ACCURATE WHEN DISCLOSED AND THERE HAS BEEN NO MATERIAL CHANGE IN EITHER THE
PRICING METHODOLOGY OR THE HEDGING PROCEDURES SINCE THE DATE DISCLOSED.
33
(E)
SOLVENCY.
THE CEDING COMPANY IS AND WILL BE SOLVENT ON A
STATUTORY BASIS IMMEDIATELY AFTER GIVING EFFECT TO THIS AGREEMENT.
FOR THE
PURPOSES OF THIS SECTION 18.01(E), "SOLVENT" MEANS THAT: (I) THE AGGREGATE
ASSETS OF THE CEDING COMPANY ARE GREATER THAN THE AGGREGATE LIABILITIES OF THE
CEDING COMPANY, IN EACH CASE DETERMINED IN ACCORDANCE WITH SAP; (II) THE CEDING
COMPANY DOES NOT INTEND TO, AND DOES NOT BELIEVE THAT IT WILL, INCUR DEBTS OR
OTHER LIABILITIES BEYOND ITS ABILITY TO PAY SUCH DEBTS AND OTHER LIABILITIES AS
THEY COME DUE AND (III) THE CEDING COMPANY IS NOT ENGAGED IN A BUSINESS OR
TRANSACTION, AND DOES NOT CONTEMPLATE ENGAGING IN A BUSINESS OR TRANSACTION, FOR
WHICH THE CEDING COMPANY'S ASSETS WOULD CONSTITUTE UNREASONABLY INSUFFICIENT
CAPITAL.
(F)
ACCURACY OF BOOKS AND RECORDS.
THE CEDING COMPANY MAINTAINS
RECORDS RELATING TO THE REINSURED POLICIES AND THE HEDGES, AND IMPLEMENTS
ADMINISTRATIVE AND OPERATING PROCEDURES WITH RESPECT TO SUCH RECORDS, AND KEEPS
AND MAINTAINS ALL MATERIAL DOCUMENTS, BOOKS AND RECORDS REASONABLY NECESSARY FOR
THE MAINTENANCE OF THE REINSURED POLICIES AND THE HEDGES, WHICH DOCUMENTS, BOOKS
AND RECORDS ARE COMPLETE AND ACCURATE IN ALL MATERIAL RESPECTS, WITH THE UTMOST
GOOD FAITH AND WITH THE SKILL, DILIGENCE AND EXPERTISE THAT WOULD REASONABLY BE
EXPECTED FROM QUALIFIED PERSONNEL PERFORMING SUCH DUTIES IN LIKE CIRCUMSTANCES.
(G)
GOVERNMENTAL LICENSES.
THE CEDING COMPANY HAS ALL LICENSES,
CERTIFICATES OF AUTHORITY OR OTHER SIMILAR CERTIFICATES, REGISTRATIONS,
FRANCHISES, PERMITS, APPROVALS OR OTHER SIMILAR AUTHORIZATIONS ISSUED BY
GOVERNMENTAL AUTHORITIES (COLLECTIVELY, "PERMITS") NECESSARY TO CONDUCT ITS
BUSINESS AS CURRENTLY CONDUCTED, EXCEPT IN SUCH CASES WHERE THE FAILURE TO HAVE
A PERMIT HAS NOT HAD AND WOULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT WITH RESPECT TO THE CEDING COMPANY.
ALL PERMITS THAT ARE
MATERIAL TO THE CONDUCT OF THE CEDING COMPANY'S BUSINESS ARE VALID AND IN FULL
FORCE AND EFFECT.
THE CEDING COMPANY IS NOT SUBJECT TO ANY PENDING ACTION OR,
TO THE KNOWLEDGE OF THE CEDING COMPANY, ANY THREATENED ACTION THAT SEEKS THE
REVOCATION, SUSPENSION, TERMINATION, MODIFICATION OR IMPAIRMENT OF ANY PERMIT
THAT, IF SUCCESSFUL, WOULD REASONABLY BE EXPECTED TO HAVE, OR WITH THE PASSAGE
OF TIME BECOME, A MATERIAL ADVERSE EFFECT WITH RESPECT TO THE CEDING COMPANY.
(H)
FINANCIAL STATEMENTS.
THE CEDING COMPANY HAS PROVIDED TO THE
REINSURER A COPY OF ITS AUDITED STATUTORY FINANCIAL STATEMENTS AS OF THE END OF
THE MOST RECENT CALENDAR YEAR AND ITS UNAUDITED STATUTORY FINANCIAL STATEMENTS
AS OF THE END OF THE MOST RECENT CALENDAR QUARTER FOR WHICH THE CEDING COMPANY'S
STATUTORY FINANCIAL STATEMENTS HAVE BEEN PREPARED AND AS WERE PROVIDED BY THE
CEDING COMPANY TO THE IOWA INSURANCE DIVISION.
EXCEPT AS DISCLOSED IN SUCH
FINANCIAL STATEMENTS (INCLUDING IN THE NOTES THERETO), SUCH FINANCIAL STATEMENTS
HAVE BEEN PREPARED IN ALL MATERIAL RESPECTS IN ACCORDANCE WITH SAP APPLIED ON A
CONSISTENT BASIS DURING THE PERIOD INVOLVED AND PRESENT FAIRLY, IN ALL