Ceding Company  20


and the Reinsurer, and other than Ceding Company
Indemnified Parties and Reinsurer Indemnified Parties, the terms and provisions
of this Agreement are intended solely for the benefit of the parties hereto,
the Ceding Company and the Reinsurer and their permitted successors and
assigns, and it is not the intention of the parties to confer any rights as a
third-party beneficiary to this Agreement upon any other person.  Section 9.8. Binding Effect; No Assignment.
This Agreement shall be binding upon and inure to the benefit of the parties
and their respective successors, permitted assigns and legal representatives,
whether by merger, consolidation or otherwise. This Agreement shall not be
assigned by any of the parties hereto without the prior written approval of the
other party; provided, that nothing in this Section 9.8
shall be interpreted to prevent the retrocession by the Reinsurer of all or any
portion of the Insurance Liabilities, but only after the delivery by the
Reinsurer of prior written notice thereof to the Ceding Company.  Section 9.9. Governing Law. This Agreement
will be governed by and construed in accordance with the laws of the state of
domicile of the Ceding Company, without regard to its conflicts of law
doctrine.  Section 9.10. Counterparts. This Agreement may
be executed in counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.  Section 9.11. Severability. If any
provision of this Agreement is held to be illegal, invalid or unenforceable
under any present or future law or if determined by a court of competent
jurisdiction to be unenforceable, and if the rights or obligations of the
Ceding Company or the Reinsurer under this Agreement will not be materially and
adversely affected thereby, such provision shall be fully severable, and this
Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions of this Agreement shall remain in full force and effect
and will not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom.  Section 9.12. Exhibits and Schedules.
Exhibits and Schedules attached hereto are hereby made a part of this
Agreement.  Section 9.13. Election Statement. The
parties hereby jointly make the election to determine specified policy
acquisition expenses without regard to the general deductions limitation
described in Internal Revenue Regulation 1.848-2(g)(8) (the Regulation) under Section 848 of
the Code. This Section 9.13 shall constitute the Election Statement
specified in the Regulation and this Election Statement shall be construed in
accordance with all of the requirements of such Regulation regarding such
election, including, without limitation, the election statement and Tax return
reporting requirements of Regulation Sections 1.848-2(g)(8)(ii) and 1.848-2(g)(8)(iii).
Pursuant to this Election Statement, the parties agree as follows:  21


(a)to exchange information each and every year for which this Agreement is in
effect pertaining to the amount of net consideration under this Agreement as
that term is used in the Regulation. In order to effect this information
exchange, the parties agree that:  (i)the Ceding Company shall submit its calculation of the net consideration
for purposes of that Regulation to the Reinsurer not later than May 1st
for each and every taxable year for which this Agreement is in effect;  (ii)the Reinsurer
may challenge such calculation within ten (10) Business Days of its
receipt of the Ceding Companys calculation;  (iii)should the Reinsurer challenge the Ceding Companys calculation of the
net consideration and the parties be unable to agree as to the appropriate
methodology to determine the net consideration for purposes of the Regulation,
the parties shall refer such dispute to an outside tax consultant unrelated to
either of the parties, in lieu of the arbitration provisions of this Agreement,
and if the parties cannot agree on a tax consultant, the tax consultant shall
be Deloitte & Touche LLP, and the parties agree to be bound by the
decision of such tax consultant;  (b)that the party with net positive consideration with respect to this Agreement
for each taxable year will capitalize specified policy acquisition expenses
with respect to this Agreement without regard to the general deductions
limitation of Section 848(c)(1) of the Code; and  (c)that the first taxable year for which this Election Statement shall be effective
is taxable year 2009.  Section 9.14. Additional Tax Provisions. The
parties each agree to attach a schedule to their federal income Tax returns
that identifies this Agreement as a reinsurance agreement for which the
Election Statement in Section 9.13 has been made. This schedule
shall be attached to each of the parties federal income Tax returns filed for
the first taxable year of each party ending after the Election Statement
becomes effective.  Section 9.15. Set Off. Any debts or credits
between the Ceding Company and the Reinsurer under this Agreement only are
deemed mutual debts and credits, as the case may be, and the Ceding Company and
the Reinsurer shall have, and may exercise at any time and from time to time,
the right to net or offset any such debts or credits under this Agreement only
and only the balance shall be allowed or paid hereunder. This right of netting
and offset shall not be affected or diminished because of insolvency of either
party to this Agreement.  22


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed effective this 24th day of April,2009.   MARQUETTE NATIONAL LIFE
  INSURANCE COMPANYBy:
  /s/Gary W.
  BryantName:
  Gary W. BryantTitle:
  President & CEOCOMMONWEALTH ANNUITY AND LIFE
  INSURANCE COMPANYBy:
  /s/ Michael ReardonName:
  Michael ReardonTitle:
  President   Indemnity Reinsurance
Agreement Signature Page


Schedule 3.1  SETTLEMENT
AMOUNT  Statutory Reserves and Liabilities(1)
  
  $
  454,893- Due and deferred premiums(2)
  
  $
  130- Policy loans outstanding(2) (net of accrued and unearned
  interest)
  
  $
  155- Closing Date Ceding Commission(3)
  
  $
  0+ Portion of Closing Fee(4)
  
  $
  0= Settlement Amount(5)
  
  $
  454,608+ Accrued Interest(6)
  
  $
  1,461= Total Payment
  
  $
  456,069  
 (1)   Will equal amount on Exhibit A.  (2)   On the Policies as of the Coinsurance
Effective Date.  (3)   Will equal amount determined pursuant to Section 2.2
in the Master Agreement.  (4)   Will equal amount set forth in respect
thereof on Schedule H to the Amendment.  (5)   Interest Maintenance Reserve impact relating
to the Transferred Assets transferred on the Closing Date and the Final
Settlement Date shall be the amount of zero dollars ($0.00).  (6)   Determined pursuant to Section 2.1 in
the Master Agreement.  3.1-1


Schedule 4.6  PAYMENTS RELATING TO COMMISSIONS  4.6-1


AMERICAN EXCHANGE/ MARQUETTE NATIONAL COMMISSIONS  Expressed as percentage of premium.  Policy
  YearLOB
  
  Plan
  
  IA
  
  1
  
  2
  
  3
  
  4
  
  5
  
  6
  
  7
  
  8
  
  9
  
  10
  
  11+Senior
  Life
  
  1GD05
  
  0-84
  
  125
  %
  15
  %
  15
  %
  15
  %
  15
  %
  10
  %
  10
  %
  10
  %
  10
  %
  10
  %
  3
  %85+
  
  93
  %
  15
  %
  15
  %
  15
  %
  15
  %
  10
  %
  10
  %
  10
  %
  10
  %
  10
  %
  3
  %1LD05
  
  0-84
  
  130
  %
  15
  %
  15
  %
  15
  %
  15
  %
  10
  %
  10
  %
  10
  %
  10
  %
  10
  %
  3
  %85+
  
  98
  %
  15
  %
  15
  %
  15
  %
  15
  %
  10
  %
  10
  %
  10
  %
  10
  %
  10
  %
  3
  %Traditional
  
  5JDF
  
  All
  
  60
  %
  10
  %
  10
  %
  10
  %
  10
  %
  10
  %
  10
  %
  10
  %
  10
  %
  10
  %
  10
  %5JHW
  
  All
  
  0
  %
  0
  %
  0
  %
  0
  %
  0
  %
  0
  %
  0
  %
  0
  %
  0
  %
  0
  %
  0
  %5JME
  
  All
  
  80
  %
  7.5
  %
  7.5
  %
  7.5
  %
  7.5
  %
  7.5
  %
  7.5
  %
  7.5
  %
  7.5
  %
  7.5
  %
  0
  %5JPW
  
  All
  
  0
  %
  0
  %
  0
  %
  0
  %
  0
  %
  0
  %
  0
  %
  0
  %
  0
  %
  0
  %
  0
  %5JWA1
  
  All
  
  95
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %5JWA3
  
  All
  
  95
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %5JWE
  
  All
  
  95
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %
  11
  %


Schedule 4.9  MONTHLY SETTLEMENT REPORTS  4.9-1


Commonwealth Annuity and Life
Insurance Company (Reinsurer) Sch 4.9 - Monthly Reinsurance
Settlement Statemen For the Month Ending Jan-09  Pre -
Transition Date  (TRAD)COMB LOB
  
  (TRAD) Whole
  
  (TRAD) Term
  
  Universal
  
  (SR) Senior
  
  
  
  (AE & AEII)
  
  (Grp) GroupTOTALS
  
  Life
  
  Life
  
  Life/ISWL
  
  Life
  
  (GR) GRL Life
  
  Asset Enhancer
  
  Life
  
  (ANN) AnnuityTotal
  
  Total
  
  Total
  
  Total
  
  Total
  
  Total
  
  Total
  
  Total
  
  TotalCollected PremiumsA
  
  FY Premium Collected:
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  B
  
  RNL Premium Collected
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  C
  
  Total Collected Premium
  (with waiver) (A+B)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcPlus Assumed Reinsurance
  PremiumD
  
  FY Premium Collected:
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  E
  
  RNL Premium Collected
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  F
  
  Total Collected Assumed
  Reinsurance Premium (D+E)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcLess Inuring Reinsurance
  PremiumG
  
  FY Premium Collected:
  
  
  
  H
  
  RNL Premium CollectedI
  
  Total Inuring
  Reinsurance Premium (G+H)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcJ
  
  Net Total Premium
  (C+F-I)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcPolicy BenefitsK
  
  Death Claims (including any interest)
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  L
  
  Surrenders Paid
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  M
  
  Waiver of Premium Benefits
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  N
  
  Claim Exp: Investigation Fees / Medical
  Record Fees
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  O
  
  Total Policy Benefits Paid (K + L+M+N)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcPlus Assumed Reinsurance Policy BenefitsP
  
  Death Claims (including any interest)
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  Q
  
  Surrenders Paid
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  R
  
  Waiver of Premium Benefits
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  S
  
  Claim Exp: Investigation Fees / Medical
  Record Fees
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  T
  
  Total Assumed
  Reinsurance Policy Benefits Paid (P+Q+R+S)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcLess Inuring Reinsurance
  Policy BenefitsU
  
  Death Claims (including any interest)
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  V
  
  Surrenders Paid
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  W
  
  Waiver of Premium Benefits
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  X
  
  Claim Exp: Investigation Fees / Medical
  Record Fees
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  Y
  
  Total Inuring
  Reinsurance Policy Benefits Paid, Payable or Provided(U+V+W+X)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcZ
  
  Net Total Policy Benfits
  (O+T-Y)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcLess Payments Relating
  to Commission (per schedule 4.6)AA
  
  FY Commissions
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  AB
  
  RNL Commissions
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  AC
  
  Total Payments Relating
  to Commission (AA+AB)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcPlus Inuring Reinsurance
  Allowance PaymentsAD
  
  FY Reins AllowanceComm & Exp
  Allowances
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  AE
  
  Single Reins AllowanceComm & Exp
  Allowances
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  AF
  
  RNL Reins AllowanceComm & Exp
  Allowances
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  AG
  
  Renewal Reins
  AllowanceComm & Exp Allowances Paid, Payable or Provide(AD+AE+AF)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcLess Policy Servicing
  FeeNumber of days in month
  
  # Policies Inforce Begining of Month
  
  AH
  
  Policy Servicing Fee per Sched 2.3 of ASA
  (41*Days in Month/365)
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  Less Premium TaxAI
  
  Premium Taxes (2.5% Direct Collected
  Prem)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcPlus Uncollectible
  Reinsurance Recoverables (Assumed or Inuring)AJ
  
  Plus Change in Reinsurance Recoverables
  Not Admitted**
  
  
  
  AK
  
  Net Due to (from)
  Commonwealth (J - Z - AC+AG-AH-AI+AJ)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc  
 *
  For purposes of
  this calculation, the Inuring Reinsurance shall mean Reinsurance Coverage
  (as defined in the coinsurance agreement)**
  Reinsurance
  recoverables (including reinsurance allowances) due greater than 90 days are
  not admitted; for purposes of calculation, months change due to new not
  admitted or receipt of payment previously not admitted


Commonwealth Annuity and Life Insurance Company (Reinsurer) Sch 4.9 - Monthly Reinsurance Settlement Statement For the Month Ending: Jan-09  Post - Transition Date  (TRAD)COMB LOB
  
  (TRAD) Whole
  
  (TRAD) Term
  
  Universal
  
  
  
  
  
  (AE & AEII)
  
  (Grp) GroupTOTALS
  
  Life
  
  Life
  
  Life/ISWL
  
  (SR) Senior Life
  
  (GR) GRL Life
  
  Asset Enhancer
  
  Life
  
  (ANN) AnnuityTotal
  
  Total
  
  Total
  
  Total
  
  Total
  
  Total
  
  Total
  
  Total
  
  TotalCollected PremiumsA
  
  FY Premium Collected:
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  B
  
  RNL Premium Collected
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  C
  
  Total Collected Premium
  (with waiver) (A+B)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcPlus Assumed Reinsurance
  PremiumD
  
  FY Premium Collected:
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  E
  
  RNL Premium Collected
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  F
  
  Total Collected Assumed
  Reinsurance Premium (D+E)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcLess Inuring Reinsurance
  PremiumG
  
  FY Premium Collected:H
  
  RNL Premium CollectedI
  
  Total Inuring
  Reinsurance Premium (G+H)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcJ
  
  Net Total Premium (C+F-I)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcPolicy BenefitsK
  
  Death Claims (including any interest)
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  L
  
  Surrenders Paid
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  M
  
  Waiver of Premium Benefits
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  N
  
  Claim Exp: Investigation Fees / Medical
  Record Fees
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  O
  
  Total Policy Benefits
  Paid (K+ L+M+N)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcPlus Assumed Reinsurance
  Policy BenefitsP
  
  Death Claims (including any interest)
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  Q
  
  Surrenders Paid
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  R
  
  Waiver of Premium Benefits
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  S
  
  Claim Exp: Investigation Fees / Medical
  Record Fees
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  T
  
  Total Assumed
  Reinsurance Policy Benefits Paid (P+Q+R+S)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcLess Inuring Reinsurance
  Policy Benefits*U
  
  Death Claims (including any interest)
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  V
  
  Surrenders Paid
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  W
  
  Waiver of Premium Benefits
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  X
  
  Claim Exp: Investigation Fees / Medical
  Record Fees
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  Y
  
  Total Inuring
  Reinsurance Policy Benefits Paid, Payable or Provided(U+V+W+X)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcZ
  
  Net Total Policy Benfits
  (O+T-Y)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcLess Payments Relating
  to Commission (per schedule 4.6)AA
  
  FY Commissions
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  AB
  
  RNL Commissions
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  AC
  
  Total Payments Relating
  to Commission (AA+AB)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcPlus Inuring Reinsurance
  Allowance Payments*AD
  
  FY Reins AllowanceComm & Exp
  Allowances
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  AE
  
  Single Reins AllowanceComm & Exp
  Allowances
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  AF
  
  RNL Reins AllowanceComm & Exp
  Allowances
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  AG
  
  Renewal Reins AllowanceComm
  & Exp Allowances Paid, Payable or Provided(AD+AE+AF)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcLess Premium TaxAH
  
  Premium Taxes (2.5% Direct Collected
  Prem)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calcPlus Uncollectible
  Reinsurance Recoverables (Assumed or Inuring)AI
  
  Plus Change in Reinsurance Recoverables
  Not Admitted** (pos is incr NotAdmit)
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  AJ
  
  Net Due to (from)
  Universal American (AC+AH-AI) (positive to UA)
  
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc
  
  calc  
 *
  For purposes of this calculation, the Inuring Reinsurance shall mean
  Reinsurance Coverage (as defined in the coinsurance agreement)**
  Reinsurance recoverables (including reinsurance allowances) due
  greater than 90 days are not admitted; for purposes of calculation, months
  change due to new not admitted or receipt of payment previously not admitted


Post -
Transition Date  COMB
  
  
  
  
  
  
  
  (TRAD)LOB
  
  (TRAD)
  
  
  
  (TRAD)
  
  Universal
  
  
  
  (SR)TOTALS
  
  Whole Life
  
  
  
  Term Life
  
  Life/ISWL
  
  
  
  Senior LifeTotal
  
  Total
  
  REALIC
  
  Total
  
  Total
  
  REALIC
  
  TotalLess
  Inuring Reinsurance AllowanceX
  
  FY Rein Allow -
  Comm/Exp
  
  
  
  
  
  
  
  
  
  
  
  
  
  Y
  
  FY Ren Allow -
  App/Pol Fee
  
  
  
  
  
  
  
  
  
  
  
  
  
  Z
  
  FY Rein Allow -
  Per Pol Isd NB
  
  
  
  
  
  
  
  
  
  
  
  
  
  AA
  
  FY Rein Allow -
  Per Rid Isd NB
  
  
  
  
  
  
  
  
  
  
  
  
  
  AB
  
  FY Rein Allow -
  Per Tel Interv
  
  
  
  
  
  
  
  
  
  
  
  
  
  AC
  
  FY Rein Allow -
  Per 1K issued
  
  
  
  
  
  
  
  
  
  
  
  
  
  AD
  
  FY Rein Allow -%Prm
  NB
  
  
  
  
  
  
  
  
  
  
  
  
  
  AE
  
  FY Rein Allow -%Prm
  MKTG
  
  
  
  
  
  
  
  
  
  
  
  
  
  AF
  
  FY Rein Allow -%
  Prm Prem Tax
  
  
  
  
  
  
  
  
  
  
  
  
  
  AG
  
  FY Rein Allow -%Prm
  Netwk Fee
  
  
  
  
  
  
  
  
  
  
  
  
  
  AH
  
  FY Rein Allow -%Prm
  Maint
  
  
  
  
  
  
  
  
  
  
  
  
  
  AI
  
  FY Rein Allow -%Prm
  Care Advi
  
  
  
  
  
  
  
  
  
  
  
  
  
  AJ
  
  FY Rein Allow -%Clm
  Pd Admin
  
  
  
  
  
  
  
  
  
  
  
  
  
  AK
  
  FY Rein Allow -
  Per Pol Inf
  
  
  
  
  
  
  
  
  
  
  
  
  
  AL
  
  SGL Rein Allow -
  Comm/Exp
  
  
  
  
  
  
  
  
  
  
  
  
  
  AM
  
  SGL Rein Allow -
  App'Pol Fee
  
  
  
  
  
  
  
  
  
  
  
  
  
  AN
  
  SGL Rein Allow -
  Per Pol Issd
  
  
  
  
  
  
  
  
  
  
  
  
  
  AO
  
  SGL Rein Allow -
  Per Rid Issd
  
  
  
  
  
  
  
  
  
  
  
  
  
  AP
  
  SGL Rein Allow -%Prm
  NB
  
  
  
  
  
  
  
  
  
  
  
  
  
  AQ
  
  SGL Rein Allow -%Prm
  MKTG
  
  
  
  
  
  
  
  
  
  
  
  
  
  AR
  
  SGL Rein Allow -
  Prm Prm Tax
  
  
  
  
  
  
  
  
  
  
  
  
  
  AS
  
  SGL Rein Allow -%Prm
  Maint
  
  
  
  
  
  
  
  
  
  
  
  
  
  AT
  
  SGL Rein Allow -%Clm
  Pd Adm
  
  
  
  
  
  
  
  
  
  
  
  
  
  AU
  
  SGL Rein Allow -
  Per Pol Inf
  
  
  
  
  
  
  
  
  
  
  
  
  
  AV
  
  RNL Rein Allow -
  Comm/Exp
  
  
  
  
  
  
  
  
  
  
  
  
  
  AW
  
  RNL Rein Allow -
  Per 1K Inf
  
  
  
  
  
  
  
  
  
  
  
  
  
  AX
  
  RNL Rein Allow -%Prm
  Prm Tax
  
  
  
  
  
  
  
  
  
  
  
  
  
  AY
  
  RNL Rein Allow -%Prm
  Ntwk Fee
  
  
  
  
  
  
  
  
  
  
  
  
  
  AZ
  
  RNL Rein Allow -%Prm
  Maint
  
  
  
  
  
  
  
  
  
  
  
  
  
  BA
  
  RNL Rein Allow -%Prm
  Care Adv
  
  
  
  
  
  
  
  
  
  
  
  
  
  BB
  
  RNL Rein Allow -%Clm
  Pd Admin
  
  
  
  
  
  
  
  
  
  
  
  
  
  BC
  
  RNL Rein Allow -
  Per Pol Inf
  
  
  
  
  
  
  
  
  
  
  
  
  
  BD
  
  RNL Rein Allow -
  DAC Tax
  
  
  
  
  
  
  
  
  
  
  
  
  
  BE
  
  Disabilitiy
  Income
  
  
  
  
  
  
  
  
  
  
  
  
  
  BF
  
  Comm/Exp Allow
  Reins Assmd-FY
  
  
  
  
  
  
  
  
  
  
  
  
  
  BG
  
  Comm/Exp Allow
  Reins Assmd-Sgl
  
  
  
  
  
  
  
  
  
  
  
  
  
  BH
  
  Comm/Exp Allow
  Reins Assmd-Ren
  
  
  
  
  
  
  
  
  
  
  
  
  
  BI
  
  Exp Allow -
  Acquisition
  
  
  
  
  
  
  
  
  
  
  
  
  
  BJ
  
  Exp Allow -
  Marketing
  
  
  
  
  
  
  
  
  
  
  
  
  
  BK
  
  Exp Allow -
  Maintenance
  
  
  
  
  
  
  
  
  
  
  
  
  
  BL
  
  Prem Tax Allow
  Assmd - 1Yr
  
  
  
  
  
  
  
  
  
  
  
  
  
  BM
  
  Prem Tax Allow
  Assmd - Rnl
  
  
  
  
  
  
  
  
  
  
  
  
  
  BN
  
  Total Ceding Commission (Sum (X : BM))
  
  
  
  
  
  
  
  
  
  
  
  
  
  


(AE &AEII)(GR)
  GRL
  
  Asset
  
  
  
  (Grp)
  
  (ANN)Life
  
  Enhancer
  
  
  
  Group
  Life
  
  Annuity
  
  50%REALIC
  
  Total
  
  Total
  
  REALIC
  
  Total
  
  Total
  
  REALICLess
  Inuring Reinsurance AllowanceX
  
  FY Rein Allow -
  Comm/Exp
  
  
  
  
  
  
  
  
  
  
  
  Y
  
  FY Ren Allow -
  App/Pol Fee
  
  
  
  
  
  
  
  
  
  
  
  Z
  
  FY Rein Allow -
  Per Pol Isd NB
  
  
  
  
  
  
  
  
  
  
  
  AA
  
  FY Rein Allow -
  Per Rid Isd NB
  
  
  
  
  
  
  
  
  
  
  
  AB
  
  FY Rein Allow -
  Per Tel Interv
  
  
  
  
  
  
  
  
  
  
  
  AC
  
  FY Rein Allow -
  Per 1K issued
  
  
  
  
  
  
  
  
  
  
  
  AD
  
  FY Rein Allow -%Prm
  NB
  
  
  
  
  
  
  
  
  
  
  
  AE
  
  FY Rein Allow -%Prm
  MKTG
  
  
  
  
  
  
  
  
  
  
  
  AF
  
  FY Rein Allow -%
  Prm Prem Tax
  
  
  
  
  
  
  
  
  
  
  
  AG
  
  FY Rein Allow -%Prm
  Netwk Fee
  
  
  
  
  
  
  
  
  
  
  
  AH
  
  FY Rein Allow -%Prm
  Maint
  
  
  
  
  
  
  
  
  
  
  
  AI
  
  FY Rein Allow -%Prm
  Care Advi
  
  
  
  
  
  
  
  
  
  
  
  AJ
  
  FY Rein Allow -%Clm
  Pd Admin
  
  
  
  
  
  
  
  
  
  
  
  AK
  
  FY Rein Allow -
  Per Pol Inf
  
  
  
  
  
  
  
  
  
  
  
  AL
  
  SGL Rein Allow -
  Comm/Exp
  
  
  
  
  
  
  
  
  
  
  
  AM
  
  SGL Rein Allow -
  App'Pol Fee
  
  
  
  
  
  
  
  
  
  
  
  AN
  
  SGL Rein Allow -
  Per Pol Issd
  
  
  
  
  
  
  
  
  
  
  
  AO
  
  SGL Rein Allow -
  Per Rid Issd
  
  
  
  
  
  
  
  
  
  
  
  AP
  
  SGL Rein Allow -%Prm
  NB
  
  
  
  
  
  
  
  
  
  
  
  AQ
  
  SGL Rein Allow -%Prm
  MKTG
  
  
  
  
  
  
  
  
  
  
  
  AR
  
  SGL Rein Allow -
  Prm Prm Tax
  
  
  
  
  
  
  
  
  
  
  
  AS
  
  SGL Rein Allow -%Prm
  Maint
  
  
  
  
  
  
  
  
  
  
  
  AT
  
  SGL Rein Allow -%Clm
  Pd Adm
  
  
  
  
  
  
  
  
  
  
  
  AU
  
  SGL Rein Allow -
  Per Pol Inf
  
  
  
  
  
  
  
  
  
  
  
  AV
  
  RNL Rein Allow -
  Comm/Exp
  
  
  
  
  
  
  
  
  
  
  
  AW
  
  RNL Rein Allow -
  Per 1K Inf
  
  
  
  
  
  
  
  
  
  
  
  AX
  
  RNL Rein Allow -%Prm
  Prm Tax
  
  
  
  
  
  
  
  
  
  
  
  AY
  
  RNL Rein Allow -%Prm
  Ntwk Fee
  
  
  
  
  
  
  
  
  
  
  
  AZ
  
  RNL Rein Allow -%Prm
  Maint
  
  
  
  
  
  
  
  
  
  
  
  BA
  
  RNL Rein Allow -%Prm
  Care Adv
  
  
  
  
  
  
  
  
  
  
  
  BB
  
  RNL Rein Allow -%Clm
  Pd Admin
  
  
  
  
  
  
  
  
  
  
  
  BC
  
  RNL Rein Allow -
  Per Pol Inf
  
  
  
  
  
  
  
  
  
  
  
  BD
  
  RNL Rein Allow -
  DAC Tax
  
  
  
  
  
  
  
  
  
  
  
  BE
  
  Disabilitiy
  Income
  
  
  
  
  
  
  
  
  
  
  
  BF
  
  Comm/Exp Allow
  Reins Assmd-FY
  
  
  
  
  
  
  
  
  
  
  
  BG
  
  Comm/Exp Allow
  Reins Assmd-Sgl
  
  
  
  
  
  
  
  
  
  
  
  BH
  
  Comm/Exp Allow
  Reins Assmd-Ren
  
  
  
  
  
  
  
  
  
  
  
  BI
  
  Exp Allow -
  Acquisition
  
  
  
  
  
  
  
  
  
  
  
  BJ
  
  Exp Allow -
  Marketing
  
  
  
  
  
  
  
  
  
  
  
  BK
  
  Exp Allow -
  Maintenance
  
  
  
  
  
  
  
  
  
  
  
  BL
  
  Prem Tax Allow
  Assmd - 1Yr
  
  
  
  
  
  
  
  
  
  
  
  BM
  
  Prem Tax Allow
  Assmd - Rnl
  
  
  
  
  
  
  
  
  
  
  
  BN
  
  Total Ceding Commission (Sum (X : BM))
  
  
  
  
  
  
  
  
  
  
  
  


Exhibit A  POLICY FORMS AND PLAN CODES, SUM OF ALL RESERVE ITEMS  A-1


Marquette
National (as of 12/31/2008)  5A  Company
  
  Plan
  Code
  
  Amount
  Inforce
  
  Stat
  Reserve
  
  Deficiency
  Reserve
  
  Final
  Stat Reserve
  
  Count
  
  Type
  
  Wilton
  Coverage038
  
  038ML6111
  
  XN
  
  17,678
  
  1,932
  
  
  
  1,932
  
  13
  
  Traditional - Senior Life
  
  Wilton038
  
  038PWA611
  
  XN
  
  230
  
  157
  
  
  
  157
  
  9
  
  Traditional - Senior Life
  
  Wilton038
  
  038WA6111
  
  XN
  
  1,581,443
  
  47,023
  
  
  
  47,023
  
  204
  
  Traditional - Senior Life
  
  Wilton038
  
  038WA6211
  
  XN
  
  840,575
  
  39,516
  
  
  
  39,516
  
  150
  
  Traditional - Senior Life
  
  WiltonTotal
  
  
  
  
  
  2,439,926
  
  88,627
  
  
  
  88,627
  
  376Adjustments
  
  
  
  
  
  
  
  
  
  
  
  
  
  Total
  
  
  
  
  
  2,439,926
  
  88,627
  
  
  
  88,627
  
  376  5B  Company
  
  Plan
  
  
  
  Stat
  Reserve
  
  
  
  
  
  
  
  Type38
  
  MQ Deferred Anuuities
  
  
  
  454,892
  
  
  
  
  
  
  
  Deferred AnnuitiesTotal
  
  
  
  
  
  454,892Adjustments
  
  
  
  
  
  Total
  
  
  
  
  
  454,892  5C  Company
  
  Plan
  
  
  
  Stat
  Reserve
  
  
  
  
  
  
  
  TypeTotal
  
  
  
  
  
  Adjustments
  
  
  
  
  
  Total
  
  
  
  
  
    5D  Company
  
  Plan
  
  
  
  Stat
  Reserve
  
  
  
  
  
  
  
  Type012
  
  ADB
  
  
  
  515
  
  
  
  
  
  
  
  BLNYTotal
  
  
  
  
  
  515Adjustments
  
  
  
  
  
  Total
  
  
  
  
  
  515  5E  Company
  
  Plan
  
  
  
  Stat
  Reserve
  
  
  
  
  
  
  
  TypeTotal
  
  
  
  
  
  Adjustments
  
  
  
  
  
  Total
  
  
  
  
  
    5F  Company
  
  Plan
  
  
  
  Stat Reserve
  
  
  
  
  
  
  
  TypeTotal
  
  
  
  
  
  Adjustments
  
  
  
  
  
  Total
  
  
  
  
  
    5G  Company
  
  Plan
  
  
  
  Stat
  Reserve
  
  
  
  
  
  
  
  TypeTotal
  
  
  
  
  
  Adjustments
  
  
  
  
  
  Total
  
  
  
  
  
    Reinsurance  Company
  
  Name
  
  Amount
  Inforce
  
  Reserve
  Credit38
  
  Wilton Reassurance Co.
  
  1,829,944
  
  66,857Total
  
  
  
  
  
  66,857  MARQ
TOTALS  Exhibit
  
  
  
  Amount
  Inforce
  
  Statutory
  Reserve5A
  
  
  
  2,439,926
  
  88,6275B
  
  
  
  
  
  454,8925C
  
  
  
  
  
  5D
  
  
  
  
  
  5155E
  
  
  
  
  
  5F
  
  
  
  
  
  5G
  
  
  
  
  
  Adjustments
  
  
  
  Total
  
  2,439,926
  
  544,034Actual
  
  2,439,926
  
  544,034Total
  CEDED
  
  1,829,944
  
  66,857Adjustments
  
  
  
  Total
  CEDED
  
  1,829,944
  
  66,857Actual
  
  1,829,944
  
  66,857Total
  NET
  
  609,981
  
  477,177Actual
  
  609,982
  
  477,177Wilton Coverage
  
  609,981
  
  22,286Total After
  Wilton removed
  
  0
  
  454,892


Exhibit B  STATUTORY RESERVES AND LIABILITIES BY POLICY  The Ceding Company sent the
information on Exhibit B to
the Reinsurer via a CD data file on Friday, April 10, 2009. The Reinsurer
received the information on Monday, April 13, 2009.  B-1


Exhibit C  TRANSFERRED ASSETS  The
Transferred Assets shall be within one of the following two (2) categories:  1.
Cash  2.
United States Dollar-Denominated Securities issued or guaranteed by the United
States Treasury.  Valuation of Assets  (a) By 5:00 p.m.
on the fifth (5th) Business Day
prior to the Closing Date, the parties by mutual agreement shall designate
certain Transferred Assets as IDC
Assets,provided that IDC quotes prices for such Transferred
Assets. All Transferred Assets not designated as IDC Assets shall be designated
Brokers Assets. If the parties
cannot agree on the designation of any particular Transferred Asset as an IDC
Asset, such Transferred Asset shall be conclusively deemed to be a Brokers
Asset. The fair market value of each Transferred Asset that is an IDC Asset and
each Transferred Asset that is a Brokers Asset shall be determined as follows:  (i) No
later than 9:00 a.m. on the Business Day immediately prior to the Closing
Date, Reinsurer shall submit to IDC the CUSIP number (or other unique
identifier if CUSIP is not available) and face amount of each IDC Asset and
request that IDC provide in writing as promptly as practicable to the Ceding
Company and the Reinsurer each such Transferred Assets price (for the given
face amount) as of approximately 3:00 p.m. on such Business Day. The price
quoted by IDC shall be referred to as the IDC
Price.  (ii) No
later than 5:00 p.m. on the fourth (4th) Business Day prior to the Closing Date, the
Reinsurer shall submit simultaneously to each of the three (3) Brokers the
CUSIP number (or other unique identifier if CUSIP is not available) and face
amount of each Brokers Asset and request that each Broker provide in writing as
promptly as practicable to the Ceding Company and the Reinsurer each such
Transferred Assets price (for the given face amount), with such price setting
forth the bid value and ask value of each such Transferred Asset as of
approximately 3:00 p.m. on the Business Day immediately prior to the
Closing Date. The price quoted by each Broker for each Brokers Asset shall be
the average of such bid and ask price and shall be designated as the Brokers Quote for each such Brokers
Asset.  (iii) The
Reinsurer and the Ceding Company together shall review the IDC Prices and
Brokers Quotes for any errors and omissions or other disagreements (together,
Disagreements). If the Reinsurer
or the Ceding Company reasonably determines that there exists any Disagreement,
the Reinsurer and the Ceding Company shall immediately notify IDC or the applicable
Broker, as the case may be, and use their commercially reasonable efforts to
determine and resolve with the applicable party any such Disagreement prior to
the Closing, or as promptly as practicable after the Closing, in accordance
with the principles set forth in this Exhibit C.  C-1


(b) The fair market
value of each IDC Asset shall be the IDC Price. The fair market value of each
Brokers Asset is the Brokers Quote remaining for such asset after discarding
the highest and lowest Brokers Quote for such asset.  Such fair market values for the IDC and
Brokers Assets shall be referred to as the Fair
Market Value of such asset.  (c) For purposes of
this Exhibit C:  (i) Brokers means the following brokers:
Citigroup, Merrill Lynch & Co. and JPMorgan Chase & Co.;provided, that, if any such broker does
not provide a Brokers Quote or hereafter becomes an Affiliate of the Reinsurer
or the Ceding Company, the parties shall mutually decide in good faith whether
to proceed without such Brokers Quote or to identify a mutually acceptable
replacement broker.  (ii) IDC means the pricing and quotation
service offered by Financial Time Interactive Data Corp.  C-2