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EXHIBIT (8)(b)
FORM OF SERVICE AGREEMENT
THIS AGREEMENT, made as of the _____ day of _______________, 1998 (the
"Effective Date") by and between Sage Life Assurance of America, Inc. (the
"Client Company"), having its principal office and place of business at 000
Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000 and Financial Administrative
Services, Inc. ("FAS"), having its principal office and place of business at
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxxxxxxxxx, XX 00000-0000.
RECITALS:
WHEREAS, Client Company desires to retain FAS to provide those
services described in Exhibit A (the "Services"), for those products of Client
Company described in Exhibit B (the "Products"); and
WHEREAS, FAS desires to provide the Services;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I: APPOINTMENT
1.01 Retainer. Subject to the terms and conditions set forth in this
Agreement, Client Company hereby retains FAS to perform the Services.
1.02 Acceptance. FAS hereby agrees that on and after the Effective Date,
upon the terms and conditions set forth hereinafter, it will perform the
Services.
ARTICLE II: TERM
2.01 Initial Term; Renewal Term. Unless earlier terminated as provided in
Article XIII, this Agreement, as amended from time to time, shall remain in
full force and effect for a period of three (3) years from the date hereof (the
"Initial Term") and thereafter shall automatically continue in full force and
effect for succeeding 1-year renewal periods, until terminated as herein
provided (each such additional 1-year period being a "Renewal Term'').
ARTICLE III: COMPENSATION
3.01 Fees and Charges. During the Initial Term and each Renewal Term,
Client Company shall pay to FAS, within thirty (30) days after receipt of an
FAS invoice, such fees and charges as determined in accordance with the
provisions set forth in Exhibit C hereto. In the event the nature or quantity
of the Services changes as a result of any request by Client Company, the
related fees and charges shall change to the extent agreed to by Client Company
and FAS and reflected on the Service Orders containing the requested changes or
additions in Services and related adjustment to fees and services, each of
which Service Orders reflecting a change, once signed by both parties, shall be
deemed an amendment to Exhibit C. In the event the quantity or nature of the
Services provided by FAS changes as the result of federal or state requirements
enacted or promulgated after the date hereof, FAS shall have the right to
modify such fees and charges, upon sixty (60) days' prior written notice to
Client Company, to reflect the reasonable
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cost to FAS of complying with such changes. In the event the Services
encompass the adjustment or settlement of claims, FAS' compensation shall in no
way be contingent on claims experience.
3.02 Expenses. Client Company shall reimburse FAS on a pass-through basis
without the addition of any administrative or similar charges by FAS, for all
out-of-pocket expenses reasonably and necessarily incurred by FAS in the
performance of this Agreement or expressly authorized in advance by Client
Company. Client Company shall make such reimbursements within thirty (30) days
of receipt of an FAS invoice indicating such expenses and any supporting
documentation that Client Company may reasonably request. Such expenses may
include, without limitation, expenses incurred for:
(a) data communications and related equipment usage charges
authorized by Client Company and incurred on Client Company's behalf;
(b) telephone charges incurred in communicating with Client
Company, its insureds and its agents and representatives;
(c) freight and postage charges incurred as a direct result of the
Services performed hereunder for and on behalf of Client Company;
(d) travel expenses (including transportation, parking, lodging
and meals) incurred by FAS, its employees and/or its duly authorized agents and
representatives in providing the Services;
(e) charges for stationery and other supplies unique to Client
Company or to the provision of the Services hereunder for Client Company; and
(f) reasonable expenses incurred by FAS for extraordinary
activities either requested by Client Company or authorized by Client Company
to be performed during the implementation or administration of the Products or
otherwise in performance of the Services.
3.03 Renewal Terms. For each Renewal Term, FAS shall be entitled to
receive the same fees and charges as for the prior term, unless new fees and
charges have been agreed upon in writing by the parties by amendment to Exhibit
C prior to commencement of such term. Not fewer than onetwo hundred and twenty
(120) days prior to the end of any term hereof, FAS shall give Client Company
written notice via certified or registered mail if FAS intends, effective at
the start of the next Renewal Term, to increase its fees or charges to Client
Company. Any increase in the fees shall occur no more than one(1) time per year
at the commencement of each Renewal Term and shall be limited to a maximum of
ten percent (10%). Unless Client Company elects not to renew this Agreement,
or the parties otherwise agree in writing, such written notice shall be deemed
an amendment to Exhibit C
3.04 Late Payment. Payment terms hereunder are net thirty (30) days from
receipt of an invoice with interest at one and one half (1-1/2%) percent per
month (but in no event more than the highest interest rate allowable by law)
assessed on all amounts due and owing more than thirty (30) days; provided,
however, that Client Company shall not be obligated to pay interest to FAS on
an overdue amount unless FAS provides notice to Client Company of such overdue
amount, and Client Company has not made payment to FAS within ten (10) business
days after Client Company's receipt of such notice. In addition, Client
Company shall pay FAS' costs of collection, including, without limitation,
reasonable attorneys' fees and court costs.
ARTICLE IV: REPRESENTATIONS AND WARRANTIES OF FAS
FAS represents and warrants to Client Company as follows:
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4.01 Organization; Standing. FAS is a corporation duly organized, validly
existing and in good standing under the laws of the State of Connecticut.
4.02 Authority. FAS has the requisite corporate power and authority to
execute and deliver this Agreement and to provide the Services contemplated
hereunder. The execution and delivery of this Agreement and the performance of
the Services have been duly approved and authorized by FAS' Board of Directors.
No additional corporate action is required to authorize FAS to execute and
deliver this Agreement or to perform the Services.
4.03 No Violation. Neither the execution and delivery of this Agreement
nor the provision of the Services will conflict with or violate: (a) any
provision of FAS' certificate of incorporation or bylaws; (b) any applicable
law, rule or regulation; or (c) the terms of any contract to which FAS is a
party.
4.04 No Viruses. FAS will take reasonable precautions to guard against,
detect and alert Client Company to, and remedy, any known "virus" or "worm" (as
such terms are understood in the computer industry) which may invade the FAS
System and any enhancements or updates thereto
4.05 Year 2000 Systems Compliance. FAS represents and warrants that
time-appropriate date codes, internal programs and all other aspects of systems
support software will continue to operate beyond December 31, 1999 (the
"Millenium Date Change") with at least the same level of functionality and
accuracy provided prior to the Millenium Date Change. In the event of any
decrease in functionality or accuracy such that the systems support software
fails to operate beyond the Millenium Date Change with at least its
pre-existing functionality and accuracy, FAS shall promptly restore such
functionality and/or accuracy without charge to Client Company.
4.06 No Claims. There are no actions, suits, proceedings or investigations
commenced or threatened against FAS that would materially adversely affect its
provision of Services.
4.07 TPA. FAS is duly licensed as a TPA, adjuster and insurance consultant
in all applicable jurisdictions.
4.08 Rights to Software. FAS owns or holds the right to develop, use and
license all software used in connection with the Services free of any liens,
claims or encumbrances of third parties.
4.09 Licenses. FAS covenants to maintain the necessary licenses from
regulators and licenses from software and systems providers throughout the term
of this Agreement.
4.10 Services. FAS will provide all services hereunder in a good and
workmanlike manner, and shall perform according to the standards outlined in
Exhibit D.
ARTICLE V: REPRESENTATIONS AND WARRANTIES OF CLIENT COMPANY
Client Company represents and warrants to FAS as follows:
5.01 Organization; Standing. Client Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
5.02 Authority; Compliance. Client Company has the requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
approved and authorized by Client Company's Board of Directors. No additional
corporate action is required to authorize Client Company to execute and deliver
this Agreement or to consummate the transactions contemplated hereby. All of
the prospectuses, policies, literature, advertising and other materials and
forms heretofore or hereafter provided to FAS by Client Company
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have been, or at the time of delivery, shall have been, approved by all
regulatory authorities whose approval is needed and filed with all regulatory
authorities with whom such filings are required and are, or at the time of
delivery shall be, and shall remain in material compliance with all applicable
federal, state and local laws and regulations. All data and other information
supplied to FAS by Client Company was and will be materially true and correct
when supplied and Client Company will promptly update such data and information
in writing to FAS when it becomes materially erroneous or misleading.
5.03 No Violation. Neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated herein, conflict with or
violate: (a) any provision of Client Company's certificate of incorporation or
bylaws; (b) any applicable law or regulation; or (c) the terms of any material
contract to which Client Company is a party.
5.04 Authorized Representatives. Those persons identified in Schedule 5.04
hereto, as amended from time to time, as well as any Vice President or the
President of Client Company (all of the foregoing collectively, "Client
Company's Authorized Representatives"), are authorized to act for Client
Company with respect to matters involving this Agreement and FAS shall be
entitled to rely on their written instructions without further inquiry.
ARTICLE VI: RESPONSIBILITIES OF FAS
6.01 General. FAS shall perform the Services upon the terms and conditions
set forth herein. To facilitate its performance of the Services, FAS shall
maintain its facilities, equipment and systems (such facilities, equipment and
systems collectively, the "FAS System") in good operating condition. FAS
shall, nevertheless, have the right, at any time, and from time to time, to
alter or modify any system, programs, procedures or facilities used or employed
in performing its duties and obligations hereunder, provided that no such
alteration or modification shall, without the consent of Client Company, which
consent shall not be unreasonably withheld, materially change or affect the
operations and procedures or materially increase costs or result in any
degradation of the performance level of the Services of Client Company in using
or employing the FAS System hereunder.
6.02 Security. In the performance of the Services, FAS shall establish and
maintain facilities and procedures, including disaster recovery procedures, for
the safekeeping of policy forms, check forms and facsimile signature imprinting
devices, if any, and all documents, reports, records, books, files and other
materials relative to this Agreement. A description of such facilities and
procedures is available to Client Company upon request. FAS may amend, modify,
replace or eliminate any of such facilities or procedures from time to time
provided no such action would jeopardize the quality and security of its
administration of the Products or its performance of the Services. FAS
represents and warrants to Client Company that such facilities and procedures
are adequate to protect the confidentiality of Client Company materials.
6.03 Compliance. Provided Client Company timely informs FAS of changes in
laws or regulations that impact the administration of the Products, FAS shall,
within a commercially reasonable period, modify the FAS System to the extent
required in order to assure that its administration of the Products, including
the reports, data and output produced in the course of such administration,
remains in compliance with such amended laws and regulations.
6.04 Account Information Transfers. FAS shall be responsible for ensuring
the integrity and accuracy of the account information and accounting reports
transferred by FAS to Client Company except to the extent any inaccuracies are
directly attributable to Client Company.
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ARTICLE VII: RESPONSIBILITIES OF CLIENT COMPANY
7.01 General. Client Company shall, in a timely fashion, provide FAS with
all materials and information necessary for the timely and proper
administration of the Products, including, but not limited to: policy forms;
lists of all agents and representatives authorized to sell the Products,
including their respective states of license; rate books; cash value and
reserve factors; data records; actuarial support; mortality rates; and verified
client files or facsimile thereof, such as microfilm or microfiche. Client
Company shall also be responsible for providing FAS with any Product-specific
actuarial and legal support needed in order for FAS to fulfill its policy and
agent administration and financial reporting responsibilities under this
Agreement, including, without limitation, those items identified in Section
7.04.
7.02 Lockboxes. Client Company, after consultation with FAS, shall
establish such lockbox or lockboxes (at Client Company's expense) as may be
reasonably required by FAS in order to administer the Products and provide the
Services.
7.03 Representatives. Client Company shall immediately provide FAS with
written notice of any change in the nature or extent of the authority of and
the identity of Client Company's Authorized Representatives and of additions or
deletions to the list in Schedule 5.04 of such representatives.
7.04 Data Input.
(a) To enable Client Company to prepare its valuation reports, FAS
shall provide Client Company with such information extracted from Client
Company's data base as Client Company reasonably requests. Client Company
shall be responsible for the actual calculation of required reserves.
(b) To enable FAS to provide accounting reports to Client Company
through FAS' General Ledger System, Client Company shall be responsible for:
(i) defining the accounts to be used by the General
Ledger System that produces the accounting reports;
(ii) assigning Client Company's account numbers to the
accounts in the General Ledger System; and
(iii) verifying the accuracy of the Chart of Accounts,
accounting reports and accounting procedures prior to FAS' running thereof in
live production.
7.05 Compliance. To enable FAS to amend the FAS System so that its output
complies with all applicable laws and regulations, Client Company shall
promptly inform FAS in writing of all changes in such laws or regulations that
affect any of the Products.
ARTICLE VIII: INDEMNITY
In addition to any rights and remedies available under other provisions of this
Agreement, and subject to the limitations contained in Sections 8.03 and 11.06,
the parties shall have the following rights and obligations.
8.01 By Client Company. Except as otherwise expressly provided in this
Agreement, Client Company shall indemnify and hold FAS and its affiliates
harmless from and against any and all actual liabilities, losses and damages
incurred, expenses reasonably incurred (including reasonable fees of attorneys
and
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other professional advisors and of expert witnesses) and judgments, settlements
and court costs (all of the foregoing being referred to collectively
hereinafter as "Damages and Claims") which Damages and Claims arise out of or
are attributable to:
(a) the performance by FAS of any of its obligations pursuant to this
Agreement, including provision of the Services, provided such
performance does not constitute gross negligence, willful or
criminal misconduct or intentional non-performance;
(b) Client Company's material breach of any representation or warranty
under Article V or of any covenant under Article VII, X or XI;
(c) Client Company's failure to properly safeguard the codes and/or
passwords, if any, provided to implement Article XI, its failure
to properly safeguard the information obtained pursuant to such
article, and any acts or omissions of Client Company in its use of
the information so obtained, including, without limitation,
erroneous eligibility or claim coverage determination;
(d) FAS' reliance to the material detriment of FAS on or use of
information, rate books, cash value and reserve factors, data,
records, documents or other information or materials received by
FAS from Client Company, including, without limitation,
Product-specific actuarial and legal advice; and
(e) FAS' reliance on or implementation of any written instructions
provided by any of Client Company's Authorized Representatives.
8.02 By FAS. Except as otherwise expressly provided in this Agreement, FAS
shall indemnify and hold Client Company and its affiliates harmless from and
against any and all Damages and Claims which arise out of or are attributable
to FAS':
(a) gross negligence, willful or criminal misconduct or
intentional non-performance in providing the Services and performing its other
obligations under this Agreement;
(b) material breach of any representation or warranty under
Article IV or of any covenant under Article VI or X; and
(c) failure to implement timely and fully any reasonable written
instructions by Client Company's Authorized Representatives pursuant to Section
5.04, unless such instructions were inconsistent with the terms of this
Agreement or amounted to a unilateral amendment of such terms or such failure
was otherwise reasonable under the circumstances.
(d) System or Software Components for infringement of any patent
of a third party or any trademark, servicemark, copyright, proprietary rights
or other intellectual property rights of any kind of any third party,
including, without limitation, the misappropriation of a trade secret. In the
event of a intellectual property infringement claim against the FAS System or
Software Components, FAS shall, at its option and own expense, either procure
for Client Company the right to continue using the FAS System or Software
Components or modify them so that they become non-infringing to the extent it
is commercially reasonable to do so. In the event FAS is unable to perform
either of these options within a commercially reasonable time period, then
Client Company shall have the right to terminate this Agreement immediately
upon notice to FAS.
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8.03 Limitations on Liability.
(a) In the event FAS is unable at any time to perform its
obligations under this Agreement because of strikes, equipment or transmission
failure or damages, or other causes beyond its reasonable control, FAS shall
not be liable for any resulting Damages and Claims, even if advised of the
probability of their occurrence.
(b) In the event of an error, omission or delay in any record,
report, data, information or output prepared by or on behalf of FAS in
performing its obligations under this Agreement, unless such problem resulted
from actions or inactions of Client Company, FAS shall use its reasonable best
efforts, at its expense, to promptly correct and reprocess such record, report,
data, information or other output, provided Client Company promptly notifies
FAS in writing of each such error or mistake. Provided it takes such
corrective action, then, unless such error, omission or delay was primarily the
result of FAS'gross negligence or willful or criminal misconduct, neither FAS
nor its affiliates shall have additional liability to Client Company or any
other person as a result of such error, omission or delay. Where any such
error, omission or delay results in an improper payment to any person, FAS,
upon notice thereof, shall promptly attempt to correct the improper payment,
but neither FAS nor any of its affiliates shall be liable to Client Company for
the amount thereof unless and except to the extent such error, omission or
delay constitutes or is primarily the result of FAS'gross negligence or willful
or criminal misconduct.
(c) FAS shall not have any responsibility for reserve reporting or
regulatory reporting other than to the extent expressly provided in this
Agreement. Under no circumstances shall FAS or its affiliates be liable for any
actuarial, personnel, processing or other expenses incurred by Client Company
related to reserve or regulatory reporting should Client Company decide to use
other than those systems and reports provided by FAS for this purpose.(d)
WHETHER OR NOT SUCH DAMAGES AND CLAIMS ARE FORESEEABLE AND WHETHER OR NOT THE
PERSON FROM WHOM INDEMNIFICATION WILL BE SOUGHT HAS BEEN ADVISED OF THE
POSSIBILITY THEREOF, IN NO EVENT SHALL EITHER PARTY OR ITS AFFILIATES BE LIABLE
TO THE OTHER PARTY OR ITS AFFILIATES FOR PUNITIVE DAMAGES OR FOR ANY DAMAGES AND
CLAIMS THAT ARE INDIRECT, SPECIAL OR CONSEQUENTIAL (INCLUDING, BUT NOT LIMITED
TO, LOST PROFITS OR LOST BUSINESS REVENUE, LOST BUSINESS, FAILURE TO REALIZE
EXPECTED SAVINGS OR OTHER SIMILAR COMMERCIAL OR ECONOMIC LOSS OF ANY KIND
WHATSOEVER).
(e) Anything in this Agreement to the contrary notwithstanding,
the aggregate liability of FAS and its affiliates for all Damages and Claims
pursuant to all proceedings brought or claims made during the term of this
Agreement and thereafter based on, arising out of or otherwise relating to this
Agreement or the Services, shall be limited to one-half of the aggregate fees
(exclusive of reimbursement for expenses) earned by FAS hereunder (irrespective
of when received) during the twelve (12) calendar month period preceding the
date such proceeding is first instituted or claim is first made, but if
instituted or made after termination of this Agreement, then during the twelve
(12) months immediately preceding such termination. The amount payable to
Client Company by FAS or its affiliates for any such Damages and Claims shall
be reduced by: (i) any sums owed to FAS by Client Company for Services already
performed; (ii) any sums paid on behalf of FAS by its insurance carrier to
Client Company or to the order of Client Company or that reduce Client
Company's liabilities to third parties in respect of such Claims and Damages.
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ARTICLE IX: STANDARD OF CARE
9.01 General. FAS agrees that in providing Services under this Agreement it
shall (i) comply with the Standards for FAS Team processing Environment set
forth in Exhibit D, (ii) conduct itself in accordance with all reasonable
commercial and professional standards of care, diligence, and good faith,
provide that such standards must be consistant with prudent management
practices in the variable life insurance industry generally, and shall
generally act in such a way as to preserve the goodwill toward Client Company
on the part of the general public, customers and all those having business
relations with Client Company and (iii) comply with all laws, regulations and
contracts in its administration of the Products and its provision of the
Services, except that insofar as such laws, regulations and contracts are
product-related, FAS shall only be obliged to comply therewith in a timely
fashion, and only if and to the extent Client Company has notified FAS thereof
in writing sufficiently in advance of their effective date to reasonably enable
FAS to amend the FAS System. FAS agrees at all times to maintain sufficient
facilities and trained personnel of the kind necessary to perform its
obligations under this Agreement. In addition, to the extent consistent with
such laws, regulations and contracts, including this Agreement, FAS shall
follow any written instructions of Client Company's Authorized Representatives,
provided such instructions are reasonable under the relevant facts and
circumstances.
9.02 Status of Personnel and Facilities. Whenever FAS utilizes its
employees to perform Services for Client Company pursuant to this Agreement,
such personnel shall at all times remain employees of FAS subject solely to its
direction and control, and FAS shall alone retain full liability to such
employees for their welfare, salaries, fringe benefits, legally required
employer contributions and tax obligations. No facility of FAS used in
performing Services for or subject to use by Client Company shall be deemed to
be transferred, assigned, conveyed or leased by such performance or use
pursuant to this Agreement.
9.03 Exercise of Judgment in Rendering Services. In providing any Services
hereunder that require the exercise of judgment by FAS, FAS shall perform any
such Service in accordance with the standards set forth herein and any
additional guidelines Client Company develops and communicates to FAS.
9.04 Fiduciary Account.
(a) All insurance charges or premiums collected by FAS on behalf
of Client Company pursuant to this Agreement and/or returned premiums received
from Client Company shall be held by FAS hereunder in a fiduciary capacity.
FAS shall promptly remit all such funds to the person entitled to them or
promptly deposit them in a segregated fiduciary bank account established and
maintained for the benefit of Client Company for such purpose. FAS shall make
withdrawals from any such fiduciary account only for the following purposes:
(a) remittance to Client Company; (b) deposit into an account owned by Client
Company; (c) transfer or deposit to a claims paying account established by FAS
for the benefit of Client Company; (d) payment to an insured; or (e) remittance
of returned premiums to the person or entity entitled to them. FAS shall
require the bank in which the fiduciary account is maintained to keep records
clearly recording the deposits and withdrawals from such account in a fashion
that clearly distinguishes such deposits and withdrawals from those of any
other person. FAS shall not pay any claims from this account.
(b) All claims paid by FAS from funds collected on behalf of
Client Company shall be paid only on drafts of, and as authorized by, Client
Company.
(c) Payment to FAS of any premiums or charges for insurance by or
on behalf of any insured shall be deemed to have been received by Client
Company, and returned premiums or claim payments forwarded by Client Company to
FAS shall not be deemed to have been paid until such payments are received by
the insured or claimant. Nothing contained in this Section 9.04(c) limits any
right of Client
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Company against FAS resulting from the failure of FAS to make payments to
Client Company or Client Company's insureds or claimants.
9.05 Reports. In the preparation of any reports pursuant to this
Agreement, FAS shall have no responsibility for making actuarial or legal
determinations concerning the Products or other materials supplied by Client
Company and shall be entitled to assume that all such items are legally and
actually sufficient. FAS shall, however, prepare such reports in accordance
with section 9.01.
ARTICLE X: CONFIDENTIALITY
10.01 By FAS. FAS acknowledges that all correspondence, documents, reports,
records, books, files and other materials relative to Client Company, it
business, its policyholders or the Products, whether supplied by or for Client
Company or prepared by FAS, shall be the sole property of Client Company and
that such property shall be held by FAS as agent during the term of this
Agreement. Except as provided below, all information furnished by Client
Company to FAS hereunder is confidential and neither FAS nor any of its
affiliates, agents or representatives shall disclose any such information,
directly or indirectly, to any third party except to the extent required by law
to make such disclosure; and, in the case of FAS, to the extent necessarily
resulting from provision by any of FAS' affiliates of services required by FAS
in order to perform its obligations under this Agreement. Upon termination of
this Agreement, FAS shall promptly transfer to Client Company all such
correspondence, documents, reports, records, books, files and other materials
at the expense of Client Company.
10.02 By Client Company. Client Company acknowledges that: (a) FAS and
certain other persons have proprietary rights in and to the FAS System; and (b)
that the FAS System constitutes and/or contains confidential material and trade
secrets of FAS, its affiliates or unrelated persons. Accordingly, Client
Company agrees to maintain the confidentiality of the FAS System. Further,
Client Company acknowledges that this Agreement in no way gives Client Company
any rights in or to the FAS System.
10.03 By Both Parties. Both parties acknowledge that this Agreement and the
attached Exhibits and Schedules are confidential and proprietary and that the
terms thereof shall not be shared with any person other than those persons who
have a need to know in order to enable Client Company or FAS to perform their
obligations under this Agreement and which persons are employees, advisors,
representatives or agents of Client Company, FAS or the affiliates of either;
provided that any such advisors, representatives or agents have signed
confidentiality acknowledgements consistent with the provisions of this Article
X before they have access to any such confidential information.
10.04 Exceptions. Anything herein to the contrary notwithstanding, the
following information shall not be deemed confidential for purposes of this
Article:
(a) information which is already public knowledge or becomes
generally available to the public other than as a result of a disclosure by the
party alleged to have violated this Article;
(b) information which is lawfully acquired by a party on a
non-confidential basis from a source (other than the other party to this
Agreement); or
(c) information that the disclosing party authorizes the receiving
party to disclose to third parties by prior written authorization; or
(d) information that is ordered to be disclosed by a court,
administrative agency, or other governmental body with jurisdiction over the
parties, provided that the ordered party will first have provided the
disclosing party with prompt written notice of such required disclosure and
will take
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reasonable steps to allow the disclosing party to seek a protective order with
respect to the confidentiality of the information required to be disclosed.
The ordered party will promptly cooperate with and assist the disclosing party
in connection with obtaining such protective order, at the disclosing party's
expense.
10.05 Injunctive Relief. Both parties acknowledge that the breach of this
Article X by either of them could cause the non-breaching party irreparable
harm not compensable by monetary damages. Accordingly, the parties agree that
the breach or threatened breach of this Article X by either of them shall
entitle the non-breaching party to injunctive relief, in addition to any other
available remedies.
10.06 Publicity. Notwithstanding the provisions of Section 14.12, neither
FAS nor Client Customer shall directly or indirectly, by inference or
otherwise, use any name, xxxx, logo or other identifier of the other party in
any manner, or permit any third party to do so, without such other party's
prior written consent. Without limiting the generality of the foregoing,
neither FAS nor Client Company will, without the prior written consent of the
other party, use in any advertising, publicity or other promotional endeavor,
any name, xxxx or logo of such other party, or represent, directly or
indirectly, by inference or otherwise, that Client Company has retained FAS, or
that FAS has been retained by Client Company, to perform the Services.
ARTICLE XI: COMPUTER ACCESS
11.01 Authorization. Provided both parties hereto have authorized such
access by signing in the space therefor on the signature page hereof, and
subject to the terms and conditions set forth below, Client Company shall be
entitled to obtain access on a "view only" basis (i.e., Client Company may not
alter any data) to all data relating to the Products (the "Information") which
is maintained on the computer(s) utilized by and on behalf of FAS in providing
the Services to Client Company pursuant to this Agreement ("System Access").
11.02 Availability. Client Company's access to such data shall be limited
to Mondays through Fridays, exclusive of holidays, between the hours of 8 a.m.
and 5 p.m., Hartford, Connecticut time. FAS retains the right, however, to
limit or otherwise change those hours at any time and for any reason with prior
consent of Client Company, which consent shall not be unreasonably withheld.
Furthermore, FAS makes no representations or warranties as to the ability of
Client Company to successfully utilize System Access at any given time, in
light of the fact that computer facilities suffer occasional "down time" but
FAS shall provide reasonable advance notice of any scheduled "down time." For
all of the foregoing reasons, FAS SHALL HAVE NO LIABILITY TO CLIENT COMPANY OR
ANY OTHER PERSON AS A RESULT OF ANY SUCH PERSON'S INABILITY TO UTILIZE SYSTEM
ACCESS AT ANY TIME OR FOR ANY REASON, EXCEPT FOR THE INTENTIONAL AND WRONGFUL
NON-PERFORMANCE OR WILLFUL MISCONDUCT OF FAS.
11.03 Restrictions on Use. Client Company shall take no actions to affect
or modify System Access, the Information or any of the hardware or software
utilized by or on behalf of FAS in conjunction with System Access. Use of
System Access to view data shall be made only through means and codes
authorized by FAS hereunder or pursuant hereto, which means and codes Client
Company agrees not to divulge to any person other than those of its employees,
consultants or clients it wishes to have use System Access. Neither FAS nor
any of its affiliates shall have responsibility for determining whether a
person with the proper procedures and codes to utilize System Access was
properly authorized to do so by Client Company.
11.04 Modification. FAS shall have the right to modify or cause the
modification of the System Access program from time to time at its sole
discretion without prior notice to Client Company, so long as there is no
adverse impact on the business of Client Company or any degradation in the
performance level of the Services. FAS shall expeditiously inform Client
Company of any such modifications.
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11.05 Security. In the event that Client Company suspects a possible breach
of security with respect to System Access including, without limitation, any
unintended disclosure of codes, or Client Company obtains Information through
System Access on any person other than its own policyholders, then Client
Company shall immediately notify FAS of such circumstances by telephone,
followed by a confirmation in writing, specifying the nature of the problem.
11.06 Limitation of Liability. NEITHER FAS ANY OF ITS AFFILIATES OR CLIENT
COMPANY SHALL BE LIABLE TO THE OTHER FOR ANY DAMAGES (EXCEPT DIRECT DAMAGES) OR
CLAIMS ARISING OUT OF OR IN CONJUNCTION WITH THE PARTICIPATION BY CLIENT
COMPANY OR ANY OF ITS CLIENTS OR CLIENT COMPANY POLICY HOLDERS IN SYSTEM
ACCESS, INCLUDING, WITHOUT LIMITATION, ANY INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE
POSSIBILITY THEREOF.
11.07 Internet Access. FAS acknowledges that Client Company is developing
an internet web site ("Site"), the purpose of which will be to, among other
things, (a) provide general information about Client Company and its products,
(b) allow registered representatives, policy holders, and the general public to
access information regarding variable account unit values and fixed account
interest rate offerings, and (c) allow policy holders to access values and
other information regarding their own contracts and make investment allocation
and other changes. FAS agrees to cooperate with Client Company, and any third
party the Client Company has engaged to develop an electronic interface to
provide information they may need to develop the Site including, but not
limited to, variable and fixed account values, contract values, and registered
representative database information. Furthermore, FAS agrees that it will
accept service requests via the Site and the internet to the extent Client
Company has built the capability into the Site and to the extent policy
holders, registered representatives, and the public actually use it for its
intended purposes.
ARTICLE XII: ACCESS
12.01 By Client Company. Upon reasonable notice to FAS, Client
Company shall have access, during normal business hours, to all documents,
records, books, files and other materials relative to this Agreement and
maintained by FAS, subject to Client Company's adherence to FAS' security
practices and procedures.
12.02 Auditors and Regulators. Client Company and its duly authorized
independent auditors shall have the right upon reasonable notice to FAS and at
reasonable frequencies (it being agreed by FAS that semi-annually is
reasonable) during FAS' normal business hours to perform on-site examinations,
inspections and audits of records and accounts directly pertaining to the
Products. At the request of Client Company, FAS shall make available to Client
Company's auditors and to representatives of regulatory agencies, all
reasonably requested records in its custody relating to Client Company, as well
as access to FAS' operating procedures and premises.
12.03 Records Retention. FAS agrees to maintain in its principal
administrative office and make available to Client Company complete books and
records of all transactions by and among FAS, Client Company and Client
Company's insureds. The books and records of all such transactions shall be
maintained in accordance with prudent standards of insurance record keeping and
shall be maintained for
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the duration of this Agreement and for a period of not less than seven (7)
years thereafter. At the end of such period, FAS shall notify Client Company
that it intends to destroy all such records unless, within thirty (30) days of
receipt of such notice, Client Company makes arrangements, at its expense, for
the packaging, pick-up and delivery of such records to a destination of its
choosing, which arrangements are reasonably satisfactory to FAS. Any trade
secrets contained in such books and records, including, but not limited to, the
identity and addresses of policyholders and certificate holders, are
confidential. The foregoing notwithstanding, the Commissioner of Insurance or
similar regulator in any jurisdiction may have access to such books and records
for the purpose of examination, audit, inspection and use in any investigation
or other proceeding instituted against either party, provided such access is
limited to the specific materials requested by such regulator.
ARTICLE XIII: TERMINATION
13.01 At End of Term. If Client Company wishes not to renew this Agreement,
it may do so effective as of the end of the then current term, but only if it
gives FAS 90 days' written notice of such non-renewal, accompanied by a fee
equal to the total fees payable by the Client Company to FAS during the two (2)
preceding calendar months, such additional two months' fee to be applied
against any sums which would otherwise be payable to FAS under this Agreement
for the last two (2) months of the then current term. Failure to make this
payment shall be grounds for FAS to terminate this Agreement immediately.
13.02 Late Payment. If Client Company has not made a payment of fees and
charges pursuant to Section 3.01 within [ten (10)] days of the date on which
such charges were due, FAS may give notice to Client Company of such
non-payment. At any time after the expiration of thirty (30) days following
the giving of such notice by FAS to Client Company, FAS may terminate this
Agreement if, at such time, such fees and charges referred to in such notice
remain due and unpaid by Client Company.
13.03 Other Defaults; Bankruptcy. If either of the parties (the "Defaulting
Party") hereto materially breaches this Agreement or is materially in default
in the performance of any of its duties and obligations hereunder (other than
Client Company's obligations of payment under Section 3.01), the other party
hereto may give written notice thereof to the Defaulting Party and if such
default or breach shall not have been remedied to the non-defaulting party's
reasonable satisfaction within thirty (30) days after such written notice is
given, the non-defaulting may terminate the Agreement effective upon the giving
of notice of such termination to the Defaulting Party. At its option, either
party hereto may also terminate this Agreement without prior notice and be
relieved of its obligations under this Agreement in the event the other party
experiences an Event of Bankruptcy, as defined in Article 14.
13.04 Termination by Mutual Consent. This Agreement may be terminated at any
time during its term upon the mutual written consent of both parties hereto.
13.05 Continued Services. Section 13.03 notwithstanding, if FAS elects to
terminate this Agreement for other than non-payment of fees and charges and if
Client Company shall so request in writing and shall pre-pay the anticipated
fees for continuation of the Services, FAS shall continue to provide the
Services for such period of time as Client Company may request, not to exceed
three (3) months following that date on which this Agreement would otherwise
have terminated, such service to be provided in accordance with the terms of
this Agreement, but at one hundred twenty-five (125) percent of the fees in
effect with respect thereto for the term immediately preceding such three-month
period. In the
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event that the Agreement is terminated for any reason, FAS shall offer
reasonable assistance to Client Company in converting the records of Client
Company from the FAS System to whatever service or system selected by Client
Company to replace the FAS System (subject to reimbursement to FAS for such
assistance at its standard, published rates and fees at that time).13.06
Non-Waiver. Termination of this Agreement due to default or breach by Client
Company shall not constitute a waiver of any rights of FAS in reference to
Services performed prior to such termination or of any rights of FAS to be
reimbursed for expenditures. Termination of this Agreement due to default or
breach by FAS shall not constitute a waiver by Client Company of any rights it
might have under this Agreement.
ARTICLE XIV: MISCELLANEOUS
14.01 Assignment. Neither this Agreement nor any rights or obligations
hereunder may be assigned by either party hereto without the prior written
consent of the other, which consent shall not be unreasonably withheld. The
foregoing notwithstanding, in the event of its merger FAS' rights and
obligations hereunder may be assigned to the succeeding entity by operation of
law without Client Company's prior written approval. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns.
14.02 Dispute Resolution.
(a) The parties to this Agreement understand and agree that the
implementation of this Agreement will be enhanced by the timely and open
resolution of any disputes or disagreements between such parties. Each party
hereto agrees to use its best efforts to cause any disputes or disagreements
between such parties to be considered, negotiated in good faith and resolved as
soon as possible.
(b) It is the intention of the parties hereto that customs and
usages of the business of life insurance shall be given full effect in the
interpretation of this Agreement other than to the extent the unique aspects of
the transaction render such customs and usages inapplicable. The parties
hereto shall act in all things with the highest good faith. Any dispute or
difference with respect to the operation or interpretation of this Agreement on
which an amicable understanding cannot be reached shall be submitted to
arbitration in accordance with the then current Rules of the American
Arbitration Association, and such arbitration shall be mandatory and binding.
The arbitrators shall be free to considerations relating to equity and
customary practices of the life insurance industry in their consideration of
the legal issues involved.
(c) The arbitration shall be held in Stamford, Connecticut and
shall consist of three arbitrators. Client Company shall appoint one arbitrator
and FAS the second. Such Arbitrators shall then select the third arbitrator
before arbitration commences. The arbitrators appointed by the parties shall in
good faith endeavor to select for the third arbitrator a person who is either
an active or retired executive officer od a life insurance company, data
processing comapany or third-party providor.
(d) Decisions of of the arbitrators shall be by majority vote.
The cost of arbitration, including the fees of the arbitrators, shall be borne
as the arbitrators shall decide. Judgment on any award granted by the
arbitrators may be entered in a Federal court of competent jurisdiction located
in Stamford, Connecticut.
14.03 Remedies. The remedies provided for in this Agreement are the sole and
exclusive remedies available to the parties hereto for: (a) any Damages and
Claims based upon, arising out of or otherwise relating to this Agreement and
the transactions contemplated hereunder; and (b) for any breach or threatened
breach of this Agreement.
14.04 Independent Contractor. It is understood and agreed that the Services
are performed hereunder by FAS as an independent contractor and not as an
employee or partner of Client Company, and nothing
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contained in this agreement shall be construed to create the relationship of
joint venture or partnership between FAS and Client Company.
14.05 Definitions. For purposes of this Agreement:
(a) "affiliate" shall mean a person that directly, or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with another Person or beneficially owns or has the power to
vote or direct the vote of twenty-five percent (25%) or more of any class of
voting stock (or of any form of voting equity interest in the case of a person
that is not a corporation) of such other person. For purposes of this
definition, "control", including the terms "controlling" or "controlled", means
the power to direct or cause the direction of the management and policies of a
person, directly or indirectly, whether through the ownership of securities or
partnership or other ownership interests, by contract or otherwise.
(b) "insured" means a person who has a contract with Client
Company for any of the Products;
(c) the terms "Products", "certificate", "certificates",
"contract" and "contracts" are interchangeable where appropriate and refer to
the primary coverage documents for each insured and not to Master Policy(ies)
or other agreements that govern the insurance coverage of each group;
(d) "person" means a natural person, corporation, limited
liability company, partnership, association, joint stock company, governmental
entity, business trust, unincorporated organization or other legal entity; and
(e) "Event of Bankruptcy" has the meaning set forth in Schedule
14.05(d).
14.06 Entire Agreement; Amendment. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements with
respect to the subject matter hereof, whether oral or written. Except as
otherwise expressly provided in this Agreement, this Agreement, including the
Exhibits and Schedules hereto, may not be modified and no provision hereof may
be waived except in a written instrument executed by both of the parties
hereto. The waiver by either party hereto of any provisions of this Agreement
on any one or more occasions shall not be construed to constitute a waiver of
that or any other provision on any other occasion.
14.07 Survival. The representations, warranties, covenants and obligations
contained herein shall survive the execution of the Agreement and the
performance of the Services hereunder.
14.08 Governing Law. This Agreement shall be governed by the laws of the
State of Connecticut without giving effect to conflicts of law principles.
14.09 Exhibits and Schedules. The Exhibits and Schedules hereto, including
any agreed upon amendments thereto, shall be deemed a part of this Agreement as
fully and effectively as set forth in full in the body of this Agreement. The
terms used in the Exhibits and Schedules shall have the same meaning as such
terms have in this Agreement, unless the contrary intention is clearly
manifested in such exhibits or schedules.
14.10 Severability. Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
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14.11 Approval of Advertising and Marketing Materials. In performance of
the Services, FAS may use only such advertising and marketing materials
pertaining to the Client Company, the products or otherbusiness underwritten by
Client Company that are approved by Client Company in advance of its use.
14.12 Additional Requirements in Certain States.
(a) Client Company acknowledges its responsibility to cooperate in
registering FAS as an administrator in certain states in which Client Company
conducts business, including, in some cases, completing and authorizing a
Certificate of Registration and a surety bond (if required, attached as Exhibit
E).
(b) In those states for which such is required, FAS will provide a
written notice, approved by Client Company, to insureds advising them of the
identity of and relationship among FAS, the policyholder and Client Company,
and/or of whatever other matters, applicable laws and regulations may from time
to time require.
(c) With respect to insureds resident in states requiring such,
FAS, in connection with the collection of funds for Client Company, shall
identify and separately state in writing to the persons paying any charge or
premium for coverage, the amount of any such charge or premium specified by
Client Company for such coverage.
14.13 Notice. All notices required or permitted to be given under this
Agreement shall be in writing and shall be deemed duly given upon delivery if
personally delivered, upon confirmation of transmission by sending machine if
sent by facsimile, upon the third business day after mailing if sent by
registered or certified mail, postage prepaid, and upon receipt if sent by
reputable courier, as follows, or to such other address or persons either party
may designate to the other party hereunder:
If to Client Company, to:
Sage Life Assurance Company of America, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Sage Group Limited
Sage Centre
00 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxx Xxxxxx
Attention: Mr. H. Xxxxx Xxxxx
Telephone: 000-00-00-000-0000
Facsimile: 011-27-11-834-1910
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If to FAS to:
Financial Administrative Services, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xx Xxxxxxx Xxxxx
Telephone: (000) 000-0000________
Facsimile: (000) 000-0000 ________.
14.14 No Third Party Beneficiaries. Except as otherwise specifically
provided for herein, nothing in this Agreement is intended or shall be
construed to give any person, other than the parties hereto, their successors
and permitted assigns, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision contained herein.
14.15 Right to Contract with Third Parties. Nothing herein shall be deemed
to grant FAS an exclusive right to provide services to Client Company, and
Client Company retains the right to contract with any third party, affiliated
or unaffiliated, for the performance of services other than the Services as are
available to or have been requested by Client Company pursuant to this
Agreement, whether for the Products or other products of the Client Company.
Likewise, nothing herein shall be deemed to grant Client Company an exclusive
right to utilize FAS' services, and FAS retains the right to contract with any
third party, affiliated or unaffiliated, for the performance of services.
14.16 Cooperation. The parties agree to cooperate with each other in a
commercially reasonable manner in order that the duties assumed by the parties
under this Agreement may be effectively, efficiently and promptly discharged.
Each party shall at all reasonable times during normal business hours under the
circumstances make available to the other party properly authorized personnel
for the purpose of consultation and decision.
14.17 Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties.
14.18 Force Majeure. Neither FAS nor Client Company shall be deemed to be
in default of this Agreement to the extent that the performance of its
respective obligations or attempts to cure any breach of this Agreement are
delayed or prevented by reason of an act of God, fire, electrical outage,
natural disaster, act of government, or any other cause beyond the control of
such party (each, an "Event"); provided, however, that the provisions of this
Section 14.18 shall be inapplicable with respect to FAS to the extent to which
the disaster recovery systems of FAS are or, under ordinary standards of due
care within the industry, should have been adequate and sufficient to avoid
such period of delayed or prevented performance.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf by and through their duly
authorized officers as of the date and year first above written.
SAGE LIFE ASSURANCE COMPANY OF AMERICA, INC.
Attest: By: ______________________________________
Its: ___________________________________________
FINANCIAL ADMINISTRATIVE SERVICES,
Attest: By: ______________________________________
Its: ___________________________________________
System Access authorized(1) effective as of ___________, _______ [to be
completed by FAS only]
FAS: By: ____________________________________________
Client Company: By: __________________________________
Date: ________________________________________________
__________________________________
(1) Not effective unless and until signed by both parties.
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EXHIBIT A
SERVICES
I. SET UP PHASE
A. STANDARD
1. Loading all appropriate plan parameters to establish
the Products in the FAS environment.
2. Implementation of the billing and premium collection
process,
3. Formatting and implementation of the Policyholders'
Annual Statement and any other client-specific forms.
4. Implementation of accounting.
5. Implementation of appropriate management reporting.
6. Development of Client Company-specific administrative
procedures and service levels.
B. OPTIONAL
1. Conversion of Policy records from current
administrative system(s).
II. ADMINISTRATIVE PHASE
A. Standard
1. COLLECTION OF PREMIUMS. FAS shall deposit all
premiums into a Client Company owned and controlled
lockbox. The deposits and accompanying data
respecting such lockbox shall be transmitted by the
bank to FAS. Upon receipt of this data, FAS shall
balance the collections to the bank deposit record
and enter such data into the administrative system,
credited to the insured's/annuitant's policy. FAS
shall also be responsible for:
- processing EFT premium payments;
- processing returned, unhonored checks and EFT
payments;
- processing change in EFT bank accounts;
- sending confirmation statements for the
Products;
- generating and mailing scheduled premium
payments;
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- generating and mailing guideline/MEC letters
for the Products violating the maximum
premium payment allowed; and
- generating and mailing lapse warnings/letters
for applicable life insurance.
2. PAYMENT OF COMMISSIONS. FAS is responsible for
entering the commission rates and agent information
provided by Client Company into the administrative
system. FAS is also responsible for generating
proper commission payments and commission statements
for all premium payments/deposits received and
applied to the Products. FAS shall promptly send
commission payments in accordance with the schedule
authorized by Client Company, by mail or EFT.
FAS shall also answer routine commission inquiries
from Client Company's Home Office and commission
payees (i.e., amount of commission, rate of
commission, status of commission).
FAS shall generate the 1099 MISC Tax Forms at year
end and file with the IRS for Client Company, or
transmit information to Client Company if the latter
prefers to handle this tax reporting.
3. WRITTEN COMMUNICATIONS. Policies, certificates,
booklets, termination notices or other written
communications delivered by Client Company to FAS for
delivery to Client Company's policyholders shall be
delivered by FAS promptly after receipt of
instructions from Client Company to do so.
4. POLICYHOLDER SERVICES. FAS shall answer routine
policyholder and agent calls to Client Company's
"800" number. Additionally, FAS shall respond to
written inquiries regarding particular policies.
Requests for address changes, beneficiary changes,
title changes, assignments and policy changes shall
be proceeded at FAS, using Client Company forms and
letters to confirm completion of requests.
Requests for policy disbursements shall be handled at
FAS. These include loans, partial withdrawals,
surrenders and exchanges. Client Company shall
assist in writing acceptable disbursement procedures
and providing company forms and form letters. FAS
shall verify the owner's signature for every
disbursement. Conservation efforts shall occur at
Client Company's Home Office. FAS shall generate and
mail the necessary 1099R tax forms for these
disbursements and file with the IRS on behalf of
Client Company, or provide Client Company with the
information needed to do this reporting if they
prefer to control the tax reporting.
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5. CLAIMS PAYMENT. FAS shall accept notification of a
pending claim, and:
- send a Client Company approved condolence
letter advising of requirements to consider
approval of the claim;
- notify Client Company's Claim Department of a
potential claim;
- process the claim, after Client Company
adjudicates the claim; and
- prepare the needed 1099 tax reports and file
with the IRS on behalf of Client Company, or
transmit the necessary information to Client
Company to do the reporting if the latter
prefers.
6. NEW BUSINESS ISSUES. FAS is responsible for entering
the applicable information from the applications into
the administration system, generating the policies
and "Welcome Kits", assembling and forwarding the
policies to the party designated by Client Company.
Any underwriting or suitability checks shall occur at
Client Company prior to FAS issuing any policies.
Follow up for outstanding life insurance requirements
is the responsibility of Client Company.
7. RECORD KEEPING. FAS shall maintain a complete policy
file on record, either in the form of a paper file or
microfiche. FAS shall provide Client Company with
copies of each policy file on either paper or
microfiche.
All production cycles, which include accounting
reports, quarterly/annual statements, and
confirmation statements shall be maintained at FAS on
a daily, chronological microfiche. Records shall be
maintained for a period of not less than seven (7)
years.
8. ACCOUNTING. FAS basic accounting support for Client
Company includes:
- setting up one (1) Chart of Accounts, as
submitted by Client Company;
- balancing the daily cycles for completeness
and accuracy;
- research and resolution of reconciling items
and
- for variable business:
- supporting investment options
relating to the Products;
- receiving unit values from Client
Company or NAVs from fund company
and calculating unit values;
- preparing and transmitting trade
sheets to Client Company;
- running the trade system; and
- preparing/posting M&E from the trade
system.
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9. REPORT PRODUCTION. FAS shall provide the following
reports daily with respect to the prior day's
activities:
- ERROR REPORT. This report displays all
errors and warnings that occur on
transactions in the batch cycle.
- CONTROLS REPORT. This report is used to
balance the daily cycle activity. This
report shows the beginning value of each
fund, the effect of financial activity during
cycle on each fund and the balance of each
fund once the cycle is completed.
- FINANCIAL ACTIVITY. This report displays
detailed information on every transaction
processed or reversed in the last batch
cycle. This is based on policy number order.
- REMITTANCE REPORT. Similar to the Financial
Activity Report in format, this report
displays all payment transactions.
- WITHDRAWAL REPORT. Similar to the Financial
Activity Report in format, this report
displays all withdrawal transactions.
- SUSPENSE REPORT. This report produces:
- a detailed description of each item
on the Suspense file; and
- a summary of items by age
outstanding in the Suspense file.
- ISSUE REPORT. This report displays the age
in days from the application date of each
pending issue policy.
B. Optional (only provided if requested by Client Company; there
may be an additional charge)
1. ADDITIONAL 1035 FOLLOW UP. 1035 letters/follow up
can be done at FAS for an additional issue fee. For
1035 Exchanges lacking cost basis information, FAS
shall send a request to the original company and one
(1) follow up letter. For delivery receipts, FAS
shall send one (1) follow up letter and then send to
Client Company's Home Office for disposition if the
receipt is not obtained.
2. OTHER ACCOUNTING SERVICES. Other accounting services
that would be available for additional fees include:
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- preparing Client Company trades;
- preparing and completing wires;
- reconciling cash accounts/bank statements;
- balancing shares/units;
- setting up additional charts of account
submitted by Client Company; and
- providing support for additional investment
options.
3. ADDITIONAL REPORTS. Additional reports that can be
generated monthly upon request:
- NEW BUSINESS. This report lists policies
awaiting initial premium. In addition to the
company, policy number and policy effective
date, the expected premium is also reported.
Expected premium is the schedule billed
premium, not necessarily the balance of the
initial premium not yet received.
- PAID NEW BUSINESS. This report lists
policies that changed from pending initial
premium to active status during the reporting
period.
- AGENT NEW BUSINESS. This report list by
Agency/Agent policies awaiting initial
premium. Policy status, agency, agent,
company, policy number, application date and
last name are reported.
- ACTIVITY BY PRODUCT/PLAN/LOB. This report
details the financial activity by product
plan and line of business.
- ACTIVITY BY STATE. This report details the
financial activity by state, country, city
and plan.
- PREMIUM VS. ACCUMULATED VALUE. This report
provides a comparison of the accumulated
policy value to the accumulated policy value
to the accumulated premiums less withdrawals
for each policy.
- RESERVES. This report generates a reserve
extract file containing detailed reserve
information on all products.
- DISBURSEMENT SUSPENSE. This report prints
disbursement checks from the suspense file.
Disbursement checks are on the suspense file
with a source of "SYST". The suspense check
indicator shall be "N".
- SURRENDER REPORT. Similar to the financial
activity report in format this report
displays detail information on all
surrenders.
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- DEATH REPORT. Similar to the financial
activity report in format this report
displays information on all death claims.
- ACCOUNTING JOURNAL REPORT. This report shall
indicate if the system encountered any
problems when writing the accounting extract
file.
- INVALID JOURNAL REPORT. In the course of
generating accounting information in batch
cycle processing, some transactions processed
may not be matched with the chart of
accounts. This reports the transaction
components (item IDs) which could not be
located.
- ACCOUNTING REPORT. This report produces the
accounting for that cycle.
- OUT OF BALANCE REPORT. This report prints
the detailed accounting entries for Products
for which the accounting does not balance.
III. MODIFICATIONS
Any modifications requested by Client Company shall be submitted in
writing on a Service Order in the form of the one attached to this
Exhibit.
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SERVICE REQUEST FORM
DATE: ________________ TME:__________________ REQUESTOR:___________________
REQUEST FOR ESTIMATE ONLY:_____________ SERVICE REQUEST:______________________
ACCT. MAN. APPROVAL:_______________ COMPANY EFFECTED:______________________
APPROVED BY:_______________________________________ (Approval by Acct. Manger)
PROBLEM AFFECTS:_______________________________ (i.e. Accounting, Valuation...)
===============================================================================
Description of Request: Be specific and attach any applicable documentation
including screen prints and calculations.
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
===============================================================================
Date Received:__________ Date Assigned:_____________ Assigned To:__________
Describe Resolution of The Problem:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Resolved By:________________________________ Date Resolved:___________________
Requestor's Signature of Approval:____________________________________________
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EXHIBIT B
PRODUCTS
Attached hereto is a copy of each of the policy forms filed or to be filed with
any regulatory agency and which is associated with the Products subject to this
Agreement.
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EXHIBIT C
COMPENSATION
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EXHIBIT D
STANDARDS FOR FINANCIAL ADMINISTRATIVE SERVICES, INC.
Team Processing Environment
The following standards assume a team processing environment where a small
group of highly trained individuals are committed to processing any policy
level transaction on a "good order - same day" basis, completing any
policyowner request by phone or by mail, and assuring that the service provided
to policyowners, registered representatives, agents, and home office personnel
is of the highest quality.
These standards contain information of Financial Administrative Services, Inc.
(FAS), which is provided for the sole purpose of permitting the recipient to
evaluate the standards submitted herewith. In consideration of receipt of this
document, the recipient agrees to maintain such information in confidence and
to not reproduce or otherwise disclose this information to any person outside
the group directly responsible for evaluation of its contents, except that
there is no obligation to maintain the confidentiality of any information which
was known to the recipient prior to receipt of such information from FAS or
becomes publicly known through no fault of recipient, or is received without
obligation of confidentiality from a third party owing no obligation of
confidentiality to FAS.
NEW BUSINESS
APPLICATION PROCESSING:
Timeliness
100% of applications received by 3:00 p.m. will be pended on
PolicyLink and all premiums will be applied to suspense. (this may be
extended to 4:00 p.m. if arrangement with local lockbox can be
negotiated)
Quality
98% to 100% are processed error free.
ISSUE PROCESSING:
Timeliness
100% of approvals/declines received by 3:00 p.m. from Client Company
underwriting dept. for policies in good order, with premium in
suspense, will be issued or declined with cash being applied or
refunded that day.
Quality
98% to 100% are processed error free.
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REPLACEMENT/1035 EXCHANGE/ROLLOVERS/DIRECT ROLLOVERS/TRANSFERS:
Timeliness
100% of requests for exchange are mailed to the exchanging company
within one (1) business day of receipt in good order by 3:00 p.m.
Written follow-up on exchanges will be done at 30, 60 and 90 days.
Telephone follow-up on exchanges will be done at 14 and 45 days in
addition to letter.
Quality
98% to 100% of all replacements are processed error free.
POLICY ASSEMBLY AND MAILING:
Timeliness
100% of all issues will be assembled and mailed within two (2)
business days of receipt of all requirements in good order by 3:00
p.m.
Quality
98% to 100% of all issues are assembled and mailed error free.
CANCEL/NOT TAKEN/FREE LOOK:
Timeliness
100% of all free looks are processed the day of receipt in good order
by 3:00 p.m.
Quality
98% to 100% of all free looks are processed error free.
POLICY OWNER SERVICE
TELEPHONE:
Timeliness
Average speed of answer is less than 30 seconds. Abandon rate is less
than 3%.
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Standard
Caller is greeted with courtesy, patience, clarity, moderate volume
and proper speed. During the telephone conversation, the Policyowner
Service Rep. uses caller's name, sounds alert and shows interest
regarding the call. At the end of the call Policyowner Service Rep.
summarizes the call and provides a confirmation number for financial
transactions. Asks if they can help with anything else.
ASSIGNMENT, ADDRESS/TITLE CHANGE:
Timeliness
100% of all changes will be processed within one (1) business day of
receipt in good order by 2:00 p.m.
Quality
98% to 100% of all changes and associated correspondence are processed
error free.
FUND TRANSFERS:
Timeliness
100% of all fund transfers (both written and telephone) received prior
to 4:00 p.m. will be processed that day. Those received after 4:00
p.m. will be processed the next day.
Quality
98% to 100% of the transactions are processed error free.
ALLOCATION CHANGES:
Timeliness
100% of all allocation changes (both written and telephone) received
prior to 4:00 p.m. will be processed that day. Those received after
4:00 p.m. will be processed the next day.
Quality
98% to 100% of the transactions are processed error free.
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REQUESTS FOR WRITTEN RESPONSE:
Timeliness
Written or phone requests that require written response are completed
within one (1) business day or when promised to the customer.
Quality
98% to 100% of all responses to the inquirer are error free.
ADDITIONAL REQUIREMENTS:
Timeliness
100 % of requests for additional requirements are completed within one
(1) business day. Follow-ups on requests for additional requirements
are made within 15 business days.
Quality
98% to 100% of all follow-ups are processed error free.
CALL BACK:
Timeliness
90% of call backs will be done the same day. 100% of call backs will
be done in 24 hours.
PROBLEM RESOLUTION:
Timeliness
90% of call backs will be in 24 hours. 100% of call backs will be
done in 48 hours. If problem resolution exceeds 48 hours, the
supervisor will be notified and involved.
Complaints:
Timeliness
Verbal notification to Client Company within 24 hours of receipt.
Written notification with any needed supporting documentation within
48 hours.
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Quality
100% of all applicable documentation will be forwarded to Client
Company on all complaints.
BILLING AND COLLECTION
SUBSEQUENT LOCKBOX PREMIUMS:
Timeliness
100% of all collections will be reconciled and applied to the policy
on the day of receipt of the money if received by 4:00 p.m.
Quality
98% to 100% of the transactions are processed same day, error free.
PAC/EFT PROCESSING:
Timeliness
100% of PAC/EFT items received are processed prior to the day that
the policy is scheduled to be billed.
Quality
98% to 100% of the transactions are processed error free
PAC/EFT RETURNED ITEM PROCESSING:
Timeliness
95% of all returned PAC/EFT will be processed within one (1) business
day following receipt if received by 2:00 p.m. 100% will be processed
within two (2) business days.
Quality
98% to 100% of the transactions are processed error free.
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NSF CHECKS:
Timeliness
100% of processing will be completed within one (1) business day
following notification of bad check.
Quality
98% to 100% of the transactions are processed error free.
PROCESSING GROUP BILLS:
Timeliness
100 % of group bills are mailed within one (1) business day of
printing.
Quality
98% to 100% of the bills are printed error free.
PROCESSING AUTOMATIC REMINDER NOTICES:
Timeliness
100% of notices are mailed within one (1) business day of printing.
Quality
98% to 100% of the notices are printed error free.
PROCESSING NON-FINANCIAL CHANGES:
(MODE CHANGES, BANK CHANGES, ADDITIONS OR DELETIONS FROM GROUP)
Timeliness
100% of changes are completed on the day of receipt in good order by
2:00 p.m.
Quality
98% to 100% of the transactions are processed error free.
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DISBURSEMENTS
CASH LOAN/PARTIAL WITHDRAWALS:
Timeliness
100% of all cash loans/partial withdrawals will be processed the day
of receipt in good order by 2:00 p.m.
Quality
98% to 100% of transactions are processed error free.
CASH SURRENDERS/1035'S:
Timeliness
100% of all surrenders/1035's will be processed the day of receipt in
good order by 2:00 p.m.
Quality
98% to 100% of transactions are processed error free.
DEATH CLAIMS:
Timeliness
100% of death claims will be processed on the day of payment
notification by the Client Company claims department by 2:00 p.m.
Quality
98% to 100% of transactions are processed error free.
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EXHIBIT E
CERTIFICATE OF REGISTRATION AND SURETY BOND
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STATE OF WYOMING
INSURANCE DEPARTMENT
CHEYENNE, WY 82002-0440
CERTIFICATE OF REGISTRATION
This application, made pursuant to Wyoming Insurance Department Regulations,
is submitted for the purpose of registering an administrator
for__________________________________________________________________________
Insurer
of___________________________________________________________________________,
Street Address
_____________________________________________________________________________.
City, State and Zip Code
1. Name of Administrator_______________________________________________
2. Principal administrative office address_____________________________
____________________________________________________________________
3. Administrator's telephone number____________________________________
4. List names, addresses and titles of all officers if a corporation,
partners if a partnership and proprietor if a sole proprietorship.
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
5. Is it understood that, by filing this registration with the insurance
commissioner, the insurer agrees that any violation of the Wyoming
Insurance Code, any lawful rule or final order of the commissioner or
any final judgment or decree made by any court committed by the
administrator while acting within its apparent scope of authority for
the insurer shall be deemed to be a violation of said code by the
insurer?
. . . . . . . . . . . . . . . . . . . . . . . ( ) Yes ( ) No
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I,________________________________________________________ , on behalf of
Name
_______________________________________________________________________,
Insurer
certify that the Administrator designated herein is competent, trustworthy,
financially responsible and of good reputation. Attached hereto is a written
description of the functions to be performed by said Administrator and copy of
bond.
---------------------------------------------------
Signature
---------------------------------------------------
Title
ACKNOWLEDGEMENT:
State of___________________________________
County of__________________________________
The foregoing instrument was acknowledged before me this _____ day of
___________________, 19___. Witness my hand and official seal.
------------------------------------------
Notary Public
My commission expires: ____________________________
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THIRD PARTY ADMINISTRATORS BOND
STATE OF WYOMING
Bond No. _________________________________
KNOW ALL MEN BY THESE PRESENTS that_________________________, as Principal, and
_______________________________________________________________________________
_____________, a Surety, a corporation of the State of
______________________________________________________________ are held and
firmly bound unto the State of Wyoming as obligee in the sum of
__________________________________(Dollars) ($__________) for which sum well and
truly to be paid, said Principal hereby binds himself, his heirs, executors,
administrators, successors and assigns and the said surety binds itself and its
successors and assigns jointly and severally, firmly by these presents.
THE CONDITION OF THIS OBLIGATION IS SUCH that WHEREAS the above bounden has
obtained or is about to obtain a Certificate of Registration to do business as
a Third Party Administrator in the State of Wyoming.
NOW THEREFORE, if the said____________________________________________________
shall observe and honestly comply with all requirements as set forth by Statute
of the State of Wyoming and any regulations issued by the Insurance
Commissioner of the State of Wyoming as they presently exist or to be effective
at a later date and shall honestly and faithfully fulfill all obligations and
properly account for all funds under their control as a Third Party
Administrator then this obligation to be void otherwise to remain in full force
and effect.
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SCHEDULE 5.04
CLIENT COMPANY'S AUTHORIZED REPRESENTATIVES
Xxxxx X. Xxxxxxx, President & Chief Executive Officer
Xxxxxx X. Xxxxxx, Chairman
Xxxxxxxx X. Xxxxxxx, Senior Executive Vice President
Xxxxxx Xxxxxxxx, VP - Operations
Xxxxx X. Xxxxxxxx, VP - Legal
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SCHEDULE 14.05(c)
EVENT OF BANKRUPTCY
An Event of Bankruptcy occurs when a party or any person controlling a party:
suspends payment of its debts; is generally, not paying, is unable to pay, or
admits in writing its inability to pay its debts as they become due; files, or
consents by answer or otherwise to the filing against it of a petition or
application for relief or reorganization, arrangement or winding-up or any
other petition in bankruptcy, insolvency, administration or full liquidation or
takes advantage of any bankruptcy, insolvency, reorganization, administration,
arrangements, examination, readjustment of debt, dissolution, liquidation,
moratorium or other similar law of any jurisdiction; makes an assignment for
the benefit of its creditors, or proposes or enters into any compromise or
composition or arrangement for the benefit of its creditors generally or any
class of its creditors, consents to the appointment of a custodian, judicial
manager, receiver, administrative receiver, manager, administrator, examiner,
liquidator, trustee or other officer with similar powers with respect to or
with respect to any substantial part of its properties; is adjudicated as
insolvent or to be liquidated; takes corporate action for the purpose of any of
the foregoing; an attachment, execution, restraint or any similar proceeding is
levied or enforced upon or sued out against, or an encumbrance attaches or
takes possession of, all or a substantial part of the property or the revenues
therefrom of the party or any subsidiary and the same remains in effect for
more than or is not satisfied, removed or discharged within a period of sixty
(60) days; or all or any substantial part of the property or the revenues
therefrom of the party or any subsidiary shall be sequestered by court order
and such order remains in effect for more than sixty (60) days; a court or
governmental authority of competent jurisdiction enters an order appointing,
without consent by the party or any of its subsidiaries, a custodian, judicial
manager, receiver, administrative receiver, manager, liquidator, trustee or
other officer with similar powers with respect to any substantial part of its
property; a court or governmental authority of competent jurisdiction issues an
order for relief or approving a petition for relief or reorganization or any
other petition or application for bankruptcy, insolvency, reorganization,
administration, arrangement, liquidation or winding-up or under similar law or
procedure, or for liquidation or takes advantage of bankruptcy, insolvency or
other similar law of any jurisdiction, ordering the dissolution, winding-up or
the creditation of the party or any subsidiary, or any such petition shall be
filed against the party or person controlling the party or any subsidiary
thereof and such petition shall not be dismissed within sixty (60) days; or, in
the case of an insurance company or insurance holding company, any action taken
or order issued under applicable laws which is similar to any of the foregoing.
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