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EXHIBIT 10.39
SPECIALTY PERSONAL LINES
SUN COAST GENERAL INSURANCE AGENCY
CLAIMS ADMINISTRATION AGREEMENT
DRAFT #1 - APRIL 11, 1997
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CLAIMS ADMINISTRATION AGREEMENT
This agreement is effective April 1, 1997 and is entered into by and between
Millers Group Specialty Personal Lines Division ("SPL Division") and MiliRisk
("Administrator").
1. APPLICABLE TYPES OF BUSINESS
This agreement shall apply to any losses reported under policies issued
by Sun Coast General Insurance Agency.
2. STANDARDS
Administrator shall report, investigate, adjust, and compromise the
claims on behalf of Millers Group Specialty Personal Lines in accordance
with the requirements of this agreement. All claims will be
investigated and handled by administrator in accordance with applicable
law and standards set forth in this agreement, Exhibit I.
3. CLAIMS AUTHORITY
Administrator will establish loss reserves on claims relating to Sun
Coast General Insurance Agency business. Administrator will settle
claims and issue loss payments and expense payments in accordance with
the terms of this agreement.
4. CLAIM FILE CONTENTS
It is agreed that administrator will maintain a separate file for each
loss. Each claim file will contain the following:
a. original documents or legible copies of all correspondence
related to the claim.
b. copies of all investigative reports, file notes and other
material.
c. copies of all lawsuits filed in connection with the claim.
d. copies of all bills or invoices paid and copies of all payments
issued.
e. a history of all loss and expense reserve, loss and expense
payments and all amounts recovered.
NOTE: Employees of the SPL Division shall have access to these files
for review in performance of their duties. Files may not be
removed from the Administrator's control without express
permission.
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5. RECOVERIES
Administrator will develop and pursue reasonable subrogation and/or
salvage recoveries.
6. MONTHLY REPORTS
It is agreed that administrator will provide to the Specialty Personal
Lines Division, by the third (3rd) business day of each month, a report
showing all claims open at any one time during the period month, a
separate monthly report showing all closed claims, an inventory of all
open claims by examiner, a separate report on reserve changes for the
month, an inventory of all open subrogation and salvage files, and an
inventory of all files in suite. The report will consist of a printout
showing the following information for each claim:
Claim number, policy number, insured, claimant (s), date of loss, loss
payments, expense payment, loss reserves, expense reserves, all amounts
recovered, and total incurred losses (all payments and outstanding
reserves for loss and expense, less any recoverables).
7. AD HOC REPORTS
In the event that a claim meets any of the following criteria,
administrator will notify the Specialty Personal Lines Division and Sun
Coast General Insurance Agency as soon a practicable using as reporting
format as agreed by the parties:
a. any claim which has a potential to exceed $25,000 a Large Loss
report form will be submitted.
b. any claim which involves a coverage dispute
c. any claim involving death, brain injury resulting in physical or
intellectual impairment, serious spinal injury, paraplegia or
quadriplegia, serious sensory impairment (sight or hearing), loss
of or loss of us of a major limb, loss f or loss of use of vital
organs, severe xxxxx causing serious disfigurement or scarring of
the body, cosmetic deformities, sever injuries which are life
threatening or may result in long term impairment.
d. Reinsurance loss information will be reported by administrator in
a format prescribed by Millers Group Reinsurers.
e. Any claims involving extra contractual allegations or allegation
of bad faith claim handling.
f. Any loss in excess of policy limits.
g. Any claim involving fraud or suspected fraudulent activity.
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h. Any adverse underwriting information developed by the Adjuster or
Administrator shall be reported to the Sun Coast General
Insurance Agency underwriting department immediately.
8. INSURANCE DEPARTMENTS
Administrator will promptly notify the Specialty Personal Lines Division
of each complaint or written grievance received from an insured's
complaint, governmental official or authority including, but not limited
to, state insurance departments or other agencies. Administrator will
submit appropriate responses, on a timely basis, to any claim related
complaints or inquiries, with copies of such inquiries and responses
thereto, contemporaneously provided to the Specialty Personal Lines
Divisions.
9. COMPENSATION AND EXPENSES
Administrator shall receive as full compensation for its services, fees
and other compensation as outlined in Exhibit II.
10. LICENSES AND STATE INSURANCE CODE COMPLIANCE
Administrator warrants that its adjusters, investigators and
subcontractors hold proper licenses as required by the states in which
their business in conducted. Administrator further agrees to conduct
its services in compliance with all applicable statutes, regulations and
Attorney General opinions regarding the servicing of claims or losses.
11. CHANGES
It is agreed that any changes or addition to this agreement, other than
those previously referenced herein, shall be made in writing and signed
by all parties.
12. ENTIRE AGREEMENT
This agreement and its exhibit are the entire agreement among the
parties relating to the subject matter hereof. This agreement may only
be modified or amended by mutual agreement of the parties in a writing
which specifically refers to this agreement and is signed by all such
persons or entities.
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In witness whereof, the parties hereto have executive this agreement in
duplicate counterparts to be effective as of the date first above written.
By , Millers Specialty Personal Lines
----------------------------------- Division
Name
---------------------------------
Title
--------------------------------
Date
---------------------------------
By , MiliRisk Claims Department
-----------------------------------
Name
---------------------------------
Title
--------------------------------
Date
---------------------------------
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EXHIBIT I
SERVICE STANDARDS
I. CUSTOMER COMMUNICATION
a. Contact
1. Immediate phone contact of insured and/or claimants will
be attempted. If after three (3) attempts within one (1)
full business day, contact has not been made, a contact
mailer will be immediately sent. If the claim has been
reported as a bodily injury claim, phone contact will be
attempted at least once per business day until contact is
made.
b. Acknowledgment
1. Advice to Sun Coast General Insurance Agency within 24
hours of receipt of loss notice.
2. Telephone messages should receive a return call response
within one business day.
II. SERVICES
a. Coverage will be verified on all losses.
b. MiliRisk will administer the appraisal/assessment process and
will use in this endeavor a combination of staff, vendor,
adjuster and appraiser.
c. Perform all reasonable and necessary administrative and clerical
work in connection with claim or loss reports.
d. Establish and maintain a claim file for each reported claim or
loss which shall be reviewable at any and all reasonable times by
the customer.
e. Provide the customer with litigation management. MiliRisk will
no abandon files to the control and handling by defense counsel.
MiliRisk will work with counsel to determine the best course of
action within a reasonable budget and will continue to do all
claims adjusting/investigation activities that it can do.
f. Provide the customer with monthly reports on all claims activity.
g. Issue payments on behalf of the customer.
h. MiliRisk will aggressively pursue recovery through both salvage
and subrogation on behalf of the customer.
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i. MiliRisk will report monthly on salvage/subrogation receipts and
open subrogation/salvage files as requested in #6 above.
j. MiliRisk will maintain a contract relationships with mutually
agreed to Glass Company(s) and notify Sun Coast General Insurance
Agency on claims where this service has not been utilized because
of actions by the insured or agent.
k. MiliRisk will maintain a contract relationship with a mutually
agreed to Automobile Rental Company(s) and notify Sun Coast
General Insurance Agency on claims where this service has not
been utilized because of actions by the insured or agent.
l. MiliRisk will maintain a contract relationship with a mutually
agreed to Automobile Salvage Company(s) and notify Sun Coast
General Insurance Agency on claims where this service has not
been utilized because of actions by the insured or agent.
m. All material damage appraisals issued by either a body shop or a
third party independent appraiser, shall be validated through
either the ADP system or by American Computer Estimating Company
or similar service. Results of this "audit" shall be kept in the
claim file.
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EXHIBIT II
SERVICE FEES AND RATES
MiliRisk will provide claims services as follows;
1. Claim administration services, including all LAE but excluding
legal expense and catastrophe, 7.00% of earned premium.
2. Catastrophes (any single event given rise to more than 100 new
features will be defined as a catastrophe). Fee of $175.00 per
claim plus appraisal costs.
