Exhibit 10.24
SERVICE AGREEMENT
This agreement between Allstate Insurance Company, (herein referred to as
"Allstate"), and Allstate Life
Insurance Company of New York, (herein referred to as "New York"), shall be
effective as of July 1, 1989.
WHEREAS, the parties agree that Allstate shall render services to and on behalf
of New York; and
WHEREAS, New York agrees to pay Allstate for services and expenses incurred on
its behalf:
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Allstate and New York agree that expenses incurred by Allstate on behalf of
New York, and expenses and the cost of services provided to New York, will
be apportioned on an equitable basis in conformity with generally accepted
accounting principles. It is further agreed that the parties will operate
at arm's length and that apportionment and classification of expenses
incurred or for services rendered shall be in accordance with Section 1505
of the New York Insurance Law and New York Insurance Department
Regulation 33. New York agrees to maintain at its Home Office in the State
of New York, and Allstate agrees to maintain at its Home Office, records
sufficient to disclose clearly and accurately the nature and details of all
transactions between the parties, including such accounting information as
is necessary to support the apportioned expenses charged to the respective
parties.
2. Allstate agrees that the services of such of its personnel, as it may
designate from time to time, will be made available to New York at all
reasonable times, but upon terms and conditions herein stated.
3. New York agrees to pay Allstate for direct expenses incurred on its behalf.
Such direct expenses shall include, but not be limited to, the costs of
goods and services purchased from outside vendors, and travel expenses.
4. New York agrees to pay Allstate for the costs of services rendered by
Allstate personnel and the use of Allstate equipment. Such services shall
include:
a. Audit services;
b. Creation, development and distribution of national advertising
programs;
c. Recruitment, training, and contract and compensation
administration for soliciting agents;
d. Establishment and administration of cash management systems;
e. Services related to the purchase and maintenance of supplies,
furniture, fixtures and equipment;
f. Legal services relating to the preparation and filing of holding
company statements and related filings;
g. Investment services, including research, selection, processing
and administration of investment programs relating to tax-exempt
bonds, preferred stocks and common stocks.
The principal allocation basis used for compensation will be time
estimates. The bases used for other expenses will include direct
charge, job time, work content weights, weighted volume and
proportionate distribution of related expenses. Allocation factors
will be reviewed at regular intervals and adjusted where necessary.
5. a. New York and Allstate agree that, as to members of the Board of
Directors of New York who are also officers or employees of Allstate and
who do not receive fees from New York for services performed in their
capacities as members of the Board of Directors or the Committees
appointed by the Board of Directors of New York, New York shall reimburse
Allstate for the costs of such travel and other expenses for attendance at
meetings of its Board of Directors or Committees thereof.
b. Notwithstanding any provision in this paragraph, the parties expressly
agree that New York's operations will be directed by its own management
and that all final decisions concerning the acceptance or rejection or
risks and the payment or nonpayment of claims shall be made by New York.
6. Following each month-end, inter-company listings will be prepared by
Allstate, showing the apportionment of services rendered and the direct
expenses incurred on behalf of New York. The preparation of such shall be
based on generally accepted accounting principles, records and allocation
methods adopted and used by Allstate and New York.
7. Xxxxxxxx for inter-company expenses shall be presented after the month for
which such account is rendered. Settlements are due and payable within
thirty days after receipt. Settlements are due and payable within thirty
days after receipt. The xxxxxxxx presented shall be deemed to be correct
unless, prior to the date of payment, New York gives written notice of any
alleged inaccuracies therein.
8. The accounting for each monthly period may reflect any necessary adjustment
to correct any over or under charges in the prior monthly xxxxxxxx as
described in Paragraph 4. No less often than annually, New York shall
conduct a review of the performance obligation undertaken on its behalf by
Allstate.
9. For the purposes of this agreement, each party shall be deemed to be an
independent contractor, and its personnel shall not be deemed to be
employees of the other. Records supporting inter-company expense charges
and maintained by one party on behalf of the other shall be considered the
latter's records and shall be available to the party upon request. All
original documents, records and policy files relating to the operations of
New York are the property of that company and will be maintained at its
home office.
10. Any dispute arising between New York and Allstate relating to the subject
matter of this agreement which cannot be amicably resolved by parties will
be referred to an Arbitration
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Panel composed of three members. One of the arbitrators shall be
chosen by New York, one by Allstate and the third by agreement of the
two arbitrators selected by the parties. New York and Allstate agree
to accept the decision of the panel of arbitrators as final binding.
11. a. This agreement shall remain in effect until terminated. It may be
terminated by either party as of the first day of any calendar month by
giving the other party as of the first day of any calendar month by
giving the other party at least 30-days prior written notice, and in the
event it is terminated, it is agreed that the Superintendent of Insurance
of the State of New York shall be so informed in writing.
b. Notwithstanding the foregoing, if Allstate should be the terminating
party, New York shall have the option to continue to receive the same
systems services as it was receiving immediately prior to the date of
termination for a continuing period not to exceed six calendar months
from the date of termination. Allstate shall provide such continued
systems services on the same terms and conditions as set forth in this
agreement as of the date of termination. This option shall be effective
only in the event that New York gives Allstate written notice of its
intent to exercise the option prior to the date of termination of this
agreement.
12. a. Within 90 days of termination, each party will submit to the other a
final accounting for the current calendar year reflecting any adjustments
to charges made for such calendar year and correcting any over or under
charges. The parties agree to pay any amount due pursuant to such final
accounting not later than 30 days after that accounting is submitted.
b. If the option referred to in Paragraph 11b above is exercised by New
York, then notwithstanding the termination of the other services provided
by Allstate under this agreement, Allstate will continue to xxxx New York
for the systems services furnished pursuant to Paragraph 11b in
accordance with the terms of Paragraphs 6 and 7 of this agreement, and
New York agrees to pay such xxxxxxxx as stated herein.
13. It is understood that the parties have certain obligations under a
Commitment Letter to the New York Insurance Department dated December
15, 1983, and it is agreed that no services will be provided under
this Agreement in violation of the aforementioned Commitment Letter.
IN WITNESS WHEREOF the parties have caused this agreement to be executed by
their duly authorized officers on the date first above written.
ALLSTATE INSURANCE COMPANY
Date Executed: 2/27/90 By: /s/ Xxxxx X. Xxxxxxxx
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XXXXX X. XXXXXXXX,
Vice President
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ALLSTATE LIFE INSURANCE
COMPANY OF NEW YORK
Date Executed: 2/27/90 By: /s/ Xxxxx X. Xxxxxxxx
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XXXXX X. XXXXXXXX, Assistant Vice
President
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