ADMINISTRATIVE SERVICES AGREEMENT
American Capitol Insurance Company, hereinafter referred to as "Administrator,"
and Universal Life Insurance Company, hereinafter referred to as "Client,"
agree as follows:
1. Except as provided below for an initial period of time referred to herein
as the "Transition Period," during the term of this agreement ("Agreement"),
Administrator will perform for Client in respect to Client's "Policies"
(defined below) the policy administration and data processing services
hereinafter designated in this Agreement and exhibits attached hereto and made
a part hereof for all purposes. The parties acknowledge that the parties have
entered into a coinsurance agreement effective January 1, 1998 ("Coinsurance
Agreement") which agreement is incorporated herein by reference thereto for all
purposes, whereby Administrator (a life insurance company) has coinsured 100%
of the Policy Obligations (as defined in the Coinsurance Agreement) of all of
Client's individual life insurance policies in force as of December 31, 1997
("Policies" as defined in the Coinsurance Agreement) as set forth in the
Coinsurance Agreement, and that the purpose of this Agreement is to provide for
the administration of the Polices by Administrator for Client. This Agreement
does not involve marketing of new policies or adding other polices that would
be subject to this Agreement. The Commissioner of Commerce and Insurance for
the State of Tennessee shall be referred to herein as the "Commissioner."
2. Client shall designate the person or persons to whom Administrator will
report. Client will keep Administrator informed of its corporate policy and
changes in policy to enable Administrator to carry out the subject services for
Client in an efficient manner. Client shall appoint one or more of
Administrator's officers as its attorney-in-fact to act for Client in
performing routine functions in the course of administering the Policies and
performing data processing services as called for by this Agreement.
3. Following the "Transition Period" as hereinafter defined, Administrator
shall maintain at its principal administrative office for the duration of this
Agreement and five (5) years thereafter adequate books and records of all
transactions between Administrator, Client and the insureds ("Transaction
Information"), and shall safeguard all such Transaction Information in
confidence to the same extent that Administrator safeguards comparable
information relating to its own business, provided, however, if such
Transaction Information is available to the general public, is known or in the
possession of Administrator prior to the date of this Agreement, or is known
or in the possession of Administrator prior to actual receipt by Administrator
of such Transaction Information from Client or is obtained from third parties,
Administrator shall bear no responsibility for its disclosure, inadvertently
or otherwise. Notwithstanding anything to the contrary herein contained, the
Commissioner may use any such Transaction Information in any proceedings
instituted against Administrator, and Client shall retain the right to
continuing access to such books and records of Administrator sufficient to
permit Client to fulfill all of its contractual obligations to insured persons.
4. Client agrees that it will assign, convey, transfer and deliver at the end
of the Transition Period to Reinsurer its data processing hardware and license
its software as more fully set forth in the Coinsurance Agreement. All
hardware and software relating to the subject services furnished, owned,
licensed or developed by Administrator during the term of this Agreement and
at any time thereafter shall be and remain the sole property of Administrator.
5. In the event of termination of this Agreement, Administrator may, at its
option, retain any property or data in its possession that belongs to Client
until all sums due Administrator pursuant to this Agreement are paid, including
such additional charges as may be determined by Administrator and Client to be
reasonable and necessary to effect an orderly termination of the work and
services then being performed by Administrator and to assure and protect the
orderly and timely perpetuation of Client's business as affected by such work
and services. Upon termination of this Agreement, Client shall instruct
Administrator in writing prior to such termination as to the disposition of all
such property or data.
6. Administrator (or Client during the Transition Period) shall use due care
and diligence in performing the work and services to be performed hereunder and
agrees that it will correct any errors which are caused solely by
Administrator, its authorized agents, employees, programs, or data processing
equipment, and its liability for such errors shall be limited to the correction
of same within a reasonable time as full compensation for any and all damages
which may result from such error or errors and, in any event, the liability of
Administrator to Client or any other party for any and all losses or damages
directly or indirectly arising out of this Agreement, or the performance
hereof, shall not exceed the task of performing the correction of such error
or errors giving rise to such loss or damages and it is hereby stipulated that
such amount shall constitute an agreed amount of liquidated damages for such
losses and damages. The parties acknowledge that Administrator has certain
liabilities in respect to the subject Policies in its capacity as Reinsurer
under the Coinsurance Agreement and, except as hereinabove stated,
Administrator shall not incur any additional liability by virtue of its role
and responsibilities as Administrator pursuant to this Agreement.
7. Administrator shall perform the subject administrative services at no
charge, it being understood that Administrator's charges have been incorporated
in the consideration involved in the Coinsurance Agreement. The charges
hereinafter set forth in Exhibit C attached hereto shall be paid to Client for
performing the administrative services during the Transition Period, as set
forth below and in the Coinsurance Agreement.
8. Each party agrees that in the event of default in any of the covenants or
agreements contained herein and in any exhibit or exhibits attached hereto or
made a part hereof, the defaulting party will pay all costs and expenses of
enforcement or collection, including reasonable attorney's fees, which may
arise or accrue as a result thereof.
9. This Agreement may not be terminated by either party during the existence
of the Coinsurance Agreement and shall automatically terminate if and when such
Coinsurance Agreement terminates, unless the parties agree otherwise in
writing.
10. Beginning on the Effective Date hereof, there shall be a transition period
during which the Policies, which are currently being serviced exclusively by
Client, shall continue to be serviced exclusively by Client ("Transition
Period"). During such Transition Period Client shall provide all of the
services in respect to the Policies that are required by this Agreement to be
provided by Administrator, and Client shall provide to Administrator all of the
financial interface and financial reports in respect to the Policies that
Administrator is required to furnish to Client during the term of this
Agreement following the Transition Period. More specifically, Client is to
provide to Administrator on a timely basis the financial information relating
to the subject Policies sufficient to enable Administrator to complete
reporting requirements of the various state insurance departments in its role
as Reinsurer under the Coinsurance Agreement and to complete applicable
miscellaneous reporting forms as required by the states. During the Transition
Period, Client shall perform the billing and collection called for in the
"BILLING/COLLECTION" section below and remit to Administrator all premiums and
other payments collected or received by Client in respect to the Policies. On
or about the "Transition Period Termination Date" (defined below),
Administrator shall give written notice to the holders of the Policies to the
effect that future premiums and other payments shall be addressed to
Administrator's home office address. During the Transition Period,
Administrator shall pay to Client 100% of the fees set forth in Schedule C for
each month that Client provides the subject administrative services, which
payment shall be made by crediting such amount to Client in the Monthly Cash
Settlement called for in the Coinsurance Agreement. The Transition Period
shall begin on the Effective Date of this Agreement and shall end at the close
of business on June 30, 1998 (the "Transition Period Termination Date"). The
transfers to be made by Client to Administrator as set forth as Client's
Responsibilities in items 3 and 4 under "Management" below shall be made on the
Transition Period Termination Date. During the Transition Period, Client shall
provide assistance and opportunity for Administrator to observe, investigate,
and analyze Client's procedures, methods, policies, documents, equipment,
systems and other ways and means by which servicing is provided in respect to
the Policies and the operations of the data processing activities, and Client
shall fully share with and inform Administrator of its procedures, methods,
policies, documents, equipment, systems and other ways and means used by Client
to perform such services, including Client's progress and plans for completing
the conversion of its data processing from its main frame data processing
system to its Unisys system. During the Transition Period Client shall
complete the documentation called for by item 3 under "Management" below.
Administrator shall be allowed the opportunity to interview Client's personnel
involved in the subject services and to make offers of employment and/or
consultation to such personnel, and to make employment and consulting
arrangements with such personnel to the extent approved by Client, provided,
however, Administrator shall not unduly interfere with the work
responsibilities of such personnel nor attempt to terminate the employment
relationship between Client and such personnel prior to the Transition Period
Termination Date. During the Transition Period, Client shall be responsible
for processing the work involved in the subject services on a current basis and
to maintain personnel responsible for such work at current levels, if
necessary, to assure that the work is maintained on a current basis, even if
this involves hiring employees on a short term and/or temporary basis to
maintain such personnel at current levels (notwithstanding the fact that a
period of transition such as the subject one may involve personnel turnover and
instability). Client and Administrator commit to cooperate with each other in
a good faith effort to effect a smooth and effective transition so as to
accomplish the needs of each party and to continue quality and orderly services
to the holders of the Policies, and the maintaining of good systems and
procedures customarily dedicated to that purpose.
11. Client warrants that it is duly authorized to enter into this Agreement
and that Administrator has in no way caused or induced Client to breach any
contracted obligation and Client agrees to indemnify and hold harmless
Administrator from any claim or claims.
12. The parties hereto agree that each will comply with all applicable
federal, state and local laws, the violation of which may adversely affect the
performance of this Agreement.
13. This Agreement, the Coinsurance Agreement incorporated herein by
reference, and the exhibits attached hereto and made a part hereof constitute
the entire agreement of the parties on the subject of policy administration and
data processing services, and supersedes all prior and contemporaneous
agreements or understandings between the parties, whether written or oral. Any
modifications or amendments hereof must be in writing signed by both parties.
14. This Agreement shall inure to the benefit of and be binding upon the
parties hereto, their successors and legal representatives, and shall not be
assigned by either party without the prior written consent of the other party.
15. If any failure to pay amounts due or to perform any other act required by
this Agreement is unintentional and caused by oversight, Client and
Administrator will adjust the situation to what it would have been had the
oversight not occurred. Any amounts which are not paid when due shall bear
interest at the rate of 10% per annum, compounded annually, until paid.
16. Client or Administrator, their respective employees or authorized
representatives may audit, inspect and examine, during regular business hours,
at the home office of Client or Administrator, as the case may be, provided
that three working days advance written notice has been given to the other
party, any and all books, records, statements, correspondence, reports, trust
accounts and their related documents or other documents that relate to the
Policies. The audited party agrees to provide a reasonable work space for such
audit, inspection or examination and to cooperate fully and to faithfully
disclose the existence of and produce any and all materials reasonably
requested by such auditors, investigators, or examiners. The expense of the
auditing party's employee(s) or authorized representative(s) engaged in such
activities shall be borne solely by such auditing party, and the party being
audited shall be entitled to reimbursement for expenses reasonably incurred by
such audited party. The auditing party agrees to conduct such audit in a
courteous, prompt, professional and reasonable manner, and to provide immediate
written disclosure to the audited party of any discrepancy or variance (when
compared to any previously reported information) discovered by the auditing
party.
17. This Agreement is subject to and is to be interpreted in accordance with
the laws of the State of Texas. Venue for any action, suit or other proceeding
shall be exclusively in Xxxxxx County, Texas, or Shelby County, Tennessee. The
parties agree to waive any other venue.
18. In the event that any provision or term of this Agreement shall be held
by any court to be illegal or unenforceable, all of the other terms and
provisions shall remain in full force and effect.
19. This Agreement shall be amended only by mutual consent and written
agreement executed and delivered by the parties.
20. The representations, warranties, covenants and agreements respectively
made by Client and Administrator in this Agreement shall survive the
termination or expiration of this Agreement.
21. Any notices made pursuant to this Agreement shall be in writing and shall
be deemed to have been duly given on the date of delivery if delivered
personally (including overnight delivery service) or by facsimile transmission
to the party to whom notice is given, or on the third day after mailing if
mailed to the party to whom notice is to be given by certified mail, return
receipt requested, and properly addressed as follows:
If to Client:
Universal Life Insurance Company
Attn: Xx. Xxxxxxxx X. Xxxxx
Chairman of the Board
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
FAX: (000) 000-0000
With a copy to:
Xxxxx X. Xxxx, Esq.
Twentieth Floor
First Tennessee Building
000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
FAX: (000) 000-0000
If to Administrator:
American Capitol Insurance Company
Attn: Xxxxxxx X. Guest, Chairman
00000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
FAX: (000) 000-0000
Any party to this Agreement may change the address to which notice is to be
delivered to such party by delivering written notice to that effect to the
other party in accordance herewith. Any document delivered via facsimile
transmission shall be treated as the original for all purposes unless the
original is substituted therefor.
22. The Parties agree that the drafting of this Agreement has been a joint
effort and no special weight or presumption should arise in favor of or against
either party based on whether one party or the other was more responsible for
the drafting of this Agreement. Each party has consulted with its accounting,
actuarial and legal advisers in respect to the negotiations and the drafting
of this Agreement. Each party has read and understands this Agreement, and
each party agrees that it shall not be entitled to claim a failure to
understand the meaning or effect of this Agreement, or any part thereof, as a
defense under any circumstances.
23. No party may assign this Agreement or any of its rights, interests, or
obligations hereunder without the prior written consent of the other party.
24. The parties agree that they will from time to time, upon the request of
any other party and without further consideration, execute, acknowledge, and
deliver in proper form any further instruments and take such other action as
the other party may reasonably require in order to carry out effectively the
intent of this Agreement.
25. Unless otherwise expressly provided in this Agreement, each party shall
pay all of its own costs, fees, and expenses incurred or to be incurred in
negotiating and preparing this Agreement and in closing and carrying out the
transactions contemplated by this Agreement.
26. Nothing in this Agreement, whether express or implied, is intended to
confer any rights or remedies under or by reason of this Agreement on any
persons or entities other than the parties to it and their respective
successors and permitted assigns. In addition, nothing in this Agreement is
intended to relieve or discharge the obligation or liability of any third
person or entity to any party to this Agreement or give any third person or
entity any right of subrogation or action against any party to this Agreement.
27. The party for whose benefit a warranty, representation, covenant, or
condition is intended may waive any inaccuracies in the warranties and
representations contained in the Agreement or waive compliance with any of the
covenants, warranties, or conditions contained herein and so waive performance
of any of the obligations of the other party and any defaults under this
Agreement, but to be effective any such waiver must be in writing signed by the
party granting such waiver. A waiver shall not affect or impair, however, the
waiving party's rights with respect to any other warranty, representation, or
covenant or any default hereunder not specifically waived, nor shall any waiver
constitute a continuing waiver.
28. This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
29. Client and Administrator both expressly waive any right to trial by jury
of any claim, demand, action or cause of action (a) arising under this
Agreement or any other instrument or document executed or delivered in
connection herewith, or (b) in any way connected or incident to the dealing of
the parties hereto in connection with the transactions related hereto, in each
case whether now existing or hereafter arising; and Client and Administrator
both hereby agree and consent that any such claim, demand, actin or cause of
action shall be decided by arbitration (pursuant to the Arbitration Agreement
as set forth in the Coinsurance Agreement) and to the extent applicable by a
court trial without a jury, and that any party to this Agreement may file an
original counterpart or a copy of this Agreement with any court as written
evidence of the consent of Client and Administrator to the waiver of the right
to trial by jury.
30. The Effective Date of this Agreement is January 1, 1998.
IN TESTIMONY WHEREOF, Client and Administrator have caused this Agreement
to be duly executed by their respective undersigned authorized officers,
effective as of the Effective Date.
UNIVERSAL LIFE INSURANCE COMPANY
By:/s/Xxxxxxxx X. Xxxxx
--------------------------------------------
Xxxxxxxx X. Xxxxx
Chairman of the Board of Directors
Witness:/s/Xxxxxxxx X. Xxxxxxxx
---------------------------------------
Xxxxxxxx X. Xxxxxxxx, Executive Vice President
AMERICAN CAPITOL INSURANCE COMPANY
By: /s/Xxxxxxx X. Guest
-------------------------------------------
Xxxxxxx X. Guest
Chairman of the Board of Directors
Witness:/s/Xxx X. Xxxxxx
----------------------------------------
Xxx X. Xxxxxx, Vice President
EXHIBIT A
MANAGEMENT
Client's responsibility shall be:
1. To provide from its Board of Directors or an Officer instructions
regarding its corporate policy, products, growth and general operations of
Client and such other instructions as are called for herein. To select and
authorize one or more officers of Client to whom Administrator is to report and
from whom Administrator is to receive instructions. To designate and appoint
not less than two officers of Administrator to act as Client's attorney-in-fact
to perform in Client's place and stead the routine policy transactions, such
as claims payments and such other functions as the parties may deem
appropriate.
2. Following the Transition Period, to provide financial interface and
receive the financial reports from Administrator.
3. Prior to the Transition Period Termination Date, to provide Administrator
with documentation regarding user (customer service personnel) procedures and
data processing systems operations, such documentation to be reasonably
sufficient to enable the performance of the respective services. (The parties
acknowledge that the subject documentation is not adequate as of the effective
date of this Agreement, that a Transition Period is called for in this
Agreement before Administrator fully assumes the duties hereunder, and,
accordingly, prior to the end of such Transition Period, Client will develop
the documentation to a level of sufficiency specified in the preceding
sentence.)
4. To transfer to Administrator on the Transition Period Termination Date all
of the files, books and records, in paper, microfiche, electronic, and/or other
format, required for, and customarily used by, Client in maintaining, recording
and reporting the information and transactions pertaining to the Policies such
that the Policies can be reasonably and accurately administered and serviced;
and also to transfer to Administrator on the Transition Period Termination Date
all of Client's data processing hardware and to license Client's software as
provided in above and in the Coinsurance Agreement.
5. During the Transition Period, to provide financial information relating to
the subject Policies sufficient to enable Administrator to complete
requirements of the various state insurance departments, file premium tax,
advertising and miscellaneous reporting obligations as required by the states.
Administrator's responsibilities shall be:
1. Following the Transition Period, to perform the subject services in
keeping with corporate policy of Client as communicated by Client to
Administrator, which shall be in keeping with the standards customarily
observed by Client prior to the transfer of responsibilities to Administrator
as herein provided.
2. Following the Transition Period, to provide financial information relating
to the subject Policies sufficient to enable Client to complete requirements
of the various state insurance departments, file premium tax, advertising and
miscellaneous reporting obligations as required by the states.
3. During the Transition Period, to provide financial interface and receive
the financial reports from Client.
MARKETING
No new policies shall be added to this Agreement.
UNDERWRITING/ISSUE
Client's responsibility shall be:
Following the Transition Period, to set underwriting standards and guidelines
as conditions for reinstatement of policies that are eligible for
reinstatement.
Administrator's responsibility shall be:
Following the Transition Period, to reinstate policies consistent with
underwriting standards and guidelines provided by Client.
CLAIMS SERVICE
Client's responsibilities shall be:
During the Transition Period, to perform the responsibilities of Administrator
as set forth below. Following the Transition Period, to inform Administrator
of its claims-paying policies and guidelines respecting routine claims
processing. To issue instructions to Administrator in respect to claims that
are other than routine or in respect to which Administrator requests
instructions. To inform Administrator on a timely basis of all notices of
claims when notice thereof is not sent directly to Administrator. To pay to
Administrator any claims or portions of claims that Administrator is required
to pay in respect to the Policies that are not within the scope of the Policy
Obligations.
Administrator's responsibility shall be:
Following the Transition Period, to verify and pay all claims in accordance
with the terms and conditions of the Policies and Client's policies, guidelines
and, when applicable, instructions.
POLICYHOLDER SERVICE
Client's Responsibilities shall be:
During the Transition Period, to perform the responsibilities of Administrator
as set forth below. Following the Transition Period, to inform Administrator
of its policies and guidelines respecting routine policyholder service. To
issue instructions to Administrator in respect to policyholder service matters
that are other than routine or in respect to which Administrator requests
instructions. To inform Administrator on a timely basis of all communications
received from policyholders when such communication is not received directly
by Administrator.
Administrator's Responsibility shall be:
Following the Transition Period, to answer and process all inquiries received,
including cash surrenders, policy loans, reinstatement requests and policy
changes, in keeping with Client's guidelines.
BILLING/COLLECTION
Client's responsibility shall be:
During the Transition Period, to perform the responsibilities of Administrator
as set forth below, and to keep copies of all records of such premiums and
other receipts and claims payments and policy loans in respect to such Policies
and make available to Administrator upon Administrator's request such copies
pertaining to all such premiums and other receipts and claims payments and
policy loans. In respect to the holders of Policies that customarily receive
the service of premium collection at their homes or other designated places of
premium collection, during the Transition Period Client may continue or
discontinue (in its sole discretion, and without compensation for same) causing
its agents to collect premiums from such policyholders, but premiums shall not
be accepted by Client or its agents in respect to Policies that have lapsed
without prior written approval by Administrator. Client shall remit all
collected premiums and other payments to Administrator as the Reinsurer under
the Coinsurance Agreement.
Administrator's responsibilities:
Following the Transition Period, to provide billing notices either through pre-
authorized check, coupons, or direct bills for modal premiums when due. To
collect and deposit in Client's account all premiums received and to reconcile
on a daily basis premium collections and deposits as received by Administrator.
In this regard, Client hereby authorizes Administrator to establish one or more
bank accounts in the name of Client in respect to which Administrator's
officers are hereby authorized to sign and transact business in the same manner
that it operates banking accounts in its own name. Client will provide in a
timely manner appropriate resolutions by its Board of Directors and
certifications by its officers to facilitate the above. Client and
Administrator acknowledge that the subject Policies are co-insured 100% by
Administrator and that all premiums and other payments received in respect to
the subject Policies belong to Administrator as more fully set forth in the
Coinsurance Agreement. Accordingly, all such premiums and other receipts to
which Administrator is entitled may be allocated directly to Administrator.
Administrator shall keep copies of all records of such premiums and other
receipts, claims payments and other payments in respect to such Policies and
shall make available to Client upon Client's request such copies pertaining to
all such premiums and other receipts and claims payments. Claims payments
shall be paid on drafts of and as authorized by Client. On or about the time
of the Transition Period Termination Date, Administrator shall provide written
notice to Client and to insured individuals advising them of the identity of
and relationship among Administrator, the policyholder and Client. In respect
to collected funds, Administrator shall identify and state separately in
writing to the person paying to Administrator any charge or premium for
insurance coverage the amount of any charge or premium specified by Client for
such insurance coverage.
Monthly Cash Settlement
Client's responsibility shall be:
During the Transition Period, to prepare and send to Administrator the Monthly
Cash Settlement which Administrator (following the Transition Period) is
required to prepare and send to Client as set forth in the Coinsurance
Agreement, and to make remittances to Administrator as called for therein, or
to receive remittances from Administrator as called for therein, as the case
may be. Following the Transition Period, to receive and review promptly the
Monthly Cash Settlement provided by Administrator as set forth in the
Coinsurance Agreement, and to report in writing to Administrator any errors or
matters in respect to which Client disagrees or disapproves within 30 days
following receipt thereof; and to receive remittances called for therein, or
to make payments to Administrator as called for therein, as the case may be.
Administrator's responsibility shall be:
During the Transition Period, to receive and review promptly the Monthly Cash
Settlement provided by Administrator as set forth in the Coinsurance Agreement,
and to report in writing to Client any errors or matters in respect to which
Administrator disagrees or disapproves within 30 days following receipt
thereof; and to receive remittances called for therein, or to make payments to
Administrator as called for therein, as the case may be. Following the
Transition Period, to prepare and send to Client the Monthly Cash Settlement
as set forth in the Coinsurance Agreement, and to make remittances to Client
as called for therein, or to receive remittances from Client as called for
therein, as the case may be.
INVESTMENTS
Client's responsibility shall be:
Client, pursuant to the Coinsurance Agreement, has not retained any of the
Policy Obligations as set forth in the Coinsurance Agreement.
Administrator's responsibility shall be:
Administrator, pursuant to the Coinsurance Agreement, is solely responsible for
the assets covering the Policy Obligations as set forth in the Coinsurance
Agreement, and Administrator shall be solely responsible for the investments
relating to such assets.
ACCOUNTING, TAXES, REPORTING AND REGULATORY COMPLIANCE
Client's responsibility shall be:
During the Transition Period, to provide sufficient policy data and information
to Administrator to enable Administrator to record all accounting entries on
Administrator's books to properly account for all transactions implemented by
Client in respect to the subject Policies. Following the Transition Period,
to inform Administrator of the Officer to whom Administrator is to report and
to inform Administrator of any specific format required to interface with
Client in respect to accounting procedures, taxes and tax reporting, financial
reporting and regulatory compliance. Client shall be solely responsible for
its accounting functions, taxes and tax reporting, financial reporting and
regulatory compliance.
Administrator's responsibility shall be:
During the Transition Period, to inform Client of the Officer to whom Client
is to report and to inform Client of any specific format required to interface
with Administrator in respect to accounting procedures, taxes and tax
reporting, financial reporting and regulatory compliance. Following the
Transition Period, to provide sufficient policy data and information to Client
to enable Client to record all accounting entries on Client's books to properly
account for all transactions implemented by Administrator in respect to the
subject Policies.
COMMISSIONS
Client's responsibility shall be:
Subject to the provisions and limitations in the Coinsurance Agreement, to make
all commission and other compensation arrangements with its agents. During the
Transition Period, to prepare agent commission statements and disburse funds
to agents based on the results of the commission statements, not to exceed the
"Commission Allowance" as defined in the Coinsurance Agreement.
Administrator's responsibility shall be:
Following the Transition Period, to prepare agent commission statements and
disburse funds to agents based on the results of the commission statements,
pursuant to Client's guidelines and instructions, not to exceed the "Commission
Allowance" as defined in the Coinsurance Agreement.
POLICY DIVIDENDS
Client's responsibility shall be:
It is Administrator's understanding that all of the subject Policies are non-
participating and therefore no dividends have been or will be payable. If any
dividend obligation exists, it shall be Client's responsibility to determine,
declare, and fund all dividends to be paid in respect to the subject Policies
and to instruct Administrator accordingly. During the Transition Period, to
pay or otherwise credit dividends to the subject Policies, if any.
Administrator's responsibility shall be:
Following the Transition Period, to pay or otherwise credit dividends to the
subject Policies, if any, in accordance with Client's instructions.
Administrator shall be entitled to rely upon and implement the dividend scales
and practices of Client.
EXHIBIT B
DATA PROCESSING SERVICES
Client's responsibility shall be:
During and Transition Period, to furnish data, documentation, instructions, and
assistance to Administrator in a timely manner as needed by Administrator from
Client to enable Administrator to prepare for and to perform the subject
administrative services when the Transition Period ends, and following the
Transition Period, to provide such follow-up information and assistance that
is needed to supplement the foregoing as needed by Administrator.
Administrator's responsibilities shall be:
To provide all data processing services necessary to the normal administration
of the subject Policies as called for by this Agreement.
Exhibit C
FEES
During the Transition Period, Client will be entitled to charge monthly for the
administrative services it performs under this Agreement according to the
following schedule.
Maintenance
Monthly Fee Per Policy. Per policy charges are based on the number of
applicable policies in force at the beginning of each month. Per transaction
charges are based on the number of such transactions processed during the
month.
Policy Status In Force (Beginning of Month)
Industrial Premium Paying .................. $.8333 per policy
Industrial Non-Premium Paying............... .4166 per policy
Ordinary Premium Paying..................... 2.083 per policy
Ordinary Non-Premium Paying................. 1.042 per policy
Death Claim................................. 25.00 per claim
Surrender................................... 10.00 per surrender
[Signatures appear on Page 9.]
