“Statutory Reserves” means, as of any given date, the gross reserves established and maintained as a liability on the Company’s statutory financial statements for the Policies, prior to giving effect to the reinsurance provided hereunder, calculated in accordance with Iowa SAP and in accordance with sound actuarial principles.

“Statutory Basis Reserves” shall mean, as of any date of determination, # the statutory reserves established by the Ceding Company in respect of the Reinsured Policies (which, for the avoidance of doubt, shall include the higher statutory reserves previously established by the Ceding Company on account of such Reinsured Policies consistent with the valuation rates identified on [Schedule IV]), plus # Post-Effective Time IMR, and which, in the case of each of clauses (i) and (ii), are calculated by the Ceding Company in good faith in accordance with Ceding Company SAP, including future changes to the calculation of statutory reserves resulting from regulatory changes or developments, and calculated on a gross basis and without giving effect to the reinsurance provided hereunder.