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PREMIUMS AND PREMIUM RATES PAYMENT OF PREMIUM. No coverage provided by this Policy will be in effect until the first premium for such coverage is paid. *or coverage to remain in effect, the Employer must pay each subsequent premium on or before its due date at the Company's Home ffice. The premium must be paid in U.S. dollars. PREMIUM RATES. The initial premium rates for this Policy are shown on the Face Page of this Policy. Premium rates are subject to change. PREMIUM RATE CHANGE. The Company may change any premium rate: 1. when this Policy's terms are changed: (a) as agreed upon by the Policyholder and the Company; or (b) as a result of a change in federal, state or local law which affects this Policy; 2. when the Company's liability is changed as a result of a change in federal, state, or local law; 3. when the Policyholder or any covered division, subsidiary or affiliated company relocates; 4. when a division, subsidiary, or affiliated company is added to or removed from this Policy; 5. when the number of Insured Employees changes by 25% or more from the number of Insured Employees on the date this Policy took effect or the most recent Rate Guarantee Date expired, if later; 6. when the Employer ceases to be covered by the state Workers' Compensation program or any other program of like intent; or 7. on any premium due date on or after: (a) this Policy's first anniversary; or (b) any later Rate Guarantee Date agreed upon by the Company. Unless the Company and the Group Policyholder agree otherwise, the Company will give at least 45 days' advance written notice of any increase in premium rates. MONTHLY PREMIUM AMOUNT. The amount of monthly premium due on each due date will be the Total Covered Payroll multiplied by the premium rate. Changes will not be pro -rated daily. Instead, premium will be adjusted as follows. 1. When an Insured Employee's insurance (or increased amount of insurance) takes effect, premium will be charged •from the monthly due date coinciding with or next following that change. 2. When all or part of an Insured Employee's insurance terminates, the applicable premium will cease on the monthly due date coinciding with or next following that termination. 3. When premiums are paid other than monthly, increases or decreases will result in an adjustment from the premium due date coinciding with or next following that change. The above manner of charging premium is for accounting purposes only. It will not extend insurance coverage beyond a date it would have otherwise terminated. Each premium payment will include any adjustments in past premiums, which are needed due to changes that have not yet been taken into account. If a premium adjustment involves a return of unearned premium, the amount of the return will be limited to the prior 12 -month period. GRACE PERIOD. A Grace Period of 31 days from the due date will be allowed for the payment of each premium after the first. This Policy will remain in effect during the Grace Period. The Policyholder will be liable to the Company for the payment of all premiums due for the period this Policy remains in effect, however. WAIVER OF PREMIUM. Premium will be administered as follows during any period for which benefits are payable. 1. Long Term Disability premium payments are waived for an Insured Employee who is Disabled, during any period for which benefits are payable. 2. If coverage is to be continued following a period during which premiums were waived; then premium payments must be resumed, as they become due. • GL3001- LTD -11 98 FL 18 01 /01 /01