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EXHIBIT 8(h)
SERVICES AGREEMENT
THIS AGREEMENT, made as of the first day of November, 1995, (the
"Effective Date") by and between IL Annuity and Insurance Company (the
"Customer"), having its principal office and place of business at 0000 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000, and Financial Administration Services,
Inc. ("FAS") having its principal office and place of business at 00 Xxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxx 00000.
WHEREAS, Customer is in the business of issuing variable annuity products which
are funded through investments in a Separate Account and a Fixed Account. The
Separate Account invests in shares of several investment companies; and
WHEREAS, Customer desires to appoint FAS as Recordkeeping Service Agent for
Customer's variable annuity products described hereinafter in Exhibit A ("the
Policies"): and
WHEREAS, FAS desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties agree as follows:
SECTION 1
TERMS OF APPOINTMENT
1.01 Subject to the provisions set forth in this Agreement, Customer hereby
appoints FAS as Recordkeeping Service Agent for the Policies. The
Policies are described in Exhibit A and encompass the sample
Policy(ies) attached thereto.
1.02 FAS hereby accepts such appointment and agrees that, on or after the
Effective Date, it will act as Customer's Recordkeeping Service Agent
for the Policies.
1.03 FAS agrees to provide the necessary facilities, equipment, systems and
personnel to perform its duties and obligations hereunder in
accordance with the standards set forth in Exhibit G. Provided,
however, FAS shall administer the Policies within any applicable laws,
regulations, guidelines and time constraints established by federal or
state regulatory authorities. Such facilities being referred to
hereinafter as the "FAS Facilities" and such systems being referred to
hereinafter as the "FAS System."
1.04 FAS agrees that it will perform, at the direction of Customer, those
Recordkeeping Service Agent Functions set forth in Exhibit B attached.
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1.05 FAS agrees to use its best efforts to modify its systems and
procedures to comply with any applicable federal or state statute, law
or regulation pertaining to the administration and servicing of the
Policies under this Agreement, within a reasonable time of receiving
notice of enactment of such a statute, law or regulation. Any such
modifications will be made at FAS's expense.
SECTION 2
TERM
2.01 Subject to earlier termination as hereinafter provided, this Agreement
shall remain in full force and effect for a period of three (3) years
from the Effective Date (the initial term of the Agreement) and shall
continue in force and effect from year to year thereafter until
terminated as herein provided, each such additional year being an
additional term of this Agreement.
2.02 In the event that this Agreement is terminated, FAS agrees that, in
order to assist in providing uninterrupted service to Customer, FAS
shall offer reasonable assistance to Customer in converting the
records of Customer from the FAS System to whatever service or system
is selected by Customer. Customer shall reimburse FAS for such
assistance at its standard rates and fees in effect at that time.
SECTION 3
FEES AND EXPENSES
3.01 At the beginning of each month, FAS shall provide Customer a detailed
statement of fees and charges incurred by Customer during the
preceding month. Customer shall remit payment to FAS within thirty
(30) days after receipt of the statement or authorize FAS to deduct
such fees and only such fees from the Customer's bank account, as
described in Section 8.05 of this Agreement.
3.02 Customer shall also reimburse FAS for all out of pocket expense
reasonably incurred by FAS in the performance of this Agreement. FAS
hereby agrees that the expenses referred to in this Section shall be
only those charges directly incurred by FAS as set forth in Exhibit C
and such other expenses as may be authorized by Customer.
3.03 During the initial term of this Agreement, the fees and charges will
not exceed the amounts set out in Exhibit C attached hereto and made a
part hereof. For each additional term of this Agreement, FAS shall be
entitled to receive such fees and charges as shall be agreed upon in
writing by the parties prior to commencement of each term.
3.04 In no event will any fee under Section 3.03 above exceed the like fee
charged during the previous term by more than ten (10%), unless the
quantity or nature of the related service changes.
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3.05 Payment terms hereunder are net thirty (30 ) days with interest at one
(1) percent per month (but in no event more than the highest interest
rate allowable by law) assessed on all amount owing more than thirty
(30) days.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF FAS
FAS represents and warrants to Customer as follows:
4.01 It is a corporation duly organized and existing in good standing under
the laws of the State of Connecticut.
4.02 It is empowered under applicable laws and by its charter and bylaws to
enter into and perform the services contemplated in this Agreement.
4.03 All requisite corporate proceedings have been taken to authorize it to
enter into and perform the services contemplated in this Agreement.
4.04 It has, and will continue to have and maintain the necessary
facilities, equipment, and personnel to perform its duties and
obligations under this Agreement.
4.05 FAS is licensed or has applied for a license as a third party
administrator in each state in which FAS performs services on behalf
of Customer pursuant to the terms of this Agreement if such is
required under applicable laws, rules regulations or bulletins of that
state. FAS will provide evidence of its license to Customer upon
request.
4.06 To the best of FAS's knowledge, neither FAS nor any person employed in
any material connection with respect to the services provided pursuant
to this Agreement:
(a) within the last ten (10) years has been convicted of any
felony or misdemeanor arising out of conduct involving
embezzlement, fraud, fraudulent conversion or misappropriation
of funds or securities; or
(b) within the last ten (10) years has been found by any state
regulatory authority to have violated or has acknowledged
violation of any provision of any state insurance law
involving fraud, deceit or knowing misrepresentation; or
(c) within the last ten (10) years has been found by any federal
or state regulatory authorities to have violated or
acknowledged violation of any provision of federal or state
securities laws involving fraud, deceit or knowing
misrepresentation.
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4.07 FAS owns or licenses the software which will be used to perform its
duties and obligations under this Agreement. FAS warrants that it has
full rights to use such software for these purposes.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF CUSTOMER
Customer represents and warrants to FAS as follows:
5.01 It is a corporation organized and existing in good standing under the
laws of the State of Massachusetts.
5.02 It is empowered under the applicable laws and regulations and by its
articles of incorporation and bylaws to enter into and perform this
Agreement.
5.03 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
5.04 All of the Policies and other forms provided to FAS by Customer have
been approved by all regulatory authorities whose approval is needed.
All of the Prospectuses have been declared effective by the United
States Securities and Exchange Commission. All such Prospectuses,
Policies and other forms are and shall remain in compliance with all
applicable federal, state and local laws and regulations.
5.05 Customer has complied with and will continue to comply in all material
respects with all applicable laws and it has and will continue to make
all required filings with regulatory authorities in connection with
the offer, sale or administration of the Policies.
5.06 Those persons identified on Exhibit D, as amended from time to time,
are authorized to act for Customer with respect to matters involving
this Agreement and FAS shall be entitled to rely on their
instructions.
SECTION 6
LIABILITY
6.01 Notwithstanding any other provision of this Agreement, Customer bears
the ultimate responsibility and authority for services to policy
owners and governmental regulatory bodies with respect to the sales or
marketing of the Policies. Customer shall indemnify and hold FAS
harmless from and against material liabilities, losses and damages
incurred, expenses reasonably incurred (including fees of expert
witnesses and advisors) and judgements, settlements and court costs
(all of the foregoing being referred to collectively as "Damages and
Claims") arising out of or attributable to:
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(a) Any action taken by FAS in good faith pursuant to this
Agreement;
(b) The refusal or failure of Customer to comply with the terms of
this Agreement, or any situations which arise out of the
negligence or misconduct of Customer or the breach of any
warranty of Customer hereunder;
(c) the reliance of FAS on or use of information, rate books, cash
value and reserve factors, data records and documents received
by FAS from Customer; and
(d) the reliance of FAS on, or the implementation of, any
instructions or requests made by any person listed on Exhibit
D, as amended from time to time in writing by Customer.
6.02 Subject to Section 6.01, FAS shall be responsible to Customer in the
event that FAS fails to perform any of the services provided for
hereunder. FAS shall indemnify and hold Customer harmless from and
against, material Damages and Claims, as defined in Section 6.01 and
in Section 6.03, arising out of or attributable to:
(a) Any action taken by Customer in good faith pursuant to this
Agreement;
(b) The refusal or failure of FAS to comply with the terms of this
Agreement, or any situations which arise out of the negligence
or misconduct of FAS or the breach of any warranty of FAS
hereunder; and
(c) The reliance of Customer on or use of information, data
records and documents received by Customer from FAS.
6.03 Indemnification provided under Section 6.01 and 6.02 shall be limited
to individual claims of $1,000 or more, with an aggregate limit equal
to 50# of the Service Fees paid to FAS under this Agreement and be
limited in duration to the statute of limitations applicable to said
individual claim(s).
6.04 If a third party claims that the FAS System infringes its patent,
copyright, or trade secret, or any similar intellectual property
right, FAS will defend Customer against that claim at FAS's expense
and pay all damages that a court finally awards, provided that
Customer promptly notifies FAS in writing of the claim, and allows FAS
to control, and cooperates with FAS in, the defense or any related
settlement negotiations. If such a claim is made or appears possible,
Customer agrees to permit FAS to enable Customer to continue to use
the System, or to modify or replace it.
6.05 In the event FAS is unable to perform its obligations under this
Agreement because of strikes, equipment or transmission failure or
damage or other causes beyond its control, FAS will not be liable for
any resulting Damages and Claims. Provided, however, FAS will use its
best efforts to assist Customer in obtaining an alternate source or
sources of services.
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6.06 At any time FAS may apply written instructions from a person
identified in Exhibit D with respect to any matter arising in
connection with this Agreement. FAS shall not be liable for, and
shall be indemnified by Customer against any action taken or omitted
by FAS in good faith reliance on such instructions.
6.07 Customer shall immediately provide FAS with written notice of any
change of authority of persons identified in Exhibit D and of any
additions or deletions to such list of authorized persons.
6.08 In the event a malfunction of the FAS System causes an error or
mistake in any record, report, data, information or output under the
terms of this Agreement, FAS shall at its own expense correct and
reprocess such records; provided the Customer, promptly upon discovery
of such error or mistake, notifies FAS in writing of each error or
mistake.
SECTION 7
COVENANTS
7.01 FAS shall establish and maintain facilities and procedures for the
safekeeping of policy forms, check forms, facsimile signature
imprinting devices, if any, and all other documents, reports, books,
files and other materials relative to this Agreement.
7.02 FAS shall maintain, at its principal administrative office, in
accordance with prudent standards of insurance recordkeeping, for the
duration of this Agreement and for 6 years thereafter, adequate books
and records of all transactions between FAS and the Customer. FAS
shall maintain records of all transactions with the policyowners for
the duration of the policy and for 6 years thereafter.
7.03 Customer and its duly authorized independent auditors have the right
under this Agreement to perform on-site audits of records and accounts
directly pertaining to the Contracts serviced by FAS hereunder at the
FAS Facilities in accordance with reasonable procedures and at
reasonable frequencies. Customer and its independent auditors shall
have full access, during ordinary business hours, to all documents,
records, reports, books, file and other materials relative to the
Agreement and maintained by FAS, subject to reasonable security
concerns of FAS. FAS shall allow access to all books and records
maintained by FAS for the Customer to any regulatory authority, such
as the NASD, the SEC or commissioners of insurance, for the purpose of
examination, audit and inspection of the business administered by FAS
pursuant to this Agreement.
7.04 It is expressly understood and agreed that all documents, reports,
records, books, files and other materials relative to this Agreement
shall be the sole property of Customer and that such property shall be
held by FAS as agent, during the effective term of the Agreement.
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7.05 FAS shall maintain appropriate back-up computer files (on a daily
basis stored in an off-site location) to permit file recovery in the
event of destruction of normal processing files. Customer may review
the procedures in effect upon demand.
7.06 Customer shall, in a timely fashion, provide FAS with all information
necessary for the timely and proper administration of the Policies,
including but not limited to policy forms, lists of all states of
license, agents and representatives authorized to sell Customer's
policies; cash value and reserve factors; data records; actuarial
support; and mortality rates.
7.07 All information furnished by Customer or by policy owners to FAS
hereunder, including but not limited to, the identity and the address
of policy owners, is confidential and FAS shall not disclose any such
information, directly or indirectly, to any third party except: (a) to
the extent that FAS is required by law to make such a disclosure; (b)
to the extent necessarily resulting from provisions by any of its
affiliates of services required by FAS in order to perform its
obligations under this Agreement; and (c) to the extent proper
authorization for disclosure is received from the policy owner and
Customer.
7.08 Customer acknowledges that FAS and certain other persons have
proprietary rights in and to the FAS System and that the FAS System
constitutes confidential material and trade secrets of FAS, its
affiliates or unrelated person; and Customer agrees to maintain the
Confidential of the FAS System. THIS AGREEMENT AND THE ATTACHED
EXHIBITS ARE CONSIDERED CONFIDENTIAL AND PROPRIETARY AND SHALL BE
SHARED ONLY WITH THOSE PERSONS WHO HAVE A NEED TO KNOW AND WHO ARE
EMPLOYED OF CUSTOMER OR ITS AFFILIATES OR FAS AND ITS AFFILIATES.
7.09 Customer acknowledges that this Agreement in no way gives Customer any
rights in or to the FAS System or FAS Facilities.
7.10 Customer acknowledges its responsibility to provide actuarial and
legal support for policy and agent administration and financial
reporting.
7.11 Any policies, certificates, booklets, termination notices, or other
written communications delivered by the Customer to FAS for delivery
to its policyholders shall be delivered by FAS promptly after receipt
of instructions from the Customer to do so.
7.12 To the extent that FAS adjusts and settles claims, the compensation to
FAS with regard to the policies shall in no way be contingent on claim
experience.
7.13 Customer acknowledges its responsibility to provide cooperation in
registering FAS as a third party administrator in Wyoming. This
entails completing and authorizing a certificate of registration and a
surety bond (Exhibit F). In turn, FAS will provide a
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written notice, approved by the Customer, to insured individuals,
advising them of the identity of and relationship among FAS, the
policy owner and the Customer.
7.14 Upon receipt of any summons, written pleadings or other notice of suit
or any regulatory inquiry or complaint, relating to the service
provided or business conducted under this Agreement, FAS shall forward
to Customer a copy of same along with supporting documents for
handling by the Customer.
7.15 FAS shall (a) provide evidence that it has the insurance coverage
specified in Exhibit H attached hereto or (b) provide a guarantee from
Phoenix Home Mutual Life Insurance Company of FAS's obligations under
this contract.
SECTION 8
PAYMENTS AND COLLECTIONS
8.01 The payment to FAS of any premiums, loan repayments or charges for
insurance by or on behalf of a policy owner is considered received by
Customer upon receipt by FAS. The payment of return premiums or
claims by Customer to FAS is not considered payment to the policy
owner or claimant until the payments are received by the policy owner
or claimant. FAS agrees that all such premiums and insurance charges
shall be made payable to and remain the property of Customer. Subject
to Section 8.05, Customer hereby authorizes FAS to sign and endorse
any checks representing premiums and insurance charges; provided,
however, Customer reserves the right to change, modify or withdraw the
authorization at any time. Provided, further, that the Customer
releases FAS of any liability and FAS shall not be considered in
breach, if FAS is unable to perform its functions under this Agreement
as a result of such change, modification or withdrawal.
8.02 All premiums, loans repayments and other receipts shall be payable to
the order of Customer and shall be directed to a customer-owned lock
box for deposit in a customer owned account. In the event FAS
receives any such monies, it shall deposit such checks or other funds
collected on behalf of Customer in the bank accounts opened and
maintained by Customer for such purposes. Any funds held by FAS in
connection with this Agreement shall be held in trust for Customer and
shall not be commingled by FAS for any personal use whatsoever. FAS
shall immediately remit such funds to the person or persons entitled
thereto or shall promptly deposit them in the bank accounts to be
established by Customer as set forth in this Agreement. Customer
shall require the bank or banks in which the accounts are maintained
to keep records clearly recording the deposits in and withdrawals from
such accounts on behalf of Customer for which FAS may collect
insurance charges or premiums. FAS shall promptly obtain and keep
copies of all records and, upon request of Customer, furnish Customer
with copies of such records pertaining to deposits and withdrawals of
behalf of or for Customer.
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8.03 All claims paid by FAS from funds collected on behalf of Customer
shall be paid only on checks or draft of Customer and as authorized by
Customer. FAS shall not be responsible for any claims determination
or approval.
8.04 To the extent required by applicable law, FAS will provide a written
notice to the policy owner advising him of the identity of and
relationship among FAS, the policy owner and Customer. If FAS
collects funds from the policy owner, FAS will provide the policy
owner with written notice of the premium charged by Customer for such
insurance coverage.
8.05 Customer shall establish one or more bank accounts for use by FAS to
carry out its responsibilities under this Agreement. Such accounts
will include an account for the deposit of all premium remittances
received by FAS for the benefit of Customer and an account to enable
FAS to process and pay claims under the Policies.
Customer shall authorize such individuals as FAS shall designate to
draw against any such account subject to the right of Customer to
terminate such authority at any time in Customer's sole discretion and
further subject to the prior deposit by Customer of periodic deposits
to such account in such amounts as are necessary for the payment of
ail valid claims under the Policies.
Notwithstanding the foregoing authorization by Customer of FAS
employees to use these accounts, the parties hereby agree that such
bank accounts are the sole and absolute property of Customer.
It is understood by the parties hereto that the amounts payable by
Customer to FAS hereunder may be paid at, Customer's option, by
Customer allowing FAS to have access to such accounts for payment of
such fees. The access granted by Customer to FAS is for the
convenience of Customer and may be withdrawn by Customer at any time
in its sole discretion.
Nothing herein shall be construed to afford FAS any rights in the bank
accounts, it being expressly understood that all rights with respect
to these accounts are vested in Customer.
SECTION 9
COMPUTER ACCESS
9.01 Subject to the term and condition set forth below, Customer shall be
entitled to obtain access on a "view only" basis to all data relating
to Policies (the "Information") which is maintained on the computers
utilized by or on behalf of FAS in providing services to Customer
pursuant to this Agreement ("System Access").
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9.02 Customer's access to such data shall be on Mondays through Fridays,
exclusive of holidays, between the hours of 8 a.m. and 5 p.m.,
Hartford, Connecticut time. FAS makes no representations or
warranties as to the ability of Customer to successfully utilize
System Access at any given time, in light of the fact that computer
facilities suffer occasional "down time."
9.03 Customer 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 Customer
agrees not to divulge to any person other than those of its employees
it wishes to have 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 Customer.
9.04 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 Customer.
9.05 In the event that Customer suspects a possible breach of security with
respect to System Access, including any unintended disclosure of code,
or Customer obtains information through System Access, on any person
other than its own policy owners, then Customer shall immediately
notify FAS of such circumstances by telephone, followed by a
confirmation in writing, specifying the nature of the problem.
9.06 Customer shall indemnify FAS and its affiliates and hold them harmless
from all direct losses and all liabilities resulting to them, as well
as all costs and expenses. (including court costs and attorneys fees)
reasonably incurred by them, due to Customer's failure to properly
safeguard the codes and/or passwords provided pursuant here to for its
use. Customer shall also indemnify FAS and its affiliates and hold
them harmless from all liabilities, costs and expenses (including cost
costs and attorneys fees) reasonably incurred as a result of
Customer's breach of its obligations of confidentiality with respect
to the Information. Customer shall further indemnify and hold FAS and
its affiliates harmless from all liabilities, costs and expenses
(including court costs and attorneys fees) reasonably incurred by them
due to any act or omission of Customer in its use of Information,
including, but not limited to, erroneous eligibility or claim coverage
determinations.
9.07 FAS shall indemnify Customer and hold it harmless from all direct
losses and all liabilities resulting to it, as well as all costs and
expenses (including court costs and attorneys fees) reasonably
incurred by it due to FAS's failure to properly safeguard the codes
and/or passwords provided used by it to prevent unauthorized access.
FAS shall also indemnify Customer and hold it harmless from all
liabilities, costs and expenses (including court costs and attorneys
fees) reasonably incurred as a result of FAS's breach
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of its obligations of confidentiality with respect to the Information.
FAS shall further indemnify and hold Customer harmless from all
liabilities, costs and expenses (including court costs and attorneys
fees) reasonably incurred by it due to any act or omission of FAS in
the entry of Information, including, but not limited to, inaccurate or
incomplete information which results in erroneous eligibility or claim
coverage determinations by FAS or Customer.
SECTION 10
TERMINATION OF AGREEMENT
10.01 Subsequent to e initial term as defined in Section 2.01, this
Agreement may be terminated by either party by written notice to the
other, one hundred and eighty (180) days following delivery by
registered mail of such notice to the other party.
10.02 Not fewer than ninety (90) days prior to the end of any term hereof,
FAS shall give Customer written notice if FAS desires to increase its
fees or charges to Customer or to change the manner of payment. If
FAS and Customer do not agree in writing upon fees and changes before
the end of the term during which such notice is given by FAS, this
Agreement shall terminate immediately and automatically at the end of
such term, not withstanding Section 10.01.
10.03 If Customer is more than ninety (90) days late in fulfilling its
obligations under Section 3, FAS may terminate its services upon sixty
(60) days notice to Customer.
10.04 If either of the parties hereto shall materially breach this Agreement
or be materially in default in the performance of any of its duties
and obligation hereunder, (the "Defaulting Party"), other than
Customer's obligation of payment, the other party hereto may give
written notice of such default or breach to the Defaulting Party. If
such default or breach shall not have been remedied within sixty (60)
days after such written notice is given, then the non-defaulting party
may terminate this Agreement by giving sixty (60) days written notice
of such termination to the Defaulting Party. Provided, however, that
if FAS elects to terminate this Agreement for other than non-payment
of fees and charges and if Customer shall so request in writing, FAS
shall continue to provide uninterrupted services as described herein
to Customer for such period of time as Customer may request, not to
exceed six (6) months following the date on which this Agreement would
otherwise terminate. Such service shall be provided in accordance
with the terms of this Agreement and at one hundred and twenty-five
(125%) percent of the fees in effect for the term immediately
preceding such period. Termination of this Agreement by Customer for
default or breach shall not constitute a waiver of any rights of FAS
in reference to services performed prior to such termination or rights
of FAS to be reimbursed for out of pocket expenditures. Termination
of this Agreement by FAS for default or breach shall not constitute a
waiver by Customer of any other rights it might have under this
Agreement.
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SECTION 11
CHANGES AND MODIFICATIONS
11.01 FAS shall have the right, at any time, and from time to time, to alter
and modify any system, programs, procedures or facilities used or
employed in performing its duties and obligations hereunder, provided
that no such alterations or modifications hall, without the consent of
Customer, materially change or affect the operation and procedures of
Customer in using or employing the FAS System or FAS Facilities
hereunder.
SECTION 12
ASSIGNMENT
12.01 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, either party may assign its rights and
obligations hereunder without the other party's prior written
approval: (a) to affiliated companies or (b) by operation of law in
the event of a merger.
12.02 This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
SECTION 13
DISPUTE RESOLUTION
13.01 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 them to be considered, negotiated in good
faith and resolved as soon as possible.
13.02 In the event that any dispute or disagreement between the parties
cannot be resolved to the satisfaction of the parties' administrative
personnel within twenty (20) days after either party has notified the
other in writing of the need to resolve the specific dispute or
disagreement, then the dispute or disagreement shall be immediately
referred in writing to Xxxxx X. Xxxxxxx of FAS and Xxxxxxxx X.
XxXxxxxx of IL Annuity and Insurance Company (or their respective
successors) for consideration.
13.03 Any and all disputes arising out of or in connection with the
execution, interpretation, performance, or nonperformance of this
Agreement or any other certificate, agreement, or other instrument
between, involving, or affecting the parties (including the validity,
scope, and enforceability of this arbitration agreement) shall be
solely and finally settled by arbitration. In such cases the parties
will submit their differences to three (3)
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disinterested arbitrators, one to be selected by each party and the
third to be selected by the arbitrators named by the parties.
Arbitration may be initiated by either party ("Petitioner") by written
notice to the other party ("Respondent") demanding arbitration and
naming its arbitrator. The Respondent shall have 20 days after
receipt of said notice to designate its arbitrator. If the Respondent
fails to designate its arbitrator within 20 days of receipt of the
notice or the 2 designated arbitrators are unable to agree on the
choice of the third, the President of the American Arbitration
Association shall select the second or third arbitrator, as the case
may be.
Arbitration shall be conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (the
"Rules") in effect as of the date of the initiation of the
arbitration; provided, however, that in the event of conflict between
the Rules and the terms of this Agreement, the terms of this Agreement
shall govern.
On the thirtieth business day following the appointment of the
arbitrators, the arbitration shall be held at the location of the home
office of the Petitioner. In the event of a disagreement between the
arbitrators, the decision will rest with the majority. The
arbitrators will be relieved of all judicial formality and may abstain
from the strict rules of law.
The decision of the majority of the arbitrators shall be binding upon
the parties herein without appeal. The decision of the arbitration
may be entered as a judgement in any court of competent jurisdiction.
Any monetary award shall be promptly paid in US dollars free of any
tax, deduction or offset. The parties further agree that any costs,
fees or taxes incident to enforcing the award shall, to the extent
permitted by law, be charged to the party resisting such enforcement.
Each party shall, except as otherwise provided herein, be responsible
for its own expenses, including legal fees, incurred in the course of
any arbitration proceedings. The fees of the arbitrators shall be
divided evenly between the parties.
No resolution or attempted resolution of any dispute or disagreement
pursuant to this section shall be deemed to be a waiver of any term or
provision of this Agreement or consent to any breach or default unless
such waiver or consent shall be in writing and signed by the party
claimed to have waived or consented.
SECTION 14
MISCELLANEOUS
14.01 Confidentiality - The parties hereto agree that all tapes, books,
reference manuals, instructions, records, information and data
pertaining to the business of the other party,
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the FAS System and the identity of the policy owners served by FAS
hereunder which are exchanged or received pursuant to the negotiations
of and/or implementation of this Agreement shall remain confidential
and shall not be voluntarily disclosed to any other person and that
all such tapes, books, reference manuals, instructions, records,
information and data in possession of each of the parties hereto shall
be returned to the party from whom it was obtained upon the
termination or expiration of this Agreement.
14.02 Independent Contractor - It is understood and agreed that all services
performed hereunder by FAS shall be as an independent contractor and
not as an employee of Customer.
14.03 Definitions - For the purposes of this Agreement, the terms
"policies", "certificate", "certificates contracts", and "contracts"
are interchangeable where appropriate and refer to the primary
coverage documents for each insured.
14.04 Entire Agreement. Amendment- This Agreement, the Exhibits and
Schedules hereto constitutes the entire agreement between the parties
and supersedes all prior agreements with respect to the subject matter
hereof, whether oral or written. This Agreement may not be modified
and no provision may be waived except in a written instrument executed
by both of the parties. The written instrument shall specify if the
waiver of a provision is to apply to a single occasion or is to apply
until notice of revocation is given. The waiver by either party of
any provision of this Agreement may be revoked by that party upon
written notice of the revocation. The other party is entitled to rely
upon a written waiver until it has received the notice of revocation
unless the written notice of waiver expressly states that the waiver
applies to a single occasion.
14.05 Survival - The representations, warranties, and covenants contained
herein shall survive the execution of the Agreement and the
performance of services hereunder.
14.06 Governing Law - This Agreement shall be governed by the laws of the
State of Connecticut.
14.07 Exhibits - The Exhibits and Schedules referred to herein and delivered
pursuant hereto, including any amendment 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 the terms have in this Agreement,
unless the contrary intention is clearly manifested therein.
14.08 Severability - Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent
of such invalidity or non-enforceability without invalidating or
rendering unenforceable the remaining provisions hereof, and any such
invalidity or non-enforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
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14.09 Approval of Advertising - FAS may use only such advertising pertaining
to the business underwritten by the Customer as is approved by the
Customer in advance of its use.
14.10 FAS shall deliver to Customer, within 10 days of receipt, a copy of
any preliminary or final examination or audit report with regard to
the Policies or services provided under this Agreement which is issued
by FAS's independent auditor, any federal, state or local governmental
agency.
14.11 Notices - All notices and requests in connection with this Agreements
shall be given or made upon the respective parties in writing and
shall be deemed as given as of the date either deposited in the U.S.
mails, postage prepaid, certified or registered, return receipt
requested, or sent by facsimile or recognized overnight carrier, and
addressed as follows:
For Customer For FAS
------------ -------
Xxxxxxxx X. XxXxxxxx, Esq. Xxxxx X. Xxxxxxx, CLU/FLMI/CDP
IL Annuity and Insurance Co. Financial Administration Services, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxx 00 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000 Xxxxxx, XX 00000
or such other address as a party to receive the notice or request so designates
by written notice to the other.
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.
IL ANNUITY AND INSURANCE
Attest: By:
------------------- -------------------
Title:
------------------
FINANCIAL ADMINISTRATIVE SERVICES, INC.
Attest: By:
------------------- -------------------
Title:
------------------
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EXHIBIT A
POLICIES
The Visionary Variable Annuity
