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ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement (this "Agreement") is
made effective as of 12:01 a.m., Eastern Standard Time, on the 1st day of
October, 1997 ("Effective Date"), by and between THE MANUFACTURERS LIFE
INSURANCE COMPANY, a corporation organized under the Insurance Companies Act
(Canada) ("Provider") and THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK,
a New York stock life insurance corporation ("Company").
WHEREAS, Provider has extensive experience in the operation of
an insurance business and has provided certain services to Company pursuant to
the terms of an Administrative Services Agreement effective July, 8, 1992
between the Company and North American Life Assurance Company, which
subsequently merged with and into the Provider (the "Prior Agreement"); and
WHEREAS, Company desires Provider to perform administrative
and special services (collectively, "services") for Company in its insurance
operations and desires further to make use in its day-to-day operations of
certain property, equipment and facilities (collectively, "facilities") of
Provider as Company may request; and
WHEREAS, Provider and Company contemplate that such an
arrangement will achieve certain operating economies and improve services to the
mutual benefit of both; and
WHEREAS, Provider and Company wish to assure that all charges
for services and the use of facilities incurred hereunder are reasonable and in
accordance with the requirements of New York Insurance Department Regulation No.
33 and to the extent practicable
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reflect actual costs and are arrived at in a fair and equitable manner, and that
estimated costs, whenever used, are adjusted periodically, to bring them into
alignment with actual costs; and
WHEREAS, Provider and Company wish to identify the services to
be rendered to Company by Provider and the facilities to be used by Company and
to provide a method of fixing bases for determining the charges to be made to
Company:
NOW, THEREFORE, in consideration of the premises and of the
mutual promises set forth herein, and intending to be legally bound hereby,
Provider and Company agree as follows:
PERFORMANCE OF SERVICES AND USE OF FACILITIES. Subject
to the terms, conditions and limitations of this Agreement, Provider agrees to
the extent requested by Company to perform diligently and in a professional
manner such services for Company as Company determines to be reasonably
necessary in the conduct of its insurance operations.
Subject to the terms, conditions and limitations of this
Agreement, Provider agrees to the extent requested by Company to make available
to Company such of its facilities as Company and Provider may mutually determine
to be reasonably necessary in the conduct of its insurance operations, including
but not limited to data processing equipment, business property (whether owned
or leased) and communications equipment.
Provider agrees at all times to maintain sufficient facilities
and trained personnel of the kind necessary to perform this Agreement.
With the Company's prior written consent, Provider may arrange
to furnish such services through one or more of its affiliates, subject to the
terms, conditions and limitations set forth herein. The Provider shall furnish
the Company with written confirmation of the nature and extent of services to be
provided to the Company by such affiliates and the location(s) at which
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such services shall be performed. Any such affiliate shall agree in writing to
observe and be bound by all terms and conditions of this Agreement in performing
such services and its records shall be subject to inspection, audit and
examination by the Company in accordance with Section 5 and 6 hereof. Charges
for such services shall be determined consistent with the requirements of
Section 3, and shall be included in the statement furnished by the Provider to
the Company pursuant to Section 4. Provider shall, at all times, remain liable
to the Company for the performance of services by such affiliates to the same
extent as if they had been performed by Provider itself.
CAPACITY OF PERSONNEL AND STATUS OF FACILITIES. Whenever
Provider utilizes its personnel to perform services for Company pursuant to this
Agreement, such personnel shall at all times remain employees of Provider
subject solely to its direction and control, and Provider shall alone retain
full liability to such employees for their welfare, salaries, fringe benefits,
legally required employer contributions and tax obligations.
No facility of Provider used in performing services for or
subject to use by Company shall be deemed to be transferred, assigned, conveyed
or leased by performance or use pursuant to this Agreement.
EXERCISE OF JUDGMENT IN RENDERING SERVICES. In providing
any services hereunder which require the exercise of judgment by Provider,
Provider shall perform any such service in accordance with any standards and
guidelines Company develops and communicates to Provider. In performing any
services hereunder, Provider shall at all times act in a manner reasonably
calculated to be in or not opposed to the best interests of Company.
CONTROL. The performance of services by Provider for
Company pursuant to this Agreement shall in no way impair the absolute control
of the business and
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operations of Provider or Company by their respective Boards of Directors.
Provider shall act hereunder so as to assure the separate operating identity of
Company, consistent with the provisions of Section 1507 of the New York
Insurance Law.
SERVICES. The performance of Provider under this Agreement
with respect to the business and operations of Company shall at all times be
subject to the direction and control of the Board of Directors of Company.
Subject to the foregoing and to the terms, conditions and
limitations of this Agreement, Provider shall provide to Company the services
set forth below in connection with the insurance business of the Company.
(a) UNDERWRITING. Subject to underwriting standards
established by Company and communicated to Provider, Provider shall provide
underwriting services, including review of policy applications, assignment of
policy numbers, MIB review, medical review and other investigations and actual
policy issue, all subject to final approval of Company. Provider shall provide
assistance to the Company in the development of all underwriting criteria
pursuant to which all new business applications and policyowner service
transactions requiring underwriting decisions will be processed and acted upon.
All new applications will initially be sent to Provider. Upon completion of
underwriting, originals will be sent to the Company and retained at its home
offices in Rye, New York. All policyowner service transactions requiring any
underwriting decisions shall be determined by Provider personnel.
(b) POLICY OWNER SERVICES. Provider shall provide automated
systems and personnel to assist with policyowner services, from the point of
issue through termination of
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coverage. Policyowner records of the Company shall be maintained at the home
offices of the Company.
(c) CLAIMS. Subject to claims settlement procedures
established by Company and communicated to Provider, Provider shall provide
claims services, including verification that the policy was in force, and review
and investigation of claims, all subject to final approval of Company.
(d) MARKETING. Upon request of the Company, Provider shall
assist the Company in preparation of marketing material, assist in the
recruitment and product training of agents and provide other marketing support
services. However, all decisions regarding the approval of marketing material
and the acceptance, appointment or termination of agents shall be made by the
Company.
(e) ACCOUNTING. Preparation and maintenance of financial
statements and reports, including all required GAAP and statutory financial
statements and all federal, state or local tax returns.
(f) FUNCTIONAL SUPPORT SERVICES. Provider shall provide (i)
actuarial services, including rate and profit share analysis, product
development, counseling on reserving requirements, work required for or in
support of rate and/or form submissions and actuarial certifications, (ii)
telecommunications services and electronic data processing services, facilities
and integration, including software programming and documentation, hardware
utilization related to provision of certain policy owner services and
administration, a system facilitating access to Provider's electronic data
processing system, (iii) legal services, including representation of Company in
the prosecution or defense of actions and in the negotiation and preparation of
contracts, agreements and agency documents, product development and drafting
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and filing of policies and forms, governmental relations and advising on
regulatory compliance and rendering opinions on various legal matters, (iv)
purchasing and employee relations services, and (v) consultation in negotiating
banking, accounting, and treasury arrangements.
CHARGES. Company agrees to reimburse Provider for
services and facilities provided by Provider to Company pursuant to this
Agreement. The charge to Company for such services and facilities shall include
all direct and directly allocable expenses, reasonably and equitably determined
to be attributable to Company by Provider, plus a reasonable charge for direct
overhead, the amount of such charge for overhead to be agreed upon by the
parties from time to time.
Subject to New York Insurance Department Regulation 33, the
bases for determining such charges to Company shall be those used by Provider
for internal cost distribution. Such bases shall be modified and adjusted by
mutual agreement where necessary or appropriate to reflect fairly and equitably
the actual incidence of cost incurred by Provider on behalf of Company.
Cost analyses will be made from time to time by Provider to
determine, as closely as possible, the actual cost of services rendered and
facilities made available to Company hereunder. Provider shall forward to
Company the information developed by these analyses, and such information shall
be used to develop bases for the distribution of expenses which more currently
reflect the actual incidence of cost incurred by Provider on behalf of Company.
Provider's determination of charges hereunder shall be
presented to Company, and if Company objects to any such determination, it shall
so advise Provider within thirty (30) days of receipt of notice of said
determination. Unless the parties can reconcile any such objection, they shall
agree to the selection of a firm of independent certified public accountants
which shall
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determine the charges properly allocable to Company and shall, within a
reasonable time, submit such determination, together with the basis therefor, in
writing to Provider and Company whereupon such determination shall be binding.
The expenses of such a determination by a firm of independent certified public
accountants shall be borne equally by Provider and Company.
PAYMENT. Provider shall submit to Company within thirty
(30) days of the end of each calendar quarter a written statement of the amount
estimated to be owed by Company for services and the use of facilities pursuant
to this Agreement in that calendar quarter, and Company shall pay to Provider
within fifteen (15) days following receipt of such written statement the amount
set forth in the statement.
Within thirty (30) days after the end of each calendar year,
Provider will submit to Company a detailed written statement of the charges due
from Company to Provider in that calendar year, including charges not included
in any previous statements, and any balance payable or to be refunded as shown
in such statement shall be paid or refunded within fifteen (15) days following
receipt of such written statement by Company.
ACCOUNTING RECORDS AND DOCUMENTS. Provider shall be
responsible for maintaining full and accurate accounts and records of all
services rendered and facilities used pursuant to this Agreement and such
additional information as Company may reasonably request for purposes of its
internal bookkeeping and accounting operations. Provider shall keep such
accounts and records insofar as they pertain to the computation of charges
hereunder available at its principal offices for audit, inspection and copying
by Company and persons authorized by it or any governmental agency having
jurisdiction over Company during all reasonable business hours.
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With respect to accounting and statistical records prepared by
Provider by reason of its performance under this Agreement, summaries of such
records shall be delivered to Company within thirty (30) days from the end of
the quarter to which the records pertain.
OTHER RECORDS AND DOCUMENTS. All books, records, and
files established and maintained by Provider by reason of its performance under
this Agreement which, absent this Agreement, would have been held by Company,
shall be deemed the property of Company, and shall be subject to examination at
all times by Company and persons authorized by it or any governmental agency
having jurisdiction over Company, and shall be delivered to Company at least
quarterly.
With respect to original documents other than those provided
for in Section 5 hereof which would otherwise be held by Company and which may
be obtained by Provider in performing under this Agreement, Provider shall
deliver such documents to Company within thirty (30) days of their receipt by
Provider except where continued custody of such original documents is necessary
to perform hereunder.
7. RIGHT TO CONTRACT WITH THIRD PARTIES. Nothing herein shall
be deemed to grant Provider an exclusive right to provide services to Company,
and Company retains the right to contract with any third party, affiliated or
unaffiliated, for the performance of services or for the use of facilities as
are available to or have been requested by Company pursuant to this Agreement.
8. CONTACT PERSON(S). Company and Provider 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
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initial contact person(s) shall be those set forth in Appendix A. Each party
shall notify the other, in writing, as to the name, address and telephone number
of any replacement for any such designated contact person.
9. TERMINATION AND MODIFICATION. This Agreement shall remain
in effect until terminated by either Provider or Company upon giving thirty (30)
days or more advance written notice, provided that Company shall have the right
to elect to continue to receive data processing services and/or to continue to
utilize data processing facilities and related software for up to 180 days from
the date of such notice. Subject to the terms (including any limitations and
restrictions) of any applicable software or hardware licensing agreement then in
effect between Provider and any licensor, Provider shall, upon termination of
this Agreement, grant to Company a perpetual license, without payment of any
fee, in any electronic data processing software developed or used by Provider in
connection with the services provided to Company hereunder if such software is
not commercially available and is necessary, in Company's reasonable judgment,
for Company to perform subsequent to termination the functions provided by
Provider hereunder. Upon termination, Provider shall promptly deliver to Company
all books and records that are, or are deemed by this Agreement to be, the
property of Company.
10. SETTLEMENT ON COMPLETE TERMINATION. No later than sixty
(60) days after the effective date of termination of this Agreement, Provider
shall deliver to Company a detailed written statement for all charges incurred
and not included in any previous statement to the effective date of termination.
The amount owed or to be refunded hereunder shall be due and payable within
fifteen (15) days of receipt of such statement.
11. ASSIGNMENT. This Agreement and any rights pursuant hereto
shall not be assignable by either party hereto, except as set forth herein or by
operation of law. Except as
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and to the extent specifically provided in this Agreement, nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto, or their respective legal successors, any rights, remedies,
obligations or liabilities, or to relieve any person other than the parties
hereto, or their respective legal successors, from any obligations or
liabilities that would otherwise be applicable. The representations, warranties,
covenants and agreements contained in this Agreement shall be binding upon,
extend to and inure to the benefit of the parties hereto, their, and each of
their, successors and assigns respectively.
12. GOVERNING LAW; SERVICE OF SUIT; FORUM SELECTION. This
Agreement shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York applicable to contracts made and to be
performed in that State, without regard to principles of conflict of laws.
13. ARBITRATION. Any unresolved dispute or difference between
the parties arising out of or relating to this Agreement, or the breach thereof,
except as provided in Section 3, shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
and the Expedited Procedures thereof. The award rendered by the Arbitrator shall
be final and binding upon the parties, and judgment upon the award rendered by
the Arbitrator may be entered in any Court having jurisdiction thereof.
The arbitration shall take place in New York, New York.
14. 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, overnight courier
service, telex or telecopier, addressed
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If to Provider to:
The Manufacturers Life Insurance Company
000 Xxxxx Xxxxxx Xxxx
Xxxxxxx Xxxxxxx Xxxxxx X0X 0X0
Attention: Senior Vice President and General
Manager, U.S. Operations
If to Company to:
The Manufacturers Life Insurance Company of New York
International Corporate Center at Rye
000 Xxxxxxxx Xxxxx Xxxxxx
Xxx, Xxx Xxxx 00000
Attention: President
or to such other persons or places as each party may from time to time designate
by written notice sent as aforesaid.
15. ENTIRE AGREEMENT. This Agreement, together with such
amendments as may from time to time be executed in writing by the parties in
accordance with Section 1505 of the New York Insurance Law, constitutes the
entire agreement and understanding between the parties in respect of the
transactions contemplated hereby and supersedes the Prior Agreement, as well as
any and all other agreements, arrangements and understandings relating to the
subject matter hereof, including the Administrative Services Agreement effective
as of July 8, 1992 between the Company and North American Security Life
Insurance Company.
16. 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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17. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed in duplicate by their respective officers duly authorized so to do,
and their respective corporate seals to be affixed hereto, as of the date and
year first above written.
(Seal) THE MANUFACTURERS LIFE INSURANCE COMPANY
BY /s/ XXxx X. Xxxxxxxxxx
-----------------------------------------------
Xxxx X. Xxxxxxxxxx
Senior Vice President and General Manager U.S.
Operations
Attest: /s/ Xxxxxxxx X. Xxxxxxxxxx
-------------------------------
(Seal) THE MANUFACTURERS LIFE INSURANCE COMPANY
OF NEW YORK
BY /s/ Xxxxxx X. Xxxxx
--------------------------------------
Xxxxxx X. Xxxxx
President
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APPENDIX A
CONTACT PERSON(S) FOR PROVIDER
Xxxxxxxx Xxxxxxxxx, Vice President, U.S. Individual Insurance
Xxxxx Xxxxxx, Vice President, U.S. Pensions
Xxxx X. XxxXxxx, Vice President, U.S. Annuities
CONTACT PERSON(S) FOR COMPANY
Xxxxxx Xxxxx, President
Xxxxxxxxx Xxxxxxx, Vice President
