CLAIMS ADMINISTRATION AGREEMENT
ENTERED INTO BY AND BETWEEN
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
OF MINNEAPOLIS, MINNESOTA
(HEREINAFTER REFERRED TO AS THE "COMPANY")
AND
LIFEUSA INSURANCE COMPANY
OF MINNEAPOLIS, MINNESOTA
(HEREINAFTER REFERRED TO AS "LIFEUSA")
WHEREAS, the Company desires to utilize LifeUSA's skills in adjusting and
paying any claims with respect to Covered Products and New Insurance Products as
those terms are defined in this Agreement;
NOW, THEREFORE, in consideration for the mutual promises and undertakings
set forth herein and for other good and valuable consideration, the parties
hereby agree as follows:
SECTION 1 - DEFINITIONS
1.1 "Covered Products" shall mean ordinary life insurance policies and
annuities issued on the forms listed on the reinsurance contract dated as of
January 1, 1995 (the "Reinsurance Contract") by and between the Company and
LifeUSA. It is expressly understood and agreed that the Reinsurance Contract may
be amended from time to time to add New Insurance Products.
1.2 "New Insurance Products" shall be life insurance and annuity products
developed by LifeUSA or its parent, Life USA Holding, Inc., which are, with the
approval of the Company added to those listed in the Reinsurance Contract.
SECTION 2 - SERVICES
2.1 LifeUSA shall provide all services related to paying claims with
respect to the Covered Products and New Insurance Products in the states listed
in Schedule A hereto. LifeUSA shall provide such claims paying services in the
name of and on behalf of the Company only as provided in this Agreement or as
directed by the Company in writing. Except as specifically set forth in this
Agreement or as authorized by the Company in writing, Holding shall not have
authority to enter into any agreements on the Company's behalf or to alter or
amend any of the policies relating to the Covered Products and New Insurance
Products or to modify, waive or extend any of their provisions.
2.2 In connection with the claims paying services provided by LifeUSA under
this Agreement, LifeUSA shall:
(a) maintain all records, including but not limited to statistical and
accounting records, that a life insurance company would maintain with respect to
the Covered Products and New Insurance Products so as to allow the Company to
make only general ledger entries in its books and records; and
(b) maintain all other data which are necessary to enable the Company to
prepare its annual convention statement and any other reports required by any
governmental agency or reporting bureau or which are reasonably required by the
Company in order that the Company may properly analyze and manage the business
included under this Agreement, provided that such data will be provided by
LifeUSA to the Company upon request bprovided that such data will be provided by
LifeUSA to the Company upon request by the Company.
2.3 LifeUSA shall provide the claims paying services (a) in accordance with
all applicable laws, regulations, bulletins and insurance department
requirements, and (b) in accordance with applicable written rules, regulations,
instructions and directives of the Company regarding claims adjustment and
payment, or such other service standards as the parties shall mutually agree in
writing from time to time.
2.4 LifeUSA shall be liable to the Company for any losses to the Company
caused by negligent or intentional acts of LifeUSA, its officers, employees or
agents.
2.5 LifeUSA agrees to indemnify and hold the Company harmless from and
against any and all losses, costs, damages and expenses (including attorney's
fees) which the Company may incur by reason of any demand or action by any
person arising out of the negligence or intentional acts of LifeUSA, and the
Company agrees to indemnify and hold LifeUSA harmless from and against any and
all losses, costs, damages and expenses (including attorney's fees) which
LifeUSA may incur by reason of any demand or action by any person arising out of
the negligence or intentional acts of the Company.
2.6 If LifeUSA does not perform all of its duties and responsibilities
under this Agreement after written notice and a reasonable opportunity to
perform, the Company may adjust the compensation paid under Section 4 of this
Agreement, or other remittances to Holding, in order to restore the Company to
the position it would have occupied had Holding performed all of its duties and
responsibilities.
SECTION 3 - OPERATION EXPENSES
LifeUSA shall be responsible for all operation expenses incurred in
connection with the business subject to this Agreement, including, by way of
illustration and not of limitation, such items as rentals, salaries, supplies
not furnished by the Company, postage, advertising, local license fees,
attorney's fees, utilities, or cost of equipment.
SECTION 4 - COMPENSATION
4.1 The Company agrees to allow LifeUSA a service fee equal to (a) 0.1% of
the reinsurance allowance or ceding commission (expressed as a percentage)
allowed the Company under the reinsurance contract dated as of January 1, 1995
(the "Reinsurance Contracts") between the Company and LifeUSA multiplied by (b)
the amount of business to which such allowance or commission is applicable.
4.2 If a policy reinsured under the Reinsurance Contract lapses at any
point in time during the first 13 months, LifeUSA agrees to reimburse the
Company an amount equal to the excess, if any, of the total first year service
fee paid by the Company on that policy over the total first year "initial"
premium paid on that policy, as defined in the Reinsurance Contract.
SECTION 5 - STATUS OF LIFEUSA, ITS EMPLOYEES AND AGENTS
While performing its authorities granted herein, LifeUSA shall be deemed an
independent contractor, as the Company reserves no authority or right to control
LifeUSA's method of performance of its duties and responsibilities hereunder. No
employees of LifeUSA shall be regarded as employees of the Company, except as
may be required by governing statutes.
SECTION 6 - EXAMINATION OF BOOKS AND RECORDS
LifeUSA shall, as often as reasonably requested by the Company, submit all
books and records maintained by LifeUSA pursuant hereto for examination and
review by any authorized representative of the Company and/or its quota share
reinsurers; and LifeUSA shall in all things cooperate and render assistance in
such examination. LifeUSA shall make copies of any such books and records and
furnish them to the Company as may be requested by the Company's
representatives.
SECTION 7 - COMMENCEMENT AND TERMINATION
7.1 The effective date of commencement of this Agreement shall be January
1, 1997, and this Agreement shall continue for a minimum of one year and will be
subject to termination upon either party giving one year advance notice of
cancellation.
7.2 If either party fails to perform substantially and materially the
duties and responsibilities set forth in this Agreement or fails to make
required payments hereunder and such failure continues for more than 30 days
after written notice delivered by the other party, the other party may terminate
this Agreement notwithstanding any other provisions to the contrary.
SECTION 8 - MISCELLANEOUS
8.1 This Agreement, and all rights and interests arising herefrom, shall be
binding upon, and shall inure to the benefit of, the parties hereto, their
representatives, successors and assigns; however, the authorities, duties and
responsibilities of either LifeUSA or the Company may not be assigned by either
of such parties without the written consent of the other.
8.2 This Agreement may not be modified verbally, nor may it be modified by
any subsequent practice or course of dealing by the parties, or in any manner
other than in writing signed by the parties hereto. No forbearance or neglect on
the part of the Company to enforce any of the provisions of this Agreement shall
be construed as a waiver of any of its rights or privileges hereunder, unless in
each instance a written memorandum specifically expressing such waiver be made
and subscribed by the President or a Vice President of the Company. No such
waiver shall modify this Agreement or affect the rights of the Company with
respect to any subsequent default or failure or performance by LifeUSA.
8.3 This Agreement shall be deemed to be a Minnesota contract and construed
in accordance with the laws of the State of Minnesota.
8.4 This Agreement supersedes all previous agreements with respect to the
subject matter herein, either oral or written, between the parties hereto.
IN WITNESS WHEREOF, the parties hereto by their respective duly authorized
representatives have executed this Agreement as of the dates undermentioned at:
Minneapolis, Minnesota, this 30th day of December, 1996.
/s/ Xxxx X. Xxxxxxxx
---------------------
Xxxx X. Xxxxxxxx, Vice President
ALLIANZ LIFE INSURANCE COMPANY
OF NORTH AMERICA
Minneapolis, Minnesota, this 30th day of December, 1996
/s/ Xxxx X. Xxxxxxxx
---------------------
Xxxx X. Xxxxxxxx, Vice President
LIFEUSA INSURANCE COMPANY
