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EXHIBIT 8(o)
[USA ADMINISTRATION SERVICES, INC. LOGO]
THIRD PARTY ADMINISTRATION AGREEMENT
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THIS AGREEMENT ("Agreement") made as of this 25th day of November,
1997 by and between Bankers Life Insurance Company (Client), a New York
Corporation, and USA Administration Services, Inc. (USA), a Kansas Corporation.
WHEREAS, Client is or will be in the business of issuing and
underwriting life insurance and/or annuity products; and
WHEREAS, USA has developed an administration capability to provide for
the administrative support and servicing of life insurance and annuity
products, which includes administrative processes, administrative support
personnel, software, data processing equipment, and other services
("Administration Functions");
WHEREAS, Client desires to appoint USA as its Third Party
Administrator in connection with the specific life insurance and/or annuity
products identified in Schedule A ("Contract" or "Contracts"), and USA desires
to provide such services and necessary facilities, equipment, and personnel to
perform those Third Party Administrator functions set forth in Schedule B;
NOW, THEREFORE, in consideration of the mutually acceptable terms of
this Agreement, the parties agree as follows:
Article 1 Appointment as Agent to Provide Services.
1.01 Subject to the terms and conditions set forth in this
Agreement, Client hereby appoints and retains USA, and USA hereby agrees to act
as Client's agent to provide the services, functions and procedures described
in Schedule B (such services are described collectively hereinafter as
"Services").
1.02 Additional services may be added to this Agreement as Services
by a written amendment to Schedule B. USA, however, has sole discretion to
permit any such amendments to Schedule B. Client shall be responsible for any
additional costs resulting from implementing any requested amendments to
Schedule B. Such costs will be mutually agreed to, in writing, by the parties.
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Article 2 Services; and Performance Standards.
2.01 USA shall perform the Services provided for in Schedule B in
accordance with performance standards set forth in Schedule B or incorporated
by reference therein ("Performance Standards"). Whenever Client has not
established a standard, USA agrees to follow generally accepted customs and
standards accepted in the insurance industry performing such services.
2.02 If at any time USA's performance of Services is not in
compliance with the Performance Standards, USA shall use its best efforts to
take necessary curative actions to bring its performance into compliance within
thirty (30) days of Client giving USA written notice of USA's non-compliance.
2.03 When Client determines that either the Services or Performance
Standards needs modification in response to any Federal or state law or
regulation, it shall inform USA of the change in such law or regulation, and
the parties shall seek to come to a mutually agreeable modification of this
Agreement in response to same. Client shall be responsible for any increased
costs associated with such modification. Such costs will be mutually agreed
to, in writing, by the parties.
2.04 USA shall have the right, at any time, and from time to time,
to alter and modify the Administration Functions and any systems, programs,
procedures or facilities used or employed in performing its duties and
obligations hereunder, provided that no such alteration or modification that
materially adversely affects the Services Client receives under this Agreement
will be implemented without USA first obtaining Client's prior written consent,
which shall not be unreasonably withheld. "Materially" means, without
limitation, any departure or deviation from (a) the Performance Standards set
forth in Schedule B or the standards set forth in this Agreement or (b) any
applicable laws, rules and regulations.
2.05 If Client requests that USA design and implement an
enhancement to accommodate either one or more special features peculiar to
Client's Contracts, or, if Client requests any other changes, then USA shall
investigate the feasibility, time and cost for such enhancements or changes.
Any enhancement or change specific to Client's needs shall be designed and
implemented only after a written agreement to do so is reached between USA and
Client. Client will be responsible, in such cases, for any additional costs
associated with such an enhancement. Such costs will be mutually agreed to, in
writing, by the parties.
2.06 USA will make its standard operating reports available to
Client at no additional expense. If Client requests modification to USA's
standard reports, or requests other customized reports beyond the scope of the
standard reports, Client and USA must mutually agree on their format and
content. Client shall be responsible for any increased cost associated with
such modified or customized reports, if any. Such costs will be mutually
agreed to, in writing, by the parties.
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Article 3 Fees and Expenses.
3.01 In consideration of the Services to be performed by USA
pursuant to this Agreement, Client shall pay USA the fees and expenses
described on Schedule C. Such amount shall be due upon receipt of USA's
billing statement. The fees contained in the billing will be for past
services.
USA shall not be entitled to compensation or other payments except as expressly
set forth on Schedule C unless such compensation or payments are agreed to in
writing between USA and Client. All fees and expenses are payable in United
States Dollars, unless otherwise specified by USA.
3.02 Client shall also reimburse USA for all reasonable
out-of-pocket expenses incurred in its performance of this Agreement, as
described on Schedule C. Any such excpenses shall be subject to the prior
consent of the Client, and if over $2,000 prior written consent.
3.03 USA may impose a late payment charge of 1.5 percent per month,
or the highest rate permitted by law, whichever is lower, on balances due under
this Agreement but unpaid for over thirty (30) days. Client may, however
withhold amounts which are due under this Agreement and in good faith disputed,
and not have such amounts subject to USA's late payment charge, provided that:
(A) Client provides USA with written notice describing its dispute with USA
before the payment is due; (B) the parties use their best effort to resolve the
dispute within ninety (90) days after Client's notice; and (C) in the event the
dispute is not resolved within ninety (90) days, disputed amounts would be
respolved by arbitration.
3.04 Client shall pay or reimburse USA for all Federal, state and
local sales, excise, use and/or similar taxes based on payments to be made
hereunder, (excluding, however, any tax on USA's income) unless Client has
provided USA with evidence reasonably satisfactory to USA that such payments
are exempt from any such taxes.
3.05 On each anniversary date of this Agreement's effective date,
USA may increase the charges identified on Schedule C by a rate equal to the
percentage increase from the preceeding year in the United States Department of
Labor Consumer Price Index -- All Urban Consumers (1982-84 = 100).
Article 4 Allocation of Responsibilities Between Client and USA.
4.01 Notwithstanding any other provision of this Agreement, Client
retains sole legal responsibility and authority for the Services provided to
its Contract holders and agents. USA has no responsibility or liability under
the Contracts and, accordingly, may not modify or cause to be modified any term
or condition of the Contract or waive any term or condition thereof. The
Contracts are solely the liability of Client, are solely underwritten by
Client, and USA shall not provide or be responsible for any underwriting
services for the
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Contracts, the Contracts' sales and/or marketing, and/or the Contracts'
separate accounts, where applicable.
4.02 Client shall, on a timely basis, provide USA with current,
final forms of its contracts, prospectuses and applications, and the names and
states of license of all insurance and/or broker-dealer agents and
representatives authorized to sell the Contracts.
4.03 Client shall, on a timely basis, provide USA with information
it needs to carry out the Services it is to provide under this Agreement.
4.04 Client shall solely be responsible for interpreting the
language of the Contracts' provisions (including benefits), and determining the
rates, (premium, interest, etc.) product pricing, claims evaluation and payment
procedures applicable to the Contracts. Client must provide USA in a timely
fashion with its written rules, procedures and documentation pertaining to the
servicing of the Contracts.
Further, if Client modifies or amends such rules, procedures and documentation,
USA will not be obligated to implement any such modification or amendment until
mutually agreeable terms of a corresponding modification or amendment of the
Services have been reached between Client and USA.
4.05 USA shall use only such advertising pertaining to the
Contracts that has been approved in writing by Client in advance of its use.
4.06 USA will promptly notify Client in writing if it receives
written notice of any lawsuit, regulatory complaint or demand by any other
third party which may materially affect Client. In the event any Contract
holder notifies or complains to USA that his or her claim has been wrongfully
or improperly denied/handled or has any other complaint or problem regarding
his or her Contract, USA shall notify such Contract holderthat he or she has
the right to submit a request for review to Client of his or her complaint or
problem.
Article 5 Banking Arrangements.
5.01 The payment to USA of any premiums or charges for the
Contracts by or on behalf of a Contract holder shall be deemed to have been
received by Client, and the payment of return premiums or claim payments
forwarded by Client to USA shall not be deemed to have been paid to a Contract
holder or claimant until such payments are received by the Contract holder or
claimant.
5.02 Banking arrangements will be established upon the mutual
written agreement of Client and USA. In all cases, Client will be the sole
owner and solely responsible for establishing and maintaining such bank
account(s) which will be in Client's name. In the event that USA collects
premiums, or disburses funds on behalf of Client, such premiums or
disbursements will be completed by USA in a fiduciary capacity. USA shall
comply with all applicable Federal and State regulations. For all deposits, USA
will immediately (an in no event longer than twenty-four (24) hours) make such
deposits of
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premiums. Client shall require the bank in which Client's bank account(s) are
maintained to send all original account statements to Client, clearly reporting
all deposits and withdrawals.
USA shall receive copies of the account statements for reconciliation purposes,
and upon Client's request, promptly furnish Client with copies of all such bank
records pertaining the deposits and withdrawals it made to Client's bank
account(s) on behalf of Client. Reconciliation should be completed by USA
within a reasonable time from receipt of account statements from Client. Any
problems with such reconciliation should be promptly reported to Client and the
bank where the account is located.
Article 6 USA's Representations, Warranties and Covenants.
USA represents and warrants to Client that:
6.01 USA is a corporation duly organized and existing in good
standing under the laws of the State of Kansas.
6.02 USA has the power and authority under the laws of the State of
Kansas and under its charter and by-laws to enter into and perform the Services
contemplated in this Agreement.
6.03 All requisite corporate and other acts or proceedings required
to be taken to authorize the execution, delivery and performance of this
Agreement have been taken.
6.04 USA is a licensed Third Party Administrator in each state
where said license is required of USA for the Services performed under this
Agreement and USA shall maintain all licenses required by and comply with
applicable state laws, rules and regulations.
6.05 USA has and will continue to have and maintain the necessary
facilities to perform Services under this Agreement.
6.06 Whenever required by a state, USA shall maintain a deposit or
a bond in favor of such state to be held in trust for the benefit and
protection of that state's Contract holders and insurers whose monies USA
handles. In addition, USA shall comply with any other bond and insurance
requirements of applicable state law.
6.07 USA is covered under a fidelity/crime bond, with a limit of at
least $1 million. Such a bond, or its replacement, covers USA from damages
resulting from any acts or occurrences covered under said bond. USA is also
covered under a Professional Liability Policy, or its replacement, with a limit
of at least $1 million for damages resulting from any acts, errors or omissions
in the performance of professional services.
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Article 7 Client's Representations, Warranties and Covenants.
Client represents and warrants to USA that:
7.01 Client is a corporation duly organized and existing in good
standing under the laws of New York.
7.02 Client is qualified and licensed to carry on its business in
those jurisdictions in which it transacts business and is required to be
qualified or licensed.
7.03 Client has the power and authority under law and under its
charter and by-laws to enter into and perform its obligations under this
Agreement.
7.04 All requisite corporate and other acts or proceedings required
to be taken to authorize the execution, delivery and performance of this
Agreement have been taken.
7.05 All of the prospectuses, contracts and other forms provided or
required by Client shall have been approved by all required regulatory agencies
and are or shall be in compliance with all applicable Federal, state, and local
laws and regulations.
7.06 Client has and will continue to comply with all laws with
respect to the Contracts and it has and will continue to make all required
filings with regulatory agencies in connection with the offer, sale, or
administration of the Contracts.
7.07 Client shall fulfill all of its lawful obligations with
respect to the Contracts, regardless of any dispute between Client and USA.
Article 8 Confidentiality
8.01 Client acknowledges that USA has sole ownership or other
proprietary rights in and to the Administration Functions, and that the
Administration Functions constitute USA's confidential material and trade
secrets.
8.02 Except as is necessary for USA's administration of the
Contracts or as required by law, Client agrees to maintain the confidentiality
of, and not disclose to any third party (excluding independent auditors,
regulatory examiners and legal counsel), the Administration Functions, or any
other information about USA's internal affairs, business plans, and business
practices. Client further agrees not to use any such information regarding the
Administration Functions, or any information about USA's internal affairs,
business plans and business practices in competition with USA. If Client is
ordered by a court of competent jurisdiction to disclose Client or USA's
confidential information, or it is served with or otherwise becomes aware of a
motion or similar request (including, but not limited to depositions,
interrogatories, requests for documents, subpoenas, or civil investigative
demands) that such an order be issued, Client shall not be liable for
disclosure of such confidential information required by such order if Client
promptly notifies USA in writing of such order.
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This notification is to permit USA to seek a protective order or take other
appropriate action at USA's cost. Client will also cooperate in USA's efforts
to obtain a protective order or other reasonable assurance that confidential
treatment will be accorded USA's confidential information.
If, in the absence of a protective order, Client is, in the written opinion of
Client's counsel addressed to USA, compelled as a matter of law to disclose
USA's confidential information, Client may disclose to the party compelling
disclosure only the part of USA's confidential information as is required by
law to be disclosed (in which case, prior to such disclosure, Client will
advise and consult with USA and its counsel as to such disclosure and the
nature and wording of such disclosure) and Client will use its best efforts to
obtain confidential treatment therefor.
8.03 USA either owns the software or has licensed to use the
software which supports the Services it will provide under this Agreement. USA
shall be the owner and shall have the right to all copyrights, patents, and
other similar protection that flow from the work product that results from any
programming services USA performs for Client, including, but not limited to,
program code, documentation, specifications, logic, and design.
8.04 USA shall hold the software source code for the software
component of the Administration Functions in escrow with Transamerica
Reinsurance (TARe), assign TARe as escrow agent, and TARe shall make such
source code available to Client at no charge under a license agreement in the
event that USA files for bankruptcy or ceases to engage in the business of
providing Third Party Administration services.
Article 9 Books, Records, Data and Audits.
9.01 USA shall establish and maintain procedures for the
safekeeping of policy forms, check forms and facsimile signature imprinting
devices, if any, and all other documents, reports, records, books and files
related to the Contracts (excluding the Administration Functions), and all
transactions between USA, Client and Client's Contract holders and agents
(collectively, "Client's Books and Records"). USA shall maintain Client's
Books and Records in an accessible and usable form to Client, and place for the
duration of this Agreement and seven years thereafter, according to industry
standards reasonably applied and as required by applicable law, including but
not limited to Rules 17a-3 and 17a-4 of the Securities Exchange Act of 1934, as
amended.
9.02 USA shall maintain the records and other data pertaining to
the Contracts at all times in order to provide back-up recordkeeping. USA
shall maintain backup computer tape files on a daily basis stored in an
off-site location.
9.03 Upon reasonable notice to USA, Client and any applicable
insurance or securities regulator shall have full and free access, during
ordinary business hours, to Client's Books and Records, which shall be in a
usable form. Client and the applicable insurance or securities regulator shall
keep confidential USA's confidential information or
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trade secrets (as described in Article 8) contained in Client's Books and
Records.
9.04 Upon reasonable notice to USA, Client or its duly authorized
independent auditors have the right under this Agreement to perform on-site
audits of Client's Book and Records directly pertaining to the Contracts, and
the Services performed under this Agreement, and to interview management
personnel involved in performing the services of USA in this Agreement, and to
review systtems of internal control. Such audits shall take place in
accordance with reasonable procedures, as defined by generally accepted
auditing practices. Client shall reimburse USA for any unreasonable costs and
expenses (including personnel time and materials) incurred in connection with
such audits.
9.05 It is expressly understood and agreed that Client's Books and
Records are Client's sole property, and that such property shall be held by USA
as an agent, during the term of this Agreement. All information furnished by
Client or its Contract holders to USA hereunder (including Client's Books and
Records, data, information, financial information and information about its
internal affairs, business plans and business practices) is confidential (the
"Client Confidential Information") and USA shall not disclose such information,
directly or indirectly, to any third party except to the extent that USA is
required by law to make such disclosure, is required to perform the Services,
or as authorized in writing by Client. If USA is requested to disclose ant
Client confidential information, USA will promptly notify Client to permit
Client to seek a protective order or take other papropriate action at Client's
sole cost. USA will also coopoerate in Client's efforts to obtain a protective
order or other reasonable assurance that confidential treatment will be
accorded the Client confidential information. If, in the absence of a
protective order, USA is, in the written opinion of USA's counsel addr4essed to
Client, compelled as a matter of law to disclose the client confidential
information, USA may disclose to the party compelling disclosure only the aprt
of the Client confidential infoprmation as is required by law to be disclosed
(in which case, prior to such disclosure, USA will advise and consult with
Client and its counsel as to such disclosure and the nature and wording of such
disclosure) and USA will use its best efforts to obtain confidential treatment
thereof.
9.06 Each party shall promptly notify the other of any demand or
request by any court, Federal, state, local or provincial government agency or
other regulatory body to examine or audit the Contracts serviced under this
Agreement.
Article 10 Delivery of Materials to Covered Individuals.
10.01 Any policies, certificates, booklets, termination notices or
other written communications delivered by Client to USA for delivery to
Contract holders will be promptly delivered by USA after receipt by USA of
Client's delivery instructions.
Article 11 Trademarks.
11.01 Neither USA nor Client shall use trademarks or service marks
without the prior written consent of the owners.
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Article 12 Limitation of Liability/Warranty of Fitness.
12.01 In the event a malfunction of any computer software or
equipment which supports the Administration Functions causes an error or
mistake in any record, report, data, information or output under the terms of
this Agreement, USA shall at its expense correct and reprocess such records,
provided that either: (A) Client shall promptly notify USA in writing of such
error or mistake; or (B) the Contract holder shall promptly notify USA or
Client of such error or mistake. USA may, prior to its correction or
reprocessing, in its discretion, require Client's written instructions
regarding such error or mistake.
12.02 In the case of any breach by USA related to this Agreement or
any transaction under this Agreement, regardless of the basis of the claim, USA
will only be liable for:
A. Bodily injury (including death) and damage to real property
and tangible personal property; and
B. The amount of actual loss or damage suffered by Client,
limited to the aggregate of the fees Client paid to USA under
this Agreement during the eight months immediately preceding
the occurrence of the claim, whichever is less.
12.03 Notwithstanding anything to the contrary herein, USA shall not
be responsible for, and Client shall indemnify and hold USA harmless from and
against, any and all costs, expenses, losses, damages, charges, counsel fees,
payments, and liability which may be asserted against USA or for which it may
be held liable, arising out of or attributable to:
A. Any action taken by USA in good faith and with due diligence
in compliance with the terms of this Agreement;
B. Client's failure to:
(1)comply with Federal, state or local laws or regulations
with respect to the offering and/or sale of the Contracts or
the records maintained;
(2)use and employ the Administration Functions and its
facilities in accordance with the procedures as set forth and
described in the reference manuals;
(3)utilize USA's control procedures as set forth and described
in the reference manuals; or
(4)verify promptly reports received through use of the
Administration Functions.
C. Client's refusal or failure to comply with the terms of this
Agreement, or, which arise out of Client's action or willful
misconduct, or, which arise out of Client's breach of any
representation or warranty hereunder;
D. Client's errors and mistakes in the use of the Administration
Functions, and its facilities and control procedures;
E. Third party claims against Client for loss or damage; or
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F. USA's reliance on or use of information, data, records and
documents received from Client, its custodian or other agents
in performing the Services.
12.04 Notwithstanding anything to the contrary herein, Client shall
not be responsible for, and USA shall indemnify and hold Client harmless from
and against, any and all costs, expenses, losses, damages, charges, counsel
fees, payments, and liability which may be asserted against Client or for which
it may be held liable, arising out of or attributable to:
A. Any action taken by Client in good faith and with due
diligence in compliance with the term of this Agreement;
B. USA's refusal or failure to comply with the terms of this
Agreement, or, which arise out of USA's action or willful
misconduct, or, which arise out of USA's breach of any
representations or warranty hereunder;
C. USA's errors and mistakes in the use of the Administration
Functions, and its facilities and control procedures; or
D. Third party claims against USA for loss or damage.
12.05 In no event shall USA be liable to Client under any provision
of this Agreement for exemplary, special, punitive or consequential damages.
12.06 No action, regardless of its form, may be brought more than
three (3) years after the cause of action has accrued.
Article 13 Dispute Resolution.
13.01 Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by Client and USA by means
of arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and judgment upon the award rendered by the
arbitrator(s) shall be final and binding upon the parties and may be entered
and enforced as a judgment in any court having jurisdiction thereof.
Notwithstanding the foregoing, Client agrees that the provisions of Article 8
or 13 herein may be enforced by temporary or permanent injunction, without the
necessity of a bond. Such injunctive relief shall be in addition to and not in
place of any other remedy provided in this Agreement.
Article 14 Term and Termination.
14.01 The effective date of this Agreement is the date first written
above, unless otherwise agreed to by the parties.
14.02 Subject to termination as provided herein, this Agreement
shall remain in force and effect for a period of four years from its effective
date.
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14.03 This Agreement is renewable at terms that will be negotiated
no later than one hundred eighty (180) days prior to the termination of this
Agreement, otherwise this Agreement will terminate pursuant to its terms.
14.04 This Agreement may be terminated by Client with written notice
to USA one hundred eighty (180) days prior to the desired termination date. In
the event of such notice of termination, the Agreement shall terminate no
earlier than the one hundred eightieth day following receipt of such notice.
Client may execute a standard perpetual License Agreement and pay USA a license
fee.
In consideration for early termination, if Client does not execute a standard
License Agreement, then Client agrees to pay USA the monthly fee of $2,000 for
the number of months remaining in the initial term of this Agreement.
14.05 If Client materially breaches this Agreement or fails to pay
fees and expenses hereunder, USA may give Client written notice of its breach
of this Agreement, and if such breach shall not have been remedied within sixty
(60) days after such written notice is given, USA may then terminate this
Agreement by giving Client thirty (30) days written notice of such intention to
terminate this Agreement.
14.06 If USA fails to comply with the material obligations and
Performance Standards contained in this Agreement, Client shall notify USA in
writing of such failure. "Material" means, without limitation, any departure
or deviation from (a) the Performance Standards set forth in Schedule B or the
standards set forth in this Agreement or (b) any applicable laws, rules and
regulations. If USA has not corrected such failure within a time frame set
reasonably by Client in writing, but in no event less than thirty (30) days,
Client may then immediately terminate this Agreement without prejudice to of
any of Client's rights or remedies against USA for breach of this Agreement.
Following such termination, Client may, at its option, enter into a license
agreement and pay USA a one time license fee, or transition, at Client's
expense, the administration of Client's Contracts to its own systems and
facilities or to another third party administrator.
14.07 During the period between the delivery of the notice of
termination and the effective date of termination, this Agreement shall remain
in effect and the parties shall continue to operate in accordance with the
terms of this Agreement except as the parties may otherwise agree in writing.
14.08 If USA elects to terminate this Agreement pursuant to section
14.05 and for other than the nonpayment of fees and expenses, and, if Client
shall so request in writing, USA shall continue to provide Services under this
Agreement to Client for a period of four (4) months following such termination,
with such Services to be provided in accordance with the terms of this
Agreement and at 133 percent of the fees in effect for the term immediately
preceding such four (4) month period.
14.09 In the event that this Agreement is terminated, USA agrees
that, in order to assist in providing uninterrupted Services to Client, it
shall offer Client reasonable assistance to Client in converting Client's
records from the Administration Functions to
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whatever service or system Client selects, subject to Client's payment to USA
for such assistance at USA's standard rates and fees in effect at that time.
14.10 Client shall provide written notice to any state or Federal
regulatory agency of any termination or cancellation or any other change in
this Agreement as required by any applicable law or regulation.
14.11 Upon termination of this Agreement, Client will return to USA
all documentation and information relating to the Administration Functions and
any other similar or related materials (and any copies thereof) confidential to
USA. Subject to Articles 8 and 9 hereof, USA will return Client's Books and
Records. Notwithstanding the above, any computer hardware, including storage
media, upon which Client's data is stored shall remain the sole property of
USA. Client agrees to allow USA reasonable access to all such returned records
in the event that USA requests such access for any reasonable and legitimate
purpose, including as a result of any regulatory request, litigation or any
similar necessity.
Article 15 Force Majeure.
15.01 If USA is unable to perform Services under this Agreement
because of strikes, equipment or transmission failure or damage, or other
causes beyond its control, e.g. floods, riots, or acts of god, then USA will
use its best efforts to assist Client to obtain alternate sources for the
Services. USA will not be liable for any interruption in the Services or
damages resulting from such causes, but USA shall cooperate with Client to
minimize and mitigate the damage, loss of data, delays or errors resulting from
an uncontrollable event.
Article 16 Non-Solicitation.
16.01 Neither USA nor its parent or affiliates shall use Client's
Books and Records or other of Client's proprietary information to contact
Client's Contract holders or any person with any interest or expectations in
the Contracts for the purpose of inducing them to purchase any non-Client
product. USA shall not sell or disclose in any manner (except to provide
Services under this Agreement) a list, partial or complete, of the applicants
for Contracts or Client's Contract holders or persons with any interest or
expectation in any Contract.
Article 17 Notices and Requests.
17.01 All notices and requests in connection with this Agreement
shall be given or made upon the respective parties in writing and shall be
deemed given as of the day deposited in the U.S. mails, postage pre-paid,
certified or registered, return receipt requested, and addressed as follows:
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If to USA: USA Administration Services, Inc.,
00000 Xxxxxxx, #000, Xxxxxxxx Xxxx, Xxxxxx 00000
Attn: J. Xxxxx Xxxxxx
If to Client: Bankers Life Insurance Company
00 Xxxxxxxxx Xxxx Xxxx.
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
or to such other address(es) as the party to receive the notice or request so
designated by written notice to the other party.
Article 18 Insolvency.
18.01 It is expressly agreed by the parties that in the event either
USA or Client becomes insolvent or otherwise admits in writing its inability to
pay its debts when they become due, becomes bankrupt, seeks protection under
any law for the protection of insolvents, or has a receiver or conservator
appointed for it under any law pertaining to insolvency, that such event in and
of itself shall be deemed to be a material breach of this Agreement and that
the other party's obligation to perform or its right to receive the benefits of
this Agreement is terminated.
Article 19 Governing Laws.
19.01 This Agreement shall be governed by and construed in
accordance with the laws of the State of Kansas without regard to conflicts of
law principles.
Article 20 Enforceability.
20.01 If any provision of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.
Article 21 No Waiver.
21.01 The failure of either party to exercise in any respect any
right provided for herein shall not be deemed to be a waiver of such right or
of any right hereunder.
Article 22 Assignments.
22.01 This Agreement and the rights and duties hereunder shall not be
assignable
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by the parties hereto except upon the written consent of the other party, which
shall not be unreasonably withheld.
22.02 This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns.
Article 23 Independent Contractor.
23.01 Client recognizes USA as an independent contractor. Nothing
contained herein shall be construed to create the relationship of employer and
employee between Client and USA.
23.02 USA is neither obliged nor expected to provide Services to
Client exclusively. Nothing contained herein shall prevent or restrict USA from
acting as a Third Party Administrator or providing any other service for other
insurance companies or others, whether or not affiliated with USA, in any
jurisdiction with respect to any insurance or annuity product, including
products which may be competitive to those of Client.
Article 24 Miscellaneous.
24.01 The headings in this Agreement are for purposes of reference
only and shall not affect in any way the meaning, construction or
interpretation of this Agreement.
24.02 This Agreement may be executed in several counterparts, each
of which is an original, but all of which together shall constitute one
instrument.
24.03 All of the Schedules which are referred to in this Agreement
shall be part of this Agreement.
24.04 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter thereof, whether oral or written and this Agreement may not be modified
except in a written instrument executed by both of the parties hereto.
24.05 Each party shall promptly deliver to the other a copy of any
preliminary or final examination or audit report with regard to the Contracts
serviced or Services provided under this Agreement which is issued by any
Federal, state, or local governmental agency within ten (10) days after it
receives it.
24.06 The rights and obligations of the parties set forth in
Articles 6, 8, 9, 13 and 14 herein, shall survive the termination of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf by and through their duly
authorized officers.
USA ADMINISTRATION SERVICES, INC.
By
--------------------------------
Name J. Xxxxx Xxxxxx
Date
------------------------------
BANKERS LIFE INSURANCE COMPANY
By
--------------------------------
Name
------------------------------
Date
------------------------------
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LISTING OF ATTACHED SCHEDULES:
SCHEDULE ITEM
A SPECIFIC CONTRACTS
B USA SERVICES AND FUNCTIONS
SMART GUIDE
C FEES
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SCHEDULE A
USA ADMINISTRATION SERVICES, INC.
The plan(s) included in this Services Agreement is/are:
Bankers Life Visionary Choice variable annuity.
Note: Draft product specifications follows.
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SCHEDULE B
USA ADMINISTRATION SERVICES, INC.
SMART Guide of operating practices and performance standards are identical to
the completed SMART Guide with IL Annuity and Insurance Company .
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SCHEDULE C
USA ADMINISTRATION SERVICES, INC.
Set-up Fee: $83,000
(50% due upon contract signing and 50% upon set up completion, but no later
than May 1, 1998)
New Business Fee: $26
Monthly Maintenance: $3.15/contract
Monthly Minimum: $0 yr. 1, $1,000 yr.2, $3,000 thereafter
Asset Balancing, Pricing, &
Accounting Fee $1000/month
Notes:
- Product set up fee includes three standard interfaces to client systems;
such as general ledger, valuation and tax reporting. Any additional
interfaces will be at an additional cost.
- New business fee is a one-time fee per application to process the
application and establish the ongoing record. This fee is charged at the
time the application is placed under system control.
- Monthly maintenance fee is an ongoing fee for the maintenance of policy
records.
- Monthly minimum is incurred when new business and monthly maintenance fees
fall below threshold.
- Asset balancing fee is established with the assumption that there are 20
sub-accounts available with this product.
The above fees include the cost of USA staff, software support, operating
expenses (except postage which will be billed as incurred) and computer
hardware. Items that are not included are special forms, printing costs,
special mailings, client hardware, communication costs, and reasonable travel
and living expenses incurred (and approved in writing in advance) by USA
personnel on Bankers Life's behalf.
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