EXHIBIT 10.10
MANAGEMENT AGREEMENT
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This AGREEMENT is made effective the 1st day of August 15, 1995 by and
between LEGION INSURANCE COMPANY, an insurance corporation having its principal
place of business at Xxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000 (hereinafter referred to as the "Company") and STIRLING XXXXX INSURANCE
SERVICES, INC. having its principal place of business at 0000 Xxxxxxxxxx Xxxx,
Xxxxx 000, Xxxxxxxx, XX 00000 (hereinafter referred to as the "Manager").
FOR AND IN CONSIDERATION OF the mutual covenants and agreements contained
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. TERM OF AGREEMENT
This Agreement shall be for a period of one (1) year commencing August
15, 1995 and ending August 15, 1996, and shall continue in force
thereafter for successive annual periods unless sooner terminated in
accordance with the provisions of the Termination Section, 27, of
this Agreement.
2. APPOINTMENT OF MANAGER
A. The Company hereby nominates, constitutes and appoints the Manager as
its legal representative and true and lawfull attorney to act in the
Company's behalf in the procuring underwriting, issuing and servicing
of policies of insurance for workers compensation and employers
liability. This appointment shall apply only with respect to Workers'
Compensation and Employers Liability insurance business (hereinafter
the "Stirling Xxxxx Florida Agency Captive Program") produced by
manager as set forth in the attached Addendum to this Agreement.
B. Such authority shall be exercised only in accordance with the terms of
this Agreement and such conditions and limitations as are from time to
time established by the Company.
3. TERRITORY
A. The Manager shall have non-exclusive authority to write on behalf of
Company Workers' Compensation and Employers Liability business in
those states set forth in the attached Addendum and such other states
as the parties may subsequently mutually agree upon in writing;
subject to the applicable licensing authority
of the Company.
B. Either party shall have the right to conduct any other business for
its own account without regard to this Agreement. Either party shall
have the right to conduct business for its own account with any
insurance or reinsurance entity or insurance or reinsurance
intermediary.
4. LIMITATIONS OF AUTHORITY OF MANAGER
A. The Manager shall not have any authority to waive any forfeiture,
grant any permit, collect any premiums except for those policies
and/or certificates which are subject to this Agreement, or bind the
Company in any way except as herein expressly stated.
B. The Manager shall not solicit or issue any policy or certificate in
any state which the Company shall exclude from this Program upon
notice in writing to Manager.
C. The Manager shall not bind reinsurance or retrocessions on behalf of
the Company.
D. The Manager shall not commit the Company to participate in insurance
or reinsurance syndicates.
E. The Manager shall not appoint any producer without assuring that the
producer is lawfully licensed to transact the type of insurance for
which he/she is appointed.
F. The Manager shall not jointly employ an individual who is employed
with the Company.
G. The Manager shall not appoint a sub-managing general agent.
H. The Manager shall not bind the Company to any risk with regard to
which the Company shall previously have notified the Manager in
writing that such risk is excluded from the business hereunder.
I. The Manager will cancel any risk forthwith at the instruction of
Company.
5. GENERAL DUTIES OF COMPANY
The Company will:
A. Procure and maintain licenses and/or certificates of authority as an
insurance company in such states as the Company is licensed as of the
effective date of this
Agreement.
B. Make all necessary rate and form filings as required by law in which
the policies or coverage set forth in the Addendum to this Agreement
are to be sold, and it shall not issue policies prior to satisfying
those state requirements.
C. Make all statistical filings and collect all statistical and
underwriting data applying to this business written pursuant to this
Agreement as mutually agreed to by the parties, such agreement not to
be withheld unreasonably.
D. Appoint such agents for the production of business as may be requested
by the Manager; provided, however, that the Company, in its sole
discretion, shall retain the right to refuse to appoint any
individual.
E. Make such filings, including policy forms, rates and rules, as may be
required by the regulatory authorities in the States in which business
is written pursuant to this Agreement.
6. GENERAL DUTIES OF MANAGER
The Manager will:
A. Maintain licenses as an agent or producer in all states in which
business is written under this Agreement, including such licenses as
may be required under any Managing General Agency law or regulation;
B. Supervise, direct and implement the production, underwriting, premium
collection, accounting, statistical, and other work necessary or
incidental to the insurance business written under this Agreement;
C. Set up and maintain such books and records in the manner and as
required by the Company to record the transactions pursuant to this
Agreement;
D. Compile and file with the Company such statistical information as more
fully set forth herein;
E. Provide notice to Company of any material change of ownership or
control of Manager;
F. Cancel policies and/or certificates for cause;
G. Provide the Company with an independent financial examination in a
form acceptable to the Company in the event that the gross direct
written premium on the business written under this Agreement equals or
exceeds
five percent (5%), in any one quarter or year, of the policyholder
surplus of the Company as reported in its last annual statement;
H. Promptly and appropriately respond to all correspondence and notices
relating to financing or proposed financing of premiums on policies
issued under this Agreement, and forward copies to Company. Manager is
not authorized to finance or engage in the financing of any policy on
behalf of Company.
7. EXCLUSIONS
The following classifications require Manager to receive prior written
approval prior to issuing binders:
A. NCCI rated Hazard Group IV risks.
B. NCCI classifications with known occupational disease exposures
including but not limited to:
1164-MINING NOC-COAL-UNDERGROUND-Drivers
1624-QUARRY NOC & DRIVERS
1710-STONE CRUSHING & DRIVERS
1741-FLINT GRINDING & DRIVERS
1803-STONE CUTTING OR POLISHING NOC & DRIVERS
1852-ASBESTOS GOODS MFG.
3081-FOUNDRY-FERROUS-NOC
3082-FOUNDRY-STEEL CASTINGS
3085-FOUNDRY-NONFERROUS
3175-RADIATOR OF HEATER MFG.
4024-REFRACTORY PRODUCTS MFG. & DRIVERS
5508-STREET OR ROAD CONSTRUCTION: ROCK EXCAVATION
& DRIVERS
6251-Tunneling-NOT PNEUMATIC-ALL OPERATIONS
6252-SHAFT SINKING-ALL OPERATIONS
C. USL&H, Xxxxx Act, or other Federal Acts exposure.
1165-MINING NOC-COAL-SURFACE & DRIVERS
2702-LOGGING OR LUMBERING & DRIVERS
2710-SAW MILL
3639-EXPLOSIVES OR AMMUNITION MFG.
4206-PULP MFG.-GROUND WOOD PROCESS
4207-PULP MFG.-CHEMICAL PROCESS
4777-EXPLOSIVES DISTRIBUTORS & DRIVERS
4800-4823-CHEMICAL & DYESTUFF
5160-ELEVATOR ERECTION OR REPAIR
5222-CONCRETE CONSTRUCTION IN CONNECTION W/BRIDGES
5551-ROOFING-ALL KINDS & YARD EMPLOYEES, DRIVERS
5703-BUILDING RAISING OR MOVING & DRIVERS
6306-SEWER CONSTRUCTION-ALL OPERATIONS & DRIVERS
6319-GAS MAIN OR CONNECTION CONSTRUCTION & DRIVERS
The following classifications will also be excluded:
1. Municipalities and Government Bodies.
2. Railroads, except scenic railways, and access
lines and industrial and owned operations.
D. Aviation risks. owner/operators of aircraft flight and ground
operations when flying is the major part except. when written as an
incidental part of an insured's overall operations.
E. Work on or navigation of any commercial vessel.
F. All mining or quarrying operations.
G. Wrecking or demolition of buildings or structures in excess of three
stories.
H. Workers' Compensation as respects asbestos manufacturing,
installation, distribution, transportation or removal.
I. Chemical/petrochemical manufacturers of highly Toxic materials.
J. Amusement parks, carnivals or circuses, except Disney properties.
K. Blasting or excavating operations over 25 feet in depth.
L. Tunnel or subway construction.
M. Marine wrecking, including repair, cleaning, or demolition of
commercial vessels or barges, except boat yards which have as their
major line of business, pleasure craft.
N. Underground, offshore or submarine operations including underground
mining.
O. Construction and/or maintenance of xxxxxx dams. Stevedoring or
operations covered by the U.S. Longshoreman's and Harbor Workers Act
or Xxxxx Act.
P. Nuclear Regulatory Commission projects and operations conducted under
license from the nuclear Regulatory Commission.
Q. Professional Sports Teams.
R. Commercial Airlines.
S. Employee Leasing.
Risks with following classifications must be submitted to
carriers/reinsurers for approval prior to Manager binding coverage;
1. Classifications:
1320-OIL OR GAS LEASE OPERATOR-ALL OPERATIONS & DRIVERS
1322-OIL OR GAS WELL:CLEAN OR SWAB BY CONTRACTOR-
NODRILL ETC.
3642-BATTERY MFG-DRY
3647-BATTERY MFG-STORAGE
3719-OIL STILL ERECTION OR REPAIR
3821-AUTOMOBILE DISMANTLING & DRIVERS
4740-OIL REFINING-PETROLEUM & DRIVERS
5069-IRON OR STEEL:ERECTION-CONSTRUCTION OF DWELLINGPER
MANUAL
5102-DOOR. DOOR FRAME OR-SASH ERECTION-METAL OR METAL
COVER
5183-PLUMBING NOC & DRIVERS
5213-CONCRETE CONSTRUCTION NOC
5221-CONCRETE OR CEMENT WORK-FLOORS, DRIVEWAYS, YARDS
OR SIDEWALKS
0000-XXXXXX XX XXXX CONSTRUCTION:PAVING OR REPAVING AND
DRIVERS
5507-STREET OR ROAD CONSTRUCTION:SUBSURFACE WORK OR
DRIVERS
0000-XXXX XXXXXXX & XXXXXXX
0000-XXXXXXXX XXX & DRIVERS
6213-OIL OR GAS WELL: SPECIALTY TOOL OPERATION NOC-BY
CONTRACT
6214-OIL OR GAS WELL:PERFORATING OR CASING-ALL
EMPLOYEES & DRIVERS
6216-OIL OR GAS LEASE WORK NOC-BY CONTRACTOR & DRIVERS
6233-OIL OR GAS PIPELINE CONSTRUCTION & DRIVERS
6235-OIL OR GAS WELL:DRILLING OR REDRILLING & DRIVERS
6236-OIL OR GAS WELL:INSTALLATION OR RECOVERY OF CASING
& DRIVERS
6237-OIL OR GAS WELL:INSTRUMENT LOGGING OR SURVEY WORK
& DRIVERS
7370-TAXICAB CO:ALL Other EMPLOYEES & DRIVERS
7539-ELECTRIC LIGHT OR POWER CO. NOC-ALL EMPLOYEES &
DRIVERS
8350-GASOLINE DEALER & DRIVERS
8393-AUTOMOBILE BODY REPAIR
8500-METAL SCRAP DEALER & DRIVERS
8. UNDERWRITING
In connection with its underwriting responsibilities under this
Agreement Manager shall underwrite on behalf of Company authorized
insurance business pursuant to the guidelines as set forth in the
attached Addendum(s) to this Agreement. In no event shall Manager be
liable to the Company or any other person for claims against the
Policy arising out of the risks underwritten or for underwriting
losses, except to the extent that such claims may be covered under the
provisions of Section 25, Indemnification, below.
9. CLAIMS ADMINISTRATION
In connection with its authority and responsibilities under this
Agreement, the Manager shall:
A. Receive and examine, on behalf of the Company, all reports of loss,
potential liability or formal claims under policies issued during the
term of this Agreement;
B. Investigate, including investigation of other available
insurance, and adjust, settle or deny all claims in accordance with
the terms of the applicable policy and applicable laws and subject to
the ultimate authority of the Company as provided in Section Nine
hereof;
C. Establish and adequately reserve a claim file for each claim for which
there is anticipated liability and/or a formal claim has been made and
code such claim in accordance with such reasonable statistical data
requirements as may be mutually agreed upon, such agreement not to be
unreasonably withheld by either party. All claims files shall be the
joint property of the Company and Manager. However, upon an order of
liquidation of the Company such files shall become the sole property
of the Company or its estate. In such instance the Manager shall have
reasonable access to and the right to copy the files on a timely
basis;
D. Make timely payments of valid claims under applicable policies issued
under the program, together with Allocated Loss Adjustment Expenses,
out of funds provided by the Company pursuant to Section 11, hereof
subject to the limitations and requirements of this Agreement. If an
authorized representative of the Company directs in writing by
facsimile or certified mail that any payment not be made, and if after
receipt of such notice Manager nevertheless makes such payment, the
Company shall be under no obligation to repay Manager for such
payment;
E. Maintain an accurate and complete claim file on each reported claim
which shall be available during normal business hours for inspection
by the Company, its representatives or by appropriate regulatory
authorities. The Company shall have the right to copy any and all
claims files or any documents related to any claim. Manager shall
maintain and store closed claim files for no less than one year after
the expiration of the statute of limitations applicable to each claim
file;
F. Provide all information necessary to the Company to allow it to timely
file all legally required forms and reports with the appropriate state
and federal agencies, including but not limited to filings required by
Section 6041 of the Internal Revenue Code;
G. In connection with the performance of its obligations under this
Agreement, provide trained, competent, and where required licensed
claims adjusters and perform the services to be rendered hereunder in
a manner commensurate with the highest professional standards, in good
faith, and in accordance with all applicable laws and regulations. At
no time shall the case load
per claims adjuster exceed 225 claims without the prior written
approval of the Company;
H. Protect any subrogation rights to the Company which may arise upon
payment of claims and notify the Company of any subrogation rights
which may be available to the Company. At the direction of the
Company, Manager shall pursue on the Company's behalf the Company's
subrogation rights through litigation or otherwise, and the cost of
such litigation shall be treated as an Allocated Loss Adjustment
Expense;
I. Perform all administrative and clerical work in connection with claims
including the preparation of checks and/or drafts drawn on the loss
fund established herein; and
J. Respond immediately to any inquiry, complaint or request received from
an Insurance Department, other Regulatory Agency, client, claimant,
agent, broker, or other interested party relating to a claim serviced
under this Agreement; a copy of the original inquiry from any
Insurance Department or other regulatory agency and the Manager's
response shall be provided in a timely manner to Company.
10. CLAIMS SETTLEMENT AUTHORITY
A. Unless otherwise advised by the Company, Manager shall have authority
and control in all matters, pertaining to the handling of claims under
this Agreement, except which involve or which are expected to involve
aggregate expenditures (of loss Adjustment Expenses) in excess of
$25,000. For claims in excess of this amount, or for claims involving
a coverage dispute or open for more than six months, Manager shall
provide Company with a Narrative Serious Loss Report and a copy of the
claim file. The Narrative Serious Loss Report shall be in a form as
may be mutually agreed upon, such agreement not to be unreasonably
withheld by either party. Additional Narrative Serious Loss Reports
shall be submitted whenever there is a change in the reserve on such
claims. Unless otherwise advised by the Company, Manager shall
continue to handle the claim but shall not settle the claim without
first obtaining the approval of the Company.
B. Manager shall not, without prior approval of the Company, collect any
payment from a reinsurer or commit the Company to any claim settlement
with a reinsurer. If the Company gives prior approval, Manager shall
promptly forward a report to the Company.
C. The Company shall retain ultimate settlement authority
for all claims serviced under applicable policies issued under the
Program. Notwithstanding the authority delegated to Manager under
this Agreement Company shall have the option of taking over the
handling and settlement of any or all claims upon 30 days written
notice to Manager and Manager's failure to cure and/or comply with
Company's objections.
D. Manager shall comply with such reasonable claims procedures and
guidelines established by Company in accordance with industry
standards and provided to Manager.
11. DRAFT AUTHORITY AND ISSUANCE
A. Manager shall have authority in a fiduciary capacity to draw upon a
bank account (the "Loss Payment Account") which shall be established
in a bank which is a member of the Federal Reserve System for use in
payment of claims. Such authority may be revoked at any time by the
Company upon written notice. Initial funding of the Loss Payment
Account will be in the amount of $10,000. The Loss Payment Account
will be replenished monthly by the Company to an amount equal to two
(2) months estimated paid losses upon receipt of required monthly
accountings as set forth in Section 12(D). The Company may review the
adequacy of the account at any time and increase or decrease the
account as necessary. The Manager shall be required, upon the request
of the Company, to remit promptly any funds in the account in excess
of the required by the Company. The Loss Payment Account Shall, to
the extent permitted by law, be an interest bearing account, with all
accrued interest, less any applicable income taxes, to be applied to
the loss fund for the payment of claims.
B. Only those persons to whom Company specifically grants authority in
writing shall issue any check upon the Loss Payment Account. Such
authority may be revoked upon written notice to the appropriate
parties. The Company shall designate two of its employees or
representatives as authorized signatories on such account.
C. Checks in excess of $25,000 shall require the prior approval of
Company. Checks in excess of $5,000 shall require the signatures of
Two Manager employees.
D. All checks shall be accounted for by Manager as on hand, issued,
voided, or canceled. Manager shall provide a monthly account to the
Company within fifteen (15) days after the end of the month for which
the account is given. Manager shall have the
responsibility for balancing the Loss Payment Account. A duplicate
copy of all statements shall be sent to the Company by Manager.
Copies of checks issued by the Company, and agreed to by Manager, such
agreement not to be unreasonably withheld.
12. RECEIPT OF FUNDS/ACCOUNTS/REPORTS
A. Accounts of money due the Company on the business written by the
Manager with the Company shall be made, and the balance therein shown
to be due shall be paid, not later than thirty (30) days after the
close of the month in which the premium is written.
B. Manager is authorized to use premium financing through unaffiliated
licensed premium finance companies on Policies issued under this
Agreement. Premiums paid to Manager by premium finance companies
shall be accounted for and paid to Company as received by Manager, and
in no event shall Manager hold any such financed premiums longer than
allowed by Section 12(A) of this Agreement. Manager shall provide all
services related to premium financing, including but not limited to
promptly and appropriately responding to all correspondence and
notices related to such premium financing. Manager shall ensure that
all pro rata refunds of premium due to premium finance companies are
properly accounted for and paid to premium finance companies, and
shall be liable for any such amounts improperly paid to the insured.
C. All premiums collected by the Manager are to be held in a fiduciary
capacity for the Company in an account in a bank which is a member of
the Federal Reserve System, and are the property of the Company. Any
interest earned in such account shall accrue for the benefit of the
Manager. The burden of collection of such premium shall be borne by
the Manager. The Manager has no interest in the premiums collected by
it and shall make no deductions therefrom before paying the same to
the Company except for the compensation authorized in Section 18. The
Manager shall not make personal use of such premium funds either in
paying expenses of the Manager or otherwise.
D. The Manager shall report to the Company not later than thirty (30)
days after the close of each month, in a form and manner acceptable to
the Company, statements of premium written:
1. All Policies and/or certificates issued;
2. Changes and cancellations;
3. Premium statements.
E. Manager shall provide to Company on a monthly basis loss runs
detailing by report period, year to date and inception to date figures
the following information by accident date: policy number (if more
than one), claim number, state, location number, total incurred
expense, broken down by loss coverage/peril, allocated loss adjustment
expense, outstanding reserve (loss and loss adjustment), salvage,
subrogation, and such other information requested by Company or
Insured and agreed to by Company.
13. BOOKS AND RECORDS
A. The Manager shall separately maintain true, accurate and complete
records and accounts of all transactions arising out of this
Agreement. Said records and accounts shall be maintained at all times
in such a manner and form as may be agreed to by the Company and in
accordance with generally accepted accounting and insurance practices
and applicable state records retention statutes.
B. It shall be the duty of the Manager, unless the Company relieves it of
the same, to prepare and submit to the Company the underwriting and
statistical data applying to the business it does for the Company for
the Company's Annual Statement and other reports required of the
Company by states for business the Manager does for the Company.
C. All records and accounts or other documents relating to the business
of the Company arising out of this Agreement are the property of the
Manager and shall be subject at all reasonable times to inspection,
duplication and/or audit by a duly authorized representative of the
Company, including representatives of regulatory agencies. In the
event of termination of this Agreement, such records, accounts and
documents will be made available to the Company for inspection and
copying at the Manager's office after termination. Manager shall
either (i) maintain such materials for a period of five (5) years
after the date of termination of this Agreement or (ii) provide for
the transfer of said records to the Company. All such copies and/or
transfers shall be at the expense of the Company.
D. All supplies furnished to the Manager by the Company shall remain the
property of the Company and shall be returned to the Company or its
representative promptly upon termination of this Agreement. All other
supplies
furnished or maintained by Manager, including blank policy forms,
shall be destroyed by Manager upon termination of this Agreement.
E. The audited books and accounts of the Company and the Manager shall be
acceptable as full and final evidence in all matters relating to this
Agreement.
14. COMPLIANCE WITH REGULATIONS AND LAWS
A. In the conduct of business under this Agreement, the Manager shall
promptly and fully comply with all instructions, rules and regulations
as it may receive from the Company and with all applicable laws,
regulations and rulings, including but not limited to Managing General
Agents laws, by any governmental authority, agency, bureau or
commission having jurisdiction. All certificates and policies of
insurance will be issued and delivered, and, when required,
countersigned, pursuant to the applicable laws, regulations and
rulings of any governmental authority, agency, bureau or commission.
In those states where the Company is qualified as a surplus lines
insurance company, the Manager shall act only through a resident
surplus lines broker.
B. In the conduct of business under this Agreement, the Company will
observe and comply with all applicable laws, regulations and rulings
by any governmental authority, agency, bureau or commission having
jurisdiction.
C. Manager shall, at its sole expense, provide for required
countersignatures on policies written pursuant to this Agreement.
Where possible, the Company will assist Manager in obtaining
countersignatures. The Manager shall not bind the Company to any risk
with regard to which the Company shall previously have notified the
Manager in writing that such risk is excluded from the business
hereunder. The Manager will cancel any risk forthwith, at the
instruction of the Company.
15. AUDIT RIGHTS
A. In order to assure itself of Manager's compliance with the terms of
this Agreement, Company, upon reasonable written notice to Manager,
shall have the right to conduct audits of the books and records of
Manager either with its own employees or independent outside auditors
during normal working hours. Such audits shall include but not be
limited to: (i) annual independent actuarial review of the adequacy
of loss
reserves established for losses incurred and outstanding and (ii)
semi-annual on-site review of underwriting and policyholder service
operations.
B. Upon reasonable written notice, Manager shall permit authorized
employees and representatives of the Company to review the operations
of Manager, both at its places of business and in the field, in order
to evaluate the quality and accuracy of Manager's employees and
operations.
16. ADVERTISING AND SOLICITATION MATERIALS
The Manager agrees that no pamphlets, booklets, advertising materials,
or any other promotional materials relating to the Company shall be
used, issued or circulated by Manager, or authority to do so granted
to Manager, unless specifically authorized by the Company, such
authorization not to be unreasonably withheld. Company shall promptly
respond to any submission of such materials by Manager.
17. EXPENSES
A. The Manager shall incur, accept and pay certain expenses in connection
with the production, marketing and servicing of the insurance
business, written under this Agreement, including but not limited to
the following:
1. Printing of proposals, booklet certificates, solicitation
brochures, premium notices, record and reports, and all documents
and other materials required to fulfill the obligation of the
Manager under this Agreement;
2. Promotional advertising and public relations expenses;
3. The Manager's general office expenses, including but not limited
to rent, salaries, utilities, transportation, furniture,
fixtures, equipment, supplies, telephone, postage and other
general overhead expenses.
B. The Company shall not be responsible for any fees or expenses incurred
by the Manager, its employees, agents or brokers to obtain or maintain
licenses required to perform activities relating to this Agreement.
18. COMPENSATION
A. Subject to compliance by the Manager with the terms and conditions of
this Agreement, the Company will allow Manager the following as full
compensation for all services rendered and expenses incurred by Manager:
1. An amount equal to a percentage of the Gross Collected Premium
specified in the attached Addendum(s) on the business coming
under this Agreement. Gross Collected Premium shall include
adjustments for termination of policies and for increases and
decreases in policy premiums.
B. The Manager shall not be entitled to any compensation for services of
any kind rendered to or on behalf of the Company except as described
in this Agreement.
19. COMMISSION REFUNDS
Commissions paid to the Manager on canceled policies and reduced
premiums shall be refunded to the Company at the same rates at which
such commissions were originally earned by the Manager.
20. LAWS GOVERNING
This Agreement, including the provisions relating to arbitration,
shall be governed by the laws of the Commonwealth of Pennsylvania.
21. INSURANCE
A. Manager shall, at all times during this Agreement, maintain:
1. An Errors and Omissions Policy covering all officers and
employees, issued by an admitted insurer or by Lloyd's
Underwriters, providing coverage of not less than $5,000,000,
with a per occurrence deductible not to exceed $1,000,000;
2. A Fidelity Bond covering all officers and other employees of
Manager, issued by an admitted insurer or by Lloyd's
Underwriters, in an amount not less than $5,000,000, with a
deductible not to exceed $25,000; and such other Bond as may be
required for the protection of the Company by any governmental
authority, agency, bureau or commission having jurisdiction;
3. Workers Compensation Insurance under the laws of the states in
which operations are conducted;
4. Comprehensive General Liability Insurance with limits of not less
than $1 million including contractual liability and personal
injury for libel, slander and assault insuring this Agreement
(with any per occurrence deductible not to exceed $25,000);
B. Company shall have the right to inspect each of the above-mentioned
policies and bonds and Manager shall cause its insurers to provide
Company with a certificate of insurance or other evidence of coverage
which provides Company with 30 days notice of cancellation;
22. ERRORS AND OMISSIONS
Inadvertent delays, errors and/or omissions made in connection with
this Agreement shall not relieve either party from any liability which
would have attached had such delays, errors or omissions not occurred;
provided that such delays, errors or omissions shall be rectified as
soon as possible after discovery.
23. ARBITRATION
A. As a condition precedent to any right of action hereunder, any dispute
or difference between the Company and the Manager relating to the
interpretation or performance of this Agreement, including its
formation or validity, or any transaction under this Agreement,
whether arising before or after termination, shall be submitted to
binding arbitration.
B. Upon written request of any party, each party shall choose an
arbitrator and the two chosen shall select a third arbitrator. If
either party refuses or neglects to appoint an arbitrator within 30
days after receipt of the written request for arbitration, the
requesting party may appoint a second arbitrator. If the two
arbitrators fail to agree on the selection of a third arbitrator
within 30 days of their appointment, each of them shall name three
individuals, of whom the other shall decline two, and the decision
shall be made by the Federal District Court for the Eastern District
of Pennsylvania. All arbitrators shall be active or retired officers
of insurance companies or insurance agencies, and disinterested in the
outcome of the arbitration. Each party shall submit its case to the
arbitrators within 30 days of the appointment of the third arbitrator.
C. The parties hereby waive all objections to the method of selection of
the arbitrators, it being the intention of both sides that all the
arbitrators be chosen from those submitted by the parties.
D. The arbitrators shall have the power to determine all procedural rules
for the holding of the arbitration including but not limited to
inspection of documents, examination of witnesses and any other matter
relating to the conduct of the arbitration. The arbitrators shall
interpret this Agreement as an honorable engagement and not as merely
a legal obligation, they are relieved of all judicial formalities and
may abstain from following the strict rules of evidence. The
arbitrators may award interest and costs. Each party shall bear the
expense of its own arbitrator and shall share equally with the other
party the expense of the third arbitrator and of the arbitration.
24. MANAGER TO ACT AS INDEPENDENT CONTRACTOR
The Manager shall be and act as an independent contractor. Nothing
contained herein shall be construed to create the relationship of
employer and employee between the Company and the Manager.
25. INDEMNIFICATION
A. Manager agrees to indemnify, defend and hold harmless Company, their
officers, agents and employees, from and against any and all
liability, loss, damage or expense, including extracontractual and
punitive damages and attorney's fees, incurred in connection with
claims or demands for damages of any nature whatsoever, to the extent
arising from or caused by any act or omission, tortious or otherwise,
of Manager, its officers, agents or employees.
B. Company agrees to indemnify, defend and hold harmless Manager, its
officers, agents and employees, from and against any and all
liability, loss, damage or expense, including extracontractual and
punitive damages and attorney's fees, incurred in connection with
claims or demands for damages of any nature whatsoever, to the extent
arising from or caused by any act or omission, tortious or otherwise,
of Company, its officers, agents or employees.
26. REPRESENTATIONS AND WARRANTIES
A. Company warrants and represents that the transactions
contemplated hereby are (i) within the corporate powers of Company,
(ii) have been duly authorized by all necessary corporate action of
Company; (iii) constitute the legal, valid and binding obligations of
Company, enforceable against it in accordance with its terms; and (iv)
do not and will not conflict with, result in a breach in any of the
provisions of; or constitute a default under the provisions of any
law, regulation, licensing requirement, charter provision, by-law or
other instrument applicable to Manager or its employees or to which
Manager is a party or may be bound.
B. Manager warrants and represents that the transactions and activities
contemplated hereby are (i) within the corporate powers of Manager;
(ii) have been duly authorized by all necessary corporate action of
Manager; (iii) constitute the legal, valid and binding obligations of
Manager, enforceable against it in accordance with its terms; and (iv)
do not and will not conflict with, result in a breach in any of the
provisions of, or constitute a default under the provisions of any
law, regulation, licensing requirement, charter provision, by-law or
other instrument applicable to Manager or its employees or to which
Manager is a party or may be bound.
C. Manager warrants and represents that it or an officer or employee is
licensed as an agent or producer in all states in which business is
written under this Agreement.
27. TERMINATION
A. This Agreement may be terminated at any time by the mutual agreement
of the parties.
B. This Agreement may be terminated by Company as follows:
1. Upon 30 days written notice in the event of a material default in
this Agreement by Manager, unless the Manager has remedied such
default prior to the end of the thirty (30) day period;
2. Immediately upon written notice in the event of fraud,
abandonment, gross or willful misconduct, insolvency, or lack of
legal capacity to act on the part of Manager;
3. Immediately upon written notice in the event Manager cancels or
non-renews fifty percent(50%) or more of the business written
pursuant to this Agreement in order to place the business with a
carrier other than Legion Insurance Company.
C. This Agreement may be terminated by Manager as follows:
1. Upon 30 days written notice to Company in the event of a material
default in this Agreement by Company, unless the Company has
remedied such default prior to the end of the thirty (30) day
period;
2. Immediately upon written notice in the event of fraud,
abandonment, gross or willful misconduct, insolvency, or lack of
legal capacity to act on the part of Company;
3. Upon 30 days written notice to Company in the event the Company
withdraws the Manager's authority to write business on risks
located in a state where more than 10% of the business written
under this Agreement is written.
D. Termination in whole or in part of reinsurance of the Company on
business covered by this Agreement shall result in the suspension of
all authority granted to the Manager under this Agreement to assume
business on behalf of the Company. Company shall give manager prompt
notice of the termination of reinsurance, and shall endeavor to give
such notice at least 90 days prior to such termination. In no event
will notice be less than 30 days prior to termination.
E. This Agreement shall terminate automatically without notice in the
event of the bankruptcy, insolvency, liquidation or assignment for the
benefit of creditors by either party, or if there is any material
change in the ownership or control of the other party.
F. This Agreement may be terminated by the Company or Manager at any time
if the Company determines that any law or regulation of a federal,
state or local government has rendered this Agreement illegal; but
only insofar as this Agreement applies to such jurisdiction.
G. Upon termination of this Agreement, no charges shall be made by the
Manager or Company for services in settlement of accounts or winding
up of affairs between the Company and the Manager.
H. If this Agreement is terminated, neither party shall have any claim
against the other for loss of prospective profits or fees or damage to
business arising therefrom.
I. In the event of termination of this Agreement, any business written
hereunder and remaining with the
Company shall be permitted to continue to normal expiration; provided,
however that if the renewal date of any annual policy shall occur
within a period of ninety (90) days after the date of termination of
this Agreement, and such renewal shall have had renewal terms already
committed, such policy shall be renewed and permitted to continue in
force until its next annual renewal date.
J. In the event of termination of this Agreement:
1. The Manager shall promptly cease all solicitation and
underwriting activities provided for hereunder;
2. The administration obligations of the Manager to the Company
including but not limited to, policy servicing, record keeping
and reporting functions, specified in this Agreement shall
survive and shall continue to be discharged promptly by the
Manager for a period of seven (7) years after the last item of
insurance business written pursuant to this Agreement has been
canceled or otherwise terminated.
K. Notwithstanding the termination of this Agreement as hereinabove
provided, the provisions of this Agreement shall continue to apply to
the extent needed for all obligations and liabilities incurred by each
party hereunder prior to such termination to be fully performed and
discharged by such parties.
L. In the event of the termination of this Agreement, the Manager's use
and control of all expirations of business produced by Manager or sub-
agents and local agents under the Program, and subject to the
Company's rights to copies of such records, the Manager's work product
and records relating thereto, shall be deemed the property of the
Manager or sub-agents and local agents and left in its undisputed
possession. The Company shall not use its records of those
expirations in any marketing method for the sale, service or renewal
of any form of insurance coverage, or other product which shall
abridge the Manager's rights of ownership, use and control, and the
Company shall not refer or communicate this expirations information or
work product to any other agent or broker. Nothing in this paragraph
shall modify in any way the Company's right to and ownership interest
in all claims files and related information, including computer data
relating to such claims, for claims on policies and certificates
issued by or on behalf of the Company.
M. In the event of the termination of this Agreement and
the Program, the Company shall cooperate with Manager in Manager's
efforts to place all business under this Program with another insurer
to the extent Company's cooperation is required for a successful
transition to such a new insurer.
28. LEGAL ACTION
The Manager and Company shall not take legal action against any third
party in connection with any matter pertaining to the business of the
other party without the written consent of the other party. Each party
shall promptly notify the other party any legal action or threat of
legal action involving that party with respect to any matters which
are the subject of this Agreement.
29. PRIVACY
A. Pursuant to the provisions of the Insurance Information and Privacy
Protection Act, as enacted in various states, Manager recognizes that,
in the performance of its obligations under this Agreement, Company
may disclose personal or privileged information about individuals
collected or received in connection with insurance transactions.
Since the disclosure of such information is protected by law, Manager
agrees that it will not redisclose such information without the
individual's written authorization, unless such disclosure is
permitted by law.
B. Pursuant to the provisions of the Insurance Information and Privacy
Protection Act, as enacted in various states, Company recognizes that,
in the performance of its obligations under this Agreement, Manager
may disclose personal or privileged information about individuals
collected or received in connection with insurance transactions.
Since the disclosure of such information is protected by law, Company
agrees that it will not redisclose such information without the
individual's written authorization unless such disclosure is permitted
by law.
30. CURRENCY
All amounts due to either party hereunder shall be payable in United
States currency.
31. ASSIGNMENT/SUBCONTRACTING
A. This Agreement shall not inure to the benefit of any successor-in-
interest of the Manager nor may any interest or obligation of the
Manager under this Agreement be assigned in whole or part by the
Manager without the written consent of the Company.
B. The obligations of the Manager under this Agreement may not be
subcontracted to any party without the express prior written consent
of the Company, provided that such subcontract shall not relieve the
Manager of its duties and obligations under this Agreement.
C. This Agreement shall not inure to the benefit of any successor-in-
interest of the Company, nor may any interest or obligation of the
Company under this Agreement be assigned in whole or part by the
Company without the written consent of the Manager.
D. The obligations of the Company under this Agreement may not be
subcontracted to any party without the express prior written consent
of the Manager, provided that such subcontract shall not relieve the
Company of its duties and obligations under this Agreement.
32. NOTICES
All notices, requests, consents and other communications by either
party, arising out of this Agreement, must be in writing and addressed
as follows:
If to Company:
Legion Insurance Company
Xxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
General Counsel
If to Manager:
Stirling Xxxxx Insurance Services, Inc.
0000 Xxxxxxxxxx Xx., Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
President
33. HEADINGS
The subject headings of the Sections of this Agreement are included
for purposes of identification and convenience only and shall not
affect the construction
or interpretation of any of its provisions.
34. ENTIRE AGREEMENT
This Agreement sets forth the entire understanding of the parties and
supersedes any prior agreement or understanding relating to the
subject matter hereof. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in
writing by the party making the waiver.
35. MODIFICATION
This Agreement may only be revised and/or modified in writing and must
be accepted by both the Company and the Manager. No other change,
modification, addition or deletion to any portion of this Agreement
will be valid or binding upon either the Company or the Manager.
Neither a representative of the Company nor the Manager has authority
to waive any of the provisions of this Agreement or to modify or
change any of its terms and conditions, except as provided herein.
36. HONORABLE UNDERTAKING
This Agreement is made in good faith and it is understood that all
questions not specifically answered in the Agreement shall be settled
in accordance with the custom and usage established in the industry.
37. EXECUTION
This Agreement shall not go into force until duly executed on behalf
of the Manager and the Company.
IN WITNESS WHEREOF, the parties have set their hands:
at Philadelphia, Pennsylvania at Sarasota, Florida
this _____ day of ____________, 19__ this 19th day of November, 1996
LEGION INSURANCE COMPANY STIRLING XXXXX INSURANCE
SERVICES, INC.
By: /s/ By: /s/
-------------------- -------------------
Xxxxx X. Xxxxx, III Xxxx X. Xxxxxx
Vice President President
WITNESS: WITNESS: /s/
ADDENDUM 1
This Addendum dated effective August 15, 1995 is attached to and made
a part of the Agreement by and between Legion Insurance Company and Stirling
Xxxxx Insurance Services, Inc., dated as of August 15, 1995.
BUSINESS COVERED: Workers Compensation/Employers Liability Insurance on
business produced by Stirling Xxxxx Insurance Services,
Inc.
LIMITS OF LIABILITY: Workers Compensation: Statutory
Employers Liability: up to $1,000,000 Per Occurrence
EXCLUSIONS: Per underwriting guidelines agreed to by the parties
TERRITORY: Risks located in Florida, Louisiana, South Carolina &
North Carolina and such other states as may be added to
this by separate writing
POLICY PERIOD: Policies commencing during the period 8/15/95 through
8/15/96
POLICY CANCELLATION: As required by policy language, state statute, and per
underwriting guidelines agreed to by the parties
BASIS OF RATES: Per rating plan agreed to by the parties and filed with
such states as may be required
MAXIMUM ANNUAL Subject to total premium volume limitation under this
PREMIUM VOLUME: agreement of $2,000,000
---------
REMUNERATION: Company shall pay Manager 22% of Gross Collected
Premium (less cancellations and returns) for business
written during the term of this Agreement.
IN WITNESS WHEREOF, the parties have set their hands:
at Philadelphia, Pennsylvania at Sarasota, Florida
this ____ day of _____________, 19__ this 19th day of November, 1996
LEGION INSURANCE COMPANY STIRLING XXXXX INSURANCE
SERVICES, INC.
By: /s/ By: /s/
Xxxxx X. Xxxxx, III Xxxx X. Xxxxxx
Vice President President
WITNESS: WITNESS:
ADDENDUM 2
This Addendum dated effective August 15, 1996 is attached to and made
a part of the Agreement by and between Legion Insurance Company and Stirling
Xxxxx Insurance Service, Inc., dated as of August 15, 1995.
BUSINESS COVERED: Workers Compensation/Employers Liability Insurance on
business produced by Stirling Xxxxx Insurance Services,
Inc.
LIMITS OF LIABILITY: Workers Compensation: Statutory
Employers Liability: up to $1,000,000 Per Occurrence
EXCLUSIONS: Per underwriting guidelines agreed to by the parties
TERRITORY: Risks located in Florida, Louisiana, South Carolina &
North Carolina and such other states as may be added to
this by separate writing
POLICY PERIOD: Policies commencing during the period August 15, 1996
through August 15, 1997
POLICY CANCELLATION
AND NON-RENEWAL: As required by policy language, state statute, and per
underwriting guidelines agreed to by the parties
BASIS OF RATES: Per rating plan agreed to by the parties and filed with
such states as may be required
MAXIMUM ANNUAL Subject to total premium volume limitation under this
PREMIUM VOLUME: agreement of $2,000,000
REMUNERATION: Company shall pay Manager 22% of Gross Collected
Premium (less cancellations and returns) for business
written during the term of this Agreement.
IN WITNESS WHEREOF, the parties have set their hands:
at Philadelphia, Pennsylvania at Sarasota, Florida
this ____ day of _____________, 19__ this 19th day of November, 1996
LEGION INSURANCE COMPANY STIRLING XXXXX INSURANCE
SERVICES, INC.
By: /s/ By: /s/
Xxxxx X. Xxxxx, III Xxxx X. Xxxxxx
Vice President President
WITNESS: WITNESS:
