FOR THE
BENEFIT OF THE CEDING COMPANY SHALL COMPLY IN ALL RESPECTS WITH THE STATUTES AND
REGULATIONS OF THE STATE OF IOWA.
(B)
THE ASSETS DEPOSITED IN SUCH REINSURANCE TRUST SHALL (I) BE VALUED
ACCORDING TO THEIR CURRENT FAIR MARKET VALUE AND (II) CONSIST ONLY OF PERMITTED
ASSETS.
(C)
PRIOR TO DEPOSITING ASSETS WITH THE TRUSTEE, THE REINSURER SHALL
EXECUTE ASSIGNMENTS, ENDORSEMENTS IN BLANK OR TRANSFER LEGAL TITLE TO THE
TRUSTEE OF ALL SHARES, OBLIGATIONS OR ANY OTHER ASSETS REQUIRING ASSIGNMENTS, IN
ORDER THAT THE CEDING COMPANY, OR THE TRUSTEE UPON THE DIRECTION OF THE CEDING
COMPANY, MAY WHENEVER NECESSARY NEGOTIATE ANY SUCH ASSETS WITHOUT CONSENT OR
SIGNATURE FROM THE REINSURER OR ANY OTHER ENTITY.
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(D)
ALL SETTLEMENTS OF ACCOUNT UNDER SUCH A TRUST AGREEMENT BETWEEN
THE CEDING COMPANY AND THE REINSURER SHALL BE MADE IN CASH OR ITS EQUIVALENT.
(E)
NOTWITHSTANDING ANY OTHER PROVISION HEREOF, ASSETS IN ANY
REINSURANCE TRUST MAY BE WITHDRAWN BY THE CEDING COMPANY AT ANY TIME AND SHALL
BE UTILIZED AND APPLIED BY THE CEDING COMPANY OR ANY OF ITS SUCCESSORS IN
INTEREST BY OPERATION OF LAW, INCLUDING ANY LIQUIDATOR, REHABILITATOR, RECEIVER
OR CONSERVATOR OF THE CEDING COMPANY, WITHOUT DIMINUTION BECAUSE OF INSOLVENCY
ON THE PART OF THE CEDING COMPANY OR THE REINSURER, ONLY FOR THE FOLLOWING
PURPOSES:
(I)
TO REIMBURSE THE CEDING COMPANY FOR THE QUOTA SHARE OF PREMIUMS
WHICH ARE RETURNED TO THE OWNERS OF THE REINSURED POLICIES BECAUSE OF
CANCELLATIONS OF SUCH REINSURED POLICIES;
(II)
TO REIMBURSE THE CEDING COMPANY FOR ANNUITIZATION PAYMENTS AND
THE QUOTA SHARE OF CLAIMS PAID PURSUANT TO THE PROVISIONS OF THE REINSURED
POLICIES;
(III)
TO FUND AN ACCOUNT WITH THE CEDING COMPANY (WHEN COMBINED WITH
ANY FUNDS WITHHELD AMOUNT AND AMOUNTS AVAILABLE UNDER LETTERS OF CREDIT PURSUANT
TO SECTION 10.05) IN AN AMOUNT AT LEAST EQUAL TO THE CEDING COMPANY'S DEDUCTION
FOR REINSURANCE CEDED ON CEDED RESERVES;
(IV)
TO PAY ANY OTHER AMOUNTS WHICH THE CEDING COMPANY CLAIMS ARE DUE
UNDER THIS AGREEMENT; AND
(V)
TO PAY ANY NET SETTLEMENT AMOUNT, FUNDS WITHHELD ADJUSTMENT OR
WEEKLY ASSIGNED HEDGE PROCEEDS SETTLEMENT AMOUNT DUE FROM THE CEDING COMPANY TO
THE REINSURER.
NOTWITHSTANDING THE FOREGOING, THE CEDING COMPANY SHALL NOT WITHDRAW FUNDS FROM
ANY REINSURANCE TRUST UNTIL THE EXPIRATION OF ANY PAYMENT PERIODS ACCORDED THE
REINSURER UNDER SECTION 9.03, AND THEN ONLY UPON PROVIDING THE REINSURER WITH
WRITTEN NOTICE AT LEAST FIVE (5) BUSINESS DAYS PRIOR TO SUCH WITHDRAWAL.
(F)
THE CEDING COMPANY SHALL PROMPTLY RETURN TO THE REINSURANCE TRUST
ANY ASSETS WITHDRAWN IN EXCESS OF THE ACTUAL AMOUNTS REQUIRED IN PARAGRAPHS
(I) THROUGH (V) IMMEDIATELY ABOVE OR ANY AMOUNTS THAT ARE SUBSEQUENTLY
DETERMINED NOT TO BE DUE UNDER PARAGRAPH (IV) IMMEDIATELY ABOVE ("REINSURANCE
TRUST EXCESS WITHDRAWALS").
THE CEDING COMPANY SHALL ALSO PAY INTEREST ON ANY
REINSURANCE TRUST EXCESS WITHDRAWALS AT A RATE EQUAL TO SIX PERCENT (6%) PER
ANNUM FROM AND INCLUDING THE DATE OF WITHDRAWAL TO BUT EXCLUDING THE DATE ON
WHICH THE REINSURANCE TRUST EXCESS WITHDRAWAL IS RETURNED TO THE REINSURANCE
TRUST.
ANY REINSURANCE TRUST