SERVICE AGREEMENT
Rev. 6.2.10 (AZNY & AZNA)
This Service Agreement (the "Agreement") is entered into as of the 1st day of July, 2010
(the "Effective Date") by and between Allianz Life Insurance Company of New York (the "Company", and Allianz Life Insurance Company of North America (the "Servicer''). Company and Servicer are each sometimes referred to as a "party".
1.
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SERVICES. At the request of the Company and subject to the Company's sole and exclusive right to control and manage its lines of business, Servicer shall provide those services set forth on Schedule A annexed
hereto and made a part hereof.
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All books and records created by the Servicer will be transferred to any new servicer commencing with the
transfer of any service to a new servicer.
2.
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RIGHT TO CONTRACT WITH THIRD PARTIES. Nothing herein shall be deemed to grant Servicer an exclusive right to provide services to Company, and Company retains the right to (i) contract with any third party, affiliated or unaffiliated, for the performance_ of
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services or for the use of facilities as are available to or
have been requested by Company pursuant to this Agreement or to (ii) perform the services itself.
Servicer, with the Company's written consent, shall have the right to subcontract
with any third party, affiliate or unaffiliated, for the performance of services requested by the Company provided that Servicer shall remain responsible for the performance of services by any such subcontractors in accordance with the terms of this
Agreement; and provided further that the charges for any such services subcontracted to an affiliate shall be determined on the basis described in Section 10. With respect to significant services that are subcontracted, this Agreement shall be
amended and filed with the New York Insurance Department for appointing/changing a subcontractor or changing subcontractor services.
3.
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STANDARD OF CARE. Xxxxxxxx agrees
that in performing or providing functions or services hereunder, it shall use that degree of ordinary care and reasonable diligence that an experienced and qualified provider of similar services would use acting in like circumstances and
experience in such matters and in accordance with the standards, practices and procedures established by Servicer for its own business. Servicer shall perform services according to servicing standards of the Company or such other standards
as may be mutually agreed upon by the Company and Servicer. Servicer shall comply with all laws, regulations, rules and orders applicable to (i) the Company with respect to the services provided hereunder or (ii) Servicer. Servicer agrees
to maintain sufficient facilities and trained personnel of the kind necessary to perform the services under this Agreement.
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Servicer shall maintain backup records with respect to the services it provides
hereunder which shall be available to the Company in the event of a disaster. Servicer shall maintain and make available its disaster recovery site to the Company.
4.
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EXERCISE OF JUDGMENT. In providing
services hereunder which require the exercise of judgment by Servicer, Servicer shall perform any such service in accordance with standards and guidelines the Company develops and communicates to Servicer. In performing any
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services hereunder, Servicer shall at all times act in a manner reasonably calculated
to be in or not opposed to the best interests of the Company.
5.
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CONTROL. The performance of services
by Servicer for Company pursuant to this Agreement shall in no way impair the absolute control of the business and operations of Servicer or Company by their respective Boards of Directors. Servicer shall act hereunder so as to assure the
separate operating identity of Company. The performance of Servicer under this Agreement with respect to the business and operations of the Company shall at all times be subject to the direction and control of the Board of Directors of the
Company.
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6.
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7.
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CAPACITY OF PERSONNEL; STATUS OF FACILITIES. Whenever
Servicer
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utilizes its personnel to perform services for the Company
pursuant to this Agreement, such personnel shall at all times remain employees of such Servicer, subject solely to its direction and control. The Company shall have no liability to such employees for their welfare, salaries, fringe benefits, legally
required employer contributions and tax obligations.
No facility of Servicer used in performing services for or subject to use by the
Company shall be deemed to be transferred, assigned, conveyed or leased by performance or use pursuant to this Agreement.
8.
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CONTACT PERSON(S).
Company and Servicer each shall appoint one or more individuals who shall serve as contact person(s) for the purpose of carrying out this Agreement. Such contact person(s) shall be authorized to act on behalf of their respective parties as
to the matters pertaining to this Agreement. Effective upon execution of this Agreement, the initial contact person(s) shall be those individuals set forth in Schedule B. Company and Servicer shall notify the other, in writing, as to the
name, address and telephone number of any replacement for any such designated contact person.
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9.
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TERMINATION. This Agreement shall remain
in effect until terminated by either Servicer or the Company upon giving ninety (90) days or more advance written notice, provided that electronic data processing services shall not be terminated by either the Company or Servicer until one
hundred and eighty (180) days or more advance written notice of termination. Subject to the terms (including any limitations and restrictions) of any applicable software licensing agreement then in effect between Servicer and any licensor,
Servicer shall, upon termination of this Agreement, grant to the Company, a perpetual license, without payment of any fee, in any electronic data processing software developed or used by Servicer in connection with the services provided to
the Company hereunder, if such software is not commercially available and is necessary, in the Company's reasonable judgment, for the Company to perform subsequent to termination the functions provided by Servicer hereunder. Upon
termination, Servicer shall promptly deliver to the Company all books and records that are, or are deemed by this Agreement to be, the property of the Company.
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10.
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CHARGES. Company agrees to reimburse
Servicer for services and facilities provided by Servicer to Company pursuant to this Agreement. The charge to Company for such services and facilities shall be at cost and shall include all direct and directly allocable expenses. The
methods for allocating expenses to the Company by Servicer shall be determined in accordance with the requirements prescribed in Department Regulation No. 33. Such methods shall be modified and adjusted by mutual agreement where necessary
or appropriate to reflect fairly and equitably the actual incidence of cost incurred by Servicer on behalf of the Company. Each party to this agreement shall have the right to discharge or "offset" all or a portion of any amount owed or
payable to another party by applying an amount receivable from such other party against the amount payable.
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11.
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PAYMENT. Servicer shall submit to
the Company within fifteen (15) days of the end of each calendar quarter a written statement of the actual, or estimated, amount owed by the Company for services and the use of facilities pursuant to this Agreement in that calendar quarter,
and the Company shall pay to Servicer within fifteen (15) days following receipt of such written statement the amount set forth in the statement. To the extent quarterly statements are based on estimated amounts, within sixty (60) days
after end of each calendar year, Servicer shall submit to the Company a statement of actual apportioned expenses for such prior calendar year showing the basis for the apportionment of each item. The Company may request a written statement
from Servicer setting forth, in reasonable detail, the nature of the services rendered or expense incurred and other relevant information to support the charge. Any difference between the amount of the estimated apportioned expenses paid by
the Company and the amount of the actual apportioned expenses shall be paid to either the Servicer or the Company as the case may be, within fifteen
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(15) days of the statement of actual apportioned expenses.
12.
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MAINTANENCE OF BOOKS. Servicer and the
Company each shall maintain its own books, accounts and records in such a way as to disclose clearly and accurately the nature and detail of the transactions between them, including such accounting information as is necessary to support the
reasonableness of charges under this Agreement, and such additional information as the Company may reasonably request for purposes of its internal bookkeeping and accounting operations. Provider shall keep such books, records and accounts
insofar as they pertain to the computation of charges hereunder available for audit, inspection and copying by the Company and persons authorized by it or any governmental agency having jurisdiction over the Company during all reasonable
business hours. Such books and records shall be maintained for a period of time according to applicable statutory provisions.
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13.
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OWNERSHIP AND CUSTODY OF BOOKS. All
records, books, and files established and maintained by Servicer by reason of its performance of services under this Agreement, which absent this Agreement would have been held by the Company, shall be deemed
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the property of the Company and shall be maintained in
accordance with applicable law and regulation, including, but not limited to, Regulation No.152. Such records should be available,- during normal business hours, for inspection by the service recipient, anyone authorized by the service recipient, and
any governmental agency that has regulatory authority over the service recipient's business activities. Copies of such records, books and files shall be delivered to the Company on demand. All such records, books and files shall be promptly
transferred to the Company by Servicer upon termination of this Agreement.
14.
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(a)
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The Company and Servicer agree that all non-public information pertaining to the business of either party, and to
policyholders or claimants under any insurance policy, shall be confidential and, unless specifically designated otherwise, be held in strict confidence and not
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disclosed to any (i) non-affiliated third party unless written authorization to make
such disclosure has been given by the appropriate party, or unless required by law, rule, regulation, a lawful order of a governmental or judicial entity; or (ii) contractor, unless all of the following are satisfied: (A) such use or disclosure is
permitted herein in connection with the Services, (B) such use or disclosure is necessary in connection therewith, (C) such use or disclosure complies with the privacy rights provision in Section 15 hereof, and (D) such use or disclosure is only to
those contractors who agreed to comply with the terms herewith in a written confidentiality agreement. The parties further agree that any such confidential information acquired during the course of this Agreement shall continue to be treated as
'confidential information after the termination of this Agreement.
(b)
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Company and Servicer agree that the requirement of confidentiality under this Agreement also applies to their employees
and agents. Each party shall use reasonable efforts to assure that its employees and agents adhere to the confidentiality requirements set forth herein. It is agreed by the parties, however, that use and disclosure of confidential
information by employees and agents is authorized to the extent necessary to carry out the terms and purposes of this Agreement.
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15.
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shall implement and maintain appropriate measures designed to
meet the objectives of Department Regulation No. 173, with respect to safeguarding the Company's customer information and customer information systems. Servicer shall adjust its information security program at the request of the Company's for any
relevant changes dictated by the Company's assessment of risk around its customer information and customer information systems. Confirming evidence that Servicer has satisfied its obligations under this agreement shall be made available, during
normal business
hours, for inspection by the Company, anyone authorized by the Company, and any governmental agency that
has regulatory authority over the Company's business activities.
Company and Servicer further agree to comply with all confidentiality and security
obligations imposed on them, in connection with the collection, use, disclosure, maintenance and transmission of personal, private, health or financial information about individual policyholders or benefit recipients, including without limitation,
those laws currently in place and those that may become effective during the term hereof, including without limitation, the following: Xxxxx- Xxxxx-Xxxxxx Act, the Health Insurance Portability and Accountability Act of 1996, IICZA Internet Security
Policy and any other applicable Federal laws aid regulations or applicable laws and regulations as enacted in various states and any existing and future rules and regulations promulgated thereunder. Such parties each agree to comply therewith and to
fully cooperate with each other and their contractors to the extent reasonably necessary to allow the other (and such contractors) to comply therewith. Servicer shall immediately report to the Company any use or disclosure of any information in
violation of this Agreement of which such Servicer becomes aware.
16.
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REGULATORY APPROVAL. This Agreement shall
not become effective unless approved or non-disapproved by the New York and Minnesota Insurance Departments.
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17.
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by the arbitrator may be entered in any Court having jurisdiction thereof. The
arbitrators may determine which party(ies) shall be responsible to pay the fees of the arbitrators. The arbitration shall take place in the county of the Company's principal office, or as otherwise mutually agreed.
18.
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AUDIT. The Company and persons authorized
by it or any governmental agency having jurisdiction over it shall have the right, at the Company's expense, to conduct an audit of such relevant books, records and accounts of Servicer upon giving reasonable notice of its intent to conduct
such an audit. In the event of such audit, Servicer shall give to the party requesting the audit reasonable cooperation and access to all books, records and accounts necessary to audit.
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19.
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NO ASSIGNMENT OR AMENDMENT.
This Agreement shall inure to the benefit of and be binding upon the parties hereto and their successors and assigns. This Agreement as between the Company and Servicer shall not be assigned or amended by such parties without the prior
written consent of both such parties and the New York Insurance Department.
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20.
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GOVERNING LAW, ENFORCEABILITY.
This Agreement shall be construed in accordance with the laws of the State of New York, without giving effect to conflicts oflaws. Should any portion of this Agreement be determined to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall be deemed, to the maximum extent possible, not to affect the validity and enforceability of the remainder of this Agreement.
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21.
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INDEMNIFICATION. The
Company on the one hand, and Servicer on the other hand, agree to hold each other harmless and to indemnify each other against any and all liability, including any extra contractual liability, and any related loss, damage, expense, costs,
cause of action, demand, penalty, fine or claim (including cost of litigation or administrative proceedings, and attorney's fees) arising out of or related to this Agreement or any of the services provided hereunder to the extent the same
are caused by the act or failure to act of the indemnifying party.
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22.
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NOWAIYER. No failure to exercise,
delay in exercising, or single or partial exercise of any rights, power or remedy by either party shall constitute a waiver of, or shall preclude any other or further exercise of, the same or any other right, power or remedy.
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23.
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INDEPENDENT CONTRACTOR. Nothing
contained in this Agreement shall be construed to create the relationship of joint venture or partnership between the Company and Servicer. Servicer is an independent contractors and shall be free, subject to the terms and conditions of
this Agreement, to exercise judgment and discretion with regard to the conduct of business.
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24.
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NOTICE. All notices, statements or
requests provided for hereunder shall be deemed to have been duly given when delivered by hand to an officer of the other party, or when deposited with the U.S. Postal Service, as first class certified or registered mail, postage prepaid,
or overnight courier service or upon confirmation of transmission if sent by telecopier or e-mail, addressed:
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(a)
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Ifto the Company to:
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Al1ianz Life Insurance Company of New York Xxx Xxxxx Xxxxxxxxx
Xxxxx
38th Floor
Attention: Chief Administrative Officer
(b)
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Ifto a Servicer to:
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Allianz Life Insurance Company of North America
PO Box 1344
Minneapolis, Minnesota 55440-1344 Attention: Chief
Administrative Officer
or to such other persons or places as each party may from time to time designate by
written notice sent as aforesaid.
25.
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COUNTERPARTS. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute' one and the same instrument.
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26.
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SECTION HEADINGS. Section headings
contained herein are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.
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27.
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. ENTIRE AGREEMENT. This Agreement as
between the Company and each Servicer constitutes the entire agreement between them, an no other agreement, statement, or promise not contained in this Agreement shall be valid or binding.
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SCHEDULE A
1.
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Preparation and maintenance of books of account Annual statement review and
approval
Tax payment and planning services Treasury services
Preparation of audit reports
Financial reporting to Board of Directors Internal control monitoring
Budgeting and forecasting, approval of expenditures Annual and
quarterly statement preparation
Preparation and maintenance of books for discontinued operations
************
All records shall be maintained in accordance with New York Insurance Depa1iment
Regulation No. 152 (11 NYCRR 243). In addition to the foregoing, a computer tenninal, which is linked to the electronic system that generates the electronic records that constitute the Company's books of account, shall be kept and maintained at the
Company's principal office in New York. During all normal business hours, there shall be ready availability and easy access through such terminal (either directly by New York Insurance Department personnel or indirectly with the aid of the Company's
employees) to the electronic media used to maintain the records comprising the Company's books of account. The electronic records shall be in a readable form.
Servicer shall maintain format integrity and compatibility
of the electronic records that constitute the Company's books of account. If the electronic system that created such records is to be replaced by a system with which the records would be incompatible, Servicer shall convert such pre existing records
to a format that is compatible with the new system.
Servicer shall maintain acceptable backup (hard copy or another durable medium, as
defined in Regulation No. 152, as long as the means to access the durable medium is also maintained at the Company's principal office) of the records constituting the Company's books of account. Such backup shall be forwarded to the Company on a
monthly basis and shall be maintained by the Company at its principal office in New York.
2.
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Audit services
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3.
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Actuarial, investment management, hedge design and execution, and risk management services
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4.
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Agent recruitment, development, training, supervision, licensing, contracting and appointment, and compensation payment
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5.
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Agency, marketing and support services:
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Administrative support services and systems support to assist Company in its agency
marketing and distribution activities in New York State'. Such support services may include agent recruitment and training support, the calculation of compensation to be paid by Company with respect to products sold by agents and agencies, and
marketing and sales research and analysis.
6.
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Reinsurance administration and management oflife and long term care businesses
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7.
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Claims services:
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Assist Company by (i) processing, examining, investigating, payment, and
administering claims and (ii) providing general claims advice.
Final decisions will be based upon guidelines and procedures
established and approved by the Company from time to time and communicated in writing to Servicer by the Company, and (ii) the Company retains final approval authority on all claim payments. Payment of claims shall be made using the Company's checks.
In performing claim services for the Company pursuant to this Agreement, Servicer shall obtain and maintain all necessary licenses and permits required in order to comply with the applicable laws and regulations, including an Independent Adjustor's
License.
8.
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Corporate communication and public relations services
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9.
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Corporate Secretary functions
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Attendance at Board and Committee meetings and preparation of minutes All other corporate secretary
functions
10.
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Data processing, computer, information and communications services, and systems support
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11.
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General management and human resource services and administrative support
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12.
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Legal services; regulatory compliance and filings
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13.
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Mailing and supply services
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14.
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"Policy/contract owner" services:
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Services and activities involving personal contact or communication with a
policyholder or beneficiary, activities relating to policy loan applications and payments, surrender and withdrawal requests including computation of benefits payable, policy conversions, beneficiary changes, policy changes, requests for general
information, preparation and mailing of disbursements, preparation and mailing of periodic reports and statements, .
dividend computations, premium payments, policy lapses, expires, nonforfeitures,
reinstatements, consumer complaints, and other related policyholder services.
15.
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Premium billing and collection services:
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Billing, collection, deposits and other remittances from policyholders
(including payments of principal or interest on policy/contract loans) and from any collection facility, including intermediaries and other persons or institutions that receive remittances with respect to the Company's business.
With regard to the collection of premiums, deposit s and other remittances from
policyholders (including payment of principal or interest on policy loans), Servicer shall act in a fiduciary capacity with respect to such payments, hold such payments for the benefit of the Company, and after the required processing of such
payments, will immediately deposit such payments in one or more bank accounts established in the name of the Company and subject to the control of officers of the Company.
16.
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Product development; policy/contract form development and regulatory filing
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17.
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Public relations
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18.
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Record-keeping and retention
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19.
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Sales, advertising and marketing promotion and marketing support services:
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Sales and marketing assistance and services, including sales aids, rate guides,
sales brochures, illustrations, solicitation materials and such other promotional and marketing materials, infonnation, assistance and advice as shall assist the sales, public relations and advertising efforts of Company
Creation and production of marketing material
Advice with respect to issues regarding public relations, advertising, sales and marketing.
All advertising, sales and marketing material utilized by or on behalf of Company
shall be subject to the prior approval of Company and Company shall maintain files of all such material in accordance with New York Insurance Department Regulation 34 and Regulation 34A.
20.
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Special Investigative Unit services
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21.
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Training of Company staff
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22.
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Underwriting services:
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14
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Provide underwriting functions and services including but not
limited to review and evaluation of applications for policies/contracts and amendments thereto, MIB review, medical review, review of rates, advice regarding issuance of policies and amendments and other related services.
With respect to any underwriting services that are provided to Company by
Servicer pursuant to this Agreement, it is understood that: (i) Servicer shall provide such services in accordance with the underwriting guidelines and procedures of Company, and
(ii) Company shall retain all final underwriting authority.
SCHEDULEB
CONTACT PERSONS
Name(s) or Function Telephone No.
Allianz Life Insurance Company of New York
Vice President, Operations
Xxxxx Xxxxxx 000 000-0000
Vice President Financial Consulting
Xxxx Xxxxxxx 000 000-0000
Operations Manager
Xxxx Xxxxxxx 000-000-0000
Allianz Life Insurance Company of North America
Email
xxxxx.xxxxxx@xxxxxxxxxxx.xxx
xxxx.xxxxxxx@xxxxxxxxxxx.xxx
xxxx.xxxxxxx@xxxxxxxxxxx.xxx
Chief Legal Officer Xxxxxxx Xxxxxxxx
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000 000-0000
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xxxxxxx.xxxxxxx@xxxxxxxxxxx.xxx
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Chief Compliance Officer Xxxx Xxxxxxx
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000 000-0000
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xxxxxxx.xxxxxxx@xxxxxxxxxxx.xxx
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Financial Director Xxxx Xxxxxxx
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000 000-0000
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xxxx.xxxxxxx@xxxxxxxxxxx.xxx
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