Reinsurance Business

Reinsurance Business QUOTA SHARE REINSURANCE AGREEMENT DWVD NO. 900804 for BASIC COLLEGE ACCIDENT AND SICKNESS MEDICAL EXPENSE INSURANCE (hereinafter referred to as the Agreement) made and entered into by GERBER LIFE INSURANCE COMPANY White Plains, NY (hereinafter referred to as the Company) and PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Enfield, CT (hereinafter referred to as the Reinsurer) EFFECTIVE: January 1, 1999 – December 31, 1999 Table of Contents ARTICLE I PARTIES TO AGREEMENT 1 ARTICLE II BASIS OF REINSURANCE 2 ARTICLE III RETENTION AND LIMIT 3 ARTICLE IV INURING REINSURANCE 4 ARTICLE V FACULTATIVE REINSURANCE 5 ARTICLE VI – EXCLUSIONS 6 ARTICLE VII EFFECTIVE DATE AND DURATION OF AGREEMENT 7 ARTICLE VIII REINSURANCE PREMIUMS 8 ARTICLE IX PREMIUM REPORTS 9 ARTICLE X CEDING ALLOWANCE/EXPENSES 10 ARTICLE XI CURRENCY 11 ARTICLE XII CLAIMS NOTIFICATION 12 ARTICLE XIII CLAIMS SETTLEMENT AND AUDIT 14 ARTICLE XIV EXTRA CONTRACTUAL OBLIGATIONS 15 ARTICLE XV SUBROGATION 16 ARTICLE XVI COMMUTATION 17 ARTICLE XVII CLAIMS FUND 18 ARTICLE XVIII OFFSET 19 ARTICLE XIX TERRITORY 20 ARTICLE XX OVERSIGHTS 21 ARTICLE XXI ACCESS TO RECORDS 22 ARTICLE XXII INSOLVENCY 23 ARTICLE XXIII ARBITRATION 24 ARTICLE XXIV – CONTROLLING LAW 25 ARTICLE XXV SEVERABILITY 26 ARTICLE XXVI UNAUTHORIZED REINSURERS 27 ARTICLE XXVII TAXES 29 ARTICLE XXVIII FEDERAL EXCISE TAX 30 ARTICLE XXIX CONFIDENTIALITY 31 ARTICLE XXX ENTIRE AGREEMENT 32 ARTICLE XXXI INTERMEDIARY 33 ARTICLE XXXII EXECUTION 34 ARTICLE I PARTIES TO AGREEMENT This Agreement is solely between the Company and the Reinsurer and the performance of obligations of each party under this Agreement shall be rendered solely to the other party. In no instances shall anyone other than the Company or the Reinsurer have any rights under this Agreement except recognizing the Company has the sole responsibility for the evaluation and appointment of the Underwriting Manager, Managed Care Concepts of Delaware, Inc. (MCCI). Further, it is agreed that Associated Accident and Health Reinsurance Underwriters (AAHRU), a participating Reinsurer, is deemed to be the Lead Reinsurer.

In that capacity, any and all actions of the Lead Reinsurer shall be made in the best interest of this Agreement and binding upon the other reinsurers. Should the Company appoint a new Underwriting Manager, the Reinsurer must approve any change in the Underwriting Manager, otherwise the Reinsurer has the right to cancel at the time of change. This Agreement shall be binding upon the parties, their heirs, and successors, if any. ARTICLE II BASIS OF REINSURANCE On and after the effective date of this Agreement, the Company shall cede and the Reinsurer shall accept as reinsurance, a Quota Share portion, as shown within ARTICLE XXXII EXECUTION, of the liability on policies, binders, contracts or agreements of insurance, hereinafter referred to as policies, issued or renewed by the Company on or after the effective date of this Agreement and underwritten for and on behalf of the Company by the Underwriting Manager and classified as Basic College Accident and Sickness Medical Expense Insurance, as described below: ? Basic College Accident and Sickness Medical Expense Insurance: Excess of all other valid and collectible insurance issued to the eligible students (various classes including, domestic undergraduate, domestic graduate and foreign students) and their eligible dependents. If the eligible student does not have primary insurance, this plan will be primary. Some plans may be written on a primary basis for which benefits will then be coordinated with any other plan in which the student is covered as a dependent.

Premiums must be paid before insurance is in force and valid. The maximum benefit per individual covered insured is $500,000. ARTICLE III RETENTION AND LIMIT The Reinsurer agrees to accept a fixed proportion of 85% of the first $500,000 per person per risk for all business subject to this Agreement. The Company agrees to retain for its own account 15% of the first $500,000 per person per risk for business subject to this Agreement. ARTICLE IV INURING REINSURANCE Inuring Reinsurance The Company and the Reinsurer agree to purchase excess of loss reinsurance that insures to the benefit of all basic quota share participants of this treaty for all per person risks that exceed $500,000. The purchase price and reinsurance security to be approved by the Company and Lead Reinsurer.

Should acceptable reinsurance not be available, the Company and Lead Reinsurer will revise this Agreement accordingly. ARTICLE V FACULTATIVE REINSURANCE For business that does not meet the automatic treaty guidelines, the Underwriting Manager must submit the risk facultatively to the Company and the Lead Reinsurer. The Lead Reinsurer will respond to the Underwriting Manager within 96 hours of receipt of the Facultative Submission. Criteria for submission shall include but not be limited to the following: a) Ceding allowance exceeds automatic treaty limit; b) Benefit period exceeds 52 weeks from date of accident; c) Benefit maximum exceeds automatic treaty limits; d) Plans of insurance or classes of insured not covered under automatic treaty guidelines; e) Any other risk that the Company, the Underwriting Manager, and the Reinsurer deem outside the automatic treaty guidelines; f) Profit Margin less than 6%; g) Target Loss Ratio is less than 61% or Combined Ratio is above 100%; h) Cases above $250,000 of premium. ARTICLE VI – EXCLUSIONS This Agreement shall not apply to and no claims will be paid for: 1.

Insurrection; war or an act of war; 2. Committing a crime, or attempting to do so; 3. Flight in any type of aircraft, unless as a fare paying passenger on a regularly scheduled commercial airline; 4. Any other Exclusions as per the Companys original policies. ARTICLE VII EFFECTIVE DATE AND DURATION OF AGREEMENT The Effective Date of this Agreement shall be at 12:01 a.m. Local standard time January 1, 1999, and shall apply to losses occurring on policies which attach during the term of this agreement and shall remain in force until midnight, December 31, 1999, both days inclusive. If any policy issued by the Company and covered by this Agreement is terminated, the reinsurance shall also be terminated with respect to such policy, subject, however, to any liability of the Company under the terminated policy not to extend beyond the contractual obligations of the underlying policy. Notwithstanding the provisions of the previous paragraphs, in a state where the Company is not allowed to cancel a policy or policies unless it withdraws from the small group market in that state, reinsurance for policies inforce in that state, on the effective date of termination of the Agreement, shall remain in full force and effect for as long as the Company is contractually liable for such policies.

ARTICLE VIII REINSURANCE PREMIUMS The Reinsurer shall receive its proportionate share of the gross premium collected by the Underwriting Manager on behalf of the Company, from its insured, less all return premiums with respect to policies attaching during this Agreement. The gross premium hereon shall be the premium developed by the Underwriting Manager, using rates and factors approved by the Lead Reinsurer and the Company. The monthly reinsurance premium is due within forty-five (45) days after the close of each calendar month during which the premium was collected by the Underwriting Manager. In the event of non-payment of reinsurance premiums as provided in the preceding paragraph the Reinsurer shall have the right to terminate reinsurance under this Agreement. If the Reinsurer elects to exercise its right of termination under the conditions of this ARTICLE, i.e., for non-payment of premiums only, the Reinsurer shall give the Company thirty (30) days prior written notice of its intention to terminate such reinsurance and if all reinsurance premiums in arrears, including any which may become due during the thirty (30) day period are not received by the Reinsurer before the expiration of such period, those policies will be considered terminated after the period for which premiums were last paid. For those terminated policies, the Reinsurer shall remain liable for any losses which may occur until the policy anniversary date on or next following the date of termination.

ARTICLE IX PREMIUM REPORTS The Underwriting Manager on behalf of the Company shall forward within 45 days of the end of each month the premium due, a statement (on forms acceptable to the Lead Reinsurer) indicating the name of each account, the number of insured persons under each account by class of business and any changes to the prior months figures including paid and outstanding; expenses, claims, loss adjustment expenses, earned and unearned premium and recommended reserves at the end of each quarter. The Underwriting Manager shall, at the same time, remit the balance due the Reinsurer net of any reinsured claims due the Company. Annually, the Reinsurer shall receive a full accounting giving such information that may be required to complete the Reinsurers annual statement. Such reports shall be prepared within fifteen (15) days of the close of each calendar year. ARTICLE X CEDING ALLOWANCE/EXPENSES The Reinsurer shall allow the Company a ceding allowance on all gross premiums ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer return payment on return premiums at the same rate.

It is expressly agreed that the ceding allowance allowed the Company includes provision for all dividends, commissions and taxes, and all board, exchange and bureau assessments, and all other expenses of whatever nature, except loss adjustment expenses. The Company and Underwriting Manager shall, whenever possible, utilize the retention exhibit outlined as follows: EXPENSE EXHIBIT Expense Items Basic College Accident & Sickness Producer Commission (includes printing not to exceed 2%) 17.00% Managing General Underwriter 4.50% Claims Administration 4.00% Premium Taxes 2.50% Issuing Company Fee 4.00% Total Retention 32.00% ARTICLE XI CURRENCY All retentions and limits hereunder are expressed in United States dollars and all premium and loss payments shall be made in United States currency. ARTICLE XII CLAIMS NOTIFICATION The Underwriting Manager, on behalf of the Company, shall immediately by facsimile notify the Reinsurer whenever a claim is likely to exceed $5,000 or if any claim meets the following criteria: 1. A covered individual has been continually hospitalized for more than one month; or 2. A covered individual has made a claim for any of the following disabilities: a. Mental disorders requiring hospital confinement; b.

Brain injuries; c. Spinal injuries resulting in real or suspected paralysis of the limbs; d. Serious burns (10% or more of the body with third-degree burns or 30% or more of the body with second-degree burns); e. Multiple or serious fractures; f. Crushing or massive internal injuries; g. Premature births; h. A.I.D.S.

(acquired immune deficiency syndrome); i. Organ transplant; j. Cancer; k. Amputations; l. Severe stroke; m. Severe heart disease; or n. Total loss of vision. 3.

The Reinsurer shall be liable for its proportionate share of all losses incurred by the Company under the policies reinsured hereunder. The Reinsurer shall also be liable for its proportionate share of all expenses incurred by the Company in the investigation, settlement or contesting the validity of claims or losses covered hereunder (excluding internal office expenses of the Company or Underwriting Manager and salaries of its regular employees) and shall on the other hand be credited with their proportionate share of any amounts received by the Company as recovery. The Company shall advise the Reinsurer promptly of all losses which, in the opinion of the Company, may result in a claim hereunder and of all subsequent developments thereto which, in the opinion of the Company, may materially affect the position of the Reinsurer. In any case, the Reinsurer shall be notified immediately of any loss that exceeds $5,000. 4. All loss settlements made by the Company, provided they are within the terms of this Agreement and within the terms and conditions of the Company’s original policies involved, shall be binding upon the Reinsurer, who agrees to pay all amounts for which it may be liable immediately upon reasonable evidence of the amount due being furnished by the Company. In no event, however, shall the Reinsurer be liable to the Company for any losses reinsured hereunder if such losses are not reported to the Reinsurer within the later of (a) fifteen (15) months following the date on which such losses occurred, and (b) six (6) months following the date on which such losses were reported to the Company and liability under the original policies could be determined by the Company.

ARTICLE XIII CLAIMS SETTLEMENT AND AUDIT All claims paid by the Underwriting Manager on behalf of the Company, and otherwise within the terms of this Agreement and within the terms and conditions of the Companys original policies shall be binding upon the Reinsurer, and the Reinsurer agrees to pay its proportionate share of each such claim in accordance with the provisions of ARTICLE III – RETENTION AND LIMIT, and strictly subject to the terms and conditions of this Agreement. In the event of a claim against a policy reinsured hereunder, the Reinsurer shall be liable for its proportionate share of claims adjustment expenses incurred by the Company in connection therewith (including litigation expenses and interest on judgments, but not including office expenses or salaries of the Company’s or Underwriting Managers regular employees), provided the Underwriting Manager has approved such expenses through consultation and concurrence with the Lead Reinsurer. CLAIMS AUDIT The Underwriting Manager, on behalf of the Company, may at any time elect to appoint its own Independent Auditor. This appointment shall be subject to approval by the Lead Reinsurer. Upon approval, the Reinsurer agrees to pay its proportionate cost of such audit as well as its proportionate part of the final claim.

In the event that a claim may be recoverable hereon and the Underwriting Manager, on behalf of the Company, does not elect to appoint an Independent Auditor, the Reinsurer reserves the right to appoint an Independent Auditor to investigate the potential claim. Should the Reinsurer appoint an Independent Auditor, all costs of this audit shall be borne by the Reinsurer. The Company agrees that the amount of any claim subsequently recovered hereon shall be based entirely on the audited figures irrespective of whether or not the Independent Auditor has reduced the initial claim. Recoveries from any form of insurance or reinsurance which protect the Company against claims, the subject matter of this Article, shall inure to the benefit of this Agreement. ARTICLE XIV EXTRA CONTRACTUAL OBLIGATIONS In no event, except as allowed for in paragraph 2 below, shall the Reinsurer participate in extra contractual damages, including but not limited to punitive, exemplary compensatory or consequential damages which are awarded against the Company as a result of an act, omission, or course of conduct committed by or on behalf of the Company in connection with the insurance reinsured under this Agreement.

The Company shall notify the Reinsurer within fifteen (15) business days after the Company is notified of any impending claim likely to involve extra contractual obligations by registered letter, and such notification shall include a suggested course of action or inaction for the Reinsurers review. The Reinsurer then has the obligation to notify the Company within fifteen (15) business days , in writing, of its decision to concur or not concur in the Companys suggested actions to be taken, or not taken. If the Reinsurer concurs with the Companys action, payment of such awarded damages will be shared by the Company and the Reinsurer in the proportions which govern this Agreement. For purposes of this provision, the following definitions shall apply: Punitive damages are tho …