Letter of Intent for Catastrophic Excess of Loss Reinsurance between Annuity and Life Reassurance Ltd. and XL Life Ltd.
Summary
Annuity and Life Reassurance Ltd. (ALRe) and XL Life Ltd. (XL) have agreed to a reinsurance arrangement covering catastrophic excess of loss for individually underwritten life insurance policies reinsured by ALRe in the U.S. and Canada. The agreement covers claims from a single accident causing more than five deaths within 24 hours, excluding group and corporate-owned policies, terrorism, and war. The coverage period is January 1, 2002, to December 31, 2002, with a premium of at least $1 million. The contract may be renewed or terminated by mutual agreement and requires ALRe board approval.
EX-10.4 7 w60806ex10-4.txt LETTER OF INTENT EXHIBIT 10.4 LETTER OF INTENT between ANNUITY AND LIFE REASSURANCE LTD and XL LIFE LTD CEDING COMPANY Annuity and Life Reassurance Ltd. ("ALRe") REINSURER XL Life Ltd ("XL") REINSURANCE Catastrophic Excess of Loss Cover RISK REINSURED ALRe's Incurred death benefit claims resulting from a single event during the Coverage Period in which ALRe has incurred more than Five (5) deaths from the Eligible Business. Multiple policies on any one life shall be treated as one death. A Covered Event shall be limited to accidents that occur during the Coverage Period that cause the deaths within 24 hours of the time of the accident to at least five lives that are reinsured by ALRe. Only the first occurrence of a Covered Event during the Coverage Period shall be reinsured by XL. ELIGIBLE BUSINESS Life Insurance individually underwritten by U.S. and Canadian Insurance Companies reinsured by ALRe. Any group-related business, such as Group Insurance and Corporate Owned Life Insurance, is excluded. COVERAGE PERIOD January 1, 2002 through December 31, 2002 PREMIUM The greater of $0.008 per $1000 of total risk reinsured of the Eligible Business as measured at the beginning of the Coverage Period, or $1 million. The premium is payable to the XL 60 days after the start of the Coverage Period. EXCLUSIONS - Deaths that occur more than 24 hours after a Covered Event are excluded. - Covered Event shall not include any act of terrorism, military terrorism, or any act of war, declared or undeclared. EXCESS OF LOSS PAYMENT The Excess of Loss Payment from XL to ALRe under this Contract shall be the average of the eligible incurred claim payments per death, not to exceed $25,000 per death, for each death in excess of 5 deaths, up to a maximum of 10 times the Premium payable under this Contract. The Excess of Loss Payment is due 90 days after ALRe has reported to XL eligible claims under this Contract from policies reinsured by ALRe. RENEWAL 1. ALRe and XL may mutually agree to renew this contract on a yearly basis on the existing terms. At any time, ALRe and XL Life may mutually agree to terminate this contract on mutually agreeable terms. 2. In the event that incurred losses under this Contract exceed paid premium under this Contract, XL has the right to mandate renewal of this contract for 10 successive years on the existing terms. TERMINATION At any time, ALRe and XL may mutually agree to terminate this contract on mutually agreeable terms. CURRENCY U.S. Dollars OTHER PROVISIONS (to include, but not be limited to the following:) Definitions Access to records Arbitration (Bermuda 1993 Act) Insolvency Offset ALRe to warrant accuracy of Reserves and Incurred Losses Governing Law (Bermuda) 30 Day due diligence period for final approval and final wording WORDING To be agreed. CONDITION PRECEDENT This transaction must be approved by ALRe's Board of Directors. Accepted for Annuity & Life Reassurance, Ltd. Signature: /s/ Robert Reale -------------------------------------- Name: ROBERT REALE -------------------------------------- Title: SVP & Chief Underwriter -------------------------------------- Date: Feb. 28, 2002 -------------------------------------- Accepted for XL Life Ltd Signature: /s/ Paul Giordano -------------------------------------- Name: Paul Giordano -------------------------------------- Title: Executive Vice President and Secretary -------------------------------------- Date: March 13, 2002 --------------------------------------
