IN THIS AGREEMENT SHALL
HAVE THE DEFINED MEANING WHEN USED IN ANY SCHEDULE, EXHIBIT, CERTIFICATE, REPORT
OR OTHER DOCUMENTS ATTACHED HERETO OR MADE OR DELIVERED PURSUANT HERETO UNLESS
OTHERWISE DEFINED THEREIN.
ARTICLE II
COVERAGE
SECTION 2.01
SCOPE OF COVERAGE.
(A)
THIS AGREEMENT SHALL BE EFFECTIVE AS OF
12:01 A.M. ON THE EFFECTIVE DATE.
(B)
THIS AGREEMENT IS AN AGREEMENT FOR INDEMNITY
REINSURANCE MADE SOLELY BETWEEN THE CEDING COMPANY AND THE REINSURER.
(C)
SUBJECT TO THE TERMS, CONDITIONS AND LIMITS
OF THIS AGREEMENT (INCLUDING THE EXCLUSION FROM COVERAGE OF EXCLUDED
LIABILITIES), THE CEDING COMPANY SHALL AUTOMATICALLY CEDE AND THE REINSURER
SHALL AUTOMATICALLY REINSURE THE QUOTA SHARE OF THE REINSURED LIABILITIES.
(D)
THE CEDING COMPANY SHALL DELIVER NOTICE TO
THE REINSURER TEN (10) BUSINESS DAYS PRIOR TO ISSUING CONTRACTS ON POLICY FORMS
THAT ARE SUBSTANTIALLY SIMILAR TO THE FORMS SET FORTH ON SCHEDULE I OR ISSUING
CONTRACTS PROVIDING SUBSTANTIALLY SIMILAR ECONOMIC BENEFITS TO POLICYHOLDERS AS
TO BE PROVIDED BY THE REINSURED POLICIES (EACH A "SIMILAR POLICY FORM").
THE
REINSURER SHALL HAVE THE RIGHT TO AMEND SCHEDULE I TO ADD ANY SIMILAR POLICY
FORM TO SCHEDULE I AND INCLUDE CONTRACTS ON ANY SIMILAR POLICY FORM AS REINSURED
POLICIES UNDER THIS
6
AGREEMENT.
THE CEDING COMPANY SHALL PROVIDE TO THE REINSURER ANY ADDITIONAL
INFORMATION RELATING TO ANY SIMILAR POLICY FORM OR CONTRACTS WRITTEN ON ANY
SIMILAR POLICY FORM AS IS REASONABLY REQUESTED BY THE REINSURER FROM TIME TO
TIME.
(E)
SUBJECT TO THE TERMS, CONDITIONS AND LIMITS
OF THIS AGREEMENT (INCLUDING THE EXCLUSION FROM COVERAGE OF EXCLUDED LIABILITIES
AND EXCLUDING THE INVESTMENT PERFORMANCE OF THE ASSETS IN THE FUNDS WITHHELD
ACCOUNT), THE REINSURER SHALL FOLLOW THE FORTUNES OF THE CEDING COMPANY, AND TO
THAT END THE REINSURER'S LIABILITY FOR THE REINSURED POLICIES SHALL BE IDENTICAL
TO THAT OF THE CEDING COMPANY AND SHALL BE SUBJECT TO THE SAME RISKS, TERMS,
CONDITIONS, INTERPRETATIONS, WAIVERS, MODIFICATIONS, ALTERATIONS AND
CANCELLATIONS AS THE RESPECTIVE INSURANCES OF THE CEDING COMPANY, SUBJECT IN
EACH CASE TO THE CEDING COMPANY'S DUTY TO ADHERE TO THE UNDERWRITING GUIDELINES
AND ITS OBLIGATIONS PURSUANT TO ARTICLE X.
(F)
NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN, THE REINSURER SHALL NOT BE LIABLE FOR ANY EXCLUDED LIABILITIES.
SECTION 2.02
UNDERWRITING OF POLICIES SUBJECT TO REINSURANCE.
(A)
THE REINSURER SHALL ONLY BE REQUIRED TO
AUTOMATICALLY REINSURE POLICIES WHICH HAVE BEEN UNDERWRITTEN IN ACCORDANCE WITH
THE UNDERWRITING GUIDELINES.
(B)
THE CEDING COMPANY SHALL NOT, WITHOUT THE
PRIOR WRITTEN CONSENT OF THE REINSURER, MAKE ANY CHANGES TO THE UNDERWRITING
GUIDELINES WHICH ARE MATERIAL TO THE BUSINESS REINSURED UNDER THIS AGREEMENT.
ANY POLICIES WRITTEN BY THE CEDING COMPANY AFTER ANY SUCH CHANGES ARE MADE TO
THE UNDERWRITING GUIDELINES WITHOUT THE PRIOR WRITTEN CONSENT OF THE REINSURER
SHALL ONLY BE REINSURED POLICIES HEREUNDER IF THE REINSURER CONSENTS TO
INCLUDING SUCH POLICIES AS REINSURED POLICIES.
SECTION 2.03
RETENTION.
THE CEDING COMPANY SHALL RETAIN, NET AND
UNREINSURED, AT ITS OWN RISK AND LIABILITY, TWENTY PERCENT (20%) OF THE
LIABILITIES WITH RESPECT TO EACH OF THE REINSURED POLICIES, AND THE CEDING
COMPANY SHALL NOT