Document:

Exhibit 10.57

 

Execution Copy

 

AMENDED AND RESTATED

UNCONDITIONAL CAPITAL MAINTENANCE AGREEMENT

AMONG

AMERICAN INTERNATIONAL GROUP, INC.

AND

AIG PROPERTY CASUALTY INC.

AND

THE INSURANCE COMPANIES NAMED ON SCHEDULE 1

 

This Amended and Restated Unconditional Capital Maintenance Agreement (this “Agreement”), is made, entered into and effective as of February 18, 2014, by and among American International Group, Inc., a corporation organized under the laws of the State of Delaware (“AIG”), AIG Property Casualty Inc., a corporation organized under the laws of the State of Delaware (“AIGPC”), and each of the insurance companies listed on Schedule 1 hereto (each, a “Company” and collectively, the “Fleet”).

 

WITNESSETH:

 

WHEREAS, each Company is a property-casualty insurer subject to certain capital requirements of the insurance laws and regulations of its applicable jurisdiction of incorporation set forth on Schedule 1 (the “Domiciliary State”);

 

WHEREAS, each Company is an indirect wholly owned subsidiary of each of AIG and AIGPC;

 

WHEREAS, AIG has an interest in unconditionally maintaining the Fleet’s financial condition (the “Fleet” for purposes of this Agreement shall be treated as one insurance company as if each Company combined its financial attributes into one entity); and

 

WHEREAS, AIG, AIGPC and each Company executed that certain Unconditional Capital Maintenance Agreement on February 20, 2013 (the “2013 CMA”) and the parties have agreed to amend and restate such 2013 CMA as provided in this Agreement:

 

NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereto agree as follows:

 

1.             Capital Contributions.  In the event that the Fleet’s Total Adjusted Capital for each of the Fleet’s first and third fiscal quarters (as determined based

 

 

on each Company’s first and third fiscal quarterly filed statutory financial statements, respectively, subject to any adjustments or modifications thereto required by the applicable Domiciliary State’s insurance department or the Fleet’s independent auditors) falls below the Specified Minimum Percentage of the Fleet’s projected year-end Authorized Control Level RBC (in each case as estimated by AIGPC as of the end of each such first and third fiscal quarters, as the case may be, taking into account (for purposes of such estimation) facts and circumstances occurring after the end of such fiscal quarter but before such time as AIG would be obligated pursuant to paragraph 3 to make a contribution to AIGPC), AIG shall, within the respective time periods set forth under paragraph 3, in accordance with paragraph 4 and in compliance with applicable law, provide to AIGPC cash, cash equivalents, securities or other instruments that qualify (as admitted assets in the appropriate jurisdiction) for purposes of calculating the Fleet’s Total Adjusted Capital, as a contribution and not as a loan, in an amount such that the Fleet’s Total Adjusted Capital as of the end of each of the Fleet’s second and fourth fiscal quarter, as the case may be, will be projected at year-end to be at least equal to the Specified Minimum Percentage of the Fleet’s Authorized Control Level RBC.  Notwithstanding the foregoing, AIG may, at any time as it deems necessary in its sole discretion and in compliance with applicable law, make a contribution to AIGPC in such amount as is required for the Fleet’s Total Adjusted Capital to equal a percentage of its Authorized Control Level RBC determined to be appropriate by AIGPC and AIG.

 

2.             Defined Terms.  For the avoidance of doubt, the terms “Total Adjusted Capital” and “Authorized Control Level RBC” shall have the meanings ascribed thereto under the insurance laws and regulations of the applicable Domiciliary State, or, if not defined therein, shall have the meanings ascribed thereto in the risk-based capital (“RBC”) instructions promulgated by the National Association of Insurance Commissioners (“NAIC”). The term “Specified Minimum Percentage” shall be equal to the percentage set forth on Schedule 2 attached hereto, which shall be agreed to by AIG and AIGPC at least once every year beginning upon the date of the filing of each Company’s 2014 Annual Statement with the applicable Domiciliary State’s insurance department and following review against the capital adequacy standards and criteria (“Agency Criteria”) of each of Standard & Poor’s Corp. (“S&P”), Moody’s Investors Service (“Moody’s”) and A.M. Best Company (“A.M. Best”).  Notwithstanding the obligation of AIGPC and AIG to review the Specified Minimum Percentage on an annual basis, the parties hereto agree to review and revise the Specified Minimum Percentage on a more frequent basis, if the parties agree it is appropriate, to take into account (a) any material changes after the date hereof to any Agency Criteria adopted by any of S&P, Moody’s or A.M. Best, on the one hand, or to the law of any applicable Domiciliary State or NAIC RBC rules or instructions, on the other hand, which causes the results under the Agency Criteria to diverge from that under the law of any applicable Domiciliary State or NAIC RBC rules or instructions, (b) any Company completes a material transaction that is treated materially differently by the Agency Criteria, on the one hand, and the NAIC RBC rules or instructions, on

 

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the other hand, or (c) any other material development or circumstance affecting the Fleet or any Company which AIG and AIGPC agree merits a reevaluation of the Specified Minimum Percentage then in effect.

 

3.             Timing of Capital Contributions.  AIGPC and AIG agree that any contribution to be made under paragraph 1 will take place within the following two time periods per year, as applicable: (a) during the time beginning on the first business day after the last filing of any Company’s first fiscal quarterly statutory financial statements and ending on the last business day prior to the end of the Fleet’s second fiscal quarter; and (b) during the time beginning on the first business day after the last filing of any Company’s third fiscal quarterly statutory financial statements and ending on the last business day prior to the end of the Fleet’s fourth fiscal quarter. Notwithstanding the foregoing, in compliance with applicable law, any capital contribution provided for under paragraph 1 may be made by AIG after the close of any fiscal quarter or fiscal year of the Fleet but prior to the last filing by any Company of its statutory financial statements for such fiscal quarter or fiscal year, respectively, and contributions of this nature shall be recognized as capital contributions receivable as of the balance sheet date of the yet to be filed quarterly or annual financial statement (as the case may be), pursuant to paragraph 8 of Statement of Statutory Accounting Principles No. 72, to the extent approved by the applicable Domiciliary State.

 

4.             Funding Mechanics.  At the time that any contribution is due under paragraph 3, AIG agrees that it will either (a) make such contribution to AIGPC and AIGPC shall further contribute such funds, securities or instruments to the applicable subsidiaries in furtherance of the purposes of this Agreement and in the reasonable discretion of the management of AIGPC, or (b) make such contribution directly to any applicable Company without receiving any capital stock or other ownership interest in exchange therefor.  All contributions contemplated under this Agreement shall be approved and made in compliance with applicable law, including, without limitation, approval by the board of directors of each applicable entity and any prior notice or approval requirements specified under applicable rules and regulations.

 

5.             AIG Policies.  Subject to the requirements of applicable law and the approval, to the extent required, by any or all of any Company’s or AIGPC’s senior management, relevant management committees, board of directors, and of any insurance regulator, each Company and AIGPC hereby acknowledges that, in a manner consistent with past practice and any other reasonable requirements of AIG, it will comply with all financial and budgetary planning, risk mitigation, derisking or pricing, corporate governance, investment, informational and procedural requirements set forth by AIG.

 

6.             No Failure to Claim.  AIG hereby waives any failure or delay on the part of AIGPC or any Company in asserting or enforcing any of its rights or in making any claims or demands hereunder.

 

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7.             Termination.  Unless earlier terminated in accordance with this paragraph 7, this Agreement shall continue indefinitely.  AIG shall have the absolute right to terminate this Agreement upon thirty (30) days’ prior written notice to AIGPC and each applicable Company, which notice shall state the effective date of termination (the “Termination Date”); provided, however, that AIG agrees not to terminate this Agreement unless (a) AIG significantly modifies the corporate structure or ownership of AIGPC or any Company, or (b) AIG sells AIGPC or any Company to an acquirer, in each case, (i) having a rating from at least one of S&P, Moody’s, A.M. Best or a substitute agency, which is a nationally recognized statistical rating organization, that is at least equal to the lower of (x) AIG’s then-current rating from such agency or (y) the then-current rating of AIGPC or such Company, as applicable, being restructured or sold as supported by this Agreement from such agency; or (ii) such that, immediately on the effective date of the modification of the corporate structure or sale by AIG of AIGPC or such Company, AIGPC’s or such Company’s capitalization, as applicable, is consistent with the minimum capital adequacy standards and criteria of at least one of S&P, Moody’s, A.M. Best or a substitute agency, which is a nationally recognized statistical rating organization, for a rating that is equal to or better than AIGPC’s or such Company’s, as applicable, then-current rating on the date immediately preceding such modification of corporate structure or sale.  To the extent not terminated previously by AIG pursuant to the foregoing, this Agreement will terminate automatically, with respect to any particular Company, one year after the closing of any sale of such Company by AIG, and all provisions hereof will be of no further force and effect.  For the avoidance of doubt, the termination of this Agreement pursuant to this paragraph 7 shall not relieve either party of any obligation it may owe to the other party hereunder that existed prior to, and remains outstanding as of, the Termination Date.

 

8.             Policyholder Rights.  Any policyholder holding a policy issued by any Company prior to the termination of this Agreement shall have the right to demand that such Company enforce such Company’s rights under paragraphs 1, 3 and 4 of this Agreement, and, if such Company fails or refuses to take timely action to enforce such rights or such Company defaults in any claim or other payment owed to any such policyholder when due, such policyholder may proceed directly against AIG to enforce such Company’s rights under paragraphs 1, 3 and 4 of this Agreement; provided, however, that no policyholder of any Company may take any action authorized under this paragraph 8 unless and until (a) such policyholder has given AIG written notice of its intent to enforce the terms of this Agreement as provided in this paragraph 8, which notice shall specify in reasonable detail the nature of and basis for the policyholder’s complaint and (b) AIG has failed to comply with this Agreement within sixty (60) days after such notice is given; and, provided, further, that upon termination of this Agreement in accordance with paragraph 7 hereof, the rights of any policyholder as provided for under this paragraph 8 shall terminate effective as of the Termination Date, except with respect to the obligation of AIG (if any) to

 

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make capital contributions to any Company pursuant to paragraphs 1, 3 and 4 of this Agreement solely to the extent such obligation arose prior to, and remained unsatisfied as of, the Termination Date (it being understood that upon AIG’s satisfaction of all such obligations after the Termination Date, no such policyholder shall have any rights against AIGPC or any Company or AIG, as the case may be, under this paragraph 8).

 

9.             No Indebtedness; No Policyholder Recourse Against AIG.  This Agreement is not, and nothing herein contained and nothing done pursuant hereto by AIG shall constitute or be construed or deemed to constitute, an evidence of indebtedness or an obligation or liability of AIG as guarantor, endorser, surety or otherwise in respect of any obligation, indebtedness or liability, of any kind whatsoever, of AIGPC or any Company.  This Agreement does not provide, and is not intended to be construed or deemed to provide, any policyholder of any Company with recourse to or against any of the assets of AIG.

 

10.          Notices.  Any notice, instruction, request, consent, demand or other communication required or contemplated by this Agreement shall be in writing, shall be given or made or communicated by United States first class mail, addressed as follows:

 

If to AIG:

 

American International Group, Inc.

175 Water Street

New York, New York 10038

Attention:  Secretary

 

If to AIGPC:

 

AIG Property Casualty Inc.

175 Water Street, 24th Floor

New York, NY 10038

Attention:  Chief Financial Officer

 

with a copy (which shall not constitute notice) to:

 

AIG Property Casualty U.S. Law Department

175 Water Street, 18th Floor

New York, NY 10038

Attention:  AIG Property Casualty U.S. General Counsel

 

11.          Fiscal Year.  Each of the Companies represents that its fiscal year is the same as each other Company and covenants that it shall not change its fiscal year without the prior written consent of AIG.

 

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12.          Successors.  The covenants, representations, warranties and agreements herein set forth shall be mutually binding upon and inure to the mutual benefit of AIG and its successors and each of AIGPC and each Company and its successors.

 

13.          Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to the principles of conflict of laws.

 

14.          Severability.  If any provision of this Agreement shall be declared null, void or unenforceable in whole or in part by any court, arbitrator or governmental agency, said provision shall survive to the extent it is not so declared and all the other provisions of this Agreement shall remain in full force and effect unless, in each case, such declaration shall serve to deprive any of the parties hereto of the fundamental benefits of or rights under this Agreement.

 

15.          Entire Agreement; Amendments.  This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussion, whether oral or written, of the parties without the need for any action.  This Agreement may be amended at any time by written agreement or instrument signed by the parties hereto.

 

16.          Headings.  The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

 

17.          Counterparts.  This Agreement may be signed by the parties in one or more counterparts which together shall constitute one and the same agreement among the parties.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

 

	
AMERICAN   INTERNATIONAL GROUP, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Charles S. Shamieh
    	
 
    
	
 
    	
Name:
    	
Charles   S. Shamieh
    	
 
    
	
 
    	
Title:
    	
Senior   Vice President and Chief Corporate Actuary
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
AIG   PROPERTY CASUALTY INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   James Bracken
    	
 
    
	
 
    	
Name:
    	
 James Bracken
    	
 
    
	
 
    	
Title:
    	
Chief   Financial Officer and Senior Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Denis M. Butkovic
    	
 
    
	
 
    	
Name:
    	
Denis   M. Butkovic
    	
 
    
	
 
    	
Title:
    	
Assistant   Secretary
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
AIG   ASSURANCE COMPANY
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Richard Hoskins
    	
 
    
	
 
    	
Name:
    	
Richard   Hoskins
    	
 
    
	
 
    	
Title:
    	
Chief   Financial Officer and Senior Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Denis M. Butkovic
    	
 
    
	
 
    	
Name:
    	
Denis   M. Butkovic
    	
 
    
	
 
    	
Title:
    	
Secretary
    	
 
    

 

 

	
AIG   PROPERTY CASUALTY COMPANY
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Richard Hoskins
    	
 
    
	
 
    	
Name:
    	
Richard   Hoskins
    	
 
    
	
 
    	
Title:
    	
Chief   Financial Officer and Senior Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Denis M. Butkovic
    	
 
    
	
 
    	
Name:
    	
Denis   M. Butkovic
    	
 
    
	
 
    	
Title:
    	
Secretary
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
AIG   SPECIALTY INSURANCE COMPANY
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Richard Hoskins
    	
 
    
	
 
    	
Name:
    	
Richard   Hoskins
    	
 
    
	
 
    	
Title:
    	
Chief   Financial Officer and Senior Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Denis M. Butkovic
    	
 
    
	
 
    	
Name:
    	
Denis   M. Butkovic
    	
 
    
	
 
    	
Title:
    	
Secretary
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
AIU   INSURANCE COMPANY
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Richard Hoskins
    	
 
    
	
 
    	
Name:
    	
Richard   Hoskins
    	
 
    
	
 
    	
Title:
    	
Chief   Financial Officer and Senior Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Denis M. Butkovic
    	
 
    
	
 
    	
Name:
    	
Denis   M. Butkovic
    	
 
    
	
 
    	
Title:
    	
Secretary
    	
 
    

 

 

	
AMERICAN   HOME ASSURANCE COMPANY
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Richard Hoskins
    	
 
    
	
 
    	
Name:
    	
Richard   Hoskins
    	
 
    
	
 
    	
Title:
    	
Chief   Financial Officer and Senior Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Denis M. Butkovic
    	
 
    
	
 
    	
Name:
    	
Denis   M. Butkovic
    	
 
    
	
 
    	
Title:
    	
Secretary
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
COMMERCE   AND INDUSTRY INSURANCE COMPANY
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Richard Hoskins
    	
 
    
	
 
    	
Name:
    	
Richard   Hoskins
    	
 
    
	
 
    	
Title:
    	
Chief   Financial Officer and Senior Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Denis M. Butkovic
    	
 
    
	
 
    	
Name:
    	
Denis   M. Butkovic
    	
 
    
	
 
    	
Title:
    	
Secretary
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GRANITE   STATE INSURANCE COMPANY
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Richard Hoskins
    	
 
    
	
 
    	
Name:
    	
Richard   Hoskins
    	
 
    
	
 
    	
Title:
    	
Chief   Financial Officer and Senior Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Denis M. Butkovic
    	
 
    
	
 
    	
Name:
    	
Denis   M. Butkovic
    	
 
    
	
 
    	
Title:
    	
Secretary
    	
 
    

 

 

	
ILLINOIS   NATIONAL INSURANCE CO.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Richard Hoskins
    	
 
    
	
 
    	
Name:
    	
Richard   Hoskins
    	
 
    
	
 
    	
Title:
    	
Chief   Financial Officer and Senior Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Denis M. Butkovic
    	
 
    
	
 
    	
Name:
    	
Denis   M. Butkovic
    	
 
    
	
 
    	
Title:
    	
Secretary
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
LEXINGTON   INSURANCE COMPANY
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Richard Hoskins
    	
 
    
	
 
    	
Name:
    	
Richard   Hoskins
    	
 
    
	
 
    	
Title:
    	
Chief   Financial Officer and Senior Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Denis M. Butkovic
    	
 
    
	
 
    	
Name:
    	
Denis   M. Butkovic
    	
 
    
	
 
    	
Title:
    	
Secretary
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
NATIONAL   UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Richard Hoskins
    	
 
    
	
 
    	
Name:
    	
Richard   Hoskins
    	
 
    
	
 
    	
Title:
    	
Chief   Financial Officer and Senior Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Denis M. Butkovic
    	
 
    
	
 
    	
Name:
    	
Denis   M. Butkovic
    	
 
    
	
 
    	
Title:
    	
Secretary
    	
 
    

 

 

	
NEW   HAMPSHIRE INSURANCE COMPANY
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Richard Hoskins
    	
 
    
	
 
    	
Name:
    	
Richard   Hoskins
    	
 
    
	
 
    	
Title:
    	
Chief   Financial Officer and Senior Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Denis M. Butkovic
    	
 
    
	
 
    	
Name:
    	
Denis   M. Butkovic
    	
 
    
	
 
    	
Title:
    	
Secretary
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
THE   INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Richard Hoskins
    	
 
    
	
 
    	
Name:
    	
Richard   Hoskins
    	
 
    
	
 
    	
Title:
    	
Chief   Financial Officer and Senior Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Denis M. Butkovic
    	
 
    
	
 
    	
Name:
    	
Denis   M. Butkovic
    	
 
    
	
 
    	
Title:
    	
Secretary
    	
 
    

 

 

SCHEDULE 1

 

	
 
    	
 
    	
Company
    	
 
    	
Domiciliary State
    
	
(a)
    	
 
    	
AIG   Assurance Company
    	
 
    	
PA
    
	
(b)
    	
 
    	
AIG   Property Casualty Company
    	
 
    	
PA
    
	
(c)
    	
 
    	
AIG   Specialty Insurance Company
    	
 
    	
IL
    
	
(d)
    	
 
    	
AIU   Insurance Company
    	
 
    	
NY
    
	
(e)
    	
 
    	
American   Home Assurance Company
    	
 
    	
NY
    
	
(f)
    	
 
    	
Commerce   and Industry Insurance Company
    	
 
    	
NY
    
	
(g)
    	
 
    	
Granite   State Insurance Company
    	
 
    	
PA
    
	
(h)
    	
 
    	
Illinois   National Insurance Co.
    	
 
    	
IL
    
	
(i)
    	
 
    	
Lexington   Insurance Company
    	
 
    	
DE
    
	
(j)
    	
 
    	
National   Union Fire Insurance Company of Pittsburgh, Pa.
    	
 
    	
PA
    
	
(k)
    	
 
    	
New   Hampshire Insurance Company
    	
 
    	
PA
    
	
(l)
    	
 
    	
The   Insurance Company of the State of Pennsylvania
    	
 
    	
PA
    

 

 

SCHEDULE 2

 

The Specified Minimum Percentage shall equal 300% of the Fleet’s Authorized Control Level RBC.

 

1Exhibit 10.58

 

Execution Copy

 

AMENDED AND RESTATED

UNCONDITIONAL CAPITAL MAINTENANCE AGREEMENT

BETWEEN

AMERICAN INTERNATIONAL GROUP, INC.

AND

AGC LIFE INSURANCE COMPANY

 

This Amended and Restated Unconditional Capital Maintenance Agreement (this “Agreement”), is made and entered into as of February 18, 2014, by and between American International Group, Inc., a corporation organized under the laws of the State of Delaware (“AIG”), and AGC Life Insurance Company, a corporation organized under the laws of Missouri  (the “Company”).

 

WITNESSETH:

 

WHEREAS, the Company is a life insurer subject to certain capital requirements of the insurance laws and regulations of Missouri (the “Domiciliary State”);

 

WHEREAS, the Company is an indirect wholly owned subsidiary of AIG;

 

WHEREAS, AIG has an interest in unconditionally maintaining and enhancing the Company’s financial condition; and

 

WHEREAS, AIG and the Company executed that certain Unconditional Capital Maintenance Agreement, dated March 15, 2011 (the “2011 CMA”) and the parties have agreed to amend and restate such 2011 CMA as provided in this Agreement:

 

NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereto agree as follows:

 

1.                                      Capital Contributions.  In the event that the Company’s Total Adjusted Capital (a) for each of the Company’s first, second and third fiscal quarters (as determined based on the Company’s first, second and third fiscal quarterly filed statutory financial statements, respectively, subject to any adjustments or modifications thereto required by the Domiciliary State’s insurance department or the Company’s independent auditors) falls below the Specified Minimum Percentage of the Company’s projected Company Action Level RBC (in each case as estimated by the Company as of the end of each such first, second and third fiscal quarters, as the case may be, taking into account (for purposes of such estimation) facts

 

 

and circumstances occurring after the end of such fiscal quarter but before such time as AIG would be obligated pursuant to paragraph 3 to make a contribution) or (b) as of each fiscal year end (as shown in the Company’s fiscal year-end filed statutory financial statements, together with any adjustments or modifications thereto required by the Domiciliary State’s insurance department or the Company’s independent auditors) falls below the Specified Minimum Percentage of the Company’s Company Action Level RBC, AIG shall, within the respective time periods set forth under paragraph 3, in accordance with paragraph 4 and in compliance with applicable law, provide to the Company cash, cash equivalents, securities or other instruments that qualify (as admitted assets) for purposes of calculating the Company’s Total Adjusted Capital, as a contribution and not as a loan, in an amount such that the Company’s Total Adjusted Capital as of the end of each of the Company’s second, third and fourth fiscal quarter, as the case may be, will be projected to be at least equal to the Specified Minimum Percentage of the Company’s Company Action Level RBC.  Notwithstanding the foregoing, AIG may, at any time as it deems necessary in its sole discretion and in compliance with applicable law, make a contribution to the Company in such amount as is required for the Company’s Total Adjusted Capital to equal a percentage of its Company Action Level RBC determined to be appropriate by the Company and AIG.

 

2.                                      Defined Terms.  For the avoidance of doubt, the terms “Total Adjusted Capital” and “Company Action Level RBC” shall have the meanings ascribed thereto under the insurance laws and regulations of the Domiciliary State, or, if not defined therein, shall have the meanings ascribed thereto in the risk-based capital (“RBC”) instructions promulgated by the National Association of Insurance Commissioners (“NAIC”) provided that in either case such calculations shall be adjusted by making appropriate extrapolations from the applicable quarterly financial statement to an estimated annual statement. The term “Specified Minimum Percentage” shall initially be equal to 250% of the Company’s Company Action Level RBC, which shall be reviewed and agreed to by AIG and the Company at least once every year beginning upon the date of the filing of the Company’s 2014 Annual Statement with the Domiciliary State’s insurance department; provided, however, that no change to the Specified Minimum Percentage would become effective until following 60 days written notice to the  Domiciliary State’s insurance department and the Domiciliary State has not otherwise disapproved. Notwithstanding the obligation of the Company and AIG to review the Specified Minimum Percentage on an annual basis, the parties hereto agree to review and revise

 

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the Specified Minimum Percentage taking into account (a) any material changes to the law of the Domiciliary State or NAIC RBC rules or instructions, (b) any material transaction completed by the Company that is treated materially differently by the NAIC RBC rules or instructions or (c) any other material development or circumstance affecting the Company which AIG and the Company agree merits a reevaluation of the Specified Minimum Percentage then in effect.

 

3.                                      Timing of Capital Contributions.  The Company and AIG agree that any contribution to be made under paragraph 1 will take place within the following two time periods per year, as applicable: (a) during the time beginning on the first business day after the filing of the Company’s first fiscal quarterly statutory financial statements and ending on the last business day prior to the end of the Company’s second fiscal quarter; and (b) during the time beginning on the first business day after the filing of the Company’s third fiscal quarterly statutory financial statements and ending on the last business day prior to the end of the Company’s fourth fiscal quarter. Notwithstanding the foregoing, in compliance with applicable law, any capital contribution provided for under paragraph 1 may be made by AIG after the close of any fiscal quarter or fiscal year of the Company but prior to the filing by the Company of its statutory financial statements for such fiscal quarter or fiscal year, respectively, and contributions of this nature shall be recognized as capital contributions receivable as of the balance sheet date of the yet to be filed quarterly or annual financial statement (as the case may be), pursuant to paragraph 8 of Statement of Statutory Accounting Principles No. 72, to the extent approved by the Domiciliary State.

 

4.                                      Funding Mechanics.  At the time that any contribution is due under paragraph 3, AIG agrees that it will either (a) make such contribution to the Company’s direct parent and cause such direct parent to then contribute such funds, securities or instruments so contributed by AIG to the Company, or (b) make such contribution directly to the Company without receiving any capital stock or other ownership interest in exchange therefor.  All contributions contemplated under this Agreement shall be approved and made in compliance with applicable law, including, without limitation, approval by the board of directors of each applicable entity and any prior notice or approval requirements specified under applicable rules and regulations.

 

5.                                      AIG Policies.  Subject to the requirements of applicable law and the approval, to the extent required, by any or all of the Company’s

 

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senior management, relevant management committees, board of directors, and of any insurance regulator, the Company hereby acknowledges that, in a manner consistent with past practice and any other reasonable requirements of AIG, it will comply with all financial and budgetary planning, risk mitigation, derisking or pricing, corporate governance, investment, informational and procedural requirements set forth by AIG.

 

6.                                      No Failure to Claim.  AIG hereby waives any failure or delay on the part of the Company in asserting or enforcing any of its rights or in making any claims or demands hereunder.

 

7.                                      Termination.  Unless earlier terminated in accordance with this paragraph 7, this Agreement shall continue indefinitely.  Subject to the requirements of paragraph 10, AIG shall have the absolute right to terminate this Agreement upon thirty (30) days’ prior written notice to the Company, which notice shall state the effective date of termination (the “Termination Date”); provided, however, that AIG agrees not to terminate this Agreement unless (a) AIG significantly modifies the corporate structure or ownership of the Company, or (b) AIG sells the Company to an acquirer, in each case, (i) having a rating from at least one of Standard & Poor’s Corp. (“S&P”), Moody’s Investors Service (“Moody’s”), A.M. Best Company (“A.M. Best”) or a substitute agency, which is a nationally recognized statistical rating organization, that is at least equal to the lower of (x) AIG’s then-current rating from such agency or (y) the Company’s then-current rating as supported by this Agreement from such agency; or (ii) such that, immediately on the effective date of the modification of corporate structure or sale by AIG of the Company, the Company’s capitalization is consistent with the minimum capital adequacy standards and criteria of at least one of S&P, Moody’s, A.M. Best or a substitute agency, which is a nationally recognized statistical rating organization, for a rating that is equal to or better than the Company’s then-current rating on the date immediately preceding such modification of corporate structure or sale.  To the extent not terminated previously by AIG pursuant to the foregoing, and subject to the requirements of paragraph 10, this Agreement will terminate automatically one year after the closing of any sale of the Company by AIG, and all provisions hereof will be of no further force and effect.  For the avoidance of doubt, the termination of this Agreement pursuant to this paragraph 7 shall not relieve either party of any obligation it may owe to the other party hereunder that existed prior to, and remains outstanding as of, the Termination Date.

 

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8.                                      No Indebtedness; No Policyholder Recourse Against AIG.  This Agreement is not, and nothing herein contained and nothing done pursuant hereto by AIG shall constitute or be construed or deemed to constitute, an evidence of indebtedness or an obligation or liability of AIG as guarantor, endorser, surety or otherwise in respect of any obligation, indebtedness or liability, of any kind whatsoever, of the Company insofar as concerns any policyholder, creditor or stakeholder of the Company.  This Agreement does not provide, and is not intended to be construed or deemed to provide, any policyholder of the Company with recourse to or against any of the assets of AIG.

 

9.                                      Any notice, instruction, request, consent, demand or other communication required or contemplated by this Agreement shall be in writing, shall be given or made or communicated by United States first class mail, addressed as follows:

 

If to AIG:

 

American International Group, Inc.

175 Water Street

New York, New York 10038

Attention:  Secretary

 

If to the Company:

 

AGC Life Insurance Company

2919 Allen Parkway

Houston, TX 77019

Attention:  Chief Financial Officer

 

with a copy (which shall not constitute notice) to:

 

AGC Life Insurance Company

c/o AIG Life and Retirement

1999 Avenue of the Stars, 27th Floor

Los Angeles, CA 90067

Attention:  General Counsel

 

10.                               Rights of Domiciliary State’s Insurance Department.  The Company and AIG agree that the Domiciliary State’s insurance department and its Director are intended to be third party beneficiaries of this Agreement with full rights to enforce its terms as to either the Company or AIG or both.  No termination of this Agreement will become effective unless ninety (90) days prior written notice of

 

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such termination has been provided to the Domiciliary State’s insurance department and its Director.

 

11.                               Successors.  The covenants, representations, warranties and agreements herein set forth shall be mutually binding upon and inure to the mutual benefit of AIG and its successors and the Company and its successors.

 

12.                               Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to the principles of conflict of laws.

 

13.                               Severability.  If any provision of this Agreement shall be declared null, void or unenforceable in whole or in part by any court, arbitrator or governmental agency, said provision shall survive to the extent it is not so declared and all the other provisions of this Agreement shall remain in full force and effect unless, in each case, such declaration shall serve to deprive any of the parties hereto of the fundamental benefits of or rights under this Agreement.

 

14.                               Entire Agreement; Amendments.  This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussion, whether oral or written, of the parties.  This Agreement may be amended at any time by written agreement or instrument signed by the parties hereto.

 

15.                               Headings.  The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

 

16.                               Counterparts.  This Agreement may be signed by the parties in one or more counterparts which together shall constitute one and the same agreement among the parties.

 

[signature page follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

 

AMERICAN INTERNATIONAL GROUP, INC.

 

 

	
By:
    	
/s/ Charles S. Shamieh
    	
 
    
	
 
    	
Name:   Charles S. Shamieh
    	
 
    
	
 
    	
Title:   Senior Vice President and Chief Corporate Actuary
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
AGC   LIFE INSURANCE COMPANY
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Mary Jane Fortin
    	
 
    
	
 
    	
Name:   Mary Jane Fortin
    	
 
    
	
 
    	
Title:   Executive Vice President & Chief Financial Officer
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Steve Anderson
    	
 
    
	
 
    	
Name:   Steve Anderson
    	
 
    
	
 
    	
Title:   Vice President & Controller
    	
 
    
				

 

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