ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement ("Agreement") is made effective
as of the 30th day of December, 1998, by and between UNIVERSAL FIDELITY LIFE
INSURANCE COMPANY, an Oklahoma insurer ("UFL"), and PIONEER FINANCIAL SERVICES,
INC., a Delaware corporation ("PFS").
WHEREAS, PFS owns a number of insurance subsidiaries directly and
indirectly (collectively, the "PFS Companies"); and
WHEREAS, PFS desires to appoint and retain UFL to perform certain
claims administrative services required to support the Medicare Supplement
insurance policies issued by PFS Companies, identified in Exhibit A of this
Agreement (the "PFS Policies") and policies reinsured under the Coinsurance
Agreement between UFL and Pioneer Life Insurance Company dated December 30, 1998
(the "UFL Policies", the PFS Policies and the UFL Policies being collectively
referred to as the "Policies"), and UFL desires to accept such appointment on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises set forth herein, and for other good and valuable consideration, and
intending to be legally bound hereby, the parties agree as follows:
1. CLAIMS ADMINISTRATION SERVICES
1.1. Services. UFL shall perform the following services ("Services") in
connection with the administration of claims under the Policies timely and
accurately in all material respects:
1.1.1. UFL agrees to process the PFS Company Part A and Part B Medicare
supplement insurance claims that are not automatically adjudicated.
1.1.2. UFL shall xxxx PFS by the 20th day of each month for claims
processed in the preceding month.
1.1.3. UFL shall perform all administration of policies reinsured under
the Coinsurance Agreement except for rights reserved to Reinsurer as provided in
the Coinsurance Agreement.
2. COMPENSATION
PFS shall pay or cause its subsidiaries to pay UFL its reasonable
expenses attributable to or incurred for the benefit of PFS and its subsidiaries
within twenty (20) days following receipt of UFL's xxxx for Services. This
expense shall be all direct and directly allocable expenses, including overhead,
exclusive of any costs associated with the executive management of UFL,
reasonably and equitably determined by UFL to be attributable to or incurred for
the benefit of administering the claims submitted under the Policies.
3. PERSONNEL, FACILITIES, AND COSTS
3.1. Personnel. UFL shall furnish all personnel necessary to provide
the Services. Such personnel shall at all times remain employees of UFL subject
solely to its direction and control. UFL shall alone retain full liability to
such employees for their welfare, salaries, fringe benefits, legally required
employer contributions and tax obligations.
3.2. Facilities. The Services will be performed by UFL using furniture,
fixtures and equipment (including computer hardware) owned or leased by UFL
(collectively, the "Facilities"). All Facilities owned by UFL shall remain the
property of UFL and PFS acknowledges and agrees that it shall not have any
right, title or interest in or to the Facilities.
3.3. Costs. UFL shall pay all personnel and other costs and expenses to
provide the Services.
4. COMPLIANCE WITH APPLICABLE LAWS
Each of the parties hereto agrees to comply with all applicable
statutes, ordinances, rules, and regulations of any and all federal, state, and
municipal authorities (collectively, "Laws") as they apply to the performance of
such party's obligations under this Agreement, including but not limited to
state laws/regulations governing the timely processing and payment of claims.
5. LICENSING
At all times during the term of this Agreement, UFL shall maintain in
full force and effect all licenses, qualifications and other authorizations
necessary under applicable Laws to provide the Services. UFL agrees to provide
PFS with copies of any such documents upon request.
6. SUPERVISION BY BOARD OF DIRECTORS
UFL acknowledges that the Boards of Directors of the PFS Companies are
vested with the power, authority and responsibility for managing the business
and affairs of the PFS Companies, including with respect to claims
administrative services. UFL acknowledges that any and all actions or services,
whether supervisory or administerial, taken or provided pursuant to this
Agreement by UFL shall be subject to the continuous supervision of the Boards of
Directors of the PFS Companies and, to the extent designated by such Boards of
Directors, the appropriate designated officers of the PFS Companies.
7. MAINTENANCE OF RECORDS
UFL shall maintain during the term of this Agreement and for the
required period to satisfy record retention requirements, complete and accurate,
in all material respects, books and records of all transactions between PFS and
its subsidiaries, and claimants including, without limitation all claims
submitted by individuals under the Policies. UFL shall maintain computerized
records of all claims administered under this Agreement and shall supply the PFS
Companies with summary tabulations of pertinent statistical data upon request.
All records shall be maintained in accordance with prudent standards of
insurance record keeping and in accordance with any and all Laws.
8. AUDIT
PFS shall have the right, after providing reasonable notice to UFL, to
audit the records and procedures of UFL pertaining to the Services performed by
UFL under this Agreement.
9. ERRORS AND OMISSIONS
Inadvertent delays, errors or omissions that occur or are made in
connection with the transactions contemplated by this Agreement shall be
rectified by the party making such error or omission as soon as possible after
discovery thereof.
10. TERMINATION
This Agreement shall remain in effect as long as any of the Policies
remain in force. However, either party may terminate the Agreement with respect
to the PFS Policies or the UFL Policies or both, without cause, upon ninety (90)
days written notice; provided that such termination does not occur prior to
December 31, 2003.
11. INDEMNIFICATION
11.1 Indemnification of UFL by PFS. PFS shall indemnify and hold UFL
harmless from any expenses, losses, claims, damages, liabilities and reasonable
attorneys' fees to which UFL becomes subject (except insofar as such arise from
the failure of UFL to perform any act required under this Agreement) which
results from a breach by PFS of any covenant contained in this Agreement.
11.2 Indemnification of PFS by UFL. UFL shall indemnify and hold PFS
harmless against any expenses, losses, claims, damages, liabilities and
reasonable attorneys' fees to which PFS becomes subject (except insofar as such
arise from (i) the specific instructions and direction of PFS to UFL or (ii) the
failure of PFS to perform any act required under this Agreement) which results
from a breach of any covenant of this Agreement by UFL; provided, however, UFL's
liability under this paragraph shall be limited to the aggregate administrative
fees paid to it by the PFS Companies under this Agreement.
11.3 Procedures for Receiving Indemnification. After receipt by either
UFL or PFS of any written notice of the commencement of any action against it in
respect to which indemnification or reimbursement may be sought against the
other party, the party seeking indemnification or reimbursement shall notify the
indemnifying party in writing within thirty (30) days after its receipt of
notification of the commencement of action; provided, however, that the
obligation of the indemnifying party shall not be reduced on account of the
failure or delay of the indemnified party to give such notice except to the
extent that the indemnifying party is damaged by such failure or delay. In case
any such action is brought against a party seeking indemnity or reimbursement,
and said party notifies the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent that
it may wish, assume the defense thereof with counsel satisfactory to the party
seeking indemnity or reimbursement. In the event that the indemnifying party
recommends a monetary settlement which is acceptable as full settlement by the
claimant bringing the action and such settlement is refused by the party seeking
indemnification, the indemnification hereunder shall be limited to the amount of
such recommended settlement. If a reasonable settlement is agreed to by both the
party seeking indemnification and the indemnifying party, the indemnifying party
shall pay all expenses, losses, claims, damages, liabilities and reasonable
attorneys' fees incurred in the settlement of such action.
12. CONFIDENTIALITY
All claims, records and other material pertaining to this Agreement are
not meant for public dissemination and shall be held by UFL in strict
confidence, except as explicitly provided under any Policy or as required by the
Laws.
13. RELATIONSHIP OF THE PARTIES
13.1 Contractual Relationship. The only relationship between UFL and
PFS is a contractual relationship established by this Agreement. Nothing
contained in this Agreement shall be construed to create the relationship of
employer and employee or constitute a partnership or joint venture arrangement
between the parties. UFL's authority shall be limited to that which is expressly
stated in this Agreement. PFS shall exercise no control over the hours, office
location, rentals or employees of UFL.
13.2 Assignment. This Agreement shall be binding upon UFL and PFS and
their respective successors and assigns. This Agreement may not be assigned in
whole or in part by UFL or PFS without the prior written consent of the other
party.
13.3 Sub-Contracting by UFL. UFL may not, without PFS's prior written
consent, which consent shall not be unreasonably withheld, sub-contract with
others for the performance of any services which UFL is to provide under this
Agreement. In the event that PFS consents to sub-contracting, UFL shall remain
responsible for the proper performance of such services.
14. AMENDMENTS
This Agreement shall not be modified or amended except in writing
signed by an authorized officer of UFL and by an authorized officer of PFS.
15. CONTROLLING LAW.
This Agreement shall be subject to and construed under the laws of the
state of Oklahoma.
16. REFERENCES AND SECTION HEADINGS
Any reference to the singular shall include reference to the plural and
vice versa. Section headings are intended for purposes of description only and
shall not be used for purposes of interpretation of this Agreement.
17. ARBITRATION
In the event any dispute arises between the parties with reference to
any aspect of this Agreement, such dispute shall be submitted for resolution by
arbitration upon the written request of either party to the other party. Within
thirty (30) days after receipt of such written request, each party shall select
one arbitrator (for a total of two), and such selected arbitrators shall select
a third arbitrator within sixty (60) days after receipt of such written request
for arbitration. If either party fails to select an arbitrator within such
period, the arbitrator that was timely selected by the other party shall serve
as the sole arbitrator. All arbitrators shall have had experience serving as an
arbitrator for claims administrative disputes or shall have served as an officer
of a life, accident or health insurance company. No arbitrators shall be or have
been affiliated with or employed by any party hereto or their respective
affiliates. The arbitration shall occur in a mutually acceptable location and be
governed pursuant to the rules of commercial arbitration of the American
Arbitration Association and the laws of the state of Oklahoma. The arbitrators
shall make their determination within thirty (30) days after the appointment of
the last arbitrator. Judgement may be entered upon the final decision of the
arbitrators in any court having jurisdiction, and notwithstanding any provision
in this Agreement to the contrary, such arbitration determination shall be final
and conclusive for all legal purposes and may not be appealed to any court or
other forum. Each party shall pay the expenses incurred by it and by the one
arbitrator selected by it. Each party shall pay one half of the fees and out of
pocket expenses of the American Arbitration Association (if any) and the third
arbitrator.
18. SEVERABILITY
If any part, term or provision shall be held void, illegal or
unenforceable, the validity of the remaining portions or provisions shall not be
effected thereby.
19. ENTIRE AGREEMENT
This Agreement contains the entire Agreement and understanding between
the parties with respect to the transactions contemplated thereby, and
supersedes all prior Agreements and understandings, written or oral, with
respect thereto.
IN WITNESS WHEREOF, the parties have executed this Agreement by their
duly authorized officers as of the date first set forth above.
UNIVERSAL FIDELITY LIFE INSURANCE COMPANY
BY: /s/ XXXXX XXXX
---------------------------------------
NAME: Xxxxx Xxxx
TITLE: CFO & COO
PIONEER FINANCIAL SERVICES, INC.
BY: /s/ XXXXXX X. XXXXXX
---------------------------------------
NAME: Xxxxxx X. Xxxxxx
TITLE: President
Exhibit A
to Administrative Services Agreement
Pre-standardized and standardized Medicare Supplement policies issued by
Health and Life Insurance Company of America, National Group Life Insurance
Company and Pioneer Life Insurance Company
AMENDMENT NO. 1 TO
ADMINISTRATIVE SERVICES AGREEMENT
This Amendment No. 1 to Administrative Services Agreement ("Amendment")
is made and entered into this 30th day of December, 1998 by and between
UNIVERSAL FIDELITY LIFE INSURANCE COMPANY, an Oklahoma insurer ("UFL"), and
PIONEER FINANCIAL SERVICES, INC., a Delaware corporation ("PFS").
WHEREAS, UFL and PFS are parties to that certain Administrative
Services Agreement dated December 30, 1998 (the "Agreement"); and
WHEREAS, UFL and PFS desire to amend the Agreement to reflect certain
changes to the Agreement and to provide for data processing services for certain
life insurance business issued by UFL and business reinsured under the
Coinsurance Agreement between UFL and Pioneer Life Insurance Company dated
December 30, 1998 ("UFL Policies").
NOW, THEREFORE, in consideration of the premises and of the mutual
promises set forth herein, and for other good and valuable consideration, and
intending to be legally bound hereby, the parties agree as follows:
1. DATA PROCESSING SERVICES.
1.1. Services. PFS or its affiliates shall perform the following
services ("Services") in connection with the administration of claims under the
Agreement:
1.1.1. PFS or its affiliates shall provide all telecommunications
services and electronic data processing services, including software programming
and documentation, hardware utilization and software licensing that are
necessary for UFL to perform the Services described in the Agreement.
1.1.2. PFS or its affiliates shall provide all telecommunications
services and electronic data processing services, including software programming
and documentation, hardware utilization and software licensing that are
necessary for UFL to administer the UFL Policies and life business comparable to
those currently provided to UFL.
1.1.3. PFS shall cause its affiliates to xxxx UFL by the 20th day of
each month for the Services listed in this Amendment.
1.1.4 The parties recognize that some software conversions or
modifications are necessary for the Services to be provided in a manner that is
year 2000 compliant. It shall be the responsibility of PFS or its affiliates to
make such conversions and modifications, so that the Services may be provided by
PFS or its affiliates in a year 2000 compliant fashion.
2. COMPENSATION
PFS shall be entitled to the reasonable expenses of its affiliates
attributable to or incurred for the benefit of UFL. This expense shall be for
all direct and directly allocable expenses, including overhead, exclusive of any
costs associated with the executive management of PFS and its affiliates,
reasonably and equitably determined by PFS or its affiliates to be attributable
to or incurred for the benefit of providing the Services rendered under this
Amendment.
PFS shall be entitled to offset the amount that its affiliates are due
for Services rendered under this Amendment against the compensation payable for
Services rendered by UFL under the Agreement. If compensation due PFS under this
Amendment exceeds that due UFL under the Agreement, UFL shall pay the excess to
PFS or its affiliates within twenty (20) days of the receipt of the PFS xxxx.
3. NO MODIFICATION
Except as set for herein, no other provision of the Agreement is
amended hereby.
4. CONTROLLING LAW
This Amendment shall be subject to and construed under the laws of the
State of Oklahoma.
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered
as of the date first above written.
UNIVERSAL FIDELITY LIFE INSURANCE COMPANY
BY: /s/ XXXXX XXXX
---------------------------------------
NAME: Xxxxx Xxxx
TITLE: CFO & COO
PIONEER FINANCIAL SERVICES, INC.
BY: /s/ XXXXXX X. XXXXXX
---------------------------------------
NAME: Xxxxxx X. Xxxxxx
TITLE: President
