EXHIBIT (8)(K). ADMINISTRATIVE SERVICES AGREEMENT BETWEEN UNITED OF OMAHA LIFE
INSURANCE COMPANY AND SECURITY BENEFIT LIFE INSURANCE COMPANY.
ADMINISTRATIVE SERVICES AGREEMENT
BY AND BETWEEN
UNITED OF OMAHA LIFE INSURANCE COMPANY
AND
SECURITY BENEFIT LIFE INSURANCE COMPANY
DATED
APRIL 20, 2004
24
TABLE OF CONTENTS
ARTICLE I DEFINITIONS..................................................... 1
1.01 Definitions.................................................... 1
ARTICLE II TERM........................................................... 1
2.01 Term........................................................... 1
ARTICLE III SERVICES; STANDARDS; AUTHORITY................................ 2
3.01 Company Services and Service Commencement Date................. 2
3.02 Service Provider Services...................................... 2
3.03 Service Standards.............................................. 2
3.04 Authority...................................................... 2
3.05 Agreements Regarding Use of the Company's Name................. 3
3.06 Legally Required Company Actions............................... 5
3.07 Responsibilities of the Service Provider....................... 6
ARTICLE IV COMPENSATION................................................... 6
4.01 Service Provider............................................... 6
4.02 Company........................................................ 6
ARTICLE V PERSONNEL, FACILITIES, AND COSTS................................ 6
5.01 Personnel...................................................... 6
5.02 Facilities..................................................... 7
5.03 Systems........................................................ 7
5.04 Costs.......................................................... 7
ARTICLE VI COMPLIANCE WITH APPLICABLE LAWS................................ 8
6.01 Legal and Tax Compliance....................................... 8
6.02 Licensing...................................................... 8
6.03 Supervision.................................................... 8
ARTICLE VII MAINTENANCE OF RECORDS........................................ 9
7.01 Maintenance.................................................... 9
7.02 Availability and Access........................................ 9
ARTICLE VIII POWER OF ATTORNEY............................................ 10
8.01 General........................................................ 10
8.02 Appointment.................................................... 10
ARTICLE IX TERMINATION.................................................... 11
9.01 Termination.................................................... 11
9.02 Effect of Termination.......................................... 12
ARTICLE X INDEMNIFICATION................................................. 13
10.01 Indemnification by the Company................................. 13
10.02 Indemnification by the Service Provider........................ 13
10.03 Procedure for Indemnification.................................. 13
ARTICLE XI TRANSFER OF RECORDS............................................ 13
11.01 Transfer ...................................................... 13
11.02 Company's Access............................................... 13
ARTICLE XII NOTIFICATION.................................................. 13
12.01 Company's Obligations.......................................... 13
12.02 Service Provider's Obligations................................. 14
ARTICLE XIII ALTERNATIVE DISPUTE RESOLUTION............................... 14
13.01 Arbitration.................................................... 14
ARTICLE XIV MISCELLANEOUS................................................. 14
14.01 Notice......................................................... 15
14.02 Expenses....................................................... 15
14.03 Governing Law.................................................. 15
14.04 Entire Agreement............................................... 15
14.05 No Assignment; Binding Effect.................................. 15
14.06 Amendment; Waiver.............................................. 15
14.07 Relationship of Parties........................................ 16
14.08 Jurisdiction................................................... 16
14.09 Headings....................................................... 16
14.10 Severability................................................... 16
14.11 Counterparts................................................... 16
14.12 No Third Party Beneficiary..................................... 17
14.13 Good Faith; Errors And Oversights.............................. 17
14.14 Force Majeure.................................................. 17
2
ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT (this "Agreement") is made as of this
20th day of April, 2004 by and between United of Omaha Life Insurance Company, a
Nebraska insurance company (the "Company"), and Security Benefit Life Insurance
Company, a Kansas insurance company (the "Service Provider").
INTRODUCTORY STATEMENTS:
The Company and the Service Provider have entered into that certain Purchase
Agreement, dated as of February 10, 2004 (the "Purchase Agreement"), which
agreement calls for, among other things, the provision of administrative
services described in this Agreement;
The Company and the Service Provider have entered into a Coinsurance Agreement,
pursuant to which the Company shall cede to the Service Provider, on a 100%
coinsurance or modified coinsurance basis (as indicated therein), the Company's
rights, liabilities, and obligations in respect of the variable life insurance
products and variable annuity contracts identified in the Coinsurance Agreement
(the "Policies");
In connection with the Coinsurance Agreement the parties hereto desire that the
Service Provider perform all services required for complete support and
administration of the Policies on behalf of the Company in accordance with the
terms and subject to the conditions of this Agreement.
DEFINITIONS
Definitions. UNLESS OTHERWISE DEFINED HEREIN, CAPITALIZED TERMS USED HEREIN
SHALL HAVE THE MEANING ASSIGNED TO THEM IN THE COINSURANCE AGREEMENT.
TERM
Term. THIS AGREEMENT SHALL BE EFFECTIVE AS OF THE DATE HEREOF, AND SHALL
REMAIN IN FULL FORCE AND EFFECT UNTIL TERMINATED IN ACCORDANCE WITH ARTICLE IX
BELOW.
SERVICES; STANDARDS; AUTHORITY
Company Services and Service Commencement Date. DURING THE PERIOD (THE
"INTERIM SERVICE PERIOD") FROM THE DATE HEREOF TO THE DATE ON WHICH THE SERVICE
PROVIDER BEGINS TO PROVIDE ADMINISTRATIVE SERVICES AS DESCRIBED HEREIN, WHICH
DATE SHALL BE NOT LATER THAN SIX MONTHS FROM THE DATE OF THIS AGREEMENT (THE
"SERVICE COMMENCEMENT DATE"), THE COMPANY SHALL CONTINUE TO PROVIDE ALL SERVICES
REQUIRED FOR COMPLETE SUPPORT AND ADMINISTRATION OF ALL POLICIES, INCLUDING
WITHOUT LIMITATION THE SERVICES SET FORTH ON EXHIBIT A HERETO (THE "SERVICES").
Service Provider Services. DURING THE PERIOD FROM AND AFTER THE SERVICE
COMMENCEMENT DATE, THE SERVICE PROVIDER SHALL PROVIDE THE SERVICES TO THE
COMPANY. UNLESS SPECIFICALLY PROVIDED FOR IN THIS AGREEMENT, AND EXCEPT FOR THE
LEGALLY REQUIRED COMPANY ACTIONS, AS BETWEEN THE PARTIES, THE COMPANY SHALL NOT
BE OBLIGATED TO PROVIDE ANY SERVICES RELATING TO THE POLICIES AFTER THE SERVICE
COMMENCEMENT DATE.
Service Standards.
During the Interim Service Period, the Company shall provide the Services
(i) in accordance with all Applicable Laws and insurance department
requirements, (ii) in a manner consistent with its current practices in
providing the Services, and (iii) as the parties may agree in writing from time
to time.
Following the Service Commencement Date, the Service Provider shall perform
the Services (i) at a level of accuracy and responsiveness not less favorable
than the practices of the Service Provider in administering products comparable
to the Policies issued by it or serviced by it for other companies during the
term of this Agreement, (ii) in accordance with all Applicable Laws and
insurance department requirements, (iii) in a manner consistent with prevailing
industry standards, (iv) as set forth on Exhibit A and (v) as the parties may
agree in writing from time to time.
Authority.
Following the Service Commencement Date, the Service Provider shall perform
the Services in the name and on behalf of the Company only as provided in this
Agreement or as directed by the Company in writing. The Service Provider shall
not have authority to issue new insurance policies or annuity contracts in the
name of the Company. Except as specifically set forth in this Agreement or
authorized by the Company in writing, the Service Provider shall not have
authority to enter into any agreements on the Company's behalf. None of the
terms or provisions of this Agreement shall prohibit the Service Provider or any
of its Affiliates from conducting business of whatever nature in their own names
and on behalf of any person or entity other than the Company. The Company shall
take all actions necessary prior to the Service
2
Commencement Date to ensure that the Service Provider has the authority to
accept funds on behalf of the Company and to disburse funds from bank accounts
on the Company's draft or check stock for the purpose of carrying out the
Service Provider's responsibilities under this Agreement. The Company shall,
upon the request of the Service Provider, take all actions necessary to execute
amendments, in form and substance reasonably acceptable to the Company, to the
Policies prepared from time to time by the Service Provider to conform such
policies to the extent required by any change in law.
Service Provider shall give written notice to policyholders of the identity
of Service Provider and the relationship between Service Provider and the
Company. The notice must be approved by the Company before distribution, which
approval shall not be unreasonably withheld or delayed. Following the Service
Commencement Date, Service Provider shall promptly adjudicate claims under the
Policies (except claims relating to the Life Insurance Contracts, which shall be
administered by the Company).
Agreements Regarding Use of the Company's Name and Marks. EXCEPT AS
PROVIDED HEREIN, THE SERVICE PROVIDER SHALL NOT USE THE NAME, LOGO OR OTHER
SERVICE OR TRADE NAMES, MARKS OR DOMAIN NAMES OF THE COMPANY OR ITS AFFILIATES,
WHETHER OR NOT USED IN THE BUSINESS (COLLECTIVELY, THE "COMPANY NAMES AND
MARKS"), IN ANY WAY OR MANNER NOT SPECIFICALLY AUTHORIZED IN WRITING BY THE
COMPANY. SUBJECT TO THE FOREGOING GENERAL LIMITATION, THE COMPANY AND THE
SERVICE PROVIDER AGREE AS FOLLOWS:
The Company hereby grants to the Service Provider and the Service Provider
hereby accepts a non-exclusive, non-transferable (other than as provided in
subsection (f) in connection with the delegation of Services), worldwide
royalty-free license to use the Company Names and Marks that are used in
connection with the Business (the "Licensed Names and Marks") in connection with
the Services rendered by the Service Provider under this Agreement, subject to
the terms and conditions set forth in this Agreement. The Parties agree that in
the course of rendering the Services, the Service Provider may reasonably
determine that there is a technical or administrative need to register domain
names that include the Licensed Names and Marks, including in conjunction with
other names or marks designated by the Service Provider. The Service Provider
shall obtain the Company's consent prior to registration of any domain names
that include the Licensed Names and Marks, which consent shall not be
unreasonably withheld. The Service Provider shall use the Licensed Names and
Marks in such a way as not to confuse third parties but to put them on notice
that the Service Provider is the provider and source of the Services. No right
is granted hereunder for the use of the Licensed Names and Marks (or any of the
Company Names and Marks) in connection with any services other than the
Services. If the Company decides to discontinue any of the Licensed Names and
Marks or create any new Licensed Names and Marks ("New Xxxx") it shall provide
written notice to the Service Provider at least six months in advance so that
the Service Provider can phase out the discontinued Licensed Name and Xxxx or
phase in the New
3
Xxxx in an orderly fashion. Any New Xxxx shall, upon the Company's notice, be
deemed a Licensed Name and Xxxx hereunder.
Without limiting the generality of the foregoing subsection (a), the
Company hereby further grants, and the Service Provider hereby accepts a
non-exclusive, non-transferable (other than as provided in subsection (f) in
connection with the delegation of Services), worldwide royalty-free right and
license to use the Licensed Names and Marks as part of any Uniform Resource
Locators ("URLs") (excluding the domain name portion of such URLs other than as
provided in subsection (a)) used in connection with the Services rendered by the
Service Provider under this Agreement, subject to the terms and conditions set
forth in this Agreement.
The Company shall have the right to control the form and manner in which
the Licensed Names and Marks are used by the Service Provider upon or in
connection with the Internet, advertisements, brochures, audio or visual
presentations, or any other materials used in the performance of Service
Provider's Services under this Agreement. The Service Provider agrees to use the
Licensed Names and Marks in accordance with such quality standards as may
reasonably be set by the Company and communicated to the Service Provider from
time to time or as may be agreed to by the Company and the Service Provider from
time to time, provided, that the Company acknowledges that it is aware of the
quality standards currently maintained by the Service Provider, such quality
standards are acceptable to the Company, and the Company covenants not to
unreasonably withhold agreement to revisions thereof. Upon the Company's request
from time to time, the Service Provider shall provide to the Company
representative samples of its uses of the Licensed Names and Marks. In the event
the Company notifies the Service Provider of its failure to maintain appropriate
quality standards with respect to its uses of the Licensed Names and Marks, the
Service Provider shall use reasonably diligent efforts to cure the cause of such
failure.
The rights and license granted in this Section 3.05 shall continue in
effect until such time as this Agreement is terminated pursuant to Article IX.
Upon the termination of this Agreement, the Service Provider shall discontinue
all use of the Licensed Names and Marks in accordance with applicable Law (but
in no event will such use extend beyond 60 days after termination) and shall not
thereafter use any names or marks that are confusingly similar to the Licensed
Names and Marks. Following any such notice of termination, the Company and the
Service Provider shall cooperate to take all action reasonably necessary to
effect such discontinuance including, but not limited to, notifying
policyholders, producers, suppliers, service providers, regulatory agencies, and
other relevant Persons of the discontinuance. Upon termination, except as
provided in this Section 3.05(d), all of Service Provider's rights to the
Licensed Names and Marks shall revert to and continue to reside with and be
owned exclusively by the Company.
4
The Company represents and warrants that it owns the Licensed Names and
Marks and has the right to grant the rights and license granted herein. The
rights and license granted herein will not conflict with the rights of any third
party and the use of the Licensed Names and Marks in connection with the
Services as licensed hereunder will not infringe or violate the rights of any
third party.
None of the rights licensed to the Service Provider under this Section 3.05
may be assigned, sublicensed or otherwise transferred by the Service Provider,
nor shall such rights inure to the benefit of any trustee in bankruptcy,
receiver or successor of the Service Provider, whether by operation of law or
otherwise without the prior written consent of the Company, and any assignment,
sublicense or other transfer without such consent shall be null and void.
Without limiting the right of the Company to pursue all other legal and
equitable rights available to it for violation of this Section 3.05 by the
Service Provider or any of its Affiliates, the Service Provider acknowledges and
agrees that other remedies cannot fully compensate the Company for such a
violation by the Service Provider or such Affiliates and that the Company shall
be entitled to injunctive relief or other equitable remedies to prevent the
violation or continuing violation thereof.
3.06 LEGALLY REQUIRED COMPANY ACTIONS. With regard to any actions the
Company is required by Applicable Law or Governmental Entities to take without
the Service Provider acting on its behalf, including, without limitation,
filings with insurance regulators, other Governmental Entities and guaranty
associations and filings and premium and other Tax returns with taxing
authorities, which, in each case, relate to the Policies (the "Legally Required
Company Actions"), the Service Provider will, not less than thirty (30) calendar
days (or if such time frame is not feasible, then that number of days which is
reasonably feasible) prior to the date on which such filings are required,
provide to the Company all information with respect to the Policies that may be
required for the Company to prepare such filings and Tax returns in a timely
fashion. However, all such information necessary for the preparation of any
federal or state income Tax return will be provided by April 30th following the
end of the taxable year. In addition, the Service Provider will be responsible
for complying with all applicable reporting, withholding and disclosure
requirements under the Code and state and local Tax laws with respect to the
Policies, and the Company will cooperate with the Service Provider to the extent
necessary to allow the Service Provider to fulfill its responsibilities.
3.07 RESPONSIBILITIES OF THE SERVICE PROVIDER. Except (i) as otherwise
provided by this Agreement; and (ii) with respect to any Legally Required
Company Actions, the Service Provider, on behalf of the Company, shall be
responsible for filings with all state insurance departments and any other
Governmental Entities (including, but not limited to, filings of policy forms,
riders and amendments), compliance with all regulatory requirements and the
taking of all required actions with respect to Governmental Entities relating to
the Policies. Nevertheless, if the Company or the Service Provider receive
notice of, or otherwise become aware of, any inquiry, investigation,
examination, audit or proceeding by Governmental Entities relating to the
Policies, the Company or the Service Provider, as applicable, shall promptly
notify the other party thereof, whereupon the parties shall cooperate in good
faith to resolve such matter in a mutually satisfactory manner and shall act
reasonably in light of the parties' respective interests in the matter at issue.
Notwithstanding the immediately preceding sentence, neither the
5
Service Provider nor the Company shall be relieved or discharged from any
liability or obligation that it has incurred or assumed in connection with such
matter under the terms of this Agreement or the Coinsurance Agreement.
COMPENSATION
Service Provider. THE SERVICE PROVIDER SHALL PROVIDE THE SERVICES IN
CONSIDERATION OF THE EXECUTION AND DELIVERY BY THE COMPANY OF THE PURCHASE
AGREEMENT AND THE COINSURANCE AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED THEREBY, AND THE SERVICE PROVIDER SHALL NEITHER IMPOSE ON THE
COMPANY NOR OTHERWISE BE ENTITLED TO RECEIVE ANY ADDITIONAL OR SEPARATE
CONSIDERATION FOR THE PROVISION OF SERVICES IN ACCORDANCE WITH THIS AGREEMENT.
Company. DURING THE INTERIM SERVICE PERIOD, THE SERVICE PROVIDER WILL
COMPENSATE THE COMPANY FOR PROVIDING THE SERVICES IN ACCORDANCE WITH EXHIBIT B
HEREOF.
PERSONNEL, FACILITIES, AND COSTS
Personnel
During the Interim Service Period, the Company shall furnish all personnel
necessary to provide the Services.
Following the Service Commencement Date, the Service Provider shall furnish
all personnel necessary to provide the Services.
Facilities.
During the Interim Service Period, the Services shall be performed by the
Company using furniture, fixtures, and equipment (including computer hardware)
owned or leased by the Company.
Following the Service Commencement Date, the Services shall be performed by
Service Provider using furniture, fixtures, and equipment (including computer
hardware) owned or leased by the Service Provider (collectively, the
"Facilities"). All Facilities owned by Service Provider shall remain the
property of Service Provider, and the Company acknowledges and agrees that it
shall not have any right, title, or interest in or to the Facilities.
Systems.
6
During the Interim Service Period, the Company shall furnish all Systems
(as hereinafter defined) that are necessary for the Company to provide the
Services.
Following the Service Commencement Date, the Service Provider shall furnish
all Systems (as hereinafter defined) that are necessary for the Service Provider
to provide the Services.
As used in this Section 5.03, the term "Systems" shall mean all computer
programs and programming aids (together with supporting documentation),
including without limitation input and output formats, program listings, systems
flow charts, narrative descriptions, operating instructions, and the tangible
media upon which such programs are recorded. All Systems owned by Service
Provider shall remain the property of Service Provider, and the Company
acknowledges and agrees that it shall not have any right, title, or interest in
or to the Systems.
Costs.
During the Interim Service Period, the Company shall pay all personnel and
other costs and expenses to provide the Services (including without limitation
all applicable filing and similar fees).
Following the Service Commencement Date, the Service Provider shall pay all
personnel and other costs and expenses to provide the Services (including
without limitation all applicable filing and similar fees).
7
COMPLIANCE WITH APPLICABLE LAWS
Legal and Tax Compliance. EACH OF THE PARTIES HERETO AGREES TO COMPLY WITH
ALL APPLICABLE LAWS AS THEY APPLY TO THE PERFORMANCE OF SUCH PARTY'S OBLIGATIONS
UNDER THIS AGREEMENT. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SUCH
COMPLIANCE WILL INCLUDE MAINTAINING COMPLIANCE OF THE POLICIES WITH ALL
REQUIREMENTS OF THE CODE, PROVIDED THAT THE SERVICE PROVIDER SHALL NOT BE LIABLE
WITH RESPECT TO ANY FAILURE TO MAINTAIN COMPLIANCE WITH THE REQUIREMENTS OF THE
INTERNAL REVENUE CODE TO THE EXTENT THAT (A) ABSENT A CHANGE OF LAW, SUCH
FAILURE IS ATTRIBUTABLE TO THE USE OF CONTRACT FORMS OR OF PRACTICES AND
PROCEDURES THAT WERE USED BY THE COMPANY PRIOR TO THE SERVICE COMMENCEMENT DATE,
(B) SUCH FAILURE IS ATTRIBUTABLE TO THE SERVICE PROVIDER'S USE OF TAX
INFORMATION INCLUDED IN THE TRANSFERRED RECORDS (AS DEFINED IN SECTION 11.01
BELOW), OR (C) SUCH FAILURE OTHERWISE ARISES FROM ANY ACT OR OMISSION OF THE
COMPANY.
Licensing.
The Company hereby covenants to the Service Provider that as of the Closing
Date, the Company will have all licenses, qualifications, and other
authorizations necessary to provide the Services. During the Interim Service
Period, the Company shall maintain in full force and effect all licenses,
qualifications, and other authorizations necessary under Applicable Law to
provide the Services. The Company agrees to provide the Service Provider with
copies of any such documents upon request.
The Service Provider hereby covenants to the Company that as of the Service
Commencement Date, the Service Provider will have all licenses, qualifications,
and other authorizations necessary to provide the Services to or on behalf of
the Company. Following the Service Commencement Date, the Service Provider shall
maintain in full force and effect all licenses, qualifications, and other
authorizations necessary under Applicable Law to provide the Services to or on
behalf of the Company. The Service Provider agrees to provide the Company with
copies of any such documents upon request.
Supervision. THE SERVICE PROVIDER ACKNOWLEDGES THAT THE BOARD OF DIRECTORS
OF THE COMPANY IS VESTED WITH THE POWER, AUTHORITY AND RESPONSIBILITY FOR
MANAGING THE BUSINESS AND AFFAIRS OF THE COMPANY, INCLUDING ADMINISTRATIVE
SERVICES. THE SERVICE PROVIDER ACKNOWLEDGES THAT ANY AND ALL ACTIONS OR
SERVICES, WHETHER SUPERVISORY OR MINISTERIAL, TAKEN OR PROVIDED PURSUANT TO THIS
AGREEMENT BY THE SERVICE PROVIDER SHALL BE SUBJECT TO THE CONTINUOUS SUPERVISION
OF THE BOARD OF DIRECTORS OF THE COMPANY AND, TO THE EXTENT DESIGNATED BY SUCH
BOARD OF DIRECTORS, THE APPROPRIATE DESIGNATED OFFICERS OF THE COMPANY. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, IN THE EVENT THAT ANY DENIAL OF A
CLAIM UNDER ANY REINSURED POLICY BY THE SERVICE PROVIDER APPEARS REASONABLY
LIKELY TO RESULT IN THE TAKING OF ANY ACTION ADVERSE TO THE COMPANY BY ANY
REGULATORY AUTHORITY, THE SERVICE PROVIDER SHALL SUBMIT TO THE COMPANY ALL
INFORMATION RELEVANT TO THE DENIAL OF SUCH CLAIM AND SERVICE PROVIDER AND THE
COMPANY SHALL THEREAFTER COOPERATE IN GOOD FAITH AND USE THEIR RESPECTIVE
COMMERCIALLY REASONABLE EFFORTS TO DETERMINE WHETHER SUCH CLAIM OR ANY PORTION
THEREOF SHOULD BE PAID OR AMOUNT OFFERED IN SETTLEMENT OF SUCH CLAIM. SERVICE
PROVIDER SHALL INDEMNIFY, DEFEND AND HOLD THE COMPANY HARMLESS AGAINST ANY
LOSSES ASSERTED AGAINST, IMPOSED UPON OR INCURRED BY THE
8
COMPANY AS A RESULT OF THE SERVICE PROVIDER'S DENIAL OF A CLAIM UNDER A
REINSURED POLICY, WHICH DENIAL WAS RECOMMENDED BY THE SERVICE PROVIDER UNDER
THIS SECTION 6.03 AND AGREED TO OR ACQUIESCED IN BY THE COMPANY UNDER THIS
SECTION 6.03; PROVIDED THAT THIS SECTION 6.03 SHALL NOT APPLY TO CLAIMS UNDER
THE LIFE INSURANCE CONTRACTS, WHICH SHALL BE ADMINISTERED BY THE COMPANY.
MAINTENANCE OF RECORDS
Maintenance.
During the Interim Service Period, the Company agrees to (a) maintain the
Books and Records at its principal administrative office and (b) preserve the
Books and Records for such period as may be required by Applicable Law, except
to the extent transferred under the Purchase Agreement or the Coinsurance
Agreement. The Company shall maintain such Books and Records as are not
transferred under the Purchase Agreement or the Coinsurance Agreement (the
"Retained Records") at the Company's expense and in accordance with prudent
standards of insurance recordkeeping and all Applicable Law.
Following the Service Commencement Date, the Service Provider agrees to (a)
maintain a true and complete set of books and records relating to all
transactions under this Agreement (the "Service Provider Books and Records") at
its principal administrative office and (b) preserve such Service Provider Books
and Records for the term of this Agreement plus five years thereafter (or such
longer period as may be required by Applicable Law). The Service Provider shall
maintain such Service Provider Books and Records and the Transferred Records (as
defined in Section 11.01 below) at the Service Provider's expense and in
accordance with prudent standards of insurance recordkeeping and all Applicable
Laws.
9
Availability and Access.
Prior to the Service Commencement Date, the Books and Records shall be
available (at their place of keeping) for inspection, examination, and audit by
the Service Provider and its representatives at all reasonable times. Prior to
the Service Commencement Date, the Company shall provide to Service Provider and
its representatives, without cost to Service Provider, access, upon reasonable
notice and during normal business hours, to the Business Employees and other
employees of the Company and its Affiliates who shall provide reasonable
assistance to Service Provider and its representatives as to any matter with
respect to the Books and Records, the transfer of the Books and Records to the
Service Provider, and the transition of the Services from the Company to the
Service Provider.
Following the Service Commencement Date, the Service Provider Books and
Records shall be available (at their place of keeping) for inspection,
examination, and audit by the Company and state and federal regulatory
authorities (in each case together with their respective representatives) at all
reasonable times. Following the Service Commencement Date, the Service Provider
shall furnish to the Company (i) at the Service Provider's expense, copies of
any Service Provider Books and Records relating to the transactions under this
Agreement as may be reasonably required by the Company in connection with the
preparation of the Company's financial statements, state and federal income and
other Tax returns, and any other filings or reports required to be filed with,
or requested by, state or federal regulatory authorities or any rating agencies
and (ii) at the Company's expense, copies of any such Service Provider Books and
Records for any other reason, provided, however, that Service Provider's
obligations with respect to any such Service Provider Books and Records that are
kept in machine readable format (including but not limited to data bases) in
Service Provider's custody shall be limited to providing a machine readable
file, current as of the date provided in accordance with Service Provider's
customary practices, prepared for reading and manipulation using the
application, operating system, machine language, data field format, and field
content of the file in which such data resides as of the date requested (a file
conversion process commonly referred to as a "flat file").
POWER OF ATTORNEY
General. EFFECTIVE AS OF THE SERVICE COMMENCEMENT DATE, THE COMPANY GRANTS
TO THE SERVICE PROVIDER AUTHORITY IN ALL MATTERS RELATING TO ADMINISTRATION OF
THE POLICIES TO THE EXTENT SUCH AUTHORITY (A) MAY BE GRANTED PURSUANT TO
APPLICABLE LAW AND (B) IS REASONABLY NECESSARY FOR THE SERVICE PROVIDER TO
PROVIDE THE SERVICES HEREUNDER (INCLUDING, WITHOUT LIMITATION, TO MAKE FILINGS
REQUIRED BY APPLICABLE LAW).
10
Appointment. IN ORDER TO ASSIST AND TO MORE FULLY EVIDENCE THE AUTHORITY
DESCRIBED IN SECTION 8.01, EFFECTIVE AS OF THE SERVICE COMMENCEMENT DATE, THE
COMPANY HEREBY NOMINATES, CONSTITUTES, AND APPOINTS THE SERVICE PROVIDER AS ITS
ATTORNEY-IN-FACT WITH RESPECT TO THE RIGHTS, DUTIES, PRIVILEGES, AND OBLIGATIONS
OF THE COMPANY IN, TO AND UNDER THE POLICIES, WITH FULL POWER AND AUTHORITY TO
ACT IN THE NAME, PLACE, AND STEAD OF THE COMPANY WITH RESPECT TO THE POLICIES,
INCLUDING, WITHOUT LIMITATION, THE POWER, WITHOUT RESERVATION, TO PROVIDE ALL
SERVICES TO ALL POLICIES, TO ADJUST, TO DEFEND, TO SETTLE, AND TO PAY ALL CLAIMS
AND BENEFITS, EXCEPT CLAIMS RELATING TO THE LIFE INSURANCE CONTRACTS WHICH WILL
BE ADMINISTERED BY THE COMPANY, TO ADMINISTER THE SEPARATE ACCOUNTS HEREUNDER,
AND TO TAKE SUCH OTHER AND FURTHER ACTIONS AS MAY BE REASONABLY NECESSARY TO
EFFECT THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND THE COINSURANCE
AGREEMENT, DURING THE TERM OF THIS AGREEMENT AND UNTIL ITS TERMINATION IN
ACCORDANCE WITH ARTICLE IX BELOW. THE COMPANY WILL, WHEN AND AS REQUESTED BY THE
SERVICE PROVIDER, EXECUTE AND PROVIDE TO SERVICE PROVIDER WRITTEN POWERS OF
ATTORNEY (IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY) OR OTHER
DOCUMENTS THAT ARE NECESSARY OR APPROPRIATE TO CARRY OUT THE OBJECTIVES OF THIS
ARTICLE VIII.
TERMINATION
Termination. THE COMPANY MAY TERMINATE THIS AGREEMENT IMMEDIATELY, BY
DELIVERY OF WRITTEN NOTICE TO THE SERVICE PROVIDER, UPON THE OCCURRENCE OF ANY
OF THE FOLLOWING EVENTS:
The Service Provider, pursuant to or within the meaning of Title 11, U.S.
Code, or any similar Federal, state or foreign law for the relief of debtors,
including without limitation any state insolvency or rehabilitation statutes
(collectively, "Bankruptcy Laws"):
commences a voluntary case or proceeding;
consents to the entry of an order for relief against it in an
involuntary case or proceeding;
consents to the appointment of a custodian of it or for all or for a
substantial part of its property;
makes a general assignment for the benefit of its creditors; or
fails to contest any involuntary case or proceeding filed against it
within the time period fixed by any applicable rules, and any extensions
granted by the court where such involuntary case or proceeding is pending;
A court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that remains unstayed and in effect for 60 days and that:
is for relief against the Service Provider in an involuntary case or
proceeding;
11
appoints a custodian of the Service Provider or a custodian for all or
for a substantial part of the property of the Service Provider; or
orders the liquidation of the Service Provider;
(c) Failure by the Service Provider to comply with any material provision
of this Agreement, which failure has not been corrected within 60 days after
written notice thereof is delivered to the Service Provider by the Company; or
Recapture of the Policies by the Company pursuant to Section 9.01 of the
Coinsurance Agreement.
Effect of Termination.
Upon termination of this Agreement, (i) no party hereto shall be relieved
of any liability for any breach of any provision of this Agreement, (ii) any
amounts owing hereunder by either party hereto to the other party hereto shall
be immediately due and payable (pro-rated for any partial periods), and (iii)
all rights and obligations hereunder will terminate except that the provisions
of Articles VII, X and XIII, and this Section 9.02, Section 14.02 and Section
14.03 shall survive the termination of this Agreement.
Following any termination of this Agreement, the Service Provider shall
cooperate fully with the Company in effecting the prompt transfer of the
Services, the bank accounts and lockboxes maintained by the Service Provider
hereunder and all Service Provider Books and Records maintained by the Service
Provider (or, where appropriate, copies thereof) to the Company or the Company's
designee, so that the Company or its designee will be able to perform the
Services without interruption following any such termination. Cooperation of the
Service Provider shall include the provision of its personnel and access to its
systems for purposes of assisting in the conversion and transfer of data and
information (in customary electronic format) to a replacement Service Provider.
In this regard, the Service Provider shall work with the replacement Service
Provider to promptly formulate a transition plan, including assistance with
respect to data format and data conversion, data interface and methods of
transferring responsibility for the Services with as little interruption in
service as possible.
Service Provider shall reimburse the Company for any reasonable
out-of-pocket cost arising as a result of such termination, including, without
limitation, (i) the cost of transitioning the Services to a substitute provider
or the Company, and (ii) except in the case of recapture of the Policies, any
reasonable fees paid to any such substitute provider and (B) to the extent not
duplicative of services provided by a substitute provider, costs incurred by the
Company with respect to the Services after termination of this Agreement.
12
INDEMNIFICATION
Indemnification by the Company. THE COMPANY SHALL INDEMNIFY AND HOLD
HARMLESS THE SERVICE PROVIDER AND ITS DIRECTORS, OFFICERS, EMPLOYEES, AFFILIATES
AND ASSIGNS FROM AND AGAINST ALL CLAIMS, LOSSES, LIABILITIES, DAMAGES,
DEFICIENCIES, COSTS OR EXPENSES, PENALTIES AND REASONABLE OUTSIDE ATTORNEYS'
FEES AND DISBURSEMENTS (COLLECTIVELY, "LOSSES," AND INDIVIDUALLY A "LOSS"),
ASSERTED AGAINST, IMPOSED UPON OR INCURRED BY THEM, DIRECTLY OR INDIRECTLY, BY
REASON OF OR ARISING OUT OF OR IN CONNECTION WITH ANY MISREPRESENTATION, BREACH
OF OR FAILURE TO PERFORM ANY REPRESENTATION, WARRANTY, COVENANT, UNDERTAKING OR
AGREEMENT OF THE COMPANY IN THIS AGREEMENT.
Indemnification by the Service Provider. THE SERVICE PROVIDER SHALL
INDEMNIFY AND HOLD HARMLESS THE COMPANY AND ITS DIRECTORS, OFFICERS, EMPLOYEES,
AFFILIATES AND ASSIGNS FROM AND AGAINST ALL LOSSES ASSERTED AGAINST, IMPOSED
UPON OR INCURRED BY THEM, DIRECTLY OR INDIRECTLY, BY REASON OF OR ARISING OUT OF
OR IN CONNECTION WITH ANY MISREPRESENTATION, BREACH OF OR FAILURE TO PERFORM ANY
REPRESENTATION, WARRANTY, COVENANT, UNDERTAKING OR AGREEMENT OF SERVICE PROVIDER
IN THIS AGREEMENT.
Procedure for Indemnification. THE PARTIES SHALL FOLLOW THE INDEMNIFICATION
PROCEDURES SET FORTH IN ARTICLE X OF THE PURCHASE AGREEMENT.
TRANSFER OF RECORDS
Transfer. ON THE SERVICE COMMENCEMENT DATE, THE COMPANY SHALL FORWARD TO
THE SERVICE PROVIDER (AT THE SERVICE PROVIDER'S EXPENSE) ALL BOOKS AND RECORDS
(THE "TRANSFERRED RECORDS").
Company's Access. IN ACCORDANCE WITH THE PURCHASE AGREEMENT, ALL THE
TRANSFERRED RECORDS SHALL BE THE PROPERTY OF THE SERVICE PROVIDER. THE
TRANSFERRED RECORDS SHALL BE AVAILABLE (AT THEIR PLACE OF KEEPING) FOR
INSPECTION, EXAMINATION, AND AUDIT BY THE COMPANY (AND ITS REPRESENTATIVES) IN
ACCORDANCE WITH SECTION 7.02.
NOTIFICATION
Company's Obligations. FOLLOWING THE CLOSING DATE, THE COMPANY SHALL
FORWARD PROMPTLY TO THE SERVICE PROVIDER ALL NOTICES AND OTHER WRITTEN
COMMUNICATIONS RECEIVED BY OR SERVED UPON THE COMPANY RELATING TO THE SERVICES
OR THE POLICIES, WITH RESPECT TO (A) INQUIRIES OR COMPLAINTS FROM STATE
INSURANCE REGULATORS, STATE AND FEDERAL SECURITIES REGULATORS (INCLUDING WITHOUT
LIMITATION THE NASD), AND COMPLAINTS FROM AGENTS, BROKERS AND INSUREDS, (B)
CLAIMS (EXCLUDING ROUTINE CLAIMS NOTICES), AND (C) SUITS AND ACTIONS FOR WHICH
THE COMPANY RECEIVES SERVICE OF PROCESS. THE COMPANY SHALL BE ENTITLED TO RETAIN
COPIES OF ALL SUCH MATERIALS. ON AND AFTER THE SERVICE COMMENCEMENT DATE, THE
COMPANY SHALL PROMPTLY FORWARD TO THE SERVICE PROVIDER ALL NOTICES AND WRITTEN
COMMUNICATIONS RECEIVED BY THE COMPANY THAT ARE NEEDED BY THE SERVICE PROVIDER
TO PROVIDE THE SERVICES UNDER THIS AGREEMENT.
13
Service Provider's Obligations. FROM AND AFTER THE SERVICE COMMENCEMENT
DATE, THE SERVICE PROVIDER SHALL FORWARD PROMPTLY TO THE COMPANY COPIES OF ALL
NOTICES AND OTHER WRITTEN COMMUNICATIONS RECEIVED BY OR SERVED UPON THE SERVICE
PROVIDER RELATING TO THE SERVICES OR THE POLICIES WITH RESPECT TO (A) INQUIRIES
OR COMPLAINTS FROM STATE INSURANCE REGULATORS, STATE AND FEDERAL SECURITIES
REGULATORS (INCLUDING WITHOUT LIMITATION THE NASD), AND COMPLAINTS FROM AGENTS,
BROKERS AND INSUREDS, (B) CLAIMS (EXCLUDING ROUTINE CLAIM NOTICES), AND (C)
SUITS AND ACTIONS FOR WHICH THE SERVICE PROVIDER RECEIVES SERVICE OF PROCESS.
ALTERNATIVE DISPUTE RESOLUTION
Arbitration. ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL
BE RESOLVED IN ACCORDANCE WITH THE PROCEDURES SPECIFIED IN ARTICLE XV OF THE
COINSURANCE AGREEMENT, WHICH SHALL BE THE SOLE AND EXCLUSIVE PROCEDURES FOR THE
RESOLUTION OF ANY SUCH DISPUTES.
MISCELLANEOUS
Notice. ANY NOTICE OR OTHER COMMUNICATION REQUIRED OR PERMITTED HEREUNDER
SHALL BE IN WRITING AND SHALL BE DELIVERED PERSONALLY, SENT BY FACSIMILE
TRANSMISSION (AND IMMEDIATELY AFTER TRANSMISSION CONFIRMED BY TELEPHONE) OR SENT
BY CERTIFIED, REGISTERED OR EXPRESS MAIL, POSTAGE PREPAID. ANY SUCH NOTICE SHALL
BE DEEMED GIVEN WHEN SO DELIVERED PERSONALLY OR SENT BY FACSIMILE TRANSMISSION
(AND IMMEDIATELY AFTER TRANSMISSION CONFIRMED BY TELEPHONE) OR, IF MAILED, ON
THE DATE SHOWN ON THE RECEIPT THEREFOR, AS FOLLOWS:
If to the Company: Xx. Xxxxxx X. Xxxxxxxx
Executive Vice President, Comptroller and Treasurer
Mutual of Xxxxx Xxxxx
Xxxxx, XX 00000
Fax Number: (000) 000-0000
If to the Service Provider: Xx. Xxxxxx X. Xxxxx
Senior Vice President and Chief Financial Officer
One Security Benefit Xxxxx
Xxxxxx, Xxxxxx 00000-0000
Fax Number: (000) 000-0000
Any party may, by notice given in accordance with this Section to the other
party, designate another address or Person for receipt of notices hereunder.
Expenses. EXCEPT AS MAY BE OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT,
EACH OF THE PARTIES HERETO SHALL PAY ITS OWN COSTS AND EXPENSES INCIDENT TO
PREPARING FOR, ENTERING INTO AND CARRYING OUT THIS AGREEMENT AND THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY.
Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEBRASKA, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
14
Entire Agreement. THIS AGREEMENT (INCLUDING THE EXHIBITS HERETO), TOGETHER
WITH PURCHASE AGREEMENT AND THE COINSURANCE AGREEMENT (INCLUDING THE EXHIBITS TO
THOSE AGREEMENTS), CONTAIN THE ENTIRE AGREEMENT BETWEEN THE PARTIES WITH RESPECT
TO THE TRANSACTIONS CONTEMPLATED HEREBY, AND SUPERSEDE ALL PRIOR AGREEMENTS,
WRITTEN OR ORAL, WITH RESPECT THERETO. IN THE EVENT OF A CONFLICT BETWEEN THE
TERMS OF THIS AGREEMENT AND THE TERMS OF THE COINSURANCE AGREEMENT, THE TERMS OF
THE COINSURANCE AGREEMENT SHALL GOVERN.
No Assignment; Binding Effect. THIS AGREEMENT SHALL BE BINDING UPON AND
INURE TO THE BENEFIT OF THE PARTIES AND THEIR RESPECTIVE SUCCESSORS, ASSIGNS AND
LEGAL REPRESENTATIVES, WHETHER BY MERGER, CONSOLIDATION OR OTHERWISE. THIS
AGREEMENT MAY NOT BE ASSIGNED BY ANY PARTY WITHOUT THE PRIOR WRITTEN CONSENT OF
THE OTHER PARTY HERETO.
Amendment; Waiver. THIS AGREEMENT MAY BE AMENDED, SUPERSEDED, CANCELED,
RENEWED OR EXTENDED, AND THE TERMS HEREOF MAY BE WAIVED, ONLY BY A WRITTEN
INSTRUMENT SIGNED BY ALL OF THE PARTIES OR, IN THE CASE OF A WAIVER, BY THE
PARTY WAIVING COMPLIANCE. NO DELAY ON THE PART OF ANY PARTY IN EXERCISING ANY
RIGHT, POWER OR PRIVILEGE HEREUNDER SHALL OPERATE AS A WAIVER THEREOF, NOR SHALL
ANY WAIVER ON THE PART OF ANY PARTY OF ANY RIGHT, POWER, REMEDY OR PRIVILEGE,
NOR ANY SINGLE OR PARTIAL EXERCISE OF ANY SUCH RIGHT, POWER, REMEDY OR
PRIVILEGE, PRECLUDE ANY FURTHER EXERCISE THEREOF OR THE EXERCISE OF ANY OTHER
SUCH RIGHT, REMEDY, POWER OR PRIVILEGE. THE RIGHTS AND REMEDIES HEREIN PROVIDED
ARE CUMULATIVE AND ARE NOT EXCLUSIVE OF ANY RIGHTS OR REMEDIES THAT ANY PARTY
MAY OTHERWISE HAVE AT LAW OR IN EQUITY.
Relationship of Parties. THE SERVICE PROVIDER SHALL BE DEEMED AN
INDEPENDENT CONTRACTOR OF THE COMPANY FOR ALL PURPOSES HEREUNDER. THIS AGREEMENT
SHALL NOT BE CONSTRUED TO CREATE AN EMPLOYMENT, PARTNERSHIP, OR JOINT VENTURE
RELATIONSHIP BETWEEN THE PARTIES HERETO.
Jurisdiction. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE DISTRICT OF NEBRASKA, OR, IF SUCH COURT DOES NOT HAVE JURISDICTION, THE
STATE OF NEBRASKA COURTS SITUATED IN THE CITY OF OMAHA, FOR PURPOSES OF
ENFORCING THIS AGREEMENT. IN ANY SUCH ACTION, SUIT OR OTHER PROCEEDING, EACH OF
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO
ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, ANY CLAIMS THAT IT IS NOT
SUBJECT TO THE JURISDICTION OF THE ABOVE COURT, THAT SUCH ACTION OR SUIT IS
BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH ACTION, SUIT OR OTHER
PROCEEDING IS IMPROPER. EACH OF THE PARTIES HERETO ALSO AGREES THAT ANY FINAL
AND UNAPPEALABLE JUDGMENT AGAINST A PARTY HERETO IN CONNECTION WITH ANY ACTION,
SUIT OR OTHER PROCEEDING SHALL BE CONCLUSIVE AND BINDING ON SUCH PARTY AND THAT
SUCH AWARD OR JUDGMENT MAY BE ENFORCED IN ANY COURT OF COMPETENT JURISDICTION,
EITHER WITHIN OR OUTSIDE OF THE UNITED STATES. A CERTIFIED OR EXEMPLIFIED COPY
OF SUCH AWARD OR JUDGMENT SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND AMOUNT OF
SUCH AWARD OR JUDGMENT. WITHOUT LIMITING THE FOREGOING, EACH PARTY AGREES THAT
SERVICE OF PROCESS ON SUCH PARTY AS PROVIDED IN SECTION 14.01 SHALL BE DEEMED
EFFECTIVE SERVICE OF PROCESS ON SUCH PARTY.
Headings. THE HEADINGS IN THIS AGREEMENT ARE FOR REFERENCE ONLY, AND SHALL
NOT AFFECT THE INTERPRETATION OF THIS AGREEMENT.
Severability. ANY TERM OR PROVISION OF THIS AGREEMENT WHICH IS INVALID OR
UNENFORCEABLE IN ANY JURISDICTION SHALL, AS TO THAT JURISDICTION, BE INEFFECTIVE
TO THE EXTENT OF SUCH INVALIDITY OR UNENFORCEABILITY WITHOUT RENDERING INVALID
OR UNENFORCEABLE THE REMAINING TERMS AND PROVISIONS OF THIS AGREEMENT OR
AFFECTING THE VALIDITY OR ENFORCEABILITY OF ANY OF THE TERMS OR PROVISIONS OF
THIS AGREEMENT IN ANY OTHER JURISDICTION, SO LONG AS THE ECONOMIC OR LEGAL
SUBSTANCE OF THE TRANSACTIONS CONTEMPLATED HEREBY IS NOT AFFECTED IN ANY MANNER
MATERIALLY ADVERSE TO ANY PARTY. IF ANY PROVISION
15
OF THIS AGREEMENT IS SO BROAD AS TO BE UNENFORCEABLE, THAT PROVISION SHALL BE
INTERPRETED TO BE ONLY SO BROAD AS IS ENFORCEABLE.
Counterparts. THIS AGREEMENT MAY BE EXECUTED BY THE PARTIES HERETO IN
SEPARATE COUNTERPARTS, EACH OF WHICH WHEN SO EXECUTED AND DELIVERED SHALL BE AN
ORIGINAL, BUT ALL SUCH COUNTERPARTS SHALL TOGETHER CONSTITUTE ONE AND THE SAME
INSTRUMENT. EACH COUNTERPART MAY CONSIST OF A NUMBER OF COPIES HEREOF EACH
SIGNED BY LESS THAN ALL, BUT TOGETHER SIGNED BY ALL OF THE PARTIES HERETO. EACH
COUNTERPART MAY BE DELIVERED BY FACSIMILE TRANSMISSION, WHICH TRANSMISSION SHALL
BE DEEMED DELIVERY OF AN ORIGINALLY EXECUTED DOCUMENT.
No Third Party Beneficiary. THE TERMS AND PROVISIONS OF THIS AGREEMENT ARE
INTENDED SOLELY FOR THE BENEFIT OF THE PARTIES HERETO, AND THEIR RESPECTIVE
SUCCESSORS OR PERMITTED ASSIGNS, AND IT IS NOT THE INTENTION OF THE PARTIES TO
CONFER THIRD-PARTY BENEFICIARY RIGHTS UPON ANY OTHER PERSON, AND NO SUCH RIGHTS
SHALL BE CONFERRED UPON ANY PERSON OR ENTITY NOT A PARTY TO THIS AGREEMENT.
Good Faith; Errors And Oversights. EACH PARTY TO THIS AGREEMENT WILL ACT
REASONABLY IN ALL MATTERS WITHIN THE TERMS OF THIS AGREEMENT. CLERICAL ERRORS
AND OVERSIGHTS OCCASIONED IN GOOD FAITH IN CARRYING OUT THIS AGREEMENT WILL NOT
PREJUDICE EITHER PARTY, AND WILL BE RECTIFIED PROMPTLY ON AN EQUITABLE BASIS.
Force Majeure. EACH PARTY SHALL BE EXCUSED FROM PERFORMANCE FOR ANY PERIOD
AND TO THE EXTENT THAT THE PARTY IS PREVENTED FROM PERFORMING ANY OF ITS
RESPONSIBILITIES, IN WHOLE OR IN PART, AS A RESULT OF AN ACT OF GOD, WAR, CIVIL
DISTURBANCE, COURT ORDER, LABOR DISPUTE, OR CAUSES BEYOND THAT PARTY'S
REASONABLE CONTROL INCLUDING, BUT NOT LIMITED TO, FAILURES OR FLUCTUATION IN
ELECTRIC POWER, HEAT, LIGHT, AIR CONDITIONING, OR TELECOMMUNICATIONS EQUIPMENT,
AND SUCH NONPERFORMANCE SHALL NOT CONSTITUTE A DEFAULT.
IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized officers as of the date first set forth above.
UNITED OF OMAHA LIFE INSURANCE COMPANY
By:
------------------------------------
Name:
Title:
SECURITY BENEFIT LIFE INSURANCE COMPANY
By:
------------------------------------
Name:
Title:
16
EXHIBIT A
SERVICE, PROCESSING AND PERFORMANCE STANDARDS
The service, processing and performance standards applicable to the
administration of the Policies will be set forth in the Service Level Manual
which will be mutually-agreed to by the Company and the Service Provider prior
to the Service Commencement Date.
EXHIBIT B
INTERIM SERVICES FEE
During the Interim Service Period, the Service Provider will pay the Company a
monthly fee for each full or partial month that the transitional services are
requested by the Service Provider. The monthly fee to be paid by the Service
Provider will be computed at the rate of $2.00 per Policy in force at the
beginning of such month.
EXHIBIT A
SERVICE, PROCESSING AND PERFORMANCE STANDARDS
NOTE: In general, the Service Provider shall maintain a staff of competent and
trained administrative personnel, supplies, systems and equipment to
perform its duties and responsibilities under this Agreement. Further,
services shall be performed in accordance with the time frames specified
herein, including those noted in Schedule 1 hereto, and in cases where a
time frame is not specified, in accordance with prevailing industry
standards and Applicable Law.
1. OVERALL SERVICING STANDARD. Unless a timeframe is otherwise specified
herein, the parties shall respond by telephone or e-mail within one
Business Day of receipt of a request or inquiry to the other party with
regard to service issues.
2. PREMIUM COLLECTION. The Service Provider shall xxxx and collect all
premiums due under the Policies, return any unearned premiums or other
premiums to be refunded, and reconcile amounts paid with returned billing
statements or other remittance media. The Service Provider shall update the
contract owner master records and all other records to reflect payments
received.
Prior to returning any funds to the customer, each party shall have a
reasonable belief that the money being returned is not money to be applied
to the Policies or a product of the other party. If required by the
circumstances, the party holding the funds will verify that a return of the
funds is appropriate by e-mailing a copy of the check and any accompanying
correspondence to the other party and asking for such verification. Any
unidentified cash that is to be applied to the Policies or a product of
Service Provider shall be forwarded by Company promptly to Service
Provider. Any unidentified cash that is to be applied to a product of
Company shall be forwarded by Service Provider promptly to Company. The
parties shall send one another appropriate documentation that allows the
other party to properly apply the unidentified cash if such documentation
is available. If either party fails to timely provide such documentation,
that party shall assume responsibility for any gain or loss arising from
processing the transaction as of the original date of receipt.
Documentation sent to Service Provider shall be e-mailed to:
XXXX-XXX@xxxxxxxxxxxxxxx.xxx
Documentation sent to Company shall be e-mailed to:
xxxxxxxx.xxxxxxx.xxxxxxx@xxxxxxxxxxxxx.xxx
3. PREMIUM AUDITING. The Service Provider shall audit premium payments with
respect to the Life Insurance Contracts to ensure the accuracy and
acceptability of such payments. Such auditing includes all applicable
guideline, XXXXX and Modified Endowment Contract ("MEC") testing, in
accordance with Sections 7702 and 7702A of the Internal Revenue Code of
1986, as amended (the "Code")
18
as well as review and testing of product specifications to ensure payments
received may be accepted. Life insurance premiums exceeding guideline
premium limits under the Code will be timely refunded to policyholders,
along with any required interest, as required by Section 7702(f)(1)(B) of
the Code. In the event of premium payments causing a Life Insurance
Contract to become a MEC, the policyholder will be notified and given the
opportunity to receive a timely refund of any excess premium according to
Section 7702A(e)(1)(B) of the Code.
4. RECORDS MAINTENANCE. The Service Provider shall maintain applications,
policyholder, annuitant, participant, contract owner, premium, tax basis,
and other necessary records, including all statements, confirmations and
computer records, to determine the true and accurate status of the
Policies. The Service Provider shall maintain and preserve records with
respect to the Separate Accounts as required by Rules 31a-1 and 31a-2 under
the 1940 Act as well as any Applicable Laws. Upon request of the Company or
any state or federal regulatory authorities, the Service Provider shall
forward a complete copy of any record reasonably requested to the
requesting party promptly and in a format appropriate to the request.
Historical claims information will be maintained for ten years beyond
termination of a policy unless a longer period is required by Applicable
Law or remains relevant to a pending or threatened legal action that is not
time barred.
5. LAPSE OF COVERAGE. The Service Provider shall inform policyholders and
assignees of any lapse in coverage under the Policies as well as grace
period notices indicating a lapse may be forthcoming as required by the
terms of the Policies.
6. PROVISION OF FORMS. The Service Provider shall provide, at the Service
Provider's own expense, forms and supplies necessary to the performance of
the Service Provider's obligations under this Agreement including, without
limitation, confirmation statements and issue-related forms, contracts, and
endorsements, The Company will maintain and provide the Life Insurance
Applications needed for Face Increases.
7. PERFORMANCE OF OBLIGATIONS. The Service Provider shall perform all of the
Company's obligations under (i) each participation agreement between the
Company and any mutual fund organizations in which assets of the Separate
Accounts are invested (the "Participation Agreements"), (ii) the principal
underwriting agreement between Company and the principal underwriter of the
Reinsured Policies, and (iii) any selling agreement relating to the payment
of commissions on additional premium in accordance with the terms of the
Reinsured Policies. The Service Provider shall be responsible for all
communications with mutual fund organizations, including but not limited to
any negotiation of extensions or modification of the Participation
Agreements; the Company shall not unreasonably withhold its consent to any
such extensions or modifications negotiated and recommended by the Service
Provider. Any notices
19
received by Company from the fund partners shall be communicated to the
Service Provider promptly, e.g., fund closures, portfolio changes, etc.,
and Company will notify fund partners of Service Provider's role and will
direct fund partners to send all such notices directly to Service Provider.
8. POLICYHOLDER SERVICES. The Service Provider shall provide general
policyholder services to individuals under the Policies, including, but not
limited to, the following:
(a) Responding to inquiries including but not limited to the scope and
amounts of coverage or benefits provided under the Policies;
(b) Supplying claimants, policyholders, annuitants and insureds with
appropriate instructions and forms for reporting claims and for submitting
relevant information; provided that Company will provide claim statements
to beneficiaries (death benefits) under Life Insurance Contracts;
(c) Issuing timely reports, statements, and confirmations as required
by the Policies and Applicable Law and in accordance with the Company's
practices in effect immediately prior to the Effective Date (subject to
adjustment as required by Applicable Law);
(d) Timely processing and recording of changes in the Policies
(including but not limited to, (i) changes of ownership, beneficiary,
amount of insurance, options under the Policies, and (ii) changes in name,
address and other data related to the policyholders and insureds under the
Policies), reissuances, and all financial transactions (e.g. transfer
requests, from one subaccount to another), in all cases within time
intervals necessary to meet SEC, NASD, and other legal and regulatory
requirements;
(e) Processing policy loans, surrenders and reinstatements as required
by the Policies and Applicable Law and in accordance with the Company's
practices in effect immediately prior to the Effective Date (subject to
adjustment as required by Applicable Law), provided, however, that
reinstatements of Life Insurance Contracts are subject to approval of the
Company;
(f) Complying with the written guidelines of the Company, if any, in
effect immediately prior to the Effective Date with respect to replacements
and exchange requests (subject to adjustment as required by Applicable
Law);
(g) Obtaining (on a daily basis) the net asset value and computing the
accumulation unit value of each subaccount of the Separate Accounts that is
a funding option for the Policies in accordance with the provisions of the
Policies, as well as with the prospectus and statement of additional
information disclosure on any day when such calculation is required by the
Investment Company Act of 1940;
20
(h) Calculating (on a daily basis) the mortality and expense risk
charges, administrative charges, and (on a monthly basis) cost of insurance
in accordance with the provisions of the Policies, as well as with the
prospectus and statement of additional information disclosure;
(i) Transmitting orders for the purchase or redemption of shares to
the subject fund manager or their authorized agents and paying and
receiving funds in connection with such purchases or redemptions as
required by any applicable agreement;
(j) Preparing contract data pages and other inserts or additions to
the Policies and mailing such items to policyholders or agents, as
appropriate;
(k) Responding to all inquires received (whether by telephone,
electronic transmission, facsimile, mail or otherwise) from agents,
insureds, policyholders, beneficiaries and annuitants or their authorized
agents or representatives in accordance with the Company's guidelines as of
the Effective Date and Applicable Law and industry standards (including
adjustments incident to changes in Applicable Law or industry standards);
(l) Maintaining a toll-free telephone number for inquiries by agents,
policyholders and claimants or their authorized agents or representatives,
with properly licensed staffing sufficient to handle inquiries on a prompt
basis;
(m) Determining amounts of death benefit and annuity payments under
Annuity Contracts (including the taxable portion of such payments),
promptly paying to the Company any death benefits due under Life Insurance
Contracts, less the portion due that constitutes the Mortality Risk death
benefit;
(n) Processing any required or permitted changes in non-guaranteed
elements (e.g. costs of insurance for life policies and crediting rates on
certain general account options) and satisfying all related notice or
approval requirements in connection with such required or permitted
changes;
(o) Responding to any requests from plan administrators or trustees
for policy information affecting the plan or participants for qualified
plans. The Company shall forward any such requests they may receive to the
Service Provider promptly;
(p) Responding to requests for calculations applicable to annuity
payments as may be necessary for Tax calculations (the Company shall
provide any necessary assistance in calculating exclusion ratios or
providing any other pre-conversion type data);
(q) Responding to requests for partial claims, including but not
limited to, nursing home provisions, and waiver of surrender charges (the
Company shall respond to requests for waiver of premium riders);
21
(r) Cooperating with the Company's efforts to facilitate fraud
detection and investigation that may relate to both the Policies and other
business of the Company or its affiliates in accordance with the Company's
procedures, a copy of which has been provided to Service Provider;
(s) Premium Receipt Process
Money received by Company for Service Provider
If a check is received at Company for multiple contracts, Company will
deposit the check and wire the appropriate amount to Service Provider by noon
central time the next business day after receipt. In the comments section of the
wire, the Company will indicate wire for previous day's faxes.
Below are wire instructions for the Service Provider:
UMB - Kansas City, MO
ABA Routing #000000000
Account #9870848783
Amount: Indicate total amount wired
Name on Account: Security Benefit Life
Instructions: Security Benefit Life A Account - FFC to Customer Account #
The Company will fax copies of the correspondence related to such payment
to the Service Provider at 000-000-0000, including contract number, owner name
and SSN. The fax will be sent no later than the close of the New York Stock
Exchange (NYSE) (normally 4 pm EST). The Company will also provide a total page
that sets forth all such transactions faxed on that day.
If a check is received by Company and the entire amount is to be applied to
the Policies, the original check will be sent by noon of the following day via
overnight mail to Service Provider. A copy of the check also shall be faxed to
Service Provider at 000-000-0000, along with the policy number, owner name and
SSN. Service Provider will apply the funds to the contract on the day the fax is
received as long as the fax is received prior to the close of the NYSE.
The check, original paperwork, and documentation (marked as duplicate)
shall be sent by noon of the following day via overnight mail to the
Service Provider at the following address:
Security Benefit
Attn: Annuity Administration - MOH
One Security Benefit Place
Topeka, KS 66636
Money received by Service Provider for Company
If the Service Provider receives money intended for a Company product
other than the Policies, Service Provider shall deposit the check and
wire the funds to the Company the next business day by noon central
time. The Service Provider will e-mail image files of documentation
received with the check to xxxxxxxx.xxxxxxx.xxxxxxx@xxxxxxxxxxxxx.xxx
the
22
same day as received. The Service Provider will include policy number,
owner name and SSN.
Below are the wire instructions for Company:
MUTUAL/UNITED
First National Bank of Omaha
0000 Xxxxx Xxxxxx
Xxxxx, XX 00000
ABA Routing #000000000
Account Name: Mutual of Omaha Insurance Company
Mutual of Xxxxx Xxxxx
Xxxxx, XX 00000
Account #00000000
Reference/Attention: Optional
COMPANION
JPMorgan Chase Bank
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA Routing #000000000
Account Name: Companion Life Insurance Company
Mutual of Xxxxx Xxxxx
Xxxxx, XX 00000
Account #9102797454
Reference/Attention: Optional
If the Service Provider cannot determine whether money is to be
allocated to Company or its affiliate, Companion Life Insurance
Company, Service Provider will wire such amounts to Company using the
wire instructions set forth above. In the comments section of the
wire, the Service Provider will indicate that it cannot determine
whether the funds should be allocated to the Company or to Companion
Life Insurance Company.
If Service Provider is processing Systematic Withdrawals on Annuity
Contracts to pay the premium on a Company product other than the
Policies, Service Provider will mail the check for any such payment
along with the policy number to the Company at:
Mutual of Omaha Annuity Services - attn: Xxxxx Xxxxx
Mutual of Xxxxx Xxxxx
Xxxxx, XX 00000
9. OVERALL GAIN LOSS. The parties shall report to one another and settle, on a
quarterly basis, any gains and losses accruing under this Agreement, unless
in any given quarter the net settlement amount is greater than fifty
thousand dollars ($50,000) prior to the end of the quarter. The parties
shall report and settle the gains and/or losses no later than five (5)
business days after the earlier of each calendar quarter end or the date as
of which the net settlement amount is $50,000 or greater. If a settlement
is required, it shall be a net settlement.
If the Company fails to perform administrative services in a timely manner
as required under applicable federal regulatory requirements, the Company
shall assume responsibility for any gain or loss resulting from corrections
the Service Provider is required to make on transaction errors occurring
prior to the Service Commencement Date. The Company shall also assume
responsibility for any gain or loss resulting from transactions received,
but not processed, prior to the Service Commencement Date. Any disputes
regarding acts or omissions on behalf of the
23
Company that result in transaction errors requiring the Service Provider to
make corrections may be submitted to arbitration in accordance with the
Coinsurance Agreement.
10. TAXES--CORRECTIVE PROCESSING. In the event of correction of transactions
that occurred prior to the Service Commencement Date that affect tax
activity, the Company shall determine whether an adjustment should be made
to participant tax reporting information. Only corrections for those
transactions that do not involve an adjustment to the Federal Income Tax
("FIT") and/or the State Income Tax ("SIT") amounts will be made. If the
transaction was processed incorrectly by the Company, and the Service
Provider has adjusted the participant's account as of the transaction date,
the Company shall make the participant whole for any material loss, and
provide the Service Provider with copies of documentation showing such
correction. The Service Provider will not, however, process a correction
that results in an adjustment to the FIT and/or SIT amounts. If a
transaction was processed correctly, and the participant wants to reinstate
his/her contract, the Service Provider may reinstate the contract as of the
current date.
In the event the Company incorrectly withholds too much tax on withdrawals
processed prior to the Service Commencement Date and a refund is requested,
the Company shall issue the participant a refund in the amount of the
excess withheld and notify the Service Provider to adjust the participant
tax reporting information. The refund amount shall be issued by the Company
within ten (10) business days from the date the refund is requested. The
Company shall provide the Service Provider with copies of documentation
showing the refund has been made.
11. REPORTING OF 12(B)(1) FEES AND REVENUE SHARING. The Company shall provide
the Service Provider within 30 days of the date of this Agreement with
copies of all agreements with mutual fund organizations concerning use of
each such organization's mutual funds as funding vehicles for the Policies.
Such mutual fund agreements shall include any and all agreements that
provide for expense reimbursements, indemnification or revenue-sharing
payments, or other payments made to the Company by any mutual fund
organization or related entity thereof, which payments accrue to the
benefit of the Service Provider under the terms of the Coinsurance
Agreement. The Company further agrees to authorize each mutual fund
organization to pay the revenue sharing directly to the Service Provider.
12. SHARED PROCESSING OF TRANSACTIONS. There are certain transactions that will
require review or processing by both Company and Service Provider. The
procedures for such transactions are outlined below:
UNDERWRITING. The Company shall be responsible for providing the
underwriting services for the Life Insurance Contracts. When a request is
received that requires underwriting, the Service Provider will e-mail all
of the pertinent documents to the Company's Underwriting Department within
one Business Day of receipt of the request. The Company's Underwriting
Department will review the documents, request additional information
directly from the customer, if required, and either approve or deny the
request. Approval or denial of the request will be e-mailed to the Service
Provider (XXXX-XXX@xxxxxxxxxxxxxxx.xxx) by 1:00 pm central time on the date
approval/denial is determined. If the request is denied, the Company's
Underwriting department will send the denial letter to the customer and
copy the representative. The denial letter and all other pertinent
documents will be e-mailed to the Service Provider to be entered into the
image
24
system for storage. If the request is approved, the Company's Underwriting
department will e-mail the approval to the Service Provider. The Service
Provider will make the change to the Policy and send a confirmation
statement to the customer, with a copy to the representative.
The following transactions will require underwriting by the Company:
Face Amount Changes,
Rate Changes,
Reinstatements (unless reinstated within 5 business days of
lapse), and
Removal of Rate Ups.
The following information/documents will be compiled by Service Provider
and provided to the Company for each applicable transaction:
Face Amount Changes: Customer Policy number, original request;
Rate Changes: Customer Policy number, original request;
Reinstatements (unless reinstated within 5 business days of lapse):
Customer Policy number, original request;
Removal of Rate Ups: Customer Policy number, original request.
REINSTATEMENTS: If a premium payment is received by the Service Provider
within 5 business days after the Policy has lapsed, the Service Provider
can reverse the lapse and apply the premium payment. If it is received by
the Service Provider more than 5 business days after the lapse date, the
money will be returned to the customer. If the customer wishes to reinstate
his/her Policy after lapse, a reinstatement form needs to be completed and
signed. Reinstatements requested after lapse will be forwarded to the
Company for review and approval.
If the reinstatement application is sent to Service Provider, the premium
check will be cashed, but the money will not be applied until the
reinstatement is approved.
FAXES AND E-MAILS. If transaction requests are received by the Company via
fax or e-mail prior to 1:00 p.m. central time on a Business Day, the
Company will promptly fax such requests to the Service Provider, in any
case no later than one-half hour prior to the close of regular trading
hours on the NYSE (normally 4:00 p.m. EST). If faxes for such transaction
requests are sent by the Company after the close of the NYSE, the Service
Provider shall process such transactions on the following business day. If
transaction requests are received by the Company after 1:00 p.m. central
time on a Business Day, or at any time on a day which is not a Business
Day, the Company will fax such requests to the Service Provider by 1:00
p.m. central time on the following Business Day. The Company shall be
responsible for any gain or loss that results from as of processing of
transactions that were not forwarded to the Service Provider as required by
this Section. The Company shall send all faxes to Service Provider at the
following fax number: 000-000-0000.
If faxes or e-mails are received by the Company or the Service Provider
after the market close, as detailed above, the transactions will not be
processed until the following business day in accordance with Applicable
Law.
AGENT CHANGES. If the Company receives a request to change an
agent/representative on one of the Policies, the Company will e-mail the
request to the Service Provider within one Business Day of receipt at:
25
XXXX-XXX@xxxxxxxxxxxxxxx.xxx. The Service Provider will process any
properly authorized change in accordance with Applicable Law and will mail
a confirmation to the contract/policy holder and the representative.
CLIENT FILES. A monthly client file will be generated and placed on the FTP
Site by 8:00 p.m. central time on the second Business Day of each month.
The file will be in the format agreed to by the Company and Service
Provider. The Service Provider will identify a contact to help resolve any
issues.
REQUESTS WITH MULTIPLE CONTRACT/POLICY NUMBERS. The Company and Service
Provider will notify one another via e-mail if requests are received with
multiple contract/policy numbers that are not included in the Policies. The
Overall Service Standard of within one Business Day of receipt will apply
to this notification.
DEATH CLAIM NOTIFICATION: All Life Insurance Policy death claims will be
reviewed and approved by the Company. Upon receipt of applicable
documentation, the Service Provider will forward such documentation to the
Company within one Business Day of receipt thereof.
The Company shall adjudicate the claim, determine the payees and notify the
Service Provider of the approval or denial of the claim. The Service
Provider will process the claim on the administrative system (if approved)
and notify the Company of the death benefit amount. The Company will cut
the death benefit checks and mail with the claim letter to the
beneficiaries. The Company will provide copies of the checks and letters to
the Service Provider via e-mail to be entered into the Service Provider's
image system.
The Company will receive the Service Provider portion of the death benefit
amount via the monthly settlement process.
All Annuity Contract death claims will be processed by the Service
Provider. The Service Provider will provide applicable documentation, via
e-mail, to the Company to allow for payment of other death benefits owed by
the Company on Company products other than the Policies.
The Service Provider shall administer claims on the Policies as appropriate
including the following:
(i) Maintaining such files and records as are necessary to
enable the Company, at any time, to determine the true and
accurate claim experience on the Policies;
(ii) Conforming to the reasonable requirements set by the Company
for monthly submission of claims reports;
(iii) Performing such other claim services as may be reasonably
required in connection with the support and administration
of the Policies;
26
(iv) Administering payouts on Annuity Contracts, in the event of
the death of the owner of the contract, in conformance with
contract provisions and the applicable provisions of the
Code; and
(v) Preparing all Federal Tax reports and state tax reports
required by Applicable Law, including without limitation
1099-R, 1099-INT, 1099MISC, W-2P, W-2 and 5498 for
policyholders and beneficiaries as required, and
distributing the same to policyholders and beneficiaries and
appropriate authorities.
WAIVER CLAIM NOTICE PROCESS. Upon notification of a request for waiver of
premium (cost of insurance) under the Life Insurance Policies, the Service
Provider will send notification to the Company on the same day, via e-mail.
If the Policy owner is still in the waiting period (6 months), Service
Provider will deny the request and request that the Policy owner notify the
Service Provider after the waiting period. If the Company is notified
first, the Company will send notification to the Service Provider on the
same day via e-mail.
The Company shall review and approve/deny all waiver of premium claims
relating to the Life Insurance Policies. Upon approval or denial, the
Company will contact the Service Provider via e-mail and authorize the
waiver of cost of insurance if appropriate. The Company will create the
approval or denial letter, as indicated, and mail it to the contract owner.
A copy of the approval/denial letter will be e-mailed to the Service
Provider for entry into the image system. Upon approval, the Service
Provider will process the waiver on the system for the time period approved
by the Company.
WAIVER RENEWAL PROCESSING. The Company will follow its normal process and
communicate with Service Provider as needed to advance/remove a waiver of
premium. Company will notify Service Provider when a renewal follow-up has
been initiated via e-mail.
RESCISSIONS. There may occur a situation in which a Life Insurance Contract
needs to be rescinded due to non-disclosed health information (Policies in
the contestable period). In situations such as this, the Company shall
determine if a policy needs to be rescinded. The Company will notify the
Service Provider via e-mail to request that the policy be rescinded for the
premium amount. The Company will prepare the rescission letter, premium
refund check and mail to the appropriate policy holders/beneficiaries. The
Company will send copies of the check and rescission letter to the Service
Provider, via e-mail, to be entered into the image system.
Gain/loss associated with the refund of premiums on a Life Insurance
Contract rescission shall be borne by the Company with regard to any Life
Insurance Contract for which underwriting was performed on or prior to the
Effective Date and shall be borne by the Service Provider with regard to
any Life Insurance Contract for which underwriting was performed after the
Effective Date. If underwriting was performed both before and after the
Effective Date, the Service Provider shall bear the gain/loss associated
with the refund of premiums on a rescission of a Life Insurance Contract.
27
13. AGENT COMPENSATION. The Service Provider shall, on behalf of the Company,
make payments due from the Company or its affiliate to the broker/dealers
of record for the Reinsured Policies as required by written agreements
between the Company and/or one of its affiliates and such broker/dealers
governing compensation paid in connection with the sale and/or servicing of
the Policies, which payments become due after the Service Commencement
Date. In connection therewith, the Service Provider shall also give effect
to any transferred debit balances and/or overpayments that are recoverable
or deductible from current or future commission payments. The Service
Provider shall assure compliance with all reasonable commission accounting
or other standards.
(a) COMMISSION FILES. A daily agency commission file will be
generated and placed on the FTP Site by 4:00 a.m. central time
each business day. The file will be in the format agreed to by
the Company and Service Provider. The Service Provider will
identify a contact to help resolve any balancing issues.
(b) COMMISSION PAYMENTS TO COMPANY'S AFFILIATED BROKER/DEALER.
Service Provider shall, on behalf of the Company, make payments
due from the Company to its affiliated broker/dealer when the
affiliate is the broker/dealer of record for the Policies, which
payments become due after the Service Commencement Date,
according to the payment schedules set forth in Schedule 2
hereto.
14. ACCOUNTING AND REPORTING SERVICES. With respect to the Policies, the
Service Provider shall perform all accounting and reporting of direct and
ceded premiums, claims (and other policyholder disbursements, reserves,
policy loans, commissions, and premium Tax payments and accruals). Such
services shall include all accounting and reporting necessary to provide
the Company with all required statutory, regulatory, data needed for
statutory ("SAP") and generally accepted accounting principles ("GAAP")
financial statements and filings and state and federal income and premium
Tax reporting and filings. The Company will prepare the financial
statements and filings and state and federal income and premium tax
reporting and filings required for the Company by Applicable Law, based on
the information provided by the Service Provider. Without limiting the
generality of the foregoing, the Service Provider shall provide the
following reports to the Company in a format mutually agreed upon between
the Company, and the Service Provider:
(a) Within the time period after the end of each month indicated
below, the Service Provider shall furnish the Company with a
general ledger ("GL") summary file. The file will be generated
and placed on the FTP Site by 8:00 p.m. central time of the 6th
Business Day of each month. The file will be in the format agreed
to by both the Company and the Service Provider. The Service
Provider will generate a control report and identify a contact to
help resolve any transmission or balancing issues;
(b) Settlement Report-by the sixth (6th) Business Day;
28
(c) Non-ledger transactions - by the sixth (6th) Business Day;
(i) This information is provided in the GL file and the
reinsurance files;
(d) Pending claim information - by the sixth (6th) Business Day;
(e) Actuarial reporting:
(i) By the sixth (6th) Business Day, seriatim valuation file.
(ii) By the sixth (6th) Business Day, VUL termination file
listing Product Code, contract number and termination code.
(iii) By the fifth (5th) Business Day, the mortality payment
workbook used to determine the mortality payment due to the
Company.
(iv) By the eighth (8th) Business Day, estimated SAP and GAAP
reserves. SAP reserves will be calculated in accordance with
the definition of Statutory Reserves as defined in the
Coinsurance Agreement. GAAP reserves will be calculated in
accordance with standard actuarial practices and guidelines.
Final report to be furnished by the tenth (10th) Business
Day;
(v) Quarterly, within the time period after the end of each
quarter indicated below, the Service Provider shall, in
addition to the normal monthly reporting, furnish the
Company with:
1) Schedule D related to the Separate Account
business, including Unit Value Assets information
-- within eight (8) Business Days following the
last day of the applicable quarter.
(vi) Annually, within the time period indicated below, the
Service Provider shall in addition to the normal monthly and
quarterly reporting furnish the Company with the following
information necessary to complete the Annual Statement and
state required quarterly and supplemental filings, including
the following within ten (10) Business Days following the
last day of the applicable reporting period:
1) Schedule S;
2) Exhibit of Life Insurance(Annual Statement Pages
31 and 32) and Exhibit of Numbers (Annual
Statement Page 33);
29
3) Exhibit of Number of Policies, Contracts,
Certificates, Income Payable and Account Values In
Force for Supplementary Contracts, Annuities,
Accident & Health and Other Policies;
4) Exhibits 3 - Aggregate Reserve for Life, Annuity
and Accident Health Contracts in the Separate
Accounts Statement and Exhibit 5 - Aggregate
Reserve for Life Contracts in the General Accounts
Statement;
5) Separate Accounts Analysis of Increase in
Reserves;
6) Municipal Tax Detail (Town and County detail for
states requiring municipal taxes);
7) Applicable note information; and
8) Tax reserves as described in Section 13(d).
The Service Provider shall segregate data in the reports in
Sections 11(a), (b) and (c) of this Exhibit by product lines
to the extent required for statutory filings applicable to
the Company.
With respect to premium Taxes, the Service Provider's reporting shall be
broken out on a state-by-state basis and shall also be broken out between
Life Insurance Contracts and Annuity Contracts. Service Provider shall
break out such information into such other categories as the Company may
reasonably request. In addition, monthly reporting in forms mutually
acceptable to the parties shall be provided by Service Provider with
respect to paid and pending claims, compliance within the timeframe
standards set forth in this Agreement, and agent debit balances.
15. AGENT LICENSING. The Company shall process all agent appointments and
renewals for agents receiving compensation for the Policies and provide
periodic updates of agent appointment information on said agents to Service
Provider. Service Provider shall periodically reimburse the Company for the
actual cost of agent appointment fees paid to states for those agents who
are appointed only because they are agent of record with regard to one or
more Polices. Reimbursement shall commence on the date this Agreement is
signed.
16. AGENT/BROKER APPOINTMENTS. If an agent/broker is not appointed by the
Company on the Service Provider's records, the Service Provider will
contact the Company via e-mail to determine if the appointment information
is correct. If the agent/broker has a Company appointment the Company will
so notify the Service Provider via e-mail. The Service Provider will update
their systems. If the agent/broker does not have an appointment, the
Company will initiate the process and notify the Service Provider via
e-mail that the appointment has been approved or declined.
30
17. AGENT AND BROKER CHANGES AND TERMINATION. The Company will notify the
Service Provider via e-mail of any agent or broker changes, office closings
and consolidations. The Service Provider will remove the agent/broker from
the policy(ies) and reassign the policy(ies) to the agent/broker identified
by the Company; provided that such changes have been properly authorized.
Any phone authorizations will be updated as needed.
18. ACTUARIAL SERVICES. The Service Provider shall provide the Company with the
following actuarial services with regard to the Policies:
(a) Experience analysis (loss ratios, persistency, mortality, and
special studies), if any, required by Applicable Law (including
legally required reporting);
(b) Calculation of all actuarial reserves and liabilities and other
actuarial items necessary to prepare SAP and GAAP financial
statements and supporting exhibits and Tax filings and schedules,
with both: (i) segregation of policy activity into general ledger
accounts to track the necessary premium, claim, commissions,
policy benefits, etc. by product line as defined by the
applicable statutory annual statements, and (ii) certifications
of policyholder in force data and reserves as required for
valuation purposes;
(c) Calculation of Tax reserves meeting the requirements of Section
807(d) of the Code;
(d) Preparation of certifications necessary for actuarial opinions,
memoranda and/or certifications for annual and quarterly
statements;
(e) Maintenance of product files on system;
(f) Ongoing support, as necessary, to compliance function;
(g) Providing responses to state regulators as reasonably required;
(h) Providing the certifications necessary for the formal actuarial
opinions and related reports required by the NAIC Annual
Statement blank and other state requirements, any other
regulatory authorities, and external auditors; and
(i) A monthly file feed for the Company's Quasar Reinsurance System.
The file will be generated and placed on the FTP Site by 4:00
p.m. central time on the 4th Business Day of the month. The file
will be in the format agreed to by both the Company and the
Service Provider. The Service Provider will identify a contact to
help resolve any issues.
19. COMPLIANCE SERVICES. The Service Provider shall provide the Company with
the following compliance services:
(a) Provide information regarding the Policies for market conduct
examinations, analysis and state survey activities and work with
Company to resolve problems and take corrective action with
regard to such matters;
31
(b) Subject to any restrictions set forth in the Agreement, develop
and file policy forms, riders, endorsements, and disclosure
statements relating to the Policies as may be required from time
to time by Applicable Law;
(c) File rate changes, as required;
(d) Prepare and submit to the SEC all reports required by the SEC
with regard to the Policies (including without limitation forms
N-SAR, 485(b) registration statement updates, fund and separate
account annual reports and 24f-2 notices) (in each case only
after review and approval thereof by the Company), with all of
the foregoing to be accomplished within such time periods as are
necessary to comply with Applicable Law;
(e) Provide information related to the Policies necessary for Company
to prepare filings with the NASD (including, without limitation,
compilation of information, if any, related to the Policies that
would be reflected in any quarterly FOCUS II/IIA reports, annual
FOCUS schedule 1 or Customer Complaints Rule 3070 Report);
(f) Review and obtain approval of customer communications by
appropriately licensed personnel;
(g) Coordinate special mailings, including, among other things, the
periodic mailing of privacy notices to owners and
insureds/annuitants;
(h) Review and obtain approval by the Company of any advertising
materials containing a reference to the Company before such
materials are used;
(i) Handle any written communication primarily expressing a grievance
against the Company or the Service Provider with respect to the
Policies (see Attached Complaint Procedure Document (Attachment
1)). Complaints addressed to a Board Member or President of the
Company, will be forwarded to the Company for resolution.
(j) Draft and file registration statements and other SEC related
documents, where required, and perform services necessary to meet
SEC requirements with regard to distributing prospectuses,
supplements to the prospectuses and any underlying fund
prospectuses as well as underlying fund annual and semi-annual
reports;
(k) Make all filings and obtain all regulatory approvals required
with regard to advertising of the Policies, including without
limitation all filings and approvals required by Applicable Law
and NASD requirements (except to the extent that such services
are performed by other entities pursuant to written agreements
with the Company);
32
(l) Provide regulatory supervision and compliance, to the extent the
Service Provider is legally permitted, as to all servicing
functions contemplated by this Agreement;
(m) Monitor state insurance law and regulations of the insurance
departments in the various states in which the Policies are
issued or owners reside to ensure compliance therewith and to
ensure that any actions or communications required by such
regulations or statutes are properly made;
(n) Monitor the federal securities laws and the rules, regulations,
orders, and interpretations thereunder and the securities
statutes and rules, regulations, orders, and interpretations
thereunder of the various states in which owners of the Policies
are located to ensure compliance therewith and to ensure that any
actions or communications required thereby are properly made;
(o) Provide compliance services required by OFAC and anti-money
"laundering" procedures, including but not limited to those
adopted under the U.S.A. Patriot Act;
(p) Assist the Company in connection with responding to inquiries
relating to the Policies from the SEC, NASD, NAIC or the
insurance or securities departments of the various states in
which the policyholders are located;
(q) Provide a weekly file that will be input into the Company's CAMS
system. The file will be generated and placed on the FTP Site by
8:00 a.m. central time Saturday after the nightly cycle each
Friday. The file will be in the format agreed to by the Company
and Service Provider. The Service Provider will identify a
contact to help resolve any balancing issues; and
(r) Provide to Company a copy of Service Provider's policies and
procedures adopted pursuant to Rule 38a-1 under the Investment
Company Act of 1940, which policies and procedures shall cover
Service Provider's administration of the Policies.
20. DATA PROCESSING. The Service Provider shall provide all data processing
services, software, staffing and facilities necessary to provide the
Services including but not limited to, enhancement support for regulatory
changes, break/fix support for software and hardware, business continuity,
a secure environment, data backups and disaster recovery.
21. GENERAL SERVICES AND OVERSIGHT. The Service Provider shall provide
appropriate management oversight of the financial performance and monitor
significant activities relating to the Policies, providing appropriate data
to the Company in an agreed-upon format, including the following:
33
Making all records relating to the Policies available to the Company for
audit in a format appropriate to the request, upon reasonable notice and
during the regular business hours of the Service Provider (including, but
not limited to, federal Tax documentation, policyholder records, in-force
listings, premium records, claim forms, itemized xxxxxxxx, eligibility
documentation, and agent records and files); and
Performing such other administrative services as may be reasonably required
in connection with the support and administration of the Policies.
22. PROXY PROCESSING. The Service Provider, either directly or through a
vendor, will provide proxy processing for the underlying funds of the
Policies as required by the participation agreements between Company and
the underlying fund or relevant service provider thereto and in accordance
with Applicable Law.
23. INITIAL SET-UP/TRANSITION. Prior to the Service Commencement Date, the
Service Provider will establish its systems functions and processing and
educate its personnel so that, on the Service Commencement Date, the
performance of the Services may proceed on a fully operational basis. The
Company will use commercially reasonable efforts to cooperate with
personnel of the Service Provider, including systems, business, actuarial
and financial personnel, with respect to this initial set-up and
transition. The conversion of paper files and terminated policy records
into electronic format, initially or at a later date, may be part of the
transition and set-up process. Arrangements for the transfer or forwarding
to the Service Provider of telephone calls to the Company from
policyholders, claimants, agents and service providers will be implemented,
with assignment of phone numbers or utilization of call forwarding so as to
expedite the transition of telephone calls to the Service Provider.
The Company will provide data extract(s) to the Service Provider in
machine-readable form in the Service Provider's pre-determined record
format heretofore provided to the Company. If the Service Provider
identifies a need for data files, the parties agree to work together to
determine the appropriate record format for such data files. The Company
understands that multiple data extract re-runs will be required during the
Interim Service Period to refresh data and test the data conversion for the
transition process. A final data extract(s) as of the close of business on
the last Business Day of the Interim Service Period will be provided by
5:00 a.m. central time or earlier on the immediately succeeding day. The
Company will provide support in assisting the Service Provider in resolving
data extract(s) and product issues during the Interim Service Period.
24. PERFORMANCE RETURNS. Service Provider will calculate the performance
returns for the Policies on a monthly, quarterly, and annual basis as
required by SEC regulation. Such information will be provided on the
Service Provider's consumer and planner websites.
25. WEB SITE. On and after the Service Commencement Date, Service Provider may
maintain a web site that gives owners of Policies and their respective
authorized agents full access to Policy data including daily account values
and unit values as
34
well as allows sub-account transfers and premium allocation changes. Such
web site shall be designed, implemented and maintained in accordance with
standards of the insurance industry for customer information access and
on-line customer transactions, with such standards including firewalls and
other protections assuring: (a) the security of the web site and of
individual policyholder information and transactions, and (b) the privacy
of and limited access to, the policyholder's account and account related
information (or other personal or personally identifying information).
Suitable protections will include, but not be limited to, encryption and
appropriate password requirements that, among other things, prevent
unauthorized transactions or investment selections. Information obtained or
derived from the operation of any and all portions of the web site relating
to the Policies shall not be used for any purpose other than performance of
the Services under this Agreement. Further, the design, implementation and
operation of the web site shall be conducted in accordance with Applicable
Law. The Company may prepare an electronic link from its web site to the
web site of the Service Provider, provided, however, that any reference to
the Service Provider on the Company's web site is subject to the review and
approval of the Service Provider.
The representatives of both the independent broker/dealers and Mutual of
Omaha Investor Services, Inc. ("MOIS") will have access to their customer
accounts via the website. The Mutual of Omaha Division Offices will have
web site access to all customers of their representatives. MOIS will have
website access to all customer accounts with MOIS as the Broker/Dealer
26. INTERACTIVE VOICE RESPONSE UNIT (IVR). On and after the Service
Commencement Date, Service Provider may maintain an IVR that gives owners
of Policies and their respective authorized agents access to a subset of
Policy data including daily account values and unit values. Such IVR shall
be designed, implemented and maintained in accordance with standards of the
insurance industry for customer information access, with such standards
including protections assuring: (a) the security of the IVR and of
individual policyholder information, and (b) the privacy of and limited
access to, the policyholder's account and account related information (or
other personal or personally identifying information). Suitable protections
will include, but not be limited to, encryption and appropriate password
requirements that, among other things, prevent unauthorized transactions or
investment selections. Information obtained or derived from the operation
of any and all portions of the IVR relating to the Policies shall not be
used for any purpose other than performance of the Services under this
Agreement. Further, the design, implementation and operation of the IVR
shall be conducted in accordance with Applicable Law. The IVR will be
available 24 hours a day, 7 days a week, other than necessary maintenance
periods.
27. SCHEDULE OF PRINTING AND MAILING ARRANGEMENTS. The Company shall provide
Service Provider within 30 days of the date of this Agreement a schedule
setting forth its arrangements with mutual funds that are funding vehicles
for the Contracts with regard to printing and mailing underlying mutual
fund prospectuses and annual and semiannual reports. In particular, the
schedule shall set
35
forth the following: (1) a contact person(s) with each mutual fund
organization for underlying mutual fund prospectuses and annual and
semiannual reports; (2) whether Company or the mutual fund organization is
responsible for printing and mailing mutual fund prospectuses and annual
and semiannual reports to existing owners of the Policies; (3) whether
Company or the mutual fund organization bears the cost of printing and
mailing mutual fund prospectuses and annual and semiannual reports to such
owners.
28. P.O. BOX CHANGES. Company shall obtain Service Provider's written approval
prior to closing the following P.O. Boxes: XX Xxx 0000, XX Xxx 0000, xxx XX
Xxx 0000.
29. 800 NUMBERS. Company shall transfer the following 800 numbers used in
servicing the Policies to Service Provider effective on the Service
Commencement Date 000-000-0000 and 000-000-0000.
36
SCHEDULE 1
CERTAIN PERFORMANCE STANDARDS
Task Performance Standard
---- --------------------
Mailing Standards:
- Sending out requested forms - Mailed within 2 Business Days of request
- Sending out Policyholder Annual Reports - As required by Applicable Law
- Commission Checks - Mailed same day as produced and within 2
Business Days of the 15th and the last
- Confirmation statements and checks day of each month.
- Statements of Account - Mailed within 5 Business Days of the
related financial transaction
- Mailed by the 10th Business Day of the
following month
Phone Standards:
- Answer time - 80% of calls answered within 30 seconds
- Average hold time - No more than 90 seconds on a monthly
average
- Answering policyholder phone inquiries
- One (1) Business Day of receipt of
request
Processing Standards:
- Average time to process non-financial - Five (5) Business Days from receipt of
changes such as address, beneficiary, and request
payment mode
- Same Business Day if received, in good
- Average time to process financial changes order, prior to the close of regular
such as transfers, withdrawals, and trading hours on the New York Stock
automatic rebalancing Exchange (normally 4:00 p.m. EST). Next
Business Day if received after New York
- Average time for decisions on underwriting Stock Exchange close
requests
- Five (5) Business Days from receipt of
- Average time for decisions on death claims request
- As required by Applicable Law
Compliance Standards:
- Regulatory Complaint from Regulator - Copy of complaint to Company within 2
Business Days
- Producer Incident
- Copy of incident to Company within 2
- Correspondence directed to Company's Business Days
- Forwarded to Company within 2 Business
Executive Officers or Board Days of Service Provider receipt
- Copy of Service Provider's response - Submitted to Company within 10-15
related to regulatory complaints and Business Days of Service Provider
executive correspondence receipt, unless additional time has been
requested
- Information involving every written and
documented verbal complaint that primarily - Submitted to Company within two Business
expresses a grievance Days
38
SCHEDULE 2
PAYMENTS TO COMPANY'S AFFILIATED BROKER/DEALER
UP FRONT COMMISSIONS. The rate of commissions paid on Purchase Payments made
with respect to each particular Annuity Contract or Life Insurance Contract is
based on the issue age of the Owner (or of the Annuitant if the Contract is
owned by a non-natural person) as set forth in the tables below.
Ultrannuity Series V and Series I
ISSUE AGE OF PURCHASE
OWNER PAYMENTS TRAIL
------------ -------- -----
0-55 6.00% 0 bps
56-75 5.50% 0 bps
76-80 4.00% 0 bps
Ultra Variable Life
CONTRACT PURCHASE
YEAR PAYMENTS TRAIL
-------- -------- -----
1 4.00% 0 bps
2 3.80% 0 bps
3 3.20% 0 bps
4 2.56% 0 bps
5 2.40% 0 bps
6 2.12% 0 bps
7 1.80% 0 bps
8 1.76% 0 bps
9 1.68% 0 bps
10 1.56% 0 bps
11+ 1.56% 0 bps
39
