Document:

Exhibit 4.2

                              ALABAMA POWER COMPANY

                                       TO

                           JPMORGAN CHASE BANK, N.A.,
                                     TRUSTEE

                       THIRTY-SIXTH SUPPLEMENTAL INDENTURE

                            DATED AS OF JUNE 14, 2006

                          SERIES JJ 6.375% SENIOR NOTES

                                DUE JUNE 15, 2046

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                                                          2

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                              TABLE OF CONTENTS(1)
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                                Table of Contents

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ARTICLE 1 Series JJ Senior Notes......................................................................1

SECTION 101.   Establishment..........................................................................1
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SECTION 102.   Definitions............................................................................2
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SECTION 103.   Payment of Principal and Interest......................................................3
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SECTION 104.   Denominations..........................................................................4
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SECTION 105.   Global Securities......................................................................4
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SECTION 106.   Transfer...............................................................................5
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SECTION 107.   Redemption at the Company's Option.....................................................5
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SECTION 108.   Mandatory Redemption...................................................................5
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ARTICLE 2 Special Insurance Provisions................................................................6

SECTION 201.   Supplemental Indentures................................................................6
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SECTION 202.   Events of Default and Remedies.........................................................6
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SECTION 203.   Insurance Policy Payment Procedures....................................................7
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SECTION 204.   Application of Term "Outstanding" to Series JJ Notes...................................8
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SECTION 205.   Concerning the Special Insurance Provisions............................................8
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ARTICLE 3 Miscellaneous Provisions....................................................................8

SECTION 301.   Recitals by Company....................................................................8
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SECTION 302.   Ratification and Incorporation of Original Indenture...................................8
               -----------------------------------------------------
SECTION 303.   Executed in Counterparts...............................................................9
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EXHIBIT A  FORM OF SERIES JJ NOTE

EXHIBIT B  CERTIFICATE OF AUTHENTICATION

1 This Table of Contents does not constitute part of the Indenture or have any
bearing upon the interpretation of any of its terms and provisions.

</TABLE>

<PAGE>

         THIS THIRTY-SIXTH SUPPLEMENTAL INDENTURE is made as of the 14th day of
June, 2006, by and between ALABAMA POWER COMPANY, an Alabama corporation, 600
North 18th Street, Birmingham, Alabama 35291 (the "Company"), and JPMORGAN CHASE
BANK, N.A., a national banking association, 4 New York Plaza, New York, New York
10004 (the "Trustee").

                              W I T N E S S E T H:

         WHEREAS, the Company has heretofore entered into a Senior Note
Indenture, dated as of December 1, 1997 (the "Original Indenture"), with
JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan Bank), as
heretofore supplemented;

         WHEREAS, the Original Indenture is incorporated herein by this
reference and the Original Indenture, as heretofore supplemented and as further
supplemented by this Thirty-Sixth Supplemental Indenture, is herein called the
"Indenture";

         WHEREAS, under the Original Indenture, a new series of Senior Notes may
at any time be established pursuant to a supplemental indenture executed by the
Company and the Trustee;

         WHEREAS, the Company proposes to create under the Indenture a new
series of Senior Notes;

         WHEREAS, additional Senior Notes of other series hereafter established,
except as may be limited in the Original Indenture as at the time supplemented
and modified, may be issued from time to time pursuant to the Indenture as at
the time supplemented and modified; and

         WHEREAS, all conditions necessary to authorize the execution and
delivery of this Thirty-Sixth Supplemental Indenture and to make it a valid and
binding obligation of the Company have been done or performed.

         NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:

                                   ARTICLE 1

                             Series JJ Senior Notes

SECTION 101. Establishment. There is hereby established a new series of Senior
Notes to be issued under the Indenture, to be designated as the Company's Series
JJ 6.375% Senior Notes due June 15, 2046 (the "Series JJ Notes").

         There are to be authenticated and delivered $150,000,000 aggregate
principal amount of Series JJ Notes, and such principal amount of the Series JJ
Notes may be increased from time to time pursuant to Section 301 of the Original
Indenture. All Series JJ Notes need not be issued at the same time and such
series may be reopened at any time, without the consent of any Holder, for
issuances of additional Series JJ Notes. Any such additional Series JJ Notes
will have the same interest rate, maturity and other terms, including the
benefit of the Policy (appropriately increased to cover the principal amount of
and interest due on the additional Series JJ Notes), as those initially issued.
No Series JJ Notes shall be authenticated and delivered in excess of the
principal amount as so increased except as provided by Sections 203, 303, 304,
907 or 1107 of the Original Indenture. The Series JJ Notes shall be issued in
definitive fully registered form.

         The Series JJ Notes shall be issued in the form of one or more Global
Securities in substantially the form set out in Exhibit A hereto. The Depositary
with respect to the Series JJ Notes shall be The Depository Trust Company.

         The form of the Trustee's Certificate of Authentication for the Series
JJ Notes shall be in substantially the form set forth in Exhibit B hereto.

         Each Series JJ Note shall be dated the date of authentication thereof
and shall bear interest from the date of original issuance thereof or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for.

         The Series JJ Notes will not have a sinking fund.

SECTION 102. Definitions. The following defined terms used herein shall, unless
the context otherwise requires, have the meanings specified below. Capitalized
terms used herein for which no definition is provided herein shall have the
meanings set forth in the Original Indenture.

         "Due for Payment" means, when referring to the principal of a Series JJ
Note, the Stated Maturity and does not refer to any earlier date on which
payment is due by reason of a call for redemption, acceleration or other
advancement of maturity and means, when referring to interest on a Series JJ
Note, the stated date for payment in interest.

         "Fiscal Agent" means U.S. Bank Trust National Association, New York,
New York, or its successor.

         "Insurance Agreement" means that certain Insurance Agreement, dated as
of June 14, 2006, by and between the Company and the Insurer.

         "Insurer" means Financial Guaranty Insurance Company, a New York stock
insurance company, or any successor thereto.

         "Interest Payment Dates" means March 15, June 15, September 15 and
December 15 of each year, commencing September 15, 2006.

         "Mandatory Redemption Event" means the Company's failure to comply with
(i) Section 1.02 of the Insurance Agreement, the continuance of such failure for
a period in excess of 10 days after receipt by the Company of written notice
thereof from the Insurer and the receipt by the Trustee of notice thereof in
accordance with Section 108 hereof; or (ii) Section 3.01 or Section 3.02 of the
Insurance Agreement, the continuance of such failure for a period in excess of
30 days after receipt by the Company of written notice thereof from the Insurer
and the receipt by the Trustee of notice thereof in accordance with Section 108
hereof.

         "Nonpayment" means the failure by the Company to provide sufficient
funds to the Paying Agent for payment in full of all principal or interest on
the Series JJ Notes Due for Payment and includes any payment of principal or
interest (as applicable) made to a Holder of the Series JJ Notes by or on behalf
of the Company which has been recovered from such Holder pursuant to the United
States Bankruptcy Code by a trustee in bankruptcy in accordance with a final,
nonappealable order of a court having competent jurisdiction.

         "Original Issue Date" means June 14, 2006.

         "Policy" means the surety bond issued by the Insurer that guarantees
payment of principal of and interest on the Series JJ Notes when such principal
or interest is Due for Payment.

         "Regular Record Date" means, with respect to each Interest Payment
Date, the close of business on the 15th calendar day preceding such Interest
Payment Date (whether or not a Business Day).

         "Stated Maturity" means June 15, 2046.

SECTION 103. Payment of Principal and Interest. The principal of the Series JJ
Notes shall be due at Stated Maturity (unless earlier redeemed). The unpaid
principal amount of the Series JJ Notes shall bear interest at the rate of
6.375% per annum until paid or duly provided for. Interest shall be paid
quarterly in arrears on each Interest Payment Date to the Person in whose name
the Series JJ Notes are registered on the Regular Record Date for such Interest
Payment Date, provided that interest payable at the Stated Maturity of principal
or on a Redemption Date as provided herein will be paid to the Person to whom
principal is payable. Any such interest that is not so punctually paid or duly
provided for will forthwith cease to be payable to the Holders on such Regular
Record Date and may either be paid to the Person or Persons in whose name the
Series JJ Notes are registered at the close of business on a Special Record Date
for the payment of such defaulted interest to be fixed by the Trustee, notice
whereof shall be given to Holders of the Series JJ Notes not less than ten (10)
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange,
if any, on which the Series JJ Notes shall be listed, and upon such notice as
may be required by any such exchange, all as more fully provided in the Original
Indenture.

         Payments of interest on the Series JJ Notes will include interest
accrued to but excluding the respective Interest Payment Dates. Interest
payments for the Series JJ Notes shall be computed and paid on the basis of a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Series JJ Notes is not a Business Day, then payment
of the interest payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), with the same force and effect as if made on the date the
payment was originally payable.

         Payment of the principal and interest due at the Stated Maturity or
earlier redemption of the Series JJ Notes shall be made upon surrender of the
Series JJ Notes at the Corporate Trust Office of the Trustee. The principal of
and interest on the Series JJ Notes shall be paid in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts. Payments of interest (including interest on
any Interest Payment Date) will be made, subject to such surrender where
applicable, at the option of the Company, (i) by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register or (ii) by wire transfer or other electronic transfer at such place and
to such account at a banking institution in the United States as may be
designated in writing to the Trustee at least sixteen (16) days prior to the
date for payment by the Person entitled thereto. Regardless of any other
arrangement agreed to between the Company and the Paying Agent, the Company
shall deposit with the Paying Agent sufficient funds for the principal and
interest payment due at the Stated Maturity no later than one Business Day prior
to the Stated Maturity.

SECTION 104.      Denominations.  The  Series  JJ Notes  may be issued  in
                  --------------
denominations  of $25,  or any integral multiple thereof.

SECTION 105. Global Securities. The Series JJ Notes will be issued in the form
of one or more Global Securities registered in the name of the Depositary (which
shall be The Depository Trust Company) or its nominee. Except under the limited
circumstances described below, Series JJ Notes represented by the Global
Security will not be exchangeable for, and will not otherwise be issuable as,
Series JJ Notes in definitive form. The Global Securities described above may
not be transferred except by the Depositary to a nominee of the Depositary or by
a nominee of the Depositary to the Depositary or another nominee of the
Depositary or to a successor Depositary or its nominee.

         Owners of beneficial interests in such a Global Security will not be
considered the Holders thereof for any purpose under the Indenture, and no
Global Security representing a Series JJ Note shall be exchangeable, except for
another Global Security of like denomination and tenor to be registered in the
name of the Depositary or its nominee or to a successor Depositary or its
nominee. The rights of Holders of such Global Security shall be exercised only
through the Depositary.

         Subject to the procedures of the Depositary, a Global Security shall be
exchangeable for Series JJ Notes registered in the names of persons other than
the Depositary or its nominee only if (i) the Depositary notifies the Company
that it is unwilling or unable to continue as a Depositary for such Global
Security and no successor Depositary shall have been appointed by the Company,
or if at any time the Depositary ceases to be a clearing agency registered under
the Securities Exchange Act of 1934, as amended, at a time when the Depositary
is required to be so registered to act as such Depositary and no successor
Depositary shall have been appointed by the Company, in each case within 90 days
after the Company receives such notice or becomes aware of such cessation, (ii)
the Company in its sole discretion determines that such Global Security shall be
so exchangeable, or (iii) there shall have occurred an Event of Default with
respect to the Series JJ Notes. Any Global Security that is exchangeable
pursuant to the preceding sentence shall be exchangeable for Series JJ Notes
registered in such names as the Depositary shall direct.

SECTION 106. Transfer. No service charge will be made for any transfer or
exchange of Series JJ Notes, but payment will be required of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith.

         The Company shall not be required (a) to issue, transfer or exchange
any Series JJ Notes during a period beginning at the opening of business fifteen
(15) days before the date of the mailing of a notice pursuant to Section 1104 of
the Original Indenture identifying the serial numbers of the Series JJ Notes to
be called for redemption, and ending at the close of business on the day of the
mailing, or (b) to transfer or exchange any Series JJ Notes theretofore selected
for redemption in whole or in part, except the unredeemed portion of any Series
JJ Notes redeemed in part.

SECTION 107. Redemption at the Company's Option. The Series JJ Notes will be
subject to redemption at the option of the Company in whole or in part, without
premium or penalty, at any time and from time to time, on or after June 14,
2011, upon not less than 30 nor more than 60 days' notice, at a Redemption Price
equal to 100% of the principal amount of the Series JJ Notes to be redeemed plus
any accrued and unpaid interest thereon to the Redemption Date.

         In the event of redemption of the Series JJ Notes in part only, a new
Series JJ Note or Notes for the unredeemed portion will be issued in the name or
names of the Holders thereof upon the surrender thereof.

         Notice of redemption shall be given as provided in Section 1104 of the
Original Indenture.

         Any redemption of less than all of the Series JJ Notes shall, with
respect to the principal thereof, be divisible by $25.

SECTION 108. Mandatory Redemption. Upon the occurrence of a Mandatory Redemption
Event, the Company shall redeem the Series JJ Notes, in whole but not in part,
prior to the Stated Maturity upon not less than 30 nor more than 60 days' notice
at a Redemption Price equal to 100% of the principal amount plus accrued and
unpaid interest to the Redemption Date. A Mandatory Redemption Event will be
deemed to have occurred at the time that the Trustee receives written notice
from the Insurer of the occurrence of a Mandatory Redemption Event and such
notice shall constitute notice under Section 1102 of the Original Indenture and
shall not be required to be evidenced by a Board Resolution. Subject to the
notice requirements set forth herein, the Company shall redeem the Series JJ
Notes (i) on June 14, 2011 if the Mandatory Redemption Event occurs on or prior
to April 15, 2011 or (ii) if the Mandatory Redemption Event occurs after April
15, 2011, within 60 days after the occurrence of the Mandatory Redemption Event,
but in no event earlier than June 14, 2011. Any notice of redemption required to
be given by the Trustee in connection with a redemption required by this Section
108 need not be given earlier than 15 days after the date the Trustee receives
notice of a Mandatory Redemption Event pursuant to this Section 108.

         Notice of redemption shall be given as provided in Section 1104 of the
Original Indenture.

ARTICLE 2
                          Special Insurance Provisions
SECTION 201. Supplemental Indentures. The consent of the Insurer shall be
required with respect to any indenture or indentures supplemental to the
Original Indenture requiring the consent of the Holders of the Series JJ Notes
pursuant to Section 902 of the Original Indenture. The Company shall deliver to
any rating agency rating the Series JJ Notes notice of each indenture or
indentures supplemental to the Original Indenture and a copy thereof at least 15
days in advance of its execution and provide the Insurer with a full transcript
of all proceedings related to the execution of any such indenture or indentures
supplemental to the Original Indenture.

SECTION 202. Events of Default and Remedies. Subject to Section 107 of the
Original Indenture and to the Trust Indenture Act, including, without
limitation, Sections 316(a)(1) and 317(a) thereof, if an Event of Default with
respect to the Series JJ Notes occurs and is continuing, the Insurer shall be
entitled to control and direct the enforcement of all rights and remedies
granted to the Holders of the Series JJ Notes or the Trustee for the benefit of
the Holders of the Series JJ Notes under the Indenture, including, without
limitation, (i) the right to accelerate the principal of the Series JJ Notes as
provided in Section 502 of the Original Indenture, and (ii) the right to annul
any such declaration of acceleration, and the Insurer shall also be entitled to
approve any waiver of an Event of Default with respect to the Series JJ Notes,
the obligation of the Trustee to comply with any such direction to be subject to
compliance with the conditions set forth in Sections 512 and 603(e) of the
Original Indenture (as if references in those Sections to Holders were
references to the Insurer) and the protections provided to the Trustee by
Section 601(c)(3) of the Original Indenture shall be applicable with respect to
any direction from the Insurer given pursuant hereto (as if references in said
Section to Holders were references to the Insurer). The Insurer shall be
entitled to notify the Trustee and the Company of a default referred to in
Section 501(4) of the Original Indenture relating to the Series JJ Notes as if
it were the Holder of at least 25% in principal amount of the Outstanding Series
JJ Notes, provided that such notice shall otherwise conform to the requirements
of said Section 501(4).

         The Trustee and the Company shall give the Insurer immediate notice of
any default in the payment of the principal of or interest on the Series JJ
Notes (the obligation of the Trustee to give such notice to be deemed satisfied
if the Paying Agent shall have provided the notice required by Section 203(a)
hereof). The Trustee and the Company shall give the Insurer notice of any event
which with the giving of notice or the passage of time would constitute an Event
of Default with respect to the Series JJ Notes within 30 days of the Trustee's
or the Company's knowledge thereof, provided that the Trustee shall not be
deemed to have knowledge thereof unless a Responsible Officer of the Trustee
assigned to its Corporate Trust Office shall have actual knowledge thereof or
unless the Trustee shall have received written notice thereof from the Company
or the Holders of at least 25% in principal amount of the Series JJ Notes then
Outstanding.

         No effect shall be given to payments made under the Policy in
determining whether an Event of Default with respect to the Series JJ Notes has
occurred or is continuing.

SECTION 203. Insurance Policy Payment Procedures.(b) (a) If the Paying Agent
does not have sufficient funds for any payment of principal or interest Due for
Payment by reason of the Company's Nonpayment, then any Holder of the Series JJ
Notes or the Paying Agent will notify the Insurer by telephonic or telegraphic
notice, subsequently confirmed in writing, or written notice by registered or
certified mail. The Insurer shall make such payment to the Fiscal Agent on the
date on which such principal or interest is Due for Payment or within one
Business Day (as defined in the Policy) after receipt of the notice of
Nonpayment, whichever is later, and the Fiscal Agent shall make such payments in
accordance with the Policy. In addition to the foregoing:

          (i)  The Paying  Agent shall  provide the Insurer and the Fiscal Agent
               with a list of the  Holders  entitled  to  receive  principal  or
               interest  payments from the Insurer under the terms of the Policy
               and shall make  arrangements for the Insurer and the Fiscal Agent
               to disburse  such amount Due for Payment on any Series JJ Note to
               the Holder.

          (ii) The Paying  Agent  shall,  at the same time that it provides  the
               Insurer with the list of Holders,  notify the Holders entitled to
               receive  payment of  principal or interest on the Series JJ Notes
               from the Insurer (A) as to the fact of such entitlement, (B) that
               the  Insurer  will  remit  to them  all or  part of the  interest
               payments  Due for  Payment,  (C)  that,  except  as  provided  in
               paragraph  (iii) below,  in the event that the Holder is entitled
               to receive  full  payment of  principal  from the  Insurer,  such
               Holder  must  tender  the  Series JJ Note to the  Insurer  or the
               Fiscal Agent with an instrument of transfer  executed in the name
               of the  Insurer and (D) that,  except as  provided  in  paragraph
               (iii) below, in the event that such Holder is entitled to receive
               partial  payment of principal from the Insurer,  such Holder must
               tender its Series JJ Note for  payment to the Paying  Agent which
               shall note on such Series JJ Note the portion of  principal  paid
               by the  Paying  Agent,  and  then,  with  an  acceptable  form of
               assignment  executed  in the name of the  Insurer,  to the Fiscal
               Agent which will then pay the unpaid  portion of principal to the
               Holder subject to the terms of the Policy.

          (iii) In the event that the  Trustee  has notice  that any  payment of
               principal  of or interest on a Series JJ Note has been  recovered
               from a Holder pursuant to the United States  Bankruptcy Code by a
               trustee in bankruptcy in accordance with the final, nonappealable
               order of a court having competent jurisdiction, the Trustee shall
               notify the Insurer of such recovery in accordance with the notice
               requirements  of this Section  203(a) and notify all Holders that
               in the event  that any  Holder's  payment is so  recovered,  such
               Holder will be entitled to payment from the Insurer to the extent
               of such  recovery.  The Paying Agent shall furnish to the Insurer
               its records  evidencing the payments of principal of and interest
               on the Series JJ Notes  which have been made by the Paying  Agent
               and  subsequently  recovered  from the Holders,  and the dates on
               which such payments were made.

          (iv) The Insurer shall, to the extent it makes payment of principal of
               or  interest  on the Series JJ Notes,  become  subrogated  to the
               rights of the recipients of such payments in accordance  with the
               terms of the Policy and, to evidence such subrogation, (A) in the
               case of  subrogation  as to  claims  for past due  interest,  the
               Trustee  shall  note the  Insurer's  rights  as  subrogee  on the
               Security Register maintained by the Trustee upon receipt from the
               Insurer of proof of the payment of interest thereon to the Holder
               of such Series JJ Notes and (B) in the case of  subrogation as to
               claims  for  past  due  principal,  the  Trustee  shall  note the
               Insurer's  rights as subrogee on the  Security  Register  for the
               Series JJ Notes maintained by the Trustee, as Security Registrar,
               upon receipt of proof of the payment of the principal  thereof to
               the Holders of such Series JJ Notes.  Notwithstanding anything in
               this  Supplemental  Indenture  or  the  Series  JJ  Notes  to the
               contrary,  the Paying  Agent shall make  payment of such past due
               interest  and past due  principal  directly to the Insurer to the
               extent that the Insurer is a subrogee with respect thereto.

SECTION 204. Application of Term "Outstanding" to Series JJ Notes. In the event
that the principal and/or interest due on the Series JJ Notes shall be paid by
the Insurer pursuant to the Policy, the Series JJ Notes shall remain Outstanding
for all purposes of the Indenture, not be considered defeased or otherwise
satisfied and not be considered paid by the Company, and the Indenture and all
covenants, agreements and other obligations of the Company to the Holders of the
Series JJ Notes shall continue to exist and such covenants, agreements and other
obligations shall run to the benefit of the Insurer, and the Insurer shall be
subrogated to the rights of such Holders to the extent of each such payment.

SECTION 205. Concerning the Special Insurance Provisions. The provisions of this
Article 2 shall apply notwithstanding anything in the Indenture to the contrary,
but only so long as the Policy shall be in full force and effect and the Insurer
is not in default thereunder.

ARTICLE 3
                            Miscellaneous Provisions
SECTION 301. Recitals by Company. The recitals in this Thirty-Sixth Supplemental
Indenture are made by the Company only and not by the Trustee, and all of the
provisions contained in the Original Indenture in respect of the rights,
privileges, immunities, powers and duties of the Trustee shall be applicable in
respect of Series JJ Notes and of this Thirty-Sixth Supplemental Indenture as
fully and with like effect as if set forth herein in full.

SECTION 302. Ratification and Incorporation of Original Indenture. As heretofore
supplemented and as supplemented hereby, the Original Indenture is in all
respects ratified and confirmed, and the Original Indenture as heretofore
supplemented and as supplemented by this Thirty-Sixth Supplemental Indenture
shall be read, taken and construed as one and the same instrument.

SECTION 303. Executed in Counterparts. This Thirty-Sixth Supplemental Indenture
may be simultaneously executed in several counterparts, each of which shall be
deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.

                           [Signature page to follow.]

<PAGE>

         IN WITNESS WHEREOF, each party hereto has caused this instrument to be
signed in its name and behalf by its duly authorized officers, all as of the day
and year first above written.

ATTEST:                                   ALABAMA POWER COMPANY

By:      /s/ Ceila Shorts                 By:      /s/ Art P. Beattie
   ---------------------------------           --------------------------------
         Assistant Secretary                     Art P. Beattie
                                                 Executive Vice President,
                                                 Chief Financial Officer and
                                                 Treasurer

ATTEST:                                   JPMORGAN CHASE BANK, N.A.,
                                          as Trustee

By:      /s/ Diane Darconte               By:      /s/ L O'Brien
   -------------------------------------      ---------------------------------
   Trust Officer                                  L. O'Brien
                                                  Vice President

<PAGE>

                                    EXHIBIT A

                             FORM OF SERIES JJ NOTE

NO. __                                                   CUSIP NO. 010392 52 0

                              ALABAMA POWER COMPANY

                          SERIES JJ 6.375% SENIOR NOTE

                                DUE JUNE 15, 2046

       Principal Amount:                      $__________________

       Regular Record Date:                   15th  calendar day prior to
                                              Interest  Payment  Date  (whether
                                              or not a Business Day)

       Original Issue Date:                   June 14, 2006

       Stated Maturity:                       June 15, 2046

       Interest Payment Dates:                March 15, June 15, September 15
                                              and December 15

       Interest Rate:                         6.375%

       Authorized Denomination:               $25 or any integral multiple
                                              thereof

         Alabama Power Company, an Alabama corporation (the "Company", which
term includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to
___________________________________________, or registered assigns, the
principal sum of ____________________________________________ DOLLARS
($______________) on the Stated Maturity shown above (or upon earlier
redemption), and to pay interest thereon from the Original Issue Date shown
above, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, quarterly in arrears on each Interest Payment Date as
specified above, commencing on September 15, 2006, and on the Stated Maturity
(or upon earlier redemption) at the rate per annum shown above until the
principal hereof is paid or made available for payment and on any overdue
principal and on any overdue installment of interest. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date (other
than an Interest Payment Date that is the Stated Maturity or on a Redemption
Date) will, as provided in such Indenture, be paid to the Person in whose name
this Note (the "Note") is registered at the close of business on the Regular
Record Date as specified above next preceding such Interest Payment Date,
provided that any interest payable at the Stated Maturity or on any Redemption
Date will be paid to the Person to whom principal is payable. Except as
otherwise provided in the Indenture, any such interest not so punctually paid or
duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this Note
is registered at the close of business on a Special Record Date for the payment
of such defaulted interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Notes of this series not less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange, if any, on which
the Notes of this series shall be listed, and upon such notice as may be
required by any such exchange, all as more fully provided in the Indenture.

         Payments of interest on this Note will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this Note
shall be computed and paid on the basis of a 360-day year of twelve 30-day
months. In the event that any Interest Payment Date would otherwise be a day
that is not a Business Day, then payment of the interest payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), with the same force and
effect as if made on the date the payment was originally payable. A "Business
Day" shall mean any day other than a Saturday or a Sunday or a day on which
banking institutions in New York City are authorized or required by law or
executive order to remain closed or a day on which the Corporate Trust Office of
the Trustee is closed for business.

         Payment of the principal of and interest due at the Stated Maturity or
earlier redemption of the Series JJ Notes shall be made upon surrender of the
Series JJ Notes at the Corporate Trust Office of the Trustee. The principal of
and interest on the Series JJ Notes shall be paid in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts. Payment of interest (including interest on
an Interest Payment Date) will be made, subject to such surrender where
applicable, at the option of the Company, (i) by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register or (ii) by wire transfer or other electronic transfer at such place and
to such account at a banking institution in the United States as may be
designated in writing to the Trustee at least 16 days prior to the date for
payment by the Person entitled thereto.

         REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

         Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated:

                                                     ALABAMA POWER COMPANY

                                                     By:
                                                        -----------------------
                                                              Vice President

Attest:

         Assistant Secretary

                  {Seal of ALABAMA POWER COMPANY appears here}

<PAGE>

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Senior Notes referred to in the within-mentioned
Indenture.

                                     JPMORGAN CHASE BANK, N.A.,

                                     as Trustee

                                     By:
                                        --------------------------------------
                                               Authorized Officer
--------------------------

<PAGE>

                             (Reverse Side of Note)

         This Note is one of a duly authorized issue of Senior Notes of the
Company (the "Notes"), issued and issuable in one or more series under a Senior
Note Indenture, dated as of December 1, 1997, as supplemented (the "Indenture"),
between the Company and JPMorgan Chase Bank, N.A. (formerly known as The Chase
Manhattan Bank), Trustee (the "Trustee," which term includes any successor
trustee under the Indenture), to which Indenture and all indentures incidental
thereto reference is hereby made for a statement of the respective rights,
limitation of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Notes issued thereunder and of the terms upon
which said Notes are, and are to be, authenticated and delivered. This Note is
one of the series designated on the face hereof as Series JJ 6.375% Senior Notes
due June 15, 2046 (the "Series JJ Notes") which is unlimited in aggregate
principal amount. Capitalized terms used herein for which no definition is
provided herein shall have the meanings set forth in the Indenture.

         The Series JJ Notes (i) shall, at any time or, from time to time, on or
after June 14, 2011 upon not less than 30 nor more than 60 days' notice to the
holders thereof, be subject to optional redemption at the option of the Company,
in whole or in part, at a Redemption Price equal to 100% of the principal amount
of the Series JJ Notes to be redeemed plus accrued and unpaid interest on the
Series JJ Notes to the Redemption Date and (ii) shall be subject to mandatory
redemption, upon not less than 30 nor more than 60 days' notice, in whole but
not in part, at a Redemption Price equal to 100% of the principal amount of the
Series JJ Notes plus accrued and unpaid interest on such Series JJ Notes to the
Redemption Date, upon the occurrence of the Company's failure to comply with (x)
Section 1.02 of the Insurance Agreement, dated as of June 14, 2006 (the
"Insurance Agreement"), by and between the Company and Financial Guaranty
Insurance Company (the "Insurer"), the continuance of such failure for a period
in excess of 10 days after receipt by the Company of written notice thereof from
the Insurer and the receipt by the Trustee of notice thereof, or (y) Section
3.01 or Section 3.02 of the Insurance Agreement, the continuance of such failure
for a period in excess of 30 days after receipt by the Company of written notice
thereof from the Insurer and the receipt by the Trustee of notice thereof (each,
a "Mandatory Redemption Event"). Subject to the notice requirements of the
Indenture, the Company shall redeem the Series JJ Notes (i) on June 14, 2011 if
the Mandatory Redemption Event occurs on or prior to April 15, 2011 or (ii) if
the Mandatory Redemption Event occurs after April 15, 2011, within 60 days after
the occurrence of the Mandatory Redemption Event, but in no event earlier than
June 14, 2011.

         In the event of redemption of this Note in part only, a new Note or
Notes of this series for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the surrender hereof. The Series JJ Notes will
not have a sinking fund.

         If an Event of Default with respect to the Notes of this series shall
occur and be continuing, the principal of the Notes of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be affected
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in principal amount of the Notes at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Notes of each series at the time Outstanding, on behalf of the Holders of
all Notes of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.

         No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registerable in the Security Register,
upon surrender of this Note for registration of transfer at the office or agency
of the Company for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar and duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes of this series, of
authorized denominations and of like tenor and for the same aggregate principal
amount, will be issued to the designated transferee or transferees. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.

         Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

         The Notes of this series are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. As provided
in the Indenture and subject to certain limitations therein set forth, Notes of
this series are exchangeable for a like aggregate principal amount of Notes of
this series of a different authorized denomination, as requested by the Holder
surrendering the same upon surrender of the Note or Notes to be exchanged at the
office or agency of the Company.

         This Note shall be governed by, and construed in accordance with, the
internal laws of the State of New York.

<PAGE>

                             STATEMENT OF INSURANCE

         Financial Guaranty Insurance Company (the "Insurer") has issued a
surety bond containing the following provisions with respect to the Series JJ
Notes, such surety bond being on file at the principal corporate trust office of
Trustee, as paying agent for the Series JJ Notes (the "Paying Agent"):

         The Insurer hereby unconditionally and irrevocably agrees to pay for
disbursement to the Holders that portion of the principal of and interest on the
Series JJ Notes which is then Due for Payment and which the Company shall have
failed to provide. Due for Payment means, with respect to principal, the stated
maturity thereof, and does not refer to any earlier date on which the payment of
principal of the Series JJ Notes is due by reason of call for redemption,
acceleration or other advancement of maturity and means, with respect to
interest, the stated date for payment of such interest.

         Upon receipt of telephonic or telegraphic notice, subsequently
confirmed in writing, or written notice by registered or certified mail, from a
Holder or the Paying Agent to the Insurer that the required payment of principal
or interest has not been made by the Company to the Paying Agent, the Insurer on
the due date of such payment or within one Business Day (as defined in the
surety bond) after receipt of notice of such nonpayment, whichever is later,
will make a deposit of funds, in an account with U.S. Bank Trust National
Association, or its successor as its agent (the "Fiscal Agent"), sufficient to
make the portion of such payment not paid by the Company. Upon presentation to
the Fiscal Agent of evidence satisfactory to it of the Holder's right to receive
such payment and any appropriate instruments of assignment required to vest all
of such Holder's right to such payment in the Insurer, the Fiscal Agent will
disburse such amount to the Holder.

         As used herein the term "Holder" means the person other than the
Company or the borrower(s) of note proceeds who at the time of nonpayment of a
Series JJ Note is entitled under the terms of such Series JJ Note to payment
thereof.

         The surety bond is non-cancellable for any reason.

                      Financial Guaranty Insurance Company

<PAGE>

                                  ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM- as tenants in          UNIF GIFT MIN ACT- _______ Custodian ________

           common                                  (Cust)            (Minor)

TEN ENT- as tenants by the

                  entireties                           under Uniform Gifts to

 JT TEN- as joint tenants                              Minors Act

                  with right of

                  survivorship and                     ________________________

                  not as tenants                           (State)

                  in common

                    Additional abbreviations may also be used

                          though not on the above list.

     FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto

___________________________________________________________________________

(please insert Social Security or other identifying number of assignee)

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE

 ___________________________________________________________________________

 ___________________________________________________________________________

the within Note and all rights thereunder, hereby irrevocably constituting and
appointing

   ___________________________________________________________________________

   ___________________________________________________________________________

agent to transfer said Note on the books of the Company, with full power of
substitution in the premises.

Dated:
       --------------------         ------------------------------------------

NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular without
alteration or enlargement, or any change whatever.

<PAGE>

                                    EXHIBIT B

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Senior Notes referred to in the within-mentioned
Indenture.

                                        JPMORGAN CHASE BANK, N.A.,

                                        as Trustee

                                        By:
                                           ---------------------------------

                                                 Authorized OfficerExhibit 10.16 Key Employee Supplemental Medical Plan

    EXHIBIT
      10.16

    FORM
      OF KEY EMPLOYEE SUPPLEMENTAL MEDICAL
      PLAN

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT 10.16

     

    
    

    CERTIFIES
      THAT the person shown below has been named by the Participating Employer as
      eligible for coverage and is insured under Group Policy No. 05-000199 issued
      to
      US Bank, as Trustee of Jefferson Pilot Financial Insurance Company’s Medical
      Expense Reimbursement Insurance Trust (the Group Policyholder).

     

    
      	
               

            	
               

            	
               

            
	
              EMPLOYER:

            	
                

            	
            
	
              EMPLOYEE:

            	
                

            	
               

            
	
              GROUP
                NO:

            	
                

            	
               

            
	
              CERTIFICATE NO:

            	
                

            	
               

            
	
              EMP
                EFF DATE:

            	
                

            	
               

            
	
              POLICY
                YEAR:

            	
                

            	
               

            

    

    

     

    THE
      EFFECTIVE DATE OF THE ABOVE POLICY AMOUNT IS JANUARY 1ST OF THE POLICY YEAR
      LISTED.

     

    THIS
      IS
      NOT A MEDICARE SUPPLEMENT CERTIFICATE. If you are eligible for Medicare, review
      the Guide to Health Insurance for people with Medicare available from the
      Company.

     

    This
      Certificate replaces any prior certificate issued for the benefits described
      inside. As a Certificate of insurance, this does not constitute a contract
      of
      insurance. It is a summary of the provisions of the Policy and is subject to
      the
      terms of the Policy.

     

     

    GROUP
      ACCIDENT AND MEDICAL EXPENSE REIMBURSEMENT INSURANCE CERTIFICATE

     

    GL92

     

    1

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
               

            	
               

            
	
              Maximum Medical Benefit:

            	
                

            	
              $50,000
                per Calendar Year for Insured Person and all Dependents
                combined.

            
	
               

            	
               

            
	
              Per Occurrence Limit:

            	
                

            	
              $5,000
                per Calendar Year for anyone occurrence (the same or related condition,
                surgery, confinement or course of dental treatment).

            
	
               

            	
               

            
	
              Principal Sum for AD&D:

            	
                

            	
              $100,000
                for Insured Person only. For an Employee, this AD&D benefit reduces
                70% at age 70 and terminates at age 80. For a Retiree, Surviving
                Spouse or
                Board Member, it terminates at age
                65.

            

    

    

     

    Beneficiary:
      As shown on your most recent Group Enrollment Card or Change of Beneficiary
      Form
      on file with the Company.

     

    Group
      health plans and health insurance issuers offering group health insurance
      coverage generally may not, under federal law:

     

    
      	
               

            	
              (1)

            	
              restrict
                benefits for any hospital length of stay in connection with childbirth
                for
                the mother or newborn child to less than 48 hours following a normal
                vaginal delivery, or less than 96 hours following a cesarean section;
                or

            

    

    
      	
               

            	
              (2)

            	
              require
                that a provider obtain authorization from the plan or insurance issuer
                for
                prescribing a length of stay not in excess of the above
                periods.

            

    

    

     

    TABLE
      OF
      CONTENTS

     

    Definitions                                                                                                                                                                                                        

     

    General Provisions                                                                                                                                                                                           

     

    Participating Employers                                                                                                                                                                                    

     

    Policy Termination                                                                                                                                                                                            

     

    Individual Effective Dates and Termination                                                                                                                                                         

     

    Medical Expense Reimbursement Insurance                                                                                                                                                      

     

    Exclusions                                                                                                                                                                                                         

     

    Accidental Death and Dismemberment Insurance                                                                                                                                               

     

    Claims Procedures                                                                                                                                                                                            

     

    Beneficiary, Facility of Payment, Settlement Options                                                                                                                                          

     

    2

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXEC-U-CARE
      CLAIMS PROCEDURE

     

    Following
      is a description of how the Exec-U-Care Plan processes Claims for benefits.
      A
      Claim is defined as any request for a Plan benefit, made by a claimant or by
      a
      representative of a claimant, that complies with the Plan’s reasonable procedure
      for making benefit Claims. The times listed are maximum times only. A period
      of
      time begins at the time the Claim is filed. Decisions will be made within a
      reasonable period of time appropriate to the circumstances. “Days” means
      calendar days.

     

    If
      you
      have any questions regarding this procedure, please contact the Plan
      Administrator.

     

    Post-Service
      Claim

     

    A
      Post-Service Claim means any Claim for a Plan benefit that is a request for
      payment under the Plan for covered medical services already received by the
      claimant.

     

    In
      the
      case of a Post-Service Claim, the following timetable applies:

     

    
      	
               

            	
               

            	
               

            
	
              Notification
                to claimant of benefit determination

            	
                

            	
              30
                days

            
	
               

            	
               

            
	
              Extension
                due to matters beyond the control of the Plan

            	
                

            	
              15
                days

            
	
               

            	
               

            
	
              Insufficient
                information on the Claim:

            	
                

            	
               

            
	
               

            	
               

            
	
              Response
                by claimant

            	
                

            	
              45
                days

            
	
               

            	
               

            
	
              Review
                of adverse benefit determination

            	
                

            	
              30 days per benefit appeal

            

    

     

    Notice
      to claimant of adverse benefit determinations

     

    The
      Plan
      Administrator shall provide written or electronic notification of any adverse
      benefit determination. The notice will state, in a manner calculated to be
      understood by the claimant:

     

    The
      specific reason or reasons for the adverse determination.

     

    Reference
      to the specific Plan provisions on which the determination was
      based.

     

    A
      description of any additional material or information necessary for the claimant
      to perfect the Claim and an explanation of why such material or information
      is
      necessary.

     

    A
      description of the Plan’s review procedures and the time limits applicable to
      such procedures. This will include a statement of the claimant’s right to bring
      a civil action under section 502 of ERISA following an adverse benefit
      determination on review.

     

    A
      statement that the claimant is entitled to receive, upon request and free of
      charge, reasonable access to, and copies of, all documents, records, and other
      information relevant to the Claim.

     

    3

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    If
      the
      adverse benefit determination was based on an internal rule, guideline,
      protocol, or other similar criterion, the specific rule, guideline, protocol,
      or
      criterion will be provided free of charge. If this is not practical, a statement
      will be included that such a rule, guideline, protocol, or criterion was relied
      upon in making the adverse benefit determination and a copy will be provided
      free of charge to the claimant upon request.

     

    If
      the
      adverse benefit determination is based on the Medical Necessity or Experimental
      or Investigational treatment or similar exclusion or limit, an explanation
      of
      the scientific or clinical judgment for the determination, applying the terms
      of
      the Plan to the claimant’s medical circumstances, will be provided. If this is
      not practical, a statement will be included that such explanation will be
      provided free of charge, upon request.

     

    Appeals

     

    When
      a
      claimant receives an initial adverse benefit determination, the claimant has
      180
      days following receipt of the notification in which to submit a written request
      to appeal the decision. A claimant may submit written comments, documents,
      records, and other information relating to the Claim. Upon request a claimant
      will be provided, free of charge, reasonable access to, and copies of, all
      documents, records, and other information relevant to the Claim.

     

    Upon
      a
      second adverse benefit determination on the Claim, the claimant has 90 days
      following receipt of the notification in which to submit a written request
      for a
      second and final appeal of such determination.

     

    The
      period of time within which a benefit determination on review is required to
      be
      made shall begin at the time an appeal is filed in accordance with the
      procedures of the Plan. This timing is without regard to whether all the
      necessary information accompanies the filing.

     

    A
      document, record, or other information shall be considered relevant to a Claim
      if it:

     

    
      
        
          	
                	a.	
                  was relied upon in making the benefit
                    determination;

                

          	
                	
                  b.

                	
                  was
                    submitted, considered, or generated in the course of making the
                    benefit
                    determination, without regard to whether it was relied upon in
                    making the
                    benefit determination;

                

          	
                	
                  c.

                	
                  demonstrated
                    compliance with the administrative processes and safeguards designed
                    to
                    ensure and to verify that benefit determinations are made in
                    accordance
                    with Plan documents and Plan provisions have been applied consistently
                    with respect to all claimants; or

                

          	
                	
                  d.

                	
                  constituted
                    a statement of policy or guidance with respect to the Plan concerning the
                    denied treatment option or
                    benefit.

                

        

      

    

     

    The
      review shall take into account all comments, documents, records, and other
      information submitted by the claimant relating to the Claim, without regard
      to
      whether such information was submitted or considered in the initial benefit
      determination. The review will not afford deference to the initial adverse
      benefit determination and will be conducted by a fiduciary of the Plan
      who

     

    4

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    is
      neither the individual who made the adverse determination nor a subordinate
      of
      that individual.

     

    If
      the
      determination was based on a medical judgment, including determinations with
      regard to whether a particular treatment, drug, or other item is Experimental,
      Investigational, or not Medically Necessary or appropriate, the fiduciary may
      consult with a health care professional who was not involved in the original
      benefit determination. In the event that a health care professional is
      consulted, the health care professional will have appropriate training and
      experience in the field of medicine involved in the medical judgment.
      Additionally, medical or vocational experts whose advice was obtained on behalf
      of the Plan in connection with the initial determination will be identified
      upon
      written request.

     

    5

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    CALIFORNIA
      LIFE AND HEALTH INSURANCE

    GUARANTY
      ASSOCIATION ACT

    SUMMARY
      DOCUMENT AND DISCLAIMER

     

    Residents
      of California who purchase life and health insurance and annuities should know
      that the insurance companies licensed in this state to write these type of
      insurance are members of the California Life and Health Insurance Guaranty
      Association (“CLHIGA”). The purpose of this Association is to assure that
      policyholders will be protected, within limits, in the unlikely event that
      a
      member insurer becomes financially unable to meet its obligations. If this
      should happen, the Guaranty Association will assess its other member insurance
      companies for the money to pay the claims of insured persons who live in this
      state and, in some cases, to keep coverage in force. The valuable extra
      protection provided through the Association is not unlimited, as noted below,
      and is not a substitute for consumers I care in selecting insurers.

     

    The
      California Life and Health Insurance Guaranty Association may not provide
      coverage for this policy. If coverage is provided, it may be subject to
      substantial limitations or exclusions, and require continued residency in
      California. You should not rely on coverage by the Association in selecting
      an
      insurance company or in selecting an insurance policy.

     

    Coverage
      is NOT provided for your policy or any portion of it that is not guaranteed
      by
      the insurer or for which you have assumed the risk, such as a variable contract
      sold by prospectus.

     

    Insurance
      companies or their agents are required by law to give or send you this notice.
      However, insurance companies and their agents are prohibited by law from using
      the existence of the Guaranty Association to induce you to purchase any kind
      of
      insurance policy.

     

    Policyholders
      with additional questions should first contact their insurer or agent or may
      then contact:

     

    
      	
               

            	
               

            	
               

            	
               

            	
               

            
	
              California
                Life & Health Insurance

              Guaranty
                Association

              P.O.
                Box 17319

              Beverly
                Hills, CA 90209-3319

            	
                

            	
              or

            	
                

            	
              Consumer
                Services Division

              California
                Department of Insurance

              300
                South Spring Street

              Los
                Angeles, CA 90013

            

    

    

     

    Below
      is
      a brief summary of this law’s coverages, exclusions and limits. This summary
      does not cover all provisions of the law; nor does it in any way change anyone’s
      rights or obligations under the Act or the rights or obligations of the
      Association.

     

    COVERAGE

     

    Generally,
      individuals will be protected by the California Life and Health Insurance
      Guaranty Association if they live in this state and hold a life or health
      insurance contract, or an annuity, or if they are insured under a group
      insurance contract, issued by a member insurer. The beneficiaries, payees or
      assignees of insured persons are protected as well, even if they live in another
      state.

     

    6

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    EXCLUSIONS
      FROM COVERAGE

     

    However,
      persons holding such policies are not protected by this Guaranty Association
      if:

     

    
      	
               

            	
              •

            	
              Their
                insurer was not authorized to do business in this state when it issued
                the
                policy or contract;

            
	
               

            	
              •

            	
              Their
                policy was issued by a health care service plan (HMO, Blue Cross,
                Blue
                Shield), a charitable organization, a fraternal benefit society,
                a
                mandatory state pooling plan, a mutual assessment company, an insurance
                exchange, or a grants and annuities society;

            
	
               

            	
              •

            	
              They
                are eligible for protection under the laws of another state. This
                may
                occur when the insolvent insurer was incorporated in another state
                whose
                guaranty association protects insureds who live outside that
                state.

            

    

    

     

    The
      Guaranty Association also does not provide coverage for:

     

    
      	
               

            	
              •

            	
              Unallocated
                annuity contracts; that is, contracts which are not issued to and
                owned by
                an individual and which guarantee rights to group contractholders,
                not.individuals;

            

    

     

    
      	
               

            	
              •

            	
              
                Employer
                  and association plans, to the extent they are self-funded or
                  uninsured;

              

            

    

     

    
      	
               

            	
              •

            	
              Any
                policy or portion of a policy which is not guaranteed by the insurer
                or
                for which the individual has assumed the risk, such as a variable
                contract
                sold by prospectus;

            

    

    

    
      	
               

            	
              •

            	
              
                Any
                  policy of reinsurance unless an assumption certificate was
                  issued;

              

            

    

     

    
      	
               

            	
              •

            	
              
                Interest
                  rate yields that exceed an average
                  rate;

              

            

    

     

    
      	
               

            	
              •

            	
              
                
                  Any
                    portion of a contract that provides dividends or experience rating
                    credits.

                

              

            

       

    

    LIMITS
      ON AMOUNT OF COVERAGE

     

    The
      Act
      limits the Association to pay as follows:

     

    LIFE
      AND ANNUITY BENEFITS

     

    
      	
               

            	
              •

            	
              80
                % of what the life insurance company would owe under a life policy
                or
                annuity contract up to $100,000 in cash surrender
                values,

            
	 	
              •

            	
              $100,000
                in present value of annuities; or

            
	 	
              •

            	
              $250,000
                in life insurance death benefits.

            
	 	
              •

            	
              A
                maximum of $250,000 for anyone insured life no matter how many policies
                and contracts there were with the same company, even if the policies
                provided different types of
                coverages.

            

    

     

    7

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    HEALTH
      BENEFITS

     

    
      	
               

            	
              •

            	
              A
                maximum of $200,000 of the contractual obligations that the health
                insurance company would owe were it not insolvent. The maximum may
                increase or decrease annually based upon changes in the health care
                cost
                component of the consumer price
                index.

            

    

     

    PREMIUM
      SURCHARGE

     

    Member
      insurers are required to recoup assessments paid to the Association by way
      of a
      surcharge on premiums charged for health insurance policies to which the Act
      applies.

     

    1—DEFINITIONS

     

    BASE
      HEALTH PLAN
      means
      the Participating Employer’s major medical plan, which is not a part of the plan
      provided by the Policy. The Base Health Plan may be an insured, self-insured
      or
      service plan; but it must provide at least the following hospital and medical
      benefits:

     

    
      	
               

            	
              (1)

            	
              $250,000
                lifetime maximum per person; subject to:

            
	
               

            	
              (a)

            	
              an
                annual deductible not to exceed $1,000 per person; and

            
	
               

            	
              (b)

            	
              copayments
                not to exceed 20% of the first $10,000 of covered expenses beyond
                deductible incurred by each person each plan
                year;

            

    

    

    If
      a PPO
      (preferred provider organization) option is included, copayments may not exceed
      20% of that amount far covered expenses incurred within the PPO network, or
      40%
      of that amount for covered expenses incurred outside the PPO
      network.

    
      	
               

            	
              (2)

            	
              coverage
                of the full cost of semi-private hospital room and board, intensive
                care
                and extended care;

            
	
               

            	
              (3)

            	
              coverage
                of the usual, customary and reasonable charges for professional services
                and supplies, including (but not limited to):

            
	
               

            	
              (a)

            	
              physician’s
                or surgeon’s services, nursing care and physiotherapy;

            
	
               

            	
              (b)

            	
              prescription
                drugs and medicines; and

            
	
               

            	
              (c)

            	
              x-ray,
                laboratory and ambulance services; and

            
	
               

            	
              (4)

            	
              any
                other coverage required by federal law and by the state laws which
                apply
                where the Participating Employer’s Certificates are
                delivered.

            

    

    

     

    For
      Insured Persons and Dependents who are eligible for Medicare, the Base Health
      Plan may also consist of coverage under Medicare Parts A and B; plus a Medicare
      Supplement Insurance Policy which meets the minimum state requirements for
      such
      plans.

     

    Unless
      requested otherwise on the Employer’s Participation Agreement, the Base Health
      Plan:

     

    
      	
               

            	
              (1)

            	
              must
                remain in effect throughout the period the Participating Employer’s Policy
                coverage is in effect; and

            
	
               

            	
              (2)

            	
              must
                cover each Insured Person and Dependent throughout his or her period
                of
                Policy coverage.

            

    

    

    If
      a claimant is not covered by a Base Health Plan when Covered Medical Expenses
      are incurred, Policy coverage will remain in effect; but benefits will be
      determined as if he or she was covered for the minimum benefits shown
      above.

     

    8

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    COMPANY
      means Jefferson Pilot Financial Insurance Company, a Nebraska corporation,
      whose
      Home Office address is 8801 Indian Hills Drive, Omaha, Nebraska
      68114-4066.

     

    DEPENDENT
      means a person who:

     

    
      	
               

            	
              (1)

            	
              is
                covered as a dependent under the Base Health Plan; unless requested
                otherwise on the employer’s Participation Agreement;
                and

            
	 	
              (2)

            	
              is
                the Insured Person’s:

            
	 	
              (a)

            	
              lawful
                spouse;

            
	 	
              (b)

            	
              unmarried
                child under age 19;

            
	 	
              (c)

            	
              unmarried
                child under age 25, who is a full-time student at an accredited
                educational institution; or

            
	 	
              (d)

            	
              unmarried
                child who, since age 19, has been unable to earn a living due to
                a mental
                or physical handicap.

            

    

     

    As
      used
      above, the term “child” includes the Insured Person’s:

     

    
      	
               

            	
              (1)

            	
              natural
                born child;

            
	 	
              (2)

            	
              legally
                adopted child; or a child the Insured Person intends to
                adopt:

            
	
               

            	
              (a) 

            	
              from
                the date of placement in his or her home for an agency adoption;
                or

            
	 	
              (b)

            	
              from
                any later date the adoption petition is filed tar a private adoption;
                or

            
	 	
              (3)

            	
              step
                child or foster child, who resides in the Insured Person’s household and
                is chiefly dependent upon him or her for
                support.

            

    

     

    In
      addition, the term “Dependent” includes any child whose medical care is the
      Insured Person’s responsibility, pursuant to a divorce decree or other court
      order.

     

    GROUP
      POLICYHOLDER means the person, partnership, corporation, or trust which is
      shown
      on the Face Page of the Policy.

     

    INSURANCE
      MONTH means that period of time which:

     

    
      	
               

            	
              (1)

            	
              begins
                on the first day of the calendar month at 12:01 AM., standard time,
                at the
                Participating Employer’s main place of business; and

            
	 	
              (2)

            	
              ends
                on the last day of the same month at 12:00 midnight at the same
                place.

            

    

     

     

     

     9

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    INSURED
      PERSON means an employee of the Participating
      Employer:

    

    
      	 	
              (1)

            	
              who
                is regularly scheduled to work at least 25 hours per
                week;

            
	
               

            	
              (2)

            	
              who
                has been named by the Participating Employer as eligible for Policy
                coverage;

            
	 	
              (3)

            	
              who
                has completed an enrollment card provided by the
                Company;

            
	 	
              (4)

            	
              for
                whom premiums for Policy coverage are being paid; and

            
	 	
              (5)

            	
              who
                is covered under a Base Health Plan; unless requested otherwise on
                the
                Employer’s Participation Agreement.

            

    

     

     

    If
      requested on the Employer’s Participation Agreement, the term “Insured Person”
may also include:

     

    
      	
            	
              (1)

            	
              a
                Participating Employer’s retired
                employee;

            

      	 	
              (2)

            	
              an
                Insured Person’s surviving spouse who is not remarried;
                or

            

      	 	
              (3)

            	
              a
                member of a Participating Employer’s board of
                directors.

            

      	 	 	 

    

     

    Such
      persons must meet parts (1) through (4) above; but their Base Health Plan may
      consist of coverage under Medicare Parts A and B, plus a Medicare Supplement
      Insurance Policy.

     

    LOSS
      OF A
      MEMBER means Loss of Hand or Foot, or Loss of an Eye.

     

    LOSS
      OF
      HAND OR FOOT means complete severance through or above the wrist or ankle joint.
      (In South Carolina, “Loss of Hand” can also mean the loss of four whole fingers
      from one hand.)

     

    LOSS
      OF
      AN EYE means total and irrevocable loss of sight in that eye.

     

    LOSS
      OF
      THUMB AND INDEX FINGER means severance of the thumb and index finger of the
      same
      hand, through or above the joint closest to the wrist. (In California, it can
      also mean loss by complete severance of at least one whole phalanx of
      each.)

     

    PARTICIPATING
      EMPLOYER or EMPLOYER means an employer who has been accepted and approved by
      the
      Company for participation in the plan of coverage provided by the
      Policy.

     

    PLAN
      YEAR
      means:

    
      
        
          	    	(1)    	
                  that calendar year during which the Employer’s coverage
                    first takes effect; and

                

          	    	
                  (2)    

                	
                  each
                    subsequent calendar year after
                    that.

                

        

      

    

     

     

    PHYSICIAN
      means a licensed physician, surgeon or other medical practitioner
      who:

     

    
      	
               

            	
              (1)    

            	
              must
                be recognized as a physician for insurance purposes under the state
                laws
                which apply where the Employer’s Certificates are delivered;
                and

            
	 	
              (2)

            	
              is
                acting within the scope of his or her
                license.

            

    

     

     

    10

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    The
      term
“Physician” does not include:

     

    
      	
            	
              (1)    

            	
              the Insured Person;

            

      	 	
              (2)    

            	
              the
                Insured Person’s spouse, parent, child or sibling;
                or

            

      	 	
              (3)    

            	
              anyone
                related to the Insured Person’s spouse by the same
                degree.

            

    

     

    POLICY
      means the Group Accident and Medical Expense Reimbursement Insurance Policy
      issued by the Company to the Group Policyholder.

     

    II—GENERAL
      PROVISIONS

     

    ENTIRE
      CONTRACT. The entire contract between the parties consists of:

    
      	
            	
              (1)    

            	
              the Policy and the Group Policyholder's application
                attached to it;

            

      	 	
              (2)    

            	
              the
                Participating Employers’ Participation Agreements;
                and

            

      	 	
              (3)    

            	
              the
                Insured Persons’ enrollment cards, if
                any.

            

    

     

    All
      statements made by the Group Policyholder, by the Participating Employers,
      and
      by Insured Persons are representations and not warranties. No statement made
      by
      an Insured Person will be used to contest the coverage provided by the Policy;
      unless a copy of the statement is furnished to:

    
       

      
        	
              	(1)    	
                the
                  Insured Person with the Group Certificate;
                  or

              

        	 	
                (2)    

              	
                the
                  Insured Person’s Beneficiary.

              

      

    

     

    Only
      an
      Officer of the Company may change the Policy or extend the time for payment
      of
      any premium. No change will be valid unless made in writing and signed by an
      Officer of the Company. Any change so made will be binding on all persons
      referred to in the Policy.

     

    INCONTESTABILITY.
      Except for the non-payment of premiums, the Company may not contest the validity
      of the Policy as to any Insured Person, after coverage has been in force for
      that person for two years during his or her lifetime. No statement made by
      an
      Insured Person will be used to contest the validity of the Policy; unless the
      statement is contained in a written application signed by the Insured
      Person.

     

    INFORMATION
      TO BE FURNISHED. The Group Policyholder and Participating Employers may be
      required to furnish information needed to administer the Policy. Clerical error
      by the Group Policyholder or a Participating Employer:

     

    
      	
            	
              (1)    

            	
              will
                not affect insurance which otherwise would be in effect;
                and

            

      	 	
              (2)

            	
              will
                not continue insurance which otherwise would be
                terminated.

            

    

     

    11

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    Once
      an
      error is discovered, an equitable adjustment in premium will be made. If a
      premium adjustment involves the return of unearned premium, the amount of the
      refund will be limited to the 12 month period prior to the date the Company
      receives proof such an adjustment should be made. The Company may inspect any
      of
      the Group Policyholder’s and Participating Employers’ records which relate to
      the Policy.

     

    MISSTATEMENT
      OF AGE. If an Insured Person’s age has been misstated, premiums will be subject
      to an equitable adjustment. If the amount of benefit depends upon age, the
      benefit will be the amount which would have been payable based upon the person’s
      correct age.

     

    CERTIFICATES.
      The Participating Employer will be furnished individual Certificates for
      delivery to each Insured Person. These Certificates summarize the benefits
      provided by the Policy. If there is a conflict between the Policy and the
      Certificate, the Policy will control.

     

    NON-PARTICIPATION.
      The Policy does not participate in the Company’s profits or surplus. ASSIGNMENT.
      The insurance and benefits provided under the Policy may not be
      assigned.

     

    CONFORMITY
      WITH STATE STATUTES. If any provision of the Policy conflicts with any
      applicable state law, then the provision will be deemed to conform to the
      minimum requirements of the law.

     

    WORKER’S
      COMPENSATION. The Policy is not to be construed to provide benefits required
      by
      Worker’s Compensation laws.

     

    III
      -
      PARTICIPATING EMPLOYERS

     

    A
      Participating Employer has no rights under the Policy; except as provided in
      this Section. The Participating Employer will be liable for all accrued premiums
      payable for any of its employees and their Dependents who are insured under
      the
      Policy.

     

    EMPLOYER’S
      EFFECTIVE DATE. The Participating Employer’s Effective Date of participation
      under the Policy will be the latest of:

     

    
      	
            	
              (1)    

            	
              the
                date the Policy is issued;

            

      	 	
              (2)    

            	
              the
                first day of the Insurance Month after the Company approves the employer’s
                Participation Agreement; or

            

      	 	(3)    	any other date agreed upon by the Company and the
              Participating Employer.

    

     

    EMPLOYER
      TERMINATION. A Participating Employer’s participation under the Policy ends on
      the earliest of the following dates:

     

    
      	
               

            	
              (1)    

            	
              the
                date the Participating Employer suspends active business operations;
                is
                placed in bankruptcy or receivership; dissolves, merges or otherwise
                alters its existence;

            
	 	
              (2)

            	
              the
                date the Participating Employer is excluded from coverage by amendment
                or
                termination of the Policy;

            
	 	
              (3)

            	
              the
                end of the Insurance Month in which the Company receives the Participating
                Employer’s written request to cease participation; or

            
	 	
              (4)

            	
              the
                end of the last Insurance Month for which premium is
                paid.

            

    

     

     12

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    On
      the
      day participation ends, Policy coverage will terminate for all of the
      Participating Employer’s employees and their Dependents. After participation
      ends, the employer may not become a Participating Employer again; until the
      Company re-approves it as such.

     

    IV—POLICY
      TERMINATION

     

    GRACE
      PERIOD. A grace period of 60 days from the due date will be allowed for the
      payment of each premium after the first. If any quarterly premium remains unpaid
      through the last day of the grace period; then Policy coverage will terminate
      automatically, on the day the grace period ends. The Participating Employer
      will
      remain liable for premium for the period Policy coverage remains in effect
      during the grace period.

     

    POLICY
      TERMINATION. Until the premium rate has been in effect for at least 12 months,
      the Company may terminate the Policy coverage on any premium due date; but
      only
      if:

     

    
      	
               

            	
              (1)

            	
              the
                Participating Employer suspends active business operations; is placed
                in
                bankruptcy or receivorship; dissolves, merges or otherwise alters
                its
                existence;

            
	 	
              (2)

            	
              there
                are fewer than 100 Insured Persons covered under the
                Policy;

            
	 	
              (3)

            	
              there
                is a change in state or federal law affecting the terms of the Policy;
                or

            
	 	
              (4)

            	
              the
                Participating Employer without good cause, fails to perform its duties
                relating to the Policy or to promptly furnish any information the
                Company
                may reasonably require.

            
	 	 	 

    

    

    To
      do so,
      the Company must give the Group Policyholder and Participating Employers at
      least 31 days’ prior written notice of its intent to terminate the
      Policy

     

    EFFECT
      OF
      POLICY TERMINATION. On the date the Policy ends, Policy coverage will terminate
      for all of the Employer’s employees and their Dependents. The Employer cannot
      become a Participating Employer again, until the Company reapproves it as
      such.

     

    NOTICE
      TO
      INSURED PERSONS. The Employer shall forward the notice of cancellation,
      nonrenewal or expiration of the Policy to each Insured Person, as soon as
      reasonably possible.

     

    V
      -
      INSURED PERSONS AND DEPENDENTS

     

    ELIGIBILITY
      AND EFFECTIVE DATES. An employee becomes eligible for Policy coverage on the
      later of:

     

    
      
        	    	(1)    	
                the
                  date his or her employer becomes a Participating Employer;
                  or

              

      

    

    
      
        	    	
                (2)    

              	
                the
                  first day of the month following the date the employee first meets
                  the
                  definition of Insured Person shown in Section
                  1.

              

      

    

    

    13

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    An
      employee’s coverage takes effect on the date he or she becomes eligible. A
      Dependent’s coverage takes effect on the later of:

     

    
      
        	    	(1)    	
                the
                  date the Insured Person’s coverage takes effect;
                  or

              

      

    

    
      
        	    	
                (2)    

              	
                the
                  date he or she first meets the definition of an eligible Dependent
                  shown
                  in Section I.

              

      

    

     

    INDIVIDUAL
      TERMINATION. An Insured Person’s coverage will end on the earliest
      of:

     

    
      
        	    	(1)    	
                the
                  date the Policy
                  terminates;

              

      

    

    
      
        	    	
                (2)    

              	
                the
                  date his or her employer is no longer a Participating
                  Employer;

              

      

    

    
      
        	    	
                (3)    

              	
                the
                  last day of the Insurance Month in which the Insured Person requests
                  to
                  cancel the insurance;

              

      

    

    
      
        	    	
                (4)    

              	
                the
                  last day of the Insurance Month for which the last premium is paid
                  for the
                  insurance;

              

      

    

    
      	    	
              (5)    

            	
              the
                date he or she is no longer an eligible Insured Person as defined
                in
                Section I;

            

    

    
      
        	    	(6)    	
                the
                  date the Insured Person enters the Armed Forces of any state or
                  country on
                  active duty; except for duty of 30 days or less for training in
                  the
                  Reserves or National Guard. (The Company will refund any unearned
                  premium
                  upon receipt of proof of military service);
                  or

              

      

    

    
      
        	    	
                (7)    

              	
                the
                  date the Insured Person’s employment with the Participating Employer ends;
                  except when:

              

        	    	     	
                (a)
                  the
                  Insured Person is entitled to a Continuation provided below;
                  or

              

        	    	     	
                (b)
                  the
                  Participating Employer has elected to cover the Insured Person
                  as a
                  retired employee, surviving spouse or member of its board of
                  directors.

              

      

    

     

    If
      an
      Insured Person is covered as a retired employee, surviving spouse or member
      of
      the Participating Employer’s board of directors; then that person’s Accidental
      Death and Dismemberment Insurance will end on his or her 65th
      birthday.

     

    A
      Dependent’s coverage will end on the earliest of:

     

    
      
        	    	(1)    	
                the
                  date the Insured Person’s insurance
                  ends;

              

      

    

    
      
        	    	
                (2)    

              	
                the
                  date he or she is no longer an eligible Dependent as defined in
                  Section I;
                  or

              

      

    

    
      
        	    	
                (3)    

              	
                the
                  date the Dependent enters the Armed Forces of any state or country
                  on
                  active duty; except for duty of 30 days or less for training in
                  the
                  Reserves or National Guard. (The Company will refund any unearned
                  premium
                  upon receipt of proof of military
                  service.)

              

      

    

     

    CONTINUATION.
      Ceasing active work results in termination of eligibility; but coverage may
      be
      continued as follows.

     

    14

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    
      	
               

            	
              (1)

            	
              If
                the Insured Person is disabled due to illness or injury; then insurance
                may be continued during the disability resulting from that
                condition.

            

    

    

     

    
      	
               

            	
              (2)

            	
              If
                the Insured Person is on a temporary layoff or an approved leave
                of
                absence; then insurance may be continued for three Insurance Months
                following the month in which the layoff
                began.

            

    

    

     

    
      	
               

            	
              (3)

            	
              If
                the Insured Person or Dependent is entitled to continue coverage
                in accord
                with any federal or state law, which applies where the Participating
                Employer’s Certificates are delivered; then insurance may be continued for
                the period required by law.

            

    

    

     

    Throughout
      any period of continued coverage, the employer must remain a Participating
      Employer; and premium payments must be made on the person’s behalf.

     

    INDIVIDUAL
      REINSTATEMENT. An Insured Person who returns to work within 12 months after
      insurance ends will again be eligible for Policy coverage on the date of return
      to active work; provided:

     

    
      	
               

            	
              (1)

            	
              the
                employer remains a Participating
                Employer;

            

    

    

     

    
      	
               

            	
              (2)

            	
              the
                employee meets the definition of an Insured Person;
                and

            

    

    

     

    
      	
               

            	
              (3)

            	
              premium
                payments are resumed on his or her
                behalf.

            

    

    

     

    VI
      -
      MEDICAL EXPENSE REIMBURSEMENT INSURANCE

     

    BENEFITS.
      If an Insured Person or Dependent incurs Covered Medical Expenses, during the
      Participating Employer’s Plan Year; then the Company will pay benefits equal to
      the amount of such expenses incurred in excess of the Deductible. Benefits
      will
      not exceed:

     

    
      	
               

            	
              (1)

            	
              the
                Per Occurrence Limit for Covered Medical Expenses incurred as a result
                of
                anyone condition or period of confinement during any calendar year;
                or

            

    

    

     

    
      	
               

            	
              (2)

            	
              the
                Maximum Medical Benefit for Covered Medical Expenses incurred by
                the
                Insured Person and any Dependents combined during any calendar
                year.

            

    

    

     

    The
      Per
      Occurrence Limit and Maximum Medical Benefit are shown in the Schedule of
      Benefits on the face page.

     

    PER
      OCCURRENCE LIMIT. Covered Medical Expenses incurred by the same Insured Person
      or Dependent during anyone calendar year will be subject to the Per Occurrence
      Limit, if such expenses result from:

     

    
      	
               

            	
              (1)

            	
              the
                same or related condition, illness or injury. Treatment of all injuries
                sustained by anyone Insured Person or Dependent, as a result of the
                same
                accident, will be considered one
                occurrence.

            

    

    

     

    
      	
               

            	
              (2)

            	
              the
                same or related surgical procedures. Two or more surgical procedures
                will
                be considered one occurrence if performed bilaterally, on two or
                more
                phalanges, or in the same orifice
                or

            

    

    

     

    15

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    operative
      field; unless the procedures are performed during separate operative sessions
      and are due to unrelated conditions.

     

    
      	
               

            	
              (3)

            	
              the
                same period of confinement in a hospital, skilled nursing care facility
                or
                other health care facility. Two or more confinements will be considered
                parts of the same period of confinement, whether they are in the
                same or
                different health care facilities; unless they are separated by at
                least 30
                consecutive days without
                confinement.

            

    

    

     

    
      	
               

            	
              (4)

            	
              the
                same course of dental treatment. A course of dental treatment is
                a series
                of dental or orthodontic services prescribed by a dentist to correct
                a
                specific dental condition. It will be considered one occurrence;
                regardless of the number of teeth, quadrants, procedures, prothodontics,
                sessions or adjustments involved.

            

    

    

     

    COVERED
      MEDICAL EXPENSES. Covered Medical Expenses include reasonable expenses for
      necessary medical care which:

     

    
      	
               

            	
              (1)

            	
              are
                allowed as a medical deduction by Section 213 of the U.S. Internal
                Revenue
                Code of 1954, as amended;

            

    

    

     

    
      	
               

            	
              (2)

            	
              are
                incurred for the Insured Person’s or Dependent’s medical
                care;

            

    

    

     

    
      	
               

            	
              (3)

            	
              are
                the Insured Person’s legal obligation to pay;
                and

            

    

    

     

    
      	
               

            	
              (4)

            	
              are
                not payable under the Base Health
                Plan.

            

    

    

     

    Such
      medical care or expense may include (but is not limited to):

     

    
      	
               

            	
              (1)

            	
              hospital,
                medical and surgical services to diagnose or treat an illness or
                injury;

            

    

    

     

    
      	
               

            	
              (2)

            	
              routine
                physical exams, routine laboratory tests and preventive
                inoculations;

            

    

    

     

    
      	
               

            	
              (3)

            	
              dental
                work, prescription drugs and medical
                equipment;

            

    

    

     

    
      	
               

            	
              (4)

            	
              the
                fitting and cost of hearing aids, eyeglasses and contact
                lenses;

            

    

    

     

    
      	
               

            	
              (5)

            	
              transportation
                that is primarily for and essential to medical care;
                and

            

    

    

     

    
      	
               

            	
              (6)

            	
              premiums,
                contributions, subscriber or capacitation fees an Insured Person
                pays
                for:

            

    

    

     

    
      	
               

            	
              (a)

            	
              the
                Participating Employer’s Base Health Plan (or Medicare and a Medicare
                Insurance Policy); and

            

    

    

     

    
      	
               

            	
              (b)

            	
              any
                dental, vision or prescription drug plan provided by that
                Employer.

            

    

    

     

    Supplement

     

    Covered
      Medical Expenses will not exceed the usual and customary charge. This is the
      amount charged by most other Physicians or health care practitioners with
      similar training and experience, within the same geographic area, for a
      comparable service. That “area” may be a

     

    16

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    city,
      metropolitan area, county or greater area; as needed to identify a cross section
      of providers of the same or similar service. For expense incurred outside the
      United States, the Usual and Customary Charge will be the amount allowed for
      that service, if performed in the Company’s domicile in Omaha,
      Nebraska.

     

    DEDUCTIBLE.
      The Deductible is any amount of benefits payable to the Insured Person or
      Dependent for the same medical care under:

     

    
      	
               

            	
              (1)

            	
              the
                Base Health Plan;

            

    

    

     

    
      	
               

            	
              (2)

            	
              any
                other self-insured health plan or group health, dental, vision or
                prescription drug policy; or

            

    

    

     

    
      	
               

            	
              (3)

            	
              worker’s
                compensation, Medicare or other government
                program.

            

    

    

     

    If
      a
      claimant is not covered by a Base Health Plan when Covered Medical Expenses
      are
      incurred; then the Deductible will be determined as if he or she was covered
      for
      the minimum benefits shown in Section 1.

     

    EXCLUSIONS
      AND LIMITATIONS. Covered Medical Expenses do not include charges:

     

    
      	
               

            	
              (1)

            	
              which
                are in excess of the usual and customary charge for that
                service.

            

    

    

     

    
      	
               

            	
              (2)

            	
              for
                services or supplies which:

            

    

    

     

    
      	
               

            	
              (a)

            	
              are
                not recommended, approved or certified as medically necessary by
                a
                Physician;

            

    

    

     

    
      	
               

            	
              (b)

            	
              are
                provided by a Physician or other health care practitioner who is
                the
                Insured Person; his or her spouse, parent, child or sibling; or anyone
                related to the Insured Person’s spouse by the same degree;
                or

            

    

    

     

    
      	
               

            	
              (c)

            	
              are
                beyond the scope of the Physician’s, health care practitioner’s or
                facility’s license; or are illegal where they were
                provided.

            

    

    

     

    
      	
               

            	
              (3)

            	
              for
                any cosmetic surgical procedure, cosmetic dental procedure, or drug
                or
                medicine prescribed for cosmetic use; except to restore function
                or repair
                a disfigurement resulting from:

            

    

    

     

    
      	
               

            	
              (a)

            	
              a
                congenital birth defect; or

            

    

    

     

    
      	
               

            	
              (b)

            	
              an
                injury, disease or its surgical treatment (such as reconstruction
                after
                removal of a malignancy).

            

    

    

     

    Cosmetic
      surgical procedures include (but are not limited to):

     

    
      	
               

            	
              (a)

            	
              face
                lifts, dermabrasion, chemical peels and collagen
                injections;

            

    

    

     

    
      	
               

            	
              (b)

            	
              voluntary
                radial kerototomy, blepharoplasty, rhinoplasty, or
                otoplasty;

            

    

    

     

    17

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    
      	
               

            	
              (c)

            	
              liposuction,
                breast augmentation or reduction;
                and

            

    

    

     

    
      	
               

            	
              (d)

            	
              hair
                transplants and electrolysis.

            

    

    

     

    Cosmetic
      dental procedures include (but are not limited to) tooth bleaching, facings
      on
      crowns or pontics distal to the second bicuspid, and characterization of
      dentures.

     

    Drugs
      or
      medicines prescribed for cosmetic use include (but are not limited to) wrinkle
      treatments and hair growth stimulants.

     

    
      	
               

            	
              (4)

            	
              for
                the following services or expenses, whether or not they are prescribed
                of
                recommended by a Physician:

            

    

    

     

    
      	
               

            	
              (a)

            	
              weight
                loss or smoking cessation programs or medications, when provided
                for
                general health;

            

    

    

     

    
      	
               

            	
              (b)

            	
              physical
                therapy, massage therapy, hydrotherapy, or steam baths; when provided
                for
                general health or to relieve discomfort, rather than for a specific
                medical condition;

            

    

    

     

    
      	
               

            	
              (c)

            	
              nonprescription
                drugs or medicines (except
                insulin);

            

    

    

     

    
      	
               

            	
              (d)

            	
              vitamins,
                minerals, enzymes; herbal or homeopathic preparations, special foods
                or
                dietary supplements; which:

            

    

    

     

    
      	
               

            	
              (i)

            	
              can
                be obtained without a Physician’s written prescription;
                or

            

    

    

     

    
      	
               

            	
              (ii)

            	
              have
                an over-the-counter equivalent;

            

    

    

     

    
      	
               

            	
              (e)

            	
              non-nursing
                services provided by a personal attendant, companion or housekeeper;
                travel, lodging or meals while vacationing at a health spa, resort,
                camp
                or retreat; health club, athletic association or country club membership
                or dues; or any other service or expense not allowed as a medical
                deduction by Section 213 of the U.S. Internal Revenue Code, as
                amended.

            

    

    

     

    
      	
               

            	
              (5)

            	
              for
                modification of the Insured Person’s home, yard, motor vehicle or
                workplace; or the. purchase or rental of nonmedical equipment, such
                as:

            

    

    

     

    
      	
               

            	
              (a)

            	
              an
                air conditioner, humidifier or
                purifier;

            

    

    

     

    
      	
               

            	
              (b)

            	
              exercise,
                sports or motorized transportation
                equipment;

            

    

    

     

    
      	
               

            	
              (c)

            	
              a
                ramp, lift, escalator or elevator;
                or

            

    

    

     

    
      	
               

            	
              (d)

            	
              a
                sun or heat lamp, whirlpool bath, hot tub, sauna or swimming
                pool;

            

    

    

     

    
      	
               

            	
              (6)

            	
              for
                transportation which is not primarily for and essential to medical
                care;

            

    

    

     

    
      	
               

            	
              (7)

            	
              for
                premiums, contributions, or fees an Insured Person pays for the cost
                of:

            

    

    

     

    
      	
               

            	
              (a)

            	
              any
                disability inc_me insurance;
                        ,

            

    

    

     

    18

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    
      	
               

            	
              (b)

            	
              any
                accidental death and dismemberment insurance;
                or

            

    

    

     

    
      	
               

            	
              (c)

            	
              any
                health care plan; except for the Base Health Plan (or Medicare and
                a
                Medicare Supplement Insurance Policy) and any dental, vision or
                prescription drug plan provided by the
                Employer;

            

    

    

     

    
      	
               

            	
              (8)

            	
              for
                medical treatment provided by a health care facility or practitioner
                which:

            

    

    

     

    
      	
               

            	
              (a)

            	
              does
                not charge the Insured Person for the services;
                or

            

    

    

     

    
      	
               

            	
              (b)

            	
              does
                not normally charge for such services in the absence of
                insurance;

            

    

    

     

    
      	
               

            	
              (9)

            	
              for
                services which are provided by or reimbursable under Worker’s
                Compensation, Medicare or any other government program (except Medicaid);
                or

            

    

    

     

    
      	
               

            	
              (10)

            	
              in
                connection with any sickness contracted or injury
                sustained:

            

    

    

     

    
      	
               

            	
              (a)

            	
              during
                active duty or training in the armed forces, Reserves or National
                Guard of
                any state or country; or

            

    

    

     

    
      	
               

            	
              (b)

            	
              as
                a result of war, whether declared or undeclared; any act of war;
                or
                resistance to armed invasion or
                aggression.

            

    

    

     

    VII.
      ACCIDENTAL DEA Tn AND DISMEMBERMENT INSURANCE

     

    DEATH
      OR
      DISMEMBERMENT BENEFIT. The Company will pay the benefit listed below,
      if:

     

    
      	
               

            	
              (1)

            	
              an
                Insured Person sustains an Injury while insured under the Policy;
                and

            

    

    

     

    
      	
               

            	
              (2)

            	
              the
                Injury directly causes one of the following Covered Losses within
                365 days
                after the date of the accident.

            

    

    

     

    The
      loss
      must result directly from the injury and from no other causes.

     

    TABLE
      OF
      COVERED.LOSSES BENEFIT

     

    
      	
               

            	
               

            	
               

            
	
              Loss
                of Life

            	
                

            	
              Principal
                Sum

            
	
               

            	
               

            
	
              Loss
                of One Member (Hand, Foot or Eye)

            	
                

            	
              1⁄2
                Principal sum

            
	
               

            	
               

            
	
              Loss
                of Two or More Members

            	
                

            	
              Principal
                sum

            
	
               

            	
               

            
	
              Loss
                of Thumb and Index Finger

            	
                

            	
              1⁄4
                Principal Sum

            

    

    

     

    The
      Principal Sum is shown in the Schedule of Insurance. If an Insured Person
      sustains more than one loss resulting from the same accident, the benefit will
      be the one largest amount listed. Benefits will not exceed the Principal Sum
      for
      all of his or her losses combined.

     

    19

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    TO
      WHOM
      PAYABLE. Benefits for the Insured Person’s loss of life will be paid in accord
      with the Beneficiary section. Any other benefits will be paid to the Insured
      Person.

     

    EXCLUSIONS.
      Accidental Death and Dismemberment Insurance benefits will not be paid for
      Loss
      resulting from:

     

    
      	
               

            	
              (1)

            	
              intentionally
                self-inflicted injury or attempted injury, while sane or
                insane;

            

    

    

     

    
      	
               

            	
              (2)

            	
              sickness,
                disease or bodily infirmity; except
                for:

            

    

    

     

    
      	
               

            	
              (a)

            	
              a
                bacterial infection resulting from an accidental cut or wound;
                or

            

    

    

     

    
      	
               

            	
              (b)

            	
              the
                accidental ingestion of a poisonous food
                substance;

            

    

    

     

    
      	
               

            	
              (3)

            	
              medical
                or surgical treatment; except when it is for a covered
                injury;

            

    

    

     

    
      	
               

            	
              (4)

            	
              the
                Insured Person’s voluntary participation in a riot, insurrection or the
                commission of a felony;

            

    

    

     

    
      	
               

            	
              (5)

            	
              war
                or any act of war, whether declared or undeclared; or any injury
                which
                occurs during active duty or training in the armed forces, Reserves
                or
                National Guard of any state or
                country;

            

    

    

     

    
      	
               

            	
              (6)

            	
              travel
                or flight in any aircraft; except as a fare-paying passenger on a
                regularly scheduled flight with a licensed commercial
                airline;

            

    

    

     

    
      	
               

            	
              (7)

            	
              the
                Insured Person’s taking part in any aeronautical sport, ballooning, hang
                gliding or parachute jumping; except when a parachute jump is made
                to
                preserve his or her life;

            

    

    

     

    
      	
               

            	
              (8)

            	
              the
                Insured Person’s driving a motor vehicle while intoxicated, impaired or
                under the influence of drugs:

            

    

    

     

    
      	
               

            	
              (a)

            	
              as
                defined by the jurisdiction where the accident
                occurs;

            

    

    

     

    
      	
               

            	
              (b)

            	
              whether
                or not the driver is convicted of the
                offense.

            

    

    

     

    However,
      this Part 8 will not apply when drugs are taken as prescribed by a
      Physician.

     

    VIII.
      CLAIM PROCEDURES

     

    MEDICAL
      EXPENSE REIMBURSEMENT CLAIMS. For Medical Expense Reimbursement claims, the
      Insured Person is not required to send a written notice of claim or a request
      for claims forms to tile Company. Instead, the Insured Person may submit proof
      of any Covered Medical Expenses to the Participating Employer on forms furnished
      by the employer. This may be done:

     

    
      	
               

            	
              (1)

            	
              at
                any time during the calendar year in which such expenses are incurred;
                or

            

    

    

     

    
      	
               

            	
              (2)

            	
              within
                90 days after the close of that calendar year. (Exceptions for late
                proof
                will be made only as

            

    

    

     

    20

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    provided
      below.)

     

    The
      Participating Employer will then:

     

    
      	
               

            	
              (1)

            	
              verify
                any amounts payable for such expenses under the Base Health Plan;
                and

            

    

    

     

    
      	
               

            	
              (2)

            	
              submit
                the verified claims to the Company at least
                monthly.

            

    

    

     

    Any
      Medical Expense Reimbursement benefits will be paid as soon as the Company
      receives proper written proof of loss; provided the required premium has been
      paid on the Insured Person’s behalf.

     

    ACCIDENTAL
      DEATH OR DISMEMBERMENT CLAIMS. For an accidental death or dismemberment claim,
      a
      written notice of a claim must be given within 20 days after the loss occurs.
      The notice must be sent to the Company’s Home Office. It should
      include:

     

    
      	
               

            	
              (1)

            	
              the
                Insured Person’s name and address; and (2) the number of the
                Policy.

            

    

    

     

    When
      this
      notice of claim is received, the Company will send the Insured Person forms
      for
      filing the required proof. If the Insured Person does not receive these forms
      within 15 days; then the proof of loss requirement may be met by giving the
      Company a written statement of the nature and extent of the loss, within the
      required time period.

     

    For
      an
      accidental death or dismemberment claim, the Company must be given written
      proof
      of loss within 90 days after the loss occurs. (Exceptions for late proof will
      be
      made only as provided below.) Any benefits payable for accidental death or
      dismemberment will be paid as soon as the Company receives proper written proof
      of loss.

     

    EXCEPTIONS
      FOR LATE PROOF. If it was not reasonably possible to give written proof in
      the
      time required, the claim will not be reduced or denied solely for this reason;
      provided proof is filed as soon as reasonably possible. In any event, proof
      of
      loss must be given no later than one year from such time; unless the Insured
      Person was legally incapacitated.

     

    LEGAL
      ACTIONS. No legal action to recover any benefits may be brought until the 60
      days after the required written proof of loss is given. No legal action may
      be
      brought more than three years after the date written proof of loss is required
      to be given.

     

    PHYSICAL
      EXAMINATIONS. The Company, at its expense, may:

     

    
      	
               

            	
              (1)

            	
              have
                an Insured Person examined, as often as reasonably necessary, while
                any
                claim is pending; and (2) have an autopsy made, where allowed by
                law, if a
                claim for death benefits is made.

            

    

    

     

    RIGHT
      OF
      RECOVERY. If benefits are overpaid on any claim, full reimbursement is
      required:

     

    
      	
               

            	
              (1)

            	
              within
                60 days after the Company requests
                reimbursement;

            

    

    

     

    21

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    
      	
               

            	
              (2)

            	
              whether
                the overpayment is due to fraud, misrepresentation, the Company’s error in
                processing a claim, or any other
                reason.

            

    

    

     

    If
      reimbursement is not made, the Company has the right to reduce future benefits
      until full reimbursement is made; or to recover such overpayments from the
      Insured Person or his or her estate.

     

    COMP
      ANY’S DISCRETIONARY AUTHORITY. Except for those functions which the Policy
      specifically reserves to the Group Policyholder or Participating Employer,
      the
      Company has the authority to manage the Policy, administer claims, interpret
      its
      provisions and resolve questions arising under it. The Company’s authority
      includes the right to:

     

    
      	
               

            	
              (1)

            	
              establish
                administrative procedures, determine eligibility and resolve claims
                questions; and (2) determine what information it reasonably requires
                to
                make such decisions.

            

    

    

     

    IX.
      BENEFICIARY

     

    PAYMENTS
      TO BENEFICIARY. At the death of an Insured Person, any amount payable as a
      result of his or her death will be paid to the named Beneficiary who survives
      the Insured Person. If no named Beneficiary survives the Insured Person, payment
      will be made:

     

    
      	
               

            	
              (1)

            	
              to
                the Insured Person’s estate; or

            

    

    

     

    
      	
               

            	
              (2)

            	
              in
                accord with the Facility of Payment
                section.

            

    

    

     

    The
      right
      of a Beneficiary to receive any such amount is subject to the Facility of
      Payment section of the Policy.

     

    If
      the
      Insured Person’s Beneficiary dies:

     

    
      	
               

            	
              (1)

            	
              within
                15 days of the Insured Person’s death;
                and

            

    

    

     

    
      	
               

            	
              (2)

            	
              before
                the Company receives satisfactory proof of the Insured Person’s
                death;

            

    

    

     

    payment
      will be made as if the Insured Person had survived the Beneficiary; unless
      the
      other provisions have been made.

     

    NAMING
      THE BENEFICIARY. An Insured Person’s Beneficiary will be as shown on his or her
      enrollment

     

    card;
      unless changed. If the Policy replaces a group policy provided similar
      coverages; then an Insured Person’s

     

    Beneficiary
      named under the prior policy will be the Beneficiary under the Policy, until
      changed.

     

    CHANGING
      THE BENEFICIARY. Only the Insured Person (or his or her assignee) may change
      the
      Beneficiary. A new Beneficiary may be named by filing a written notice of the
      change with the Company at its Home Office. The change will be effective as
      of
      the date it was signed; subject to any action taken by the Company before it
      received notice of the change.

     

    22

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    X.
      FACILITY OF PAYMENT

     

    If
      any
      benefit under the Policy becomes payable to an Insured Person’s estate, a minor,
      or any person who (in the Company’s opinion) is not competent to give a valid
      release; then the Company, at its option, may make payment to anyone or more
      of
      the following:

     

    
      	
               

            	
              (1)

            	
              a
                person who has assumed the care and support of the Insured Person
                or
                Beneficiary;

            

    

    

     

    
      	
               

            	
              (2)

            	
              a
                person who has incurred expense as a result of the Insured Person’s last
                illness or death;

            

    

    

     

    
      	
               

            	
              (3)

            	
              the
                personal representative of the Insured Person’s estate;
                or

            

    

    

     

    
      	
               

            	
              (4)

            	
              any
                person related by blood or marriage to the Insured
                Person.

            

    

    

     

    No
      payment made as provided above may exceed $1,000; or the amount permitted by
      state law, if less. A payment made in good faith under this Section will
      discharge the Company to the extent of that payment. Any unpaid balance will
      be
      paid to the Insured Person’s estate; or to the Insured Person’s Beneficiary upon
      attaining the age of majority; or becoming competent to give a valid
      release.

     

    XI.
      SETTLEMENT OPTIONS

     

    All
      or
      part of any death or dismemberment benefit may be received in installments,
      by
      making written election to the Company. Such election may be made:

     

    
      	
               

            	
              (1)

            	
              by
                the Insured Person, while living;
                or

            

    

    

     

    
      	
               

            	
              (2)

            	
              by
                the person who is to receive payment, if no such election is in effect
                at
                the time of the Insured Person’s
                death.

            

    

    

     

    Any
      such
      election must comply with the Company’s practices at the time it is made. The
      amount applied under a settlement option must be at least $2,000. It must be
      sufficient to provide a payment of at least $20 per month.

     

    CERTIFICATE
      AMENDMENT NO.1

     

    TO
      BE
      ATTACHED TO THE CERTIFICATE FOR GROUP POLICY NO: 05-000199

     

    ISSUED
      TO: US Bank, as Trustee of Jefferson Pilot Financial Insurance Company’s Medical
      Expense

     

    Reimbursement
      Insurance Trust

     

    FOR
      CERTIFICATES DELIVERED IN CALIFORNIA

     

    
      	
              A.

            	
              Under
                Part IV—POLICY TERMINA TION, the following is added to the POLICY TERMINA
                TION section.

            

    

    

     

    23

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    The
      Participating Employers must:

     

    
      	
               

            	
              (1)

            	
              promptly
                mail a copy of the policy termination notice to each Insured Person
                along
                with information on any continuation rights;
                and

            

    

    

     

    
      	
               

            	
              (2)

            	
              provide
                the Company with proof of the mailing and the mailing
                date.

            

    

    

     

    B.
      Under
      Part VI—MEDICAL EXPENSE REIMBURSEMENT INSURANCE, the following items are added
      to the COVERED MEDICAL EXPENSES section as allowable medical care or expense,
      subject to the Per Occurrence Limit and Maximum Medical Benefit:

     

    
      	
               

            	
              (7)

            	
              sterilization
                procedures, infertility treatments (including in vitro fertilization),
                and
                management of pregnancy and childbirth
                including:

            

    

    

     

    
      	
               

            	
              (a)

            	
              prenatal
                diagnosis of fetal disorders in high risk pregnancy;
                and

            

    

    

     

    
      	
               

            	
              (b)

            	
              perinatal
                services of a certified nurse midwife or a licensed nurse
                practitioner;

            

    

    

     

    
      	
               

            	
              (8)

            	
              cervical
                cancer, osteoporosis and mammography screening tests; and prosthetics
                or
                reconstructive surgery after a medically necessary mastectomy (including
                surgery to restore symmetry);

            

    

    

     

    
      	
               

            	
              (9)

            	
              preventive
                health care for covered children (including immunizations and screening
                for bad blood levels);

            

    

    

     

    
      	
               

            	
              (10)

            	
              treatment
                of substance abuse, mental disorders and organic brain disorders,
                including:

            

    

    

     

    
      	
               

            	
              (a)

            	
              schizophrenia
                and schizo-affective disorders;

            
	
               

            	
               

            
	
               

            	
              (b)

            	
              bipolar
                and delusional depression; and

            
	
               

            	
               

            
	
               

            	
              (c)

            	
              pervasive
                developmental disorders;

            

    

    

     

    
      	
               

            	
              (11)

            	
              home
                health care services, under a plan established and approved by a
                physician;

            

    

    

     

    
      	
               

            	
              (12)

            	
              acupuncture;

            

    

    

     

    
      	
               

            	
              (13)

            	
              telemedicine
                services:

            

    

    

     

    
      	
               

            	
              (a)

            	
              including
                health care delivery, diagnosis treatment, medical data transfer
                and
                education using interactive audio, video or data communications;
                but

            

    

    

     

    
      	
               

            	
              (b)

            	
              not
                including phone or fax
                consultations;

            

    

    

     

    
      	
               

            	
              (14)

            	
              orthotic
                and prosthetic devices (including devices to restore speech after
                a
                laryngectomy);

            

    

    

     

    24

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    
      	
               

            	
              (15)

            	
              diabetic
                daycare self-management education programs;
                and

            

    

    

     

    
      	
               

            	
              (16)

            	
              treatment
                of jaw joint disorders (including dental and medically necessary
                surgical
                procedures.

            

    

    

     

    CERTIFICATE
      AMENDMENT (CONTINUED)

     

    
      	
              C.

            	
              Under
                Part VIII—CLAIM PROCEDURES, the following sections are
                added.

            

    

    

     

    LATE
      PAYMENTS. If benefits are not paid by the 30th working day after the Company
      receives proper written proof of loss, and the required premium has been paid
      on
      the Insured Person’s behalf; then interest will be paid on the
      benefits:

     

    
      	
               

            	
              (1)

            	
              from
                the calendar day next following the 30th working day; (2) at the
                rate of
                10% per annum.

            

    

    

     

    INFORMATION
      AND COMPLAINTS. To obtain information or dispute a claim, the Insured Person
      or
      Employer may phone Exec-U-Care’s toll-free telephone number at (800) 552-1213.
      If the dispute is not resolved, California residents may also contact the
      Consumer Service Division of the California Department of Insurance at (800)
      927-4357.

     

    This
      amendment applies only to Certificates delivered to Participating Employers
      in
      the state of California. This amendment takes effect on the Policy effective
      date, or on the Insured Person’s effective date of coverage under the Policy;
      whichever is later. In all other respects, the Certificate remains the
      same.

     

     

    25

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