MODIFIED COINSURANCE AGREEMENT

Exhibit 10.(b)

 

Amended Filing Date: October 31, 2003

Original Filing Date: October 17, 2003

 

MODIFIED COINSURANCE AGREEMENT

 

Between

 

FARMERS NEW WORLD LIFE INSURANCE COMPANY

 

And

 

KEMPER INVESTORS LIFE INSURANCE COMPANY

 

Dated as of December 1, 2003

 

TABLE OF CONTENTS

 

 

i

 

ii

INDEX OF EXHIBITS

 

 

 

iii

MODIFIED COINSURANCE AGREEMENT

 

THIS MODIFIED COINSURANCE AGREEMENT (this “Agreement”) is made and entered into as of December 1, 2003, by and between Farmers New World Life Insurance Company, a Washington domiciled stock life insurance company (the “Company”) and Kemper Investors Life Insurance Company, an Illinois domiciled stock life insurance company (the “Reinsurer”).

 

RECITALS

 

WHEREAS, the Company has issued the Contracts (as defined below); and

 

WHEREAS, the Company has agreed to cede and transfer to the Reinsurer all liabilities arising under the Contracts (which include annuity contracts written by the Company after the Effective Date) for the consideration specified herein, and the Reinsurer has agreed to reinsure such liabilities on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual and several promises and undertakings herein contained, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Reinsurer agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1 Definitions. The following terms shall have the respective meanings specified below throughout this Agreement:

 

“Affiliate” means, with respect to any Person, at the time in question, any other Person Controlling, Controlled by or under common Control with such Person.

 

“Applicable Law” means any domestic or foreign federal, state or local statute, law, ordinance or code, or any written rules, regulations or administrative interpretations issued by any Governmental Authority pursuant to any of the foregoing, and any order, writ, injunction, directive, judgment or decree of a court of competent jurisdiction applicable to the parties hereto.

 

“Books and Records” means the originals or copies of all customer lists, policy information, policy forms and rating plans, disclosure and other documents and filings, including statutory filings, required under all Applicable Laws, administrative records, reinsurance records, claim records, sales records, underwriting records, financial records, Tax records and compliance records in the possession or control of the Company and relating principally to the Contracts including, without limitation, any database, magnetic or optical media (to the extent not subject to licensing restrictions) and any other form of recorded, computer generated or stored information or process, but excluding: (a) the Company’s original certificate of incorporation, bylaws, corporate seal, licenses to do business, minute books and other corporate records relating to corporate organization and capitalization; (b) original Tax and corporate accounting records relating to the Business; (c) any original books and records relating to the Retained Liabilities; and (d) any records that are subject to attorney-client privilege.

 

4

“Business” means the marketing, issuing and administering the Contracts in the United States and the other business activities reasonably related thereto.

 

“Business Day” means any day on which banking institutions in the State of Washington and Illinois are open for normal business.

 

“Ceding Commission” means the aggregate ceding allowance payable by the Reinsurer to the Company in connection with the reinsurance of the Contracts hereunder.

 

“Closing” means the closing of the transactions contemplated by this Agreement.

 

“Closing Date” means the date and time as of which the Closing actually takes place.

 

“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations thereunder.

 

“Commissions” means all commissions, expense allowances, benefit credits and other fees and compensation payable to Producers.

 

“Company Indemnified Parties” shall have the meaning set forth in Section 9.1.

 

“Contracts” means (a) all annuity contracts issued on the forms identified on Exhibit C hereto, to the extent that such contracts are in effect as of the Effective Date, and all certificates and participation agreements in effect as of the Effective Date issued in accordance with the terms of such contracts (including all supplements, endorsements, riders and ancillary agreements in connection therewith) and (b) all Post-Closing Contracts. Also included in the definition of “Contracts” are any such contracts and certificates that have lapsed and that otherwise would be eligible for inclusion herein, subject to reinstatement pursuant to reinstatement procedures contained in such contracts and certificates.

 

“Contractholders” means contractholders, insureds and assignees under the Contracts.

 

“Control” including the terms “Controlling,” “Controlled by” and “under common Control with” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, the holding of policyholders’ proxies by contract other than a commercial contract for goods or non-management services, or otherwise, unless the power is the result of an official position with or corporate office held by the Person. Except as provided otherwise in this Agreement, Control is presumed to exist if any Person, directly or indirectly, owns, controls, holds with the power to vote, or holds shareholders’ proxies representing majority or more of the voting securities of any other Person, or holds or controls sufficient policyholders’ proxies, or is entitled by contract or otherwise, to nominate, appoint or to elect the majority of the board of directors or comparable governing body of any other Person.

 

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“Effective Date” means 12:01a.m. Pacific time on December 1, 2003.

 

“Extra Contractual Obligations” means all liabilities or obligations arising under or relating to the Contracts, exclusive of liabilities or obligations arising under the express terms and conditions of the Contracts and the other Liabilities, but including, without limitation, any liability for fines, penalties, forfeitures, punitive, special, consequential, exemplary or other form of extra-contractual damages, which liabilities or obligations arise from any act, error or omission, whether or not intentional, negligent, in bad faith or otherwise relating to: (a) the marketing, sale, underwriting, production, issuance, cancellation or administration of the Contracts; (b) the investigation, defense, trial, settlement or handling of claims, benefits, or payments under the Contracts; or (c) the failure to pay, the delay in payment, or errors in calculating or administering the payment of benefits, claims or any other amounts due or alleged to be due under or in connection with the Contracts.

 

“Final and Binding” means with respect to any determinations made in this Agreement that have the same preclusive effect for all purposes as if such determinations had been embodied in a final judgment, no longer subject to appeal, entered by a court of competent jurisdiction, and either the Company or the Reinsurer may petition a court having jurisdiction over the parties and subject matter to reduce such decision to judgment.