AMERICAN EQUITY INVESTMENT LIFE HOLDING CO
(800) 688 - 1933
<DOCUMENT>
<TYPE>EX-10.9
<SEQUENCE>3
<FILENAME>a2063467zex-10_9.txt
<DESCRIPTION>(800) 688 - 1933
<TEXT>
<Page>

           COINSURANCE AND YEARLY RENEWABLE TERM REINSURANCE AGREEMENT


                                     BETWEEN


                AMERICAN EQUITY INVESTMENT LIFE INSURANCE COMPANY
                              West Des Moines, Iowa


                                       AND


                 ATLANTIC INTERNATIONAL REINSURANCE COMPANY LTD.
                        Bridgetown, Barbados, West Indies

                                       1
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                COINSURANCE AND YEARLY RENEWABLE TERM REINSURANCE
<Table>
<Caption>

ARTICLE                                                                 PAGE
-------                                                                 ----

<S>                                                                      <C>
I.        PREAMBLE AND REINSURANCE PROVIDED.........................      3

II.       TERM, TERMINATION AND RECAPTURE...........................      3

III.      REINSURANCE COVERAGE......................................      4

IV.       REINSURANCE PREMIUMS AND EXPENSE ALLOWANCES...............      5

V.        EXPERIENCE ACCOUNT BALANCE................................      7

VI.       CASH BALANCE..............................................      8

VII.      CASH SETTLEMENT ADJUSTMENTS...............................      9

VIII.     FINANCIAL COVENANTS.......................................     10

IX.       REPORTS AND REMITTANCES...................................     12

X.        NET RETAINED LINES........................................     13

XI.       EXCLUSIONS................................................     14

XII.      INSOLVENCY................................................     15

XIII.     ARBITRATION...............................................     16

XIV.      AGREEMENT, AMENDMENTS AND MERGER..........................     17

XV.       MISCELLANEOUS.............................................     18

XVI.      SECURITY..................................................     20

XVII.     SERVICE OF SUIT...........................................     24

XVIII.    REINSURANCE INTERMEDIARY..................................     24

          SIGNATURE PAGE............................................     26

          EXHIBIT 1 - SAMPLE REPORTING FORMAT

          Schedule A - SUBJECT BUSINESS CONTRACTS (TYPES)

          Schedule B -  YRT BASE RATE BY AGE (NEAREST BIRTHDAY)

          Schedule C -  TARGET CASH BALANCES

          Schedule D -  COMPANY INFORMATION

</Table>
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                   ARTICLE I: PREAMBLE AND REINSURANCE PROVIDED


1.01      -     This is an Agreement of Coinsurance and Yearly Renewable Term
                Reinsurance between:

                AMERICAN EQUITY INVESTMENT LIFE INSURANCE COMPANY
                              West Des Moines, Iowa

                   (hereinafter referred to as the "Company")

                                       and

                ATLANTIC INTERNATIONAL REINSURANCE COMPANY LTD.
                        Bridgetown, Barbados, West Indies

                  (hereinafter referred to as the "Reinsurer")

                whereby, the Reinsurer agrees to indemnify the Company for
                Covered Losses paid by the Company subject to all of the terms
                and conditions of this Agreement.


                   ARTICLE II: TERM, TERMINATION AND RECAPTURE


2.01      -     EFFECTIVE DATE:  The Effective Date of this Agreement shall be
                12:01 a.m., Central Standard Time, January 1, 2001.

2.02      -     TERM:  This Agreement shall remain in force and the Term of this
                Agreement shall be from the Effective Date until the earlier of
                (i) the date of death of the last contract holder of a Subject
                Business agreement, or (ii) the Recapture Date.

2.03      -     NEW BUSINESS TERMINATION DATE:  With respect to new policies
                issued by the Company, this Agreement shall terminate as follows

                (a)   on the termination date requested by the Reinsurer,
                      subject to written notice to the Company at least
                      one-hundred-twenty (120) days prior such termination date;

                (b)   immediately upon failure by the Company to comply with one
                      or more of the Financial Covenants set forth in Section
                      8.02 herein; or

                (c)   immediately once the Cash Balance equals or exceeds
                      fifteen-million dollars ($15,000,000).

                The date on which this Agreement terminates with respect to new
                policies shall hereinafter be referred to as the "New Business
                Termination Date".

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2.04      -     TERMINATION AND RECAPTURE:  The Company may terminate this
                Agreement and recapture all business reinsured hereunder at any
                time after June 29, 2001 by providing written notice to the
                Reinsurer by registered or certified mail, return receipt
                requested, at least one-hundred-twenty (120) days in advance,
                such notice to include the effective date of termination and
                recapture.

                The Reinsurer may terminate this Agreement only if the Company
                fails to pay any Reinsurance Premium when due in accordance with
                Section 4.01, subject to ninety (90) days' notice and demand for
                such Reinsurance Premium by the Reinsurer.

                The date on which this Agreement is terminated by the Company or
                by the Reinsurer as set forth in this Section 2.04 shall
                hereinafter be referred to as the "Recapture Date". On the
                Recapture Date, the Company shall pay to the Reinsurer the Cash
                Balance as of the Recapture Date, that being the Cash Balance on
                the Settlement Date immediately preceding the Recapture Date
                adjusted to include interest through the Recapture Date, and the
                Reinsurer shall be released from all current and future
                liabilities under this Agreement.


                        ARTICLE III: REINSURANCE COVERAGE


3.01      -     COVERAGE:

                (a)   SECTION A: The Reinsurer shall indemnify the Company for
                      Section A Covered Losses paid by the Company.

                (b)   SECTION B: The Reinsurer shall indemnify the Company for
                      Section B Covered Losses paid by the Company.

3.02      -     SUBJECT BUSINESS:  Subject Business shall mean all contracts
                issued by the Company on or after the Effective Date that are
                classified as one of the types of contracts listed on Schedule A
                attached hereto and incorporated herein; provided, however, that
                Subject Business shall not include any contracts issued by the
                Company on or after the New Business Termination Date.

                It is understood and agreed that the Company shall continue to
                administer the Subject Business during the Term of this
                Agreement.

3.03      -     SUBJECT LOSSES:

                (a)   Section A Subject Losses shall mean all benefits paid by
                      the Company to contract holders of the Subject Business
                      contracts, including surrender values paid, death benefits
                      paid, and interest and premium bonuses credited in
                      accordance with the terms of such Subject Business
                      contracts. Section A Subject Losses shall not include
                      rider benefits, extracontractual payments,
                      extracontractual damages, and other benefits not intended
                      under the terms of the Subject Business contracts.

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                (b)   Section B Subject Losses shall mean all surrender charges
                      waived by the Company upon death of the contract holders
                      of the Subject Business contracts, but only as respects
                      that portion of the Subject Business that is not reinsured
                      under Section A of this Agreement.

3.04      -     COVERED LOSSES:

                (a)   Section A Covered Losses shall equal two percent (2%) of
                      Section A Subject Losses.

                (b)   Section B Covered Losses shall equal Section B Subject
                      Losses, subject to the Section B Aggregate Limit.

                (c)   The sum of Section A Covered Losses and Section B Covered
                      Losses shall hereinafter be referred to collectively as
                      "Covered Losses".

3.05      -     SECTION B AGGREGATE LIMIT:  The Section B Aggregate Limit for
                the sum of all Section B Covered Losses indemnified by the
                Reinsurer under this Agreement shall equal fifty-million dollars
                ($50,000,000).

                The Section B Aggregate Limit is the maximum amount recoverable
                by the Company under Section B of this Agreement. Under no
                circumstances shall the Reinsurer pay more than the Section B
                Aggregate Limit under Section B.


             ARTICLE IV: REINSURANCE PREMIUMS AND EXPENSE ALLOWANCES


4.01      -     REINSURANCE PREMIUM:

                (a)   Section A Reinsurance Premium for each Accounting Period
                      shall equal two percent (2%) of all single, first-year and
                      renewal premiums received by the Company for that
                      Accounting Period on Subject Business.

                (b)   Section B Reinsurance Premium shall equal, for the
                      Accounting Period commencing July 1, 2001 and each
                      Accounting Period thereafter, the sum of the following:

                      (i)   for each Subject Business contract in force,
                            twenty-five percent (25%) of the applicable rate
                            from Schedule B attached hereto and incorporated
                            herein, based on the contract holder's age at the
                            nearest birthday at the beginning of that Accounting
                            Period, MULTIPLIED BY the arithmetic average of the
                            Net Amount at Risk at the beginning of that
                            Accounting Period and the Net Amount at Risk at the
                            end of that Accounting Period;

                      (ii)  a policy fee of eighteen-dollars-and-seventy-five-
                            cents ($18.75) for each Subject Business contract in
                            force at the beginning of that Accounting Period;
                            and

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                      (iii) fifty-percent (50%) of the amount by which the
                            account value exceeds the cash surrender value paid
                            by the Company on each partial surrender and each
                            full surrender of Subject Business contracts during
                            that Accounting Period.

                      "Net Amount at Risk" as used herein shall mean, as
                      respects each Subject Business contract, the amount by
                      which the account value payable to the beneficiary upon
                      death of the contract holder exceeds the cash surrender
                      value at such time.

                (c)   The sum of Section A Reinsurance Premium and Section B
                      Reinsurance Premium shall hereinafter be referred to
                      collectively as the "Reinsurance Premiums". The
                      Reinsurance Premiums for each Accounting Period shall be
                      due and payable from the Company to the Reinsurer as part
                      of the Total Settlement for that Accounting Period in
                      accordance with Section 9.06.

4.02      -     EXPENSE ALLOWANCES:

                (a)   SECTION A:

                      (i)   For each Accounting Period, the Section A First Year
                            Expense Allowances shall equal the portion of the
                            Section A Reinsurance Premium paid for that
                            Accounting Period that relates to single and
                            first-year premiums received by the Company.

                      (ii)  For each Accounting Period, the Section A Renewal
                            Expense Allowances shall be equal to twenty-five
                            cents ($0.25) for each Subject Business contract in
                            force.

                      The Section A First Year Expense Allowances and the
                      Section A Renewal Expense Allowances for each Accounting
                      Period shall hereinafter be referred to collectively as
                      the "Section A Expense Allowances".

                (b)   SECTION B: Section B Expense Allowances for each
                      Accounting Period shall equal:

                      (i)   the sum of

                            (x)   two-and-twenty-five-hundredths percent (2.25%)
                                  of single and first-year premiums paid to the
                                  Company during that Accounting Period,
                                  excluding any premium bonuses, for Subject
                                  Business contracts (other than SPDA 6-5
                                  contracts) with a first-year surrender charge
                                  of fifteen percent (15%) or less; and

                            (y)   three percent (3%) of single and first-year
                                  premiums paid to the Company during that
                                  Accounting Period, excluding any premium
                                  bonuses, for Subject Business contracts with

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                                  a first-year surrender charge in excess of
                                  fifteen percent (15%); and

                            (z)   for Subject Business contracts classified as
                                  SPDA 6-5 contracts, one percent (1%) of single
                                  and first-year premiums paid to the Company
                                  during that Accounting Period, excluding any
                                  premium bonuses;

                      MINUS

                      (ii)  the absolute value of any negative Cash Settlement
                            Adjustment for that calendar quarter as determined
                            in accordance with Section 7.01.

                (c)   The Section A Expense Allowances and the Section B Expense
                      Allowances for each Accounting Period shall hereinafter be
                      referred to collectively as the "Expense Allowances". The
                      Expense Allowances for each Accounting Period shall be due
                      and payable from the Reinsurer to the Company as part of
                      the Total Settlement for that Accounting Period in
                      accordance with Section 9.06.

                (d)   It is understood and agreed that the Reinsurer shall have
                      no obligation to reimburse the Company for any direct or
                      allocable expenses or taxes.


                      ARTICLE V: EXPERIENCE ACCOUNT BALANCE


5.01      -     EXPERIENCE ACCOUNT BALANCE: An Experience Account Balance
                ("EAB") shall be calculated at the end of each Accounting
                Period. The EAB as of the Effective Date, and at any time
                thereafter until the end of the first Accounting Period, shall
                be equal to zero (0). The EAB at the end of the first Accounting
                Period shall be equal to the Experience Account Gain for that
                Accounting Period. The EAB at the end of each Accounting Period
                thereafter shall equal the EAB at the end of the prior
                Accounting Period plus the Experience Account Gain for that
                Accounting Period.

5.02      -     EXPERIENCE ACCOUNT GAIN:  The Experience Account Gain for each
                Accounting Period shall equal the sum of:

                (a)   the Section A Reinsurance Premium for that Accounting
                      Period; and

                (b)   the Coinsurance Reserves at the end of the prior
                      Accounting Period;

                minus the sum of

                (c)   the Section A Expense Allowances for that Accounting
                      Period;

                (d)   the Section A Covered Losses for that Accounting Period;

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                (e)   the Coinsurance Reserves at the end of that Accounting
                      Period; and

                (f)   the Risk and Expense Charge for that Accounting Period.

5.03      -     COINSURANCE RESERVES:  The Coinsurance Reserves at the end of
                each Accounting Period shall equal two percent (2%) of the
                statutory reserves held for the Subject Business as of the end
                of that Accounting Period.

5.04      -     RISK AND EXPENSE CHARGE:  The Risk and Expense Charge for each
                Accounting Period shall equal (a) eight-tenths-of-one-percent
                (0.8%), MULTIPLIED BY (b) the number of days in that Accounting
                Period divided by three-hundred-sixty (360) days, MULTIPLIED BY
                (c) the absolute value of the EAB at the end of the prior
                Accounting Period.


                            ARTICLE VI: CASH BALANCE


6.01      -     CASH BALANCE: The Cash Balance on the Effective Date
                shall be equal to zero (0). The Cash Balance for the first
                Accounting Period shall be determined on the Settlement Date for
                that Accounting Period in an amount equal to the Total
                Settlement for that Accounting Period. The Cash Balance for each
                Accounting Period thereafter shall be determined on the
                Settlement Date for that Accounting Period in an amount equal to
                (a) the Total Settlement for that Accounting Period, PLUS (b)
                the Interest on Cash Balance at that Settlement Date, PLUS (a)
                the Cash Balance for the prior Accounting Period, as determined
                on the applicable Settlement Date.

6.02      -     INTEREST ON CASH BALANCE: The Interest on Cash Balance at the
                first Settlement Date shall be equal to zero (0). The Interest
                on Cash Balance at each Settlement Date thereafter shall equal
                (a) the Cash Balance Rate on that Settlement Date, MULTIPLIED BY
                (b) the Cash Balance on the prior Settlement Date.

6.03      -     CASH BALANCE RATE:  The Cash Balance Rate at each Settlement
                Date shall equal (a) the ninety (90) day London Interbank
                Offered Rate ("LIBOR"), as reported on Telerate Page 3750 as of
                11:00 a.m., London time, on the last Business Day prior to that
                Settlement Date, plus one-and-four-tenths percent (1.4%),
                MULTIPLIED BY (b) the ratio that the number of days during that
                Accounting Period for which the Cash Balance is positive bears
                to three-hundred-sixty (360) days.

                "Telerate Page 3750" means the display page currently so
                designated on the Dow Jones Market Service or any successor
                service (or such other page as may replace that page on the Dow
                Jones Market Service or any successor service for the purpose of
                displaying comparable rates or prices).

6.04      -     TARGET CASH BALANCE:  The Target Cash Balance at the end of each
                Accounting Period shall be the amount set forth in Schedule C
                attached hereto and incorporated herein for that Accounting
                Period.

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                    ARTICLE VII: CASH SETTLEMENT ADJUSTMENTS


7.01      -     CASH SETTLEMENT ADJUSTMENTS:  The Cash Settlement Adjustment for
                each Accounting Period shall be calculated on or before the
                Settlement Date for that Accounting Period in an amount equal
                to:

                (a)   the Target Cash Balance at the end of that Accounting
                      Period;

                MINUS

                (b)   the Tentative Settlement for that Accounting Period;

                MINUS

                (c)   the Loss Carryover for the prior Accounting Period;

                MINUS

                (d)   the Cash Balance for the prior Accounting Period as of the
                      applicable Settlement Date;

                MINUS

                (e)   the Interest on Cash Balance for that Accounting Period;

                MINUS

                (f)   the Risk and Expense Charge for that Accounting Period.

                If the Cash Settlement Adjustment for an Accounting Period is
                greater than zero (0) AND the Company is not, and was not, in
                violation of one or more of the Financial Covenants at any time
                during that Accounting Period or any prior Accounting Periods,
                an Experience Refund in an amount equal to such Cash Settlement
                Adjustment shall be paid by the Reinsurer to the Company as part
                of the Total Settlement for that Accounting Period in accordance
                with Section 9.06. If the Cash Settlement Adjustment for an
                Accounting Period is less than zero (0), the absolute value of
                such Cash Settlement Adjustment shall be deducted from the
                Section B Expense Allowances for that Accounting Period as set
                forth in Section 4.02.

                At the sole option of the Reinsurer, the Experience Refund may
                be recalculated at the end of any Accounting Period in
                accordance with the above formula, where items (b), (e) and (f)
                include all Accounting Periods within the calendar year as
                opposed to individual Accounting Periods, and items (c) and (d)
                are valued as of the end of the last Accounting Period of the
                prior calendar year. Upon any such recalculation of the
                Experience Refund, the Total Settlement will be recalculated
                accordingly.

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7.02      -     LOSS CARRYOVER:  The Loss Carryover at the end of the first
                Accounting Period shall be equal to zero (0). The Loss Carryover
                at the end of each Accounting Period thereafter shall equal the
                greater of (i) zero (0), or (ii) an amount equal to:

                (a)   the Cash Balance for the prior Accounting Period as
                      calculated on the applicable Settlement Date,

                PLUS

                (b)   the Interest on Cash Balance for that Accounting Period as
                      calculated on the applicable Settlement Date,

                PLUS

                (c)   the Total Settlement for that Accounting Period,

                MINUS

                (d)   the Target Cash Balance at the end of that Accounting
                      Period.


                        ARTICLE VIII: FINANCIAL COVENANTS


8.01      -     NON-COMPLIANCE WITH FINANCIAL COVENANTS:  The Company shall
                notify the Reinsurer within five (5) Business Days of any
                failure by the Company to comply with one or more of the
                Financial Covenants. As provided in Section 2.03, this Agreement
                will terminate as respects new policies issued by the Company
                immediately upon failure by the Company to comply with one or
                more of the Financial Covenants.

8.02      -     FINANCIAL COVENANTS:  The Financial Covenants are:

                (a)   the Company shall maintain Risk Based Capital, as measured
                      by the formula prescribed by the insurance department of
                      the Company's state of domicile, of no less than
                      two-hundred-fifteen percent (215%) of the Company Action
                      Level;

                (b)   the Company shall maintain Total Surplus of no less than
                      one-hundred-twenty-five-million dollars ($125,000,000);

                (c)   there shall be no Change of Control of the Company, where
                      "Change of Control" is signaled by the requirement that
                      the Company, or the parent of the Company, file such
                      change with any insurance department or with the
                      Securities Exchange Commission;

                (d)   there shall be no material change in the Company's
                      underwriting guidelines from those in effect as of the
                      Effective Date, unless the

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                      Company obtains the prior written approval of the
                      Reinsurer to such change;

                (e)   there shall be no material change in the overall credit
                      quality of the Company's investment portfolio from the
                      Effective Date;

                (f)   the insurance financial strength rating of the Company as
                      assigned by A.M. Best Company shall not be less than "A-";

                (g)   the Financial Leverage Ratio (as defined in Section 8.03)
                      of the Company and its corporate parent combined shall not
                      be greater than sixty percent (60%); and

                (h)   the Cash Coverage Ratio (as defined in Section 8.04) of
                      the Company and its parent combined shall not be less than
                      one-and-two-tenths (1.2).

8.03      -     FINANCIAL LEVERAGE RATIO:  The Financial Leverage Ratio at any
                time shall be determined as follows, with the result expressed
                as a percentage:

                (a)   the sum of (i) the principal amount of loans outstanding
                      at American Equity Investment Life Holding Company (the
                      "Holding Company"), and (ii) the principal amount of loans
                      outstanding at American Equity Investment Service Company
                      (the "Service Company"), excluding any such loans that may
                      be included in (a)(i) herein;

                DIVIDED BY

                (b)   the sum of (i) the Company's Total Capital and Surplus,
                      (ii) the Company's Asset Valuation Reserve, and (iii) the
                      Company's Interest Maintenance Reserve, where items (i),
                      (ii) and (iii) are the respective amounts as reported on
                      the Company's most recent certified statutory financial
                      statements.

8.04      -     CASH COVERAGE RATIO:  The Cash Coverage Ratio at any time shall
                equal:


                (a)   the sum of (i) amounts available to the Company at that
                      time for dividends to stockholders in accordance with the
                      statutes and regulations of the State of Iowa, (ii) any
                      commissions paid by the Company to the Service Company
                      during the current Accounting Period, (iii) investment
                      income of the Holding Company, excluding income from
                      investments in subsidiaries, during the current Accounting
                      Period, (iv) cash operating expenses of the Holding
                      Company during the current Accounting Period, and (v)
                      restricted payments (dividends paid to shareholders) by
                      the Holding Company during the current Accounting Period;

                DIVIDED BY

                (b)   the sum of (i) interest on loans outstanding at the
                      Holding Company, (ii) distribution by the Holding Company
                      on trust preferreds, and (iii) twenty

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                      percent (20%) of the principal amounts of loans
                      outstanding at the Holding Company and at the Service
                      Company.


                       ARTICLE IX: REPORTS AND REMITTANCES


9.01      -     COMPANY REPORTS:  The Company shall provide to the Reinsurer, no
                less than three (3) Business Days prior to each Settlement Date,
                all information and data required by the Reinsurer to fulfill
                its obligations and rights under this Agreement and to satisfy
                its legal reporting requirements.  A suggested format for such
                reporting is attached hereto as Exhibit 1.  The Company shall
                also furnish to the Reinsurer, on a quarterly basis, a copy of
                its certified statutory financial statements at the time such
                statements are submitted by the Company to the regulatory
                authority in its state of domicile, and shall furnish the
                Reinsurer with a statement at the end of each Accounting Period
                that demonstrates the Company's compliance with the Financial
                Covenants.

9.02      -     ACCOUNTING PERIOD:  Accounting Period shall mean each calendar
                quarter during the Term of this Agreement. In the event the
                Recapture Date occurs at any time other than at the end of a
                calendar quarter, the last Accounting Period shall be the period
                from the beginning of that calendar quarter to the Recapture
                Date, both dates inclusive.

9.03      -     SETTLEMENT DATES:  The Settlement Date for each Accounting
                Period shall be the first Business Day on or after fifteen (15)
                days after the end of that Accounting Period.

9.04      -     BUSINESS DAY:  Business Day shall mean any day other than a
                Saturday, a Sunday, or a day on which commercial banks in
                Bridgetown, Barbados, the State of New York, or the State of
                Iowa are authorized by law or executive order to close.

9.05      -     TENTATIVE SETTLEMENT:  The Tentative Settlement for each
                Accounting Period shall be determined as follows:


                (a)   any amounts due to the Company under Section A of this
                      Agreement for that Accounting Period;

                PLUS

                (b)   any amounts due to the Company under Section B of this
                      Agreement for that Accounting Period;

                MINUS THE SUM OF

                (c)   any amounts due to the Reinsurer under Section A of this
                      Agreement for that Accounting Period; and

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                (d)   any amounts due to the Reinsurer under Section B of this
                      Agreement for that Accounting Period.

                For the avoidance of doubt, the Experience Refund for an
                Accounting Period shall not be included in the computation of
                the Tentative Settlement for that Accounting Period.

9.06      -     TOTAL SETTLEMENT:  The Total Settlement for each Accounting
                Period shall equal (a) the Tentative Settlement for that
                Accounting Period, plus (b) the Experience Refund, if any, for
                that Accounting Period, MINUS (c) the cost for that Accounting
                Period of any Security provided by the Reinsurer in accordance
                with Article XVI - SECURITY.  If the Total Settlement for an
                Accounting Period is greater than zero, then such Total
                Settlement shall be due and payable by the Reinsurer to the
                Company on the Settlement Date for that Accounting Period.
                If the Total Settlement is less than zero, then the absolute
                value of such Total Settlement shall be due and payable by the
                Company to the Reinsurer on the Settlement Date for that
                Accounting Period.


                          ARTICLE X: NET RETAINED LINES


10.01     -     APPLICATION OF OTHER REINSURANCE PROCEEDS:  This Agreement
                applies only to that portion of insurance or reinsurance which,
                after the application of all reinsurance other than the
                reinsurance hereunder, the Company retains net for its own
                account. In calculating the amount of loss hereunder for which
                the Company shall be reimbursed, only the loss with respect to
                such retained portion shall be included.

10.02     -     COLLECTION OF OTHER REINSURANCE PROCEEDS:  The amount of the
                Reinsurer's liability hereunder shall not be increased by reason
                of the Company's inability to collect from any other reinsurers,
                whether specific or general, any amounts which may have become
                due from them, whether such inability arises from the insolvency
                of such other reinsurers, or otherwise.

 10.03    -     OTHER REINSURANCE: In order to provide that the Reinsurer's
                liability under this Agreement shall not be increased in any
                calendar year by a change in reinsurance ceded or recoverable by
                the Company, the reinsurance arrangements, including treaties,
                facultative certificates and interpretations with respect to
                obligations thereunder, which were in effect on January 1, 2001
                are deemed to continue in effect for purposes of all
                computations hereunder.


                             ARTICLE XI: EXCLUSIONS


 11.01    -     EXTRACONTRACTUAL DAMAGES: This Agreement does not cover
                extracontractual damages or extracontractual liability resulting
                from fraud, oppression, bad faith, strict liability, or
                negligent, reckless or intentional wrongs on the part of the
                Company or its directors, officers, employees and agents. The
                following types of damages are examples of damages excluded
                under this Agreement for the

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                conduct described above: actual damages, damages for emotional
                distress, and punitive or exemplary damages.

 11.02    -     INSOLVENCY FUNDS: The Reinsurer shall not be obligated to pay to
                the Company any share of any liability of the Company arising,
                bycontract, operation of law, or otherwise, from its
                participation or membership, whether voluntary or involuntary,
                in any insolvency fund or from reimbursement of any person for
                any such liability. "Insolvency Fund" includes any guaranty or
                insolvency fund, plan, pool, association, or other arrangement
                howsoever denominated, established or governed, which provides
                for any assessment of or payment or assumption by any person or
                part of all of any claim, debt, charge, fee or other obligation
                of any insurer, or its successors or assigns which has been
                declared to be insolvent, or which is otherwise deemed unable to
                meet any claim, debt, charge, fee or other obligation in whole
                or in part.

 11.03    -     DIVIDENDS: The Reinsurer shall not participate in the
                determination of, nor reimburse the Company for, any
                policyholder or other dividends paid by the Company.


                             ARTICLE XII: INSOLVENCY


 12.01    -     REINSURER'S OBLIGATION: In the event of the insolvency of the
                Company, the reinsurance afforded by this Agreement shall be
                payable by the Reinsurer on the basis of the liability of the
                Company under the Subject Business, without diminution because
                of such insolvency, directly to the Company or its liquidator,
                receiver, conservator, or statutory successor.

 12.02    -     REINSURER'S NOTICE AND DEFENSE OF CLAIMS: The Reinsurer shall
                be given written notice of the pendency of each claim or loss
                which may involve the reinsurance afforded by this Agreement
                within a reasonable time after such claim or loss is filed in
                the insolvency proceedings. The Reinsurer shall have the right
                to investigate each such claim or loss and interpose at its own
                expense, in the proceeding where the claim or loss is to be
                adjudicated, any defense which it may deem available to the
                Company or its liquidator, receiver, conservator, or statutory
                successor. If more than one reinsurer is involved, such
                reinsurers may designate one reinsurer to act for all.

 12.03    -     DEFENSE EXPENSE: The expense thus incurred by the Reinsurer
                shall be chargeable, subject to court approval, against the
                insolvent Company as part of the expense of liquidation to the
                extent of a proportionate share of the benefit which may accrue
                to the Company solely as a result of the defense undertaken by
                the Reinsurer.

 12.04    -     OFFSET: Any debts or credits, liquidated or unliquidated, in
                favor of or against either party on the date of the receivership
                or liquidation order (except where the obligation was purchased
                by or transferred to be used as an offset) are deemed mutual
                debts or credits and shall be set off with the balance only to
                be allowed or

                                       14
<Page>

                paid. Although such claim on the part of either party may be
                unliquidated or undetermined in amount on the date of the entry
                of the receivership or liquidation order, such claim will be
                regarded as being in existence as of such date and any credits
                or claims then in existence and held by the other party may be
                offset against it.

12.05     -     RIGHTS OF PARTIES: Nothing hereinabove set forth in this Article
                shall in any way change the relationship or status of the
                parties hereto, nor enlarge the obligations of any party to any
                other except as specifically hereinabove provided, to wit, to
                pay the statutory successor on the basis of the amount of
                liability determined in the liquidation or receivership
                proceeding, rather than on the basis of the actual amount of
                loss (dividends) paid by the liquidator, receiver, conservator,
                or statutory successor to allowed claimants. Nor, except as
                hereinabove specifically provided, shall anything in this
                Article in any manner create any obligation or establish any
                right against the Reinsurer in favor of any third parties or any
                other persons not parties to this Agreement.


                            ARTICLE XIII: ARBITRATION


13.01     -     RESOLUTION OF DISPUTES: As a condition precedent to any right
                arising under this Agreement, any dispute between the Company
                and the Reinsurer arising out of the provisions of this
                Agreement, or concerning its interpretation or validity, whether
                arising before or after termination of this Agreement, shall be
                submitted to arbitration in the manner set forth in this
                Article. Either party may initiate arbitration of any dispute
                arising out of the provisions of this Agreement by giving
                written notice to the other party, by registered or certified
                mail, return receipt requested, of its intention to arbitrate
                and of its appointment of an arbitrator in accordance with
                Section 13.03.

13.02     -     COMPOSITION OF PANEL: Unless the parties agree upon a single
                arbitrator within fifteen (15) days after the receipt of a
                notice of intention to arbitrate, all disputes shall be
                submitted to an arbitration panel composed of two arbitrators
                and an umpire, chosen in accordance with Section 13.03 and
                Section 13.04.

13.03     -     APPOINTMENT OF ARBITRATORS: The members of the arbitration panel
                shall be chosen from disinterested persons knowledgeable in the
                insurance and reinsurance business. The party requesting
                arbitration (hereinafter referred to as the "claimant") shall
                appoint an arbitrator and give written notice thereof, by
                registered or certified mail, return receipt requested, to the
                other party (hereinafter referred to as the "respondent")
                together with its notice of intention to arbitrate. Unless a
                single arbitrator is agreed upon within fifteen (15) days after
                the receipt of the notice of intention to arbitrate, the
                respondent shall, within thirty (30) days after receiving such
                notice, also appoint an arbitrator and notify the claimant
                thereof in a like manner. Before instituting a hearing, the two
                arbitrators so appointed shall choose an umpire. If, within
                twenty (20) days after they are both appointed, the arbitrators
                fail to agree upon the appointment of an umpire, the umpire
                shall be appointed by the President of the American Arbitration
                Association.

                                       15
<Page>

13.04     -     FAILURE OF PARTY TO APPOINT ARBITRATOR: If the respondent
                fails to appoint an arbitrator within thirty (30) days after
                receiving a notice of intention to arbitrate, such arbitrator
                shall be appointed by the President of the American Arbitration
                Association, and shall then, together with the arbitrator
                appointed by the claimant, choose an umpire as provided in
                Section 13.03.

13.05     -     CHOICE OF LAW AND FORUM: Any arbitration instituted pursuant to
                this Article shall be held in New York, New York, or in a
                location to be mutually agreed upon by the Company and the
                Reinsurer and the laws of the State of New York, without regard
                to its conflict of laws rules, shall govern the interpretation
                and application of this Agreement.

13.06     -     SUBMISSION OF DISPUTE TO PANEL: Unless otherwise extended by
                the arbitration panel, or agreed to by the parties, each party
                shall submit its case to the panel within thirty (30) days after
                the selection of an umpire.

13.07     -     PROCEDURE GOVERNING ARBITRATION: All proceedings before the
                panel shall be informal and the panel shall not be bound by the
                formal rules of evidence. The panel shall have the power to fix
                all procedural rules relating to the arbitration proceeding. In
                reaching any decision, the panel shall give due consideration to
                the customs and usage of the insurance and reinsurance business.

13.08     -     ARBITRATION AWARD: The arbitration panel shall render its
                decision within sixty (60) days after termination of the
                proceeding, which decision shall be in writing, stating the
                reasons therefor. The decision of the majority of the panel
                shall be final and binding on the parties to the proceeding.

13.09     -     COST OF ARBITRATION: Unless otherwise allocated by the panel,
                each party shall bear the expense of its own arbitrator and its
                own witnesses and shall jointly and equally bear with the other
                parties the expense of the umpire and the arbitration.

13.10     -     LIMIT OF JURISDICTION: The arbitration panel does not have the
                jurisdiction to authorize any punitive damage awards between the
                parties.


                  ARTICLE XIV: AGREEMENT, AMENDMENTS AND MERGER


14.01     -     AGREEMENT: This Agreement states the agreement originally made
                between the Company and the Reinsurer effective January 1, 2001
                as evidenced by the Reinsurance Binder dated December 29, 2000.
                This Agreement replaces that Reinsurance Binder as the statement
                of the terms and conditions which the Company and the Reinsurer
                have agreed shall govern the obligations originally undertaken
                in the Reinsurance Binder.

14.02     -     AMENDMENTS: This Agreement may be amended only by mutual
                consent of the parties expressed in a written addendum executed
                by the parties with the same formalities as this Agreement, and
                such addendum shall be deemed to be an integral part of this
                Agreement and binding on the parties hereto.

                                       16
<Page>

14.03     -     MERGER CLAUSE: The parties hereto acknowledge that they have
                read this Agreement, understand it, and agree to be bound by its
                terms and

                conditions. Further, the parties hereto agree that this
                Agreement is the complete and exclusive statement of the
                Agreement between the parties, superseding all proposals or
                prior agreements, oral or written, and all other communications
                between the parties relating to the subject matter hereof.


                            ARTICLE XV: MISCELLANEOUS


15.01     -     ACCESS TO RECORDS: The Reinsurer shall have the right to
                examine, at any reasonable time, all papers, books, accounts,
                documents and other records of the Company relating to the
                Subject Business. Upon request, the Company shall supply the
                Reinsurer, at the Reinsurer's expense, with copies of the whole
                or any part of such papers, books, accounts, documents and other
                records relating to the Subject Business. The Reinsurer's right
                of inspection under this Section 15.01 shall continue to exist
                after termination of this Agreement as long as one of the
                parties hereto has a claim against the other arising from this
                Agreement.

15.02     -     ALTERNATE CALCULATIONS:


                (a)   If any calculation described in this Agreement produces a
                      result which is substantially different from that
                      contemplated by the parties to this Agreement, an
                      alternate calculation which preserves the same principles
                      as exemplified herein shall be prepared by the parties and
                      mutually agreed upon. Any dispute with respect to such
                      alternate calculation shall be resolved by Arbitration as
                      provided in ARTICLE XIII: ARBITRATION.

                (b)   If any pattern of actual transactions which has taken
                      place is a pattern for which this Agreement does not
                      specify a particular set of calculations, an alternate set
                      of calculations which preserves the same principles as
                      exemplified herein shall be prepared by the parties and
                      mutually agreed upon. Any dispute with respect to such
                      alternate set of calculations shall be resolved by
                      Arbitration as provided in ARTICLE XIII: ARBITRATION.

15.03     -     COUNTERPARTS: This Agreement may be executed in two or more
                counterparts, each of which shall be deemed an original, but all
                of which together shall constitute one and the same instrument.

15.04     -     CURRENCY: All payments hereunder shall be made in United
                States dollars. All monetary amounts herein are in United States
                dollars. All reports and accounts hereunder shall be rendered in
                United States dollars. For the purpose of this Agreement where
                the Company receives premiums or pays losses in currencies other
                than United States dollars, such premiums and losses shall be
                converted

                                       17
<Page>

                into United States dollars at the actual rate of exchange at
                which such premiums and losses are entered in the Company's
                books.

15.05     -     DISCLOSURES AND APPROVALS: The Company represents and
                warrants, with respect to this Agreement and the transactions
                hereunder and with respect to any insurance or reinsurance
                written or assumed by the Company which is covered by this
                Agreement and all transactions thereunder, that all disclosures
                and approvals which are necessary or appropriate under any law
                or regulation have been made or obtained, or will be made or
                obtained in a timely manner.

15.06     -     ENTIRE AGREEMENT: The terms expressed herein constitute the
                entire agreement between the parties with respect to the Subject
                Business. There are no understandings between the parties with
                respect to the Subject Business other than as expressed in this
                Agreement.

15.07     -     ERRORS AND OMISSIONS: Inadvertent errors and omissions of any
                nature made by either party shall neither increase nor reduce
                the liability of either party from what that liability would
                have been had no such error or omission taken place. Upon
                discovery, the party committing an error or omission shall
                correct such error or supply such omission retroactively to the
                time such error or omission occurred, and advise the other party
                thereof as soon as possible.

15.08     -     PARTIES TO THIS AGREEMENT: This Agreement is a reinsurance
                agreement solely between the Company and the Reinsurer, and
                performance of the obligations of each party under this
                Agreement will be rendered solely to the other party. In no
                instance will any party other than the Company and the Reinsurer
                have any rights under this Agreement, and the Company will be
                and shall remain the only party hereunder that is liable to any
                contract holder or beneficiary of any Subject Business contract.

                This Agreement shall be binding upon all successors, assignees
                and transferees of the parties to this Agreement, provided,
                however, that neither this Agreement nor any rights or
                obligations under this Agreement may be assigned or transferred
                by either party without the prior written consent of the other
                party.

15.09     -     RELIANCE ON INFORMATION SUPPLIED BY THE COMPANY: The Company
                acknowledges that, at the Reinsurer's request, it has provided
                the Reinsurer, prior to execution of this Agreement by the
                parties, with the information described in Schedule D attached
                hereto and incorporated herein (hereinafter, the "Company
                Information"),. The Company represents that any assumptions the
                Company made in preparing the Company Information were based
                upon informed judgment and are consistent with sound actuarial
                principles. The Company represents that all factual information
                contained in the Company Information was, as of the date
                provided, complete and accurate in all material respects to the
                best of the Company's knowledge and belief. The Reinsurer has
                relied on Company Information and the foregoing representations
                in entering into this Agreement.

15.10     -     RIGHT OF OFFSET: Both the Company and the Reinsurer shall have,
                and may exercise at any time, the right to offset any balance or
                balances due the other.

                                       18
<Page>

                Such offset may include balances due under this Agreement and
                any other agreements heretofore or hereafter entered into
                between the Company and the Reinsurer, regardless of whether
                such balances are in respect of premiums, or losses or
                otherwise, and regardless of the capacity of any party, whether
                as reinsurer or reinsured or otherwise, under the various
                agreements involved.

15.11     -     TAXES: The Company shall be liable for all taxes, except
                income and profit taxes of the Reinsurer, on amounts paid to the
                Reinsurer under the terms of this Agreement, and shall indemnify
                and hold the Reinsurer harmless for any taxes which the
                Reinsurer may become obligated to pay on the Company's behalf.


                              ARTICLE XVI: SECURITY


16.01     -     SECURITY: Upon the Company's written request, the Reinsurer
                shall provide security to the Company for its obligations to the
                Company by providing access to funds held in Trust or Letters of
                Credit for the benefit of the Company, in accordance with the
                provisions set forth in this Article, or by providing any other
                form of security that would permit the Company to take credit
                for the reinsurance ceded hereunder.

16.02     -     LETTER OF CREDIT:

                (a)   Upon the written request of the Company, the Reinsurer
                      agrees that it will be the applicant for and provide the
                      Company with a Letter or Letters of Credit, in a form
                      acceptable to the Company and in conformity with the
                      applicable regulations of the State of Iowa as respects
                      credit for reinsurance, in an amount no less than the
                      Reinsurer's remaining liability to the Company, as
                      determined by the Company, to secure the obligations of
                      the Reinsurer to the Company under this Agreement. The
                      cost of such Letter(s) of Credit, if any, shall be borne
                      by the Company.

                (b)   The Reinsurer and the Company agree that the Letter(s) of
                      Credit provided by the Reinsurer pursuant to the
                      provisions of this Agreement may be drawn upon at any
                      time, notwithstanding any other provisions in this
                      Agreement, and shall be utilized by the Company or any
                      successor by operation of law of the Company including,
                      without limitation, any liquidator, rehabilitator,
                      receiver, or conservator of the Company only for one or
                      more of the following purposes:

                      (i)   to reimburse the Company for the Reinsurer's share
                            of premiums returned to the owners of policies
                            reinsured under this Agreement, on account of
                            cancellations of such policies;

                      (ii)  to reimburse the Company for the Reinsurer's share
                            of surrenders and benefits or losses paid by the
                            Company pursuant to the provisions of the policies
                            reinsured under this Agreement;

                                       19
<Page>

                      (iii) to fund an account with the Company in an amount at
                            least equal to the deduction, for reinsurance ceded,
                            from the Company's liabilities for reinsurance ceded
                            under this Agreement. Such amount shall include, but
                            not be limited to, amounts for policy reserves,
                            reserves for claims and losses incurred (including
                            losses incurred but not reported), reserves for loss
                            adjustment expenses and reserves for unearned
                            premiums; and

                      (iv)  to pay any other amounts the Company claims are due
                            under this Agreement.

                      All of the foregoing shall be applied without diminution
                      because of insolvency on the part of the Company or the
                      Reinsurer.

                (c)   Should amounts be held pursuant to (b)(iii) above, then
                      the Company shall pay interest at the Prime Rate on such
                      funds as may be held from time to time.

                (d)   Should any amounts drawn down on the Letters of Credit be
                      in excess of the actual amounts required for (b)(i),
                      (b)(ii), or (b)(iii) above, or should any amounts
                      subsequently be determined not to be due under (b)(iv)
                      above, then such excess amounts and amounts not due shall
                      be returned to the Reinsurer forthwith and the Company
                      shall pay interest at the Prime Rate on such funds from
                      the date they were drawn down to the date they are
                      returned.

                (e)   Any interest calculated pursuant to the provisions of
                      paragraphs (c) and (d) above shall be offset against any
                      other obligations of the Reinsurer.

16.03     -     TRUST FUNDS:

                (a)   Upon the written request of the Company, the Reinsurer may
                      at its option provide funds in Trust for the benefit of
                      the Company as an alternative or supplement to Letter(s)
                      of Credit. Any such Trust Funds shall be held in
                      accordance with the applicable regulations of the State of
                      Iowa as respects credit for reinsurance. The cost of such
                      Trust Funds, if any, shall be borne by the Company.

                (b)   The assets deposited in the trust account shall be valued,
                      according to their current fair market value, and shall
                      consist only of cash (United States legal tender),
                      certificates of deposit (issued by a United States bank
                      and payable in United States legal tender), and
                      investments of the types specified in the applicable
                      regulations of the State of Iowa as respects credit for
                      reinsurance, provided that such investments are issued by
                      an institution that is not the parent, subsidiary, or
                      affiliate of either the Reinsurer or the Company.

                (c)   Prior to depositing assets into the Trust account, the
                      Reinsurer shall execute assignments, endorsements in
                      blank, or transfer legal title to the trustee of all
                      shares, obligations or any other assets requiring

                                       20
<Page>

                      assignments, in order that the Company, or the trustee
                      upon the direction of the Company, may whenever necessary
                      negotiate any such assets without consent or signature
                      from the Reinsurer or any other entity.

                (d)   All settlements of account between the Company and the
                      Reinsurer shall be made in cash or its equivalent.

                (e)   The Reinsurer and the Company agree that the assets in the
                      Trust account, established by the Reinsurer pursuant to
                      the provisions of this Agreement, may be withdrawn by the
                      Company at any time, notwithstanding any other provisions
                      in this Agreement, and shall be utilized and applied by
                      the Company or any successor by operation of law of the
                      Company including, without limitation, any liquidator,
                      rehabilitator, receiver or conservator of the Company only
                      for one or more of the following purposes:

                      (i)   to reimburse the Company for the Reinsurer's share
                            of premiums returned to the owners of policies
                            reinsured under this Agreement, on account of
                            cancellations of such policies;

                      (ii)  to reimburse the Company for the Reinsurer's share
                            of surrenders and benefits or losses paid by the
                            Company pursuant to the provisions of the policies
                            reinsured under this Agreement;

                      (iii) to fund an account with the Company in an amount at
                            least equal to the deduction, for reinsurance ceded,
                            from the Company's liabilities for reinsurance ceded
                            under this Agreement. Such amount shall include, but
                            not be limited to, amounts for policy reserves,
                            reserves for claims and losses incurred (including
                            losses incurred but not reported), reserves for loss
                            adjustment expenses and reserves for unearned
                            premiums; and

                      (iv)  to pay any other amounts the Company claims are due
                            under this Agreement.

                      All of the foregoing shall be applied without diminution
                      because of insolvency on the part of the Company or the
                      Reinsurer.

                (f)   The Company shall give the Reinsurer the right to seek
                      approval from the Company to withdraw from the
                      aforementioned Trust account all or any part of the assets
                      contained therein and transfer such assets to the
                      Reinsurer, provided:

                      (i)   the Reinsurer shall at the time of such withdrawal,
                            replace the withdrawn assets with other qualified
                            assets having a market value equal to the market
                            value of the assets withdrawn so as to maintain at
                            all times the deposit in the required amount, or

                                       21
<Page>

                      (ii)  after such withdrawal and transfer, the market value
                            of the Trust account is no less than one-hundred-two
                            percent (102%) of the required amount.

                (g)   Should amounts be held pursuant to (e)(iii) above, then
                      the Company shall pay interest at the Prime Rate on such
                      funds as may be held from time to time.

                (h)   Should any amounts withdrawn from the Trust account be in
                      excess of the actual amounts required for (e)(i), (e)(ii),
                      or (e)(iii) above, or should any amounts subsequently be
                      determined not to be due under (e)(iv) above, then such
                      excess amounts and amounts not due shall be returned to
                      the Reinsurer forthwith and the Company shall pay interest
                      at the Prime Rate on such funds from the date they were
                      withdrawn to the date they are returned.

                      (i)   Any interest calculated pursuant to the provisions
                            of paragraphs (g) and (h) above shall be offset
                            against any other obligations of the Reinsurer.

16.04     -     OTHER FORMS OF SECURITY: The Reinsurer may, at its option, as
                an alternative or supplement to Letter(s) of Credit and Trust
                Funds, provide security in any other form that would permit the
                Company to take credit for the reinsurance ceded hereunder. Any
                such other form of security shall be in accordance with Iowa
                Insurance Department regulations. The cost of such other form(s)
                of security shall be borne by the Company.

16.05     -     PRIME RATES: Prime Rates shall be determined for each business
                day in New York City, and for non-business days shall equal the
                Prime Rate as determined for the most recent preceding business
                day. The PRIME RATES as published in The Wall Street Journal
                (Eastern Edition) shall be the primary source for the Prime
                Rates. If The Wall Street Journal does not publish such a rate
                for a business day, the Prime Rate shall be the maximum of the
                rates publicly announced by major banks in New York City as
                their "Prime Rates" applicable to such day.


                          ARTICLE XVII: SERVICE OF SUIT


17.01     -     SUBMISSION TO JURISDICTION: It is agreed that in the event of
                the failure of the Reinsurer to pay any amount claimed to be due
                under this Agreement, the Reinsurer, at the request of the
                Company, will submit to the jurisdiction of any Court of
                competent jurisdiction within the United States of America and
                will comply with all requirements necessary to give such Court
                jurisdiction; and all matters arising hereunder shall be
                determined in accordance with the law and practice of such
                Court.

17.02     -     SERVICE OF PROCESS: It is further agreed that service of
                process in any suit instituted against the Reinsurer arising out
                of this Agreement, may be made upon Morgan, Lewis & Bockius LLP,
                101 Park Avenue, New York, New York

                                       22
<Page>

                10178-0060, U.S.A., Attention: F. Sedgwick Browne, and that in
                such suit the Reinsurer will abide by the final decision of such
                Court or of any Appellate Court in the event of an appeal.

17.03     -     APPEARANCE: Morgan, Lewis & Bockius LLP are authorized and
                directed to accept service of process on behalf of the Reinsurer
                in any such suit and/or upon the request of the Company to give
                a written undertaking to the Company that they will enter a
                general appearance upon the Reinsurer's behalf in the event such
                a suit shall be instituted.

17.04     -     INSURANCE OFFICIAL AS ATTORNEY FOR SERVICE OF PROCESS: Further,
                pursuant to any statute of any State, Territory or District of
                the United States of America which makes provision therefor, the
                Reinsurer hereby designates the Superintendent, Commissioner or
                Director of Insurance or other officer specified for that
                purpose in the statute, or his successor or successors in
                office, as their true and lawful attorney upon whom may be
                served any lawful process in any action, suit or proceeding
                instituted by or on behalf of the Company or any beneficiary
                hereunder arising out of this Agreement, and hereby designates
                Morgan, Lewis & Bockius LLP as the party to whom the said
                officer is authorized to mail such process or a true copy
                thereof.


                     ARTICLE XVIII: REINSURANCE INTERMEDIARY


18.01     -     REINSURANCE INTERMEDIARY: Swiss Re Atrium Corporation, 55 East
                52nd Street, New York, New York 10055, U.S.A., is hereby
                recognized as the Reinsurance Intermediary negotiating this
                Agreement.

18.02     -     COMMUNICATIONS: All communications, including but not limited to
                notices, reports, and statements, relating to this Agreement,
                shall be transmitted to the Company and the Reinsurer through
                the Reinsurance Intermediary.

18.03     -     PAYMENTS: All payments, including but not limited to premiums,
                expense allowances, and losses, relating to this Agreement shall
                be made directly between the Company and the Reinsurer, and not
                through any intermediary.

                                       23
<Page>

                IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized representatives,

In West Des Moines, Iowa, this                     day of                 , 2001
                               ------------------         ---------------


                       AMERICAN EQUITY INVESTMENT LIFE INSURANCE COMPANY


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

Name:                                          Name:
          -----------------------------              --------------------------

Title:                                         Title:
          -----------------------------               -------------------------


And in New York, New York, this              day of                    , 2001
                               -------------        -----------------


                           ATLANTIC INTERNATIONAL REINSURANCE COMPANY LTD.


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

Name:                                         Name:
          --------------------------                ---------------------------

Title:                                        Title:
          --------------------------                 ---------------------------

                                       24
<Page>

                       EXHIBIT 1 - SAMPLE REPORTING FORMAT


QUARTERLY REPORT OF ACTIVITY AND SETTLEMENTS
FROM:  AMERICAN EQUITY INVESTMENT LIFE INSURANCE COMPANY
TO:  ATLANTIC INTERNATIONAL REINSURANCE COMPANY LTD.

ACCOUNTING PERIOD:
REPORT DATE:

SECTION A: COINSURANCE
1.  Section A Reinsurance Premium (Section 4.01(a))
     a. First- year Premiums
     b. Single Premiums
     c. Renewal Premiums
               Total Section A Reinsurance Premium

2.   a. Section A Subject Losses (Section 3.03(a))
     b. Section A Covered Losses (Section 3.04(a))

3.  Section A Expense Allowances (Section 4.02(a))
     a. First Year Expense Allow = 100% * (First year + Single Prems)
     b. Renewal Exp Allow = $.25 per Subject Business contract
               Total Section A Expense Allowances

4.  Section A Cash Settlement = 2b + 3 -1

5.  Risk and Expense Charge (Section 5.04)

6.  Increase in Coinsurance Reserves

7.  Experience Account Gain =  - 4 - 5 - 6   (Section 5.02)

8.  Experience Account Balance = Prior EAB + 7  (Section 5.01)

SECTION B: YEARLY RENEWABLE TERM
1.  Section B Reinsurance Prem (Section 4.01(b))
     a. Age related portion calculated using Schedule B
     b. Policy fee of $18.75 per contract in force at beginning of period
     c. 50% of Surrender gains for period
               Total Section B Reinsurance Premium

2.  a. Section B Subject Losses (Section 3.03(b))
    b. Section B Covered Losses (Section 3.04(b))

                                                                      CALCULATED
3.  Section B Expense Allowances (Section 4.02(b)) ALLOWANCE  PREMIUMS ALLOWANCE
                                                   ---------  -------- ---------
     a. 2.25% of Single & first year prem on contracts w/s.c.< = 15%
     b. 3% of single & first year premium on contracts w/s.c. > 15%
     c. 1% of single premium on SPDA 6-5 contracts
     d. Absolute value of any negative Cash Settlement Adjustment per
         Section 7.01
               Total Section B Expense Allowances = a + b + c - d

4.  Section B Cash Settlement = 2b + 3 - 1

LOSS CARRYOVER (Section 7.02)
1.  Cash Balance at last Settlement Date
2.  Interest on Cash Balance from last Settlement Date to current SD
3.  Total Settlement for Accounting Period

                                       25
<Page>

4.  TARGET CASH BALANCE AT END OF ACCOUNTING PERIOD (SCHED. C)
5.  Loss Carryover = max (0, 1 + 2 + 3 - 4)

EXPERIENCE REFUND OR SECTION B EXPENSE ALLOWANCE ADJUSTMENT ( Section 7.01)
1.  Target Cash Balance at end of Accounting Period (Schedule C)
2.  Tentative Settlement for Accounting Period
3.  Cash Balance at last Settlement Date
4.  Interest on Cash Balance from last Settlement Date to current SD
5.  Loss Carryover for prior Accounting Period
6.  Risk and Expense Charge
7.  Adjustment = 1 - 2 - 3 - 4 - 5 - 6.  If negative, reduce Sect. B
     Expense Allowances; if positive, pay to AE as Experience Refund

TOTAL SETTLEMENT (Section 9.06)
1.  Tentative Settlement: Section A, (7) + Section B, (4)
2.  Experience Refund
3.  Cost of Security
4.  Total Settlement 1 + 2 - 3. If positive, pay to AE; if negative, pay to
          Reinsurer

CASH  BALANCE (Section 6.01)
1.  Cash Balance at prior Settlement Date
2.  Total Settlement from above
3.  Interest on Cash Balance from last Settlement Date to current SD
          Cash Balance = 1 + 2 + 3

INTEREST ON CASH BALANCE FROM LAST SETTLEMENT DATE TO CURRENT SD
1.  Cash Balance at prior Settlement Date
2.  Cash Balance Rate for period (Section 6.03)
3.  Interest on Cash Balance = 1 * 2


SUPPLEMENTAL INFORMATION                  ACCOUNT       SURRENDER    GROSS
------------------------      NUMBER OF   VALUES IN     VALUES IN    STATUTORY
                              CONTRACTS   FORCE         FORCE        RESERVES

Beginning of Period
+ Additions
- Terminations
End of Period

Cash Balance Rate
90 Day LIBOR
Number of Days Cash Balance > 0  during Accounting Period
Prior Accounting Period Date


SAP Entries
             Premiums Ceded (sum of Coins. & YRT)
     Other income (allowances & adjustments, pos. or neg.)

                     Death Benefits Ceded
                   Surrender Benefits Ceded
                  Increase in Reserves Ceded

                  Effect on Statutory Income:
              Cumulative Effect on Stat. Income:

GAAP Entries - Income
                   Interest Paid on Deposits
Possibly entries for change in assets and change in liabilities

                                       26
<Page>

                 -Balance Sheet
                 Asset: Cash & Invested Assets
Liability:  Deposits

                                       27
<Page>

                                   SCHEDULE A-
                        SUBJECT BUSINESS CONTRACT (TYPES)

FPDA 1
FPDA 1 (3%)
FPDA 2
FPDA 3
FPDA 5
FPDA 6
Super7
SPDA 1
SPDA 2
SPDA 6 with a 5-year interest guarantee only ("SPDA 6-5")

Index 1
Index 3
Infinity (Index 4)
Ultimate (Index 5)
New Horizons (Index 6)
Optimum (Index 8)
The Dow (Index 10)
The Russell 2000 FIA (Index 12)
The Performance Annuity (Index 13)
The New Millenium (Index 2000)
El Toro Bravo

                                       28
<Page>

<Table>
<Caption>

                                  SCHEDULE B -
                    YRT BASE RATES BY AGE (NEAREST BIRTHDAY)

-------------------- ------------------ ------------------ ------------------- ------------------- -------------------
       AGE              YRT RATE              AGE             YRT RATE              AGE               YRT RATE
-------------------- ------------------ ------------------ ------------------- ------------------- -------------------
        <S>             <C>                   <C>             <C>                   <C>               <C>
        0               0.02994               35              0.00777               69                0.09795
        1               0.00231               36              0.00816               70                0.10629
        2               0.00165               37              0.00852               71                0.11517
        3               0.00120               38              0.00885               72                0.12477
        4               0.00099               39              0.00909               73                0.13509
        5               0.00087               40              0.00936               74                0.14628
        6               0.00081               41              0.00972               75                0.15840
        7               0.00075               42              0.01023               76                0.17166
        8               0.00066               43              0.01092               77                0.18621
        9               0.00057               44              0.01176               78                0.20127
        10              0.00045               45              0.01272               79                0.21987
        11              0.00048               46              0.01377               80                0.23964
        12              0.00072               47              0.01488               81                0.26184
        13              0.00126               48              0.01596               82                0.28698
        14              0.00195               49              0.01713               83                0.34737
        15              0.00273               50              0.01839               84                0.37389
        16              0.00348               51              0.01983               85                0.40257
        17              0.00405               52              0.02163               86                0.43437
        18              0.00441               53              0.02382               87                0.46662
        19              0.00456               54              0.02634               88                0.49854
        20              0.00468               55              0.02916               89                0.53100
        21              0.00489               56              0.03213               90                0.56544
        22              0.00501               57              0.03534               91                0.60375
        23              0.00507               58              0.03879               92                0.64626
        24              0.00519               59              0.04254               93                0.69240
        25              0.00522               60              0.04653               94                0.73923
        26              0.00528               61              0.05709               95                0.78447
        27              0.00540               62              0.05535               96                0.82314
        28              0.00558               63              0.06018               97                0.85962
        29              0.00585               64              0.06537               98                0.89391
        30              0.00615               65              0.07083               99                0.92601
        31              0.00642               66              0.07671               100               0.95595
        32              0.00669               67              0.08313               101               0.98376
        33              0.00702               68              0.09021               102               1.00000
        34              0.00735

</Table>

                                       29
<Page>

                                            SCHEDULE C -
                                        TARGET CASH BALANCES

<Table>
<Caption>


                      END OF ACCOUNTING
                      PERIOD                               TARGET CASH BALANCE

                        <S>                             <C>
                         1                              $15,000,000
                         2                                         15,000,000
                         3                                         14,318,000
                         4                                         13,636,000
                         5                                         12,954,000
                         6                                         12,272,000
                         7                                         11,590,000
                         8                                         10,908,000
                         9                                         10,226,000
                        10                                    9,544,000
                        11                                    8,862,000
                        12                                    8,180,000
                        13                                    7,498,000
                        14                                    6,816,000
                        15                                    6,134,000
                        16                                    5,452,000
                        17                                    4,770,000
                        18                                    4,088,000
                        19                                       3,406,000
                        20                                    2,724,000
                        21                                    2,042,000
                        22                                    1,360,000
                        23                                            678,000
                        24 and thereafter                                 0

</Table>

                                       30
<Page>

                                  SCHEDULE D -
                             COMPANY INFORMATION


1.  Facsimile Transmission (subject: Information Requested by Will) dated
    November 22, 2000 from Brent Mardis to Marvin Fineman

2.  Memorandum (subject: Reinsurance Term Sheet) dated December 11, 2000 from
    Wendy Carlson and Brent Mardis to Wilfred Romero and Gary Winterbottom

3.  Statement of Investment Objectives and Policy for American Equity Investment
    Life Insurance Company

4.  Schedule of Future Production Estimates (2001 - 2003) and Production History
    (1997 - 2000) for American Equity Investment Life Insurance Company

5.  Schedule of Partial Withdrawals, Surrenders and Deaths for the time period
    January 1, 2000 - September 30, 2000 for policies issued in 1997, 1998,
    1999, and 2000

6.  Schedule dated February 17, 2000 of Partial Withdrawals and Surrenders for
    the time period January 1, 1999 - December 31, 1999 for policies issued in
    1997, 1998, 1999 and 2000

7.  Schedule entitled "Asset Model - Mutliple Scenario Summary" (model name:
    IST06) dated August 14, 2000

8.  Schedule entitled "Asset Model - Multiple Scenario Summary" (model name:
    FST06) dated August 14, 2000

9.  Asset Model dated October 26, 2000 for calendar years 2000 through 2019,
    Level and Uniformly Increasing

10. TAS-Data Entry Facility screen shot entitled "Asset/Liability Model
    Crediting Data [aelap] - Excess Lapse"

11. Draft of Schedule D - Part 1 dated October 5, 2000 of the Annual Statement
    for the Year 2000 of American Equity Investment Life Insurance Company

12. Draft of the Actuarial Appraisal of American Equity Investment Life
    Insurance Company prepared by Milliman & Robertson, Inc., as of December 31,
    1999 and dated April 10, 2000

13. Facsimile Transmission (subject: Cash Flow Testing Summaries) dated October
    23, 2000 from Brent Mardis to Dimitry Stambler

14. Agent's Kit for American Equity Investment Life Insurance Company

                                       31

</TEXT>
</DOCUMENT>
