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Certain portions of this Exhibit have been omitted pursuant to a request for confidential treatment. The non-public information has been filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. The omitted portions of this Exhibit are indicated by the following [*****].

Exhibit 10(i)

COINSURANCE LIFE REINSURANCE AGREEMENT

December 1, 1989

OLD AMERICAN INSURANCE COMPANY

Kansas City, Missouri


COINSURANCE LIFE REINSURANCE AGREEMENT

Entered into between

EMPLOYERS REASSURANCE CORPORATION

of

Overland Park, Kansas

(hereinafter called the CORPORATION)

and

OLD AMERICAN INSURANCE COMPANY

of

Kansas City, Missouri

(hereinafter called the REINSURED)

EFFECTIVE DATE: December 1, 1989

In consideration of the mutual covenants hereinafter contained, the parties hereto do hereby agree as follows:

ARTICLE I

APPLICATION OF AGREEMENT . This agreement applies to loss sustained by the REINSURED under the insurance policies described in the following Schedule (hereinafter called policies or policy) as a result of claims incurred on or after the effective date of this agreement.

Policy Form Schedule

Individual Whole Life Insurance Policies issued by the REINSURED to become effective prior to December 1, 1986 which are classified by the REINSURED as plan codes 10000 , 10004 and 10006


Replacements, exchanges and reinstatements of the policies shall be coinsured under this agreement without ceding commission but subject to both the expense commission indicated in Article VI, and the provisional commission allowance indicated in Article VII.

This agreement does not reinsure waiver of premium or accidental death benefits.

ARTICLE II

REINSURANCE . The CORPORATION does hereby agree to indemnify the REINSURED against 100% of loss to which this agreement applies.

ARTICLE III

INDEMNITY FOR CLAIM EXPENSES . The CORPORATION hereby agrees to indemnify the REINSURED against 100% of the claim expenses paid by the REINSURED with respect to the policies.

ARTICLE IV

DEFINITIONS . The word “loss” shall mean only such amounts as are actually paid by the REINSURED for benefits afforded under the policies, in settlement of claims for benefits under the policies, or in satisfaction of judgments for benefits under the policies. The word “loss” shall include life insurance proceeds payable by reason of death which remain unpaid because of the nature of the settlement option selected. The word “loss” shall not include:

 

(1)

claim expenses or salaries paid to employees of the REINSURED;

 

(2)

any amount paid by the REINSURED for punitive, exemplary or compensatory damages arising out of the conduct of the REINSURED in the investigation, trial or settlement of any claim or failure to pay or delay in payment of any benefits under any policy; provided that, this subparagraph (2) shall not apply if the CORPORATION has, in advance of any such conduct by the REINSURED, counseled with the REINSURED and concurred in the REINSURED’S course of conduct;

 

(3)

any statutory penalty imposed upon the REINSURED on account of any unfair trade practice or any unfair claim practice.

The term “claim expenses” shall mean statutory interest payable on insurance proceeds, court costs, interest upon judgments, and allocated investigation, adjustment and legal expenses, but the term “claim expenses” shall not include salaries paid to employees of the REINSURED.

 

- 2 -


Claims shall be deemed to be “incurred” on the date when the death occurs.

The phrase “average number of policies reinsured each month” shall mean the sum of the number of policies in force on the first day of the month and the number of policies in force on the last day of the month, divided by 2.

The phrase “average amount reinsured each month” shall mean the sum of the amount of insurance in force on the first day of the

month with respect to which reinsurance is afforded hereunder and the amount of insurance in force on the last day of the month with respect to which reinsurance is afforded hereunder, divided by 2.

ARTICLE V

INITIAL CONSIDERATION AND CEDING COMMISSION . Promptly after the execution of this agreement, the REINSURED shall pay to the CORPORATION in cash an amount to be determined as follows, using the REINSURED’S statutory figures applicable to the policies as of the effective date of this agreement.

 

 

1.

Reserves,

less

 

 

2.

Net due and deferred premiums,

plus

 

 

3.

Advance premiums,

and less

 

 

4.

Policy loans outstanding,

and less

 

 

5.

[****] ceding commission on premiums in force.

The REINSURED further agrees to pay simple interest to the CORPORATION at an annual rate of 8.5% on the cash due the CORPORATION in accordance with this article, calculated from the effective date of this agreement until such cash is remitted to the CORPORATION.

The CORPORATION shall return to the REINSURED the consideration received hereunder and interest thereon, after reduction for

ceding commission, applicable to each policy where death, lapse or surrender occurred prior to the effective date of this agreement but is reported to the REINSURED on or after the effective date of this agreement.

 

- 3 -


ARTICLE VI

REINSURANCE PREMIUM AND EXPENSE COMMISSION . The REINSURED shall pay to the CORPORATION a reinsurance premium equal to 100% of the insurance premium pertaining to the policies collected by the REINSURED on and after the effective date of this agreement, less the amount of premium refunds made by the REINSURED with respect to the policies. Such reinsurance premium shall be subject to a monthly expense commission to be calculated in accordance with the following Schedule:

Expense Commission Schedule

 

Rate

  

What

Applies to

  

How Calculated

$.666

  

Per Policy

  

Average number of policies reinsured each month times rate


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