EXHIBIT 10.8
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INTERNATIONAL RISK MANAGEMENT (CAYMAN) LTD.
INSURANCE MANAGEMENT AND ADVISORY SERVICES AGREEMENT
THIS INSURANCE MANAGEMENT AND ADVISORY SERVICES AGREEMENT, MADE THIS 30th day of
June, 1998 by and between INTERNATIONAL RISK MANAGEMENT (CAYMAN) LTD., a Cayman
Islands company having its principal office in Grand Cayman, (hereinafter
called IRMG) and SCOTTISH LIFE INSURANCE (CAYMAN) LTD., a Cayman Islands company
having its principal office in Grand Cayman (hereinafter called Scottish Life):
WITNESSETH:
WHEREAS, Scottish Life is based in Grand Cayman and from such country engages in
the underwriting of various classes of insurance, reinsurance and related
activities and desires certain management, administrative and advisory services
to assist it in the accomplishment of its intended purposes; and
WHEREAS, IRMG maintains a staff of professional insurance executives and
administrative and clerical personnel in Grand Cayman experienced in providing
the services desired by Scottish Life; and
WHEREAS, Scottish Life and IRMG desire to enter into an agreement pursuant to
which IRMG will render management, administrative and advisory services as
required by Scottish Life;
NOW, THEREFORE, in consideration of their respective promises and covenants
hereinafter contained, IRMG and Scottish Life make and enter into the following
agreement:
1. Subject at all times to the directions, approval and general supervision of
the Board of Directors of Scottish Life and/or designated officials of
Scottish Life (the Board of Directors and/or such designated officials are
hereinafter collectively called Scottish Life's Supervisors), IRMG agrees
to render, with due diligence and care in accordance with the guidelines
established by Scottish Life's Supervisors, management, administrative and
advisory services as hereinafter set forth:
(a) to maintain a properly staffed office in Grand Cayman to enable the
due performance of all duties required to be performed by IRMG under
this Agreement.
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(b) with respect to insurance and reinsurance assumed:
(i) to prepare, issue and audit all applicable policies, binders
and endorsements;
(c) with respect to reinsurance ceded:
(i) to coordinate and consult with Scottish Life's reinsurance
intermediaries in regard to information required by them to
effect reinsurance for Scottish Life in accordance with the
guidelines established by Scottish Life's Supervisors;
(ii) to receive, review and verify reinsurance binders, agreements
and documentation in order to confirm it is in accordance with
the instructions received from Scottish Life's Supervisors;
(d) with respect to claims and claims control:
(i) to coordinate with Scottish Life's service providers, and
consult as requested, as to the acceptance or rejection and
settlement of claims;
(ii) to make valid claim payments or other disbursements in
accordance with the policies and procedures established by
Scottish Life and/or in accordance with instructions issued by
Scottish Life's Supervisors;
(iii) to prepare such reports and memoranda as may be necessary to
effect efficient claim control practices in accordance with
guidelines established by Scottish Life's Supervisors;
(iv) to supervise and coordinate loss adjustment services as
specifically requested by Scottish Life's Supervisors,
including arrangement for on-site loss adjustments, by
recognized and experienced loss adjusters approved by Scottish
Life's Supervisors;
(e) with respect to general accounting and administration:
(i) to maintain and operate bank accounts in the name of Scottish
Life in accordance and within the limitations as may be
specified by Scottish Life's Supervisors;
(ii) to establish and maintain an accounting service, including the
review of monthly financial statements consisting of a balance
sheet, income statement and other supporting information as
specified by the shareholders of Scottish Life and/or Scottish
Life's supervisors;
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INTERNATIONAL RISK MANAGEMENT (CAYMAN) LTD.
INSURANCE MANAGEMENT AND ADVISORY SERVICES AGREEMENT
(iii) to review Scottish Life's annual unaudited financial
statements, instruct auditors to audit annually Scottish Life's
financial statements in accordance with generally accepted
accounting principles;
(iv) to ensure that at all times Scottish Life complies with all
reporting requirements of the Cayman Islands Monetary Authority
for the lawful conduct of its business, and to make such
filings and to pay such fees on behalf of Scottish Life as
required;
(v) to prepare such statistical reports which may be appropriate or
reasonably requested by Scottish Life's Supervisors, such as
reports of insurance and reinsurance assumed and ceded, binders
and policies issued, premiums billed and received, losses and
expenses incurred, paid and reserved;
(f) to advise promptly of all the appropriate actions that Scottish Life
should take, and in the performance of IRMG's duties hereunder to
take itself all appropriate actions necessary from time to time to
comply with the laws of the Cayman Islands and The Companies Law
(Cap. 22) (1995 Revision);
2. Scottish Life agrees as follows:
(a) to pay IRMG as compensation in full for all services to be performed
hereunder an annual minimum and deposit sum of US$25,000.00 PAYABLE
QUARTERLY IN ADVANCE, AND ADJUSTABLE AT THE HOURLY RATE OF US$150.00
PER HOUR pro rated for part years in respect of all services
performed by IRMG up to and including December 31, 1998, plus all
reasonable out-of-pocket expenses such as travel, telex, telephone,
telecopier, postage, courier, stationery and expenses of a similar
nature as it may incur in the execution of its duties hereunder, and
thereafter such fees as shall be negotiated for each succeeding
calendar year during the existence of this Agreement;
(b) that the compensation stated in paragraph 2(a) or subsequently
negotiated is based on the time and effort required to perform the
services reasonably expected of IRMG at the time the compensation is
established and that IRMG may renegotiate such compensation in the
event that during the calendar year, Scottish Life requests a change
in the type or level of the services to be provided which results in
a material
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INSURANCE MANAGEMENT AND ADVISORY SERVICES AGREEMENT
increase in the time and effort required to perform such services;
(c) to act promptly upon all requests, instructions and proposals,
whether for reinsurance or otherwise, submitted by IRMG, and to
comply promptly with any requests for instructions, information or
approval which IRMG may reasonably request in order to efficiently
perform its duties under this Agreement;
(d) to pay and bear the expense or fees of any documents; books; records;
taxes; commissions to selling agents or brokers; investment, audit,
legal and actuarial consulting; printing and stationary; and material
or costs of a similar nature as may arise in connection with the
services provided by IRMG under this Agreement;
(e) to have and to exercise sole responsibility for the investment of any
funds of Scottish Life; In the absence of directions from Scottish
Life's Supervisors, IRMG may in its sole discretion and without
liability place funds at prevailing rates of interest and to the
extent necessary upon current account without interest;
(f) to have Scottish Life's Supervisors review, approve and/or ratify and
confirm as and when appropriate, the performance of actions taken by
IRMG on behalf of Scottish Life, and the forms of any documents,
policies and contracts arising therefrom, pursuant to the terms of
this Agreement;
(g) that the obligations of IRMG hereunder to disburse funds on behalf of
Scottish Life are strictly conditioned upon the availability of
sufficient funds in Scottish Life's accounts and upon IRMG receiving
the necessary information and instructions regarding disbursements;
(h) that the directions given by Scottish Life's Supervisors may be
relied upon by IRMG whether given in writing, orally, by telephone,
telecopier, e-mail or other means, but IRMG shall not in any event be
responsible for determining the authenticity of directions or the
authority of the person giving the same and shall be absolutely
protected in all cases where it has acted in accordance with
directions honestly believed to be authentic and authorized,
notwithstanding that IRMG may decline to act upon any directions
pending proof of authenticity or authority;
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INSURANCE MANAGEMENT AND ADVISORY SERVICES AGREEMENT
(i) to indemnify and keep indemnified and hold harmless IRMG, its
officers and directors, agents and employees against all demands,
claims, assessments and liabilities arising out of or in connection
with this Agreement, the performance and exercise by IRMG, its
officers and directors, agents and employees of its responsibilities
and powers hereunder and against all costs and expenses including
reasonable legal expenses incurred in connection therewith; to waive
against IRMG, its officers and directors, agents and employees any
claim arising out of the aforesaid to the effect that IRMG, its
officers and directors, agents and employees shall not be held liable
for any loss to Scottish Life; the aforesaid indemnity and waiver
shall enure for the benefit of IRMG, its officers and directors,
agents and employees, and shall be avoided only in the case of
willful negligence, willful default, fraud or dishonesty on the part
of IRMG, its officers and directors, agents or employees;
(j) that IRMG shall have all the power and authority to carry out its
specific duties and obligations under this Agreement; provided,
however, that in no event shall Scottish Life be deemed to have
surrendered any of its power and authority to perform such actions on
its own behalf, it being understood that and agreed that any
performance by Scottish Life of the duties and obligations of IRMG
shall not reduce any sums otherwise payable IRMG under this
Agreement;
3. IRMG and Scottish Life mutually agree as follows:
(a) that nothing in this Agreement shall obligate IRMG to solicit risks
to be insured by Scottish Life at any time or to act as sales agent
for Scottish Life, and IRMG shall have no authority to and shall not
do either of those things;
(b) that, subject to Clauses 3(d) and (e), this Agreement shall become
effective as of JUNE 30, 1998, and shall remain in full force and
effect thereafter until the party desiring to terminate shall give
written notice of termination to the other party at least ninety days
in advance of the date upon which termination is to take place;
(c) that termination of this Agreement shall not relieve either party of
liability for the performance of obligations imposed upon said party
during the effective period of this Agreement, but which have not
been performed
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INSURANCE MANAGEMENT AND ADVISORY SERVICES AGREEMENT
at the time of its termination;
(d) anything to the contrary in this Agreement notwithstanding, either
party may terminate this Agreement effective immediately upon notice
to the opposite party in the case of the insolvency, bankruptcy,
receivership or liquidation of either party, or in the case of a
material breach of any of the terms or conditions of this Agreement
which has not been rectified within thirty days of such breach being
brought to the attention of the opposite party;
(e) upon cancellation or termination of this Agreement for any reason,
all forms, policies, sales aids, risk management directives and
policies developed for Scottish Life, lists of insureds and
prospective insureds, written books of account, investment records,
premium payment records and written records of every kind and nature
relating to the business of Scottish Life shall become and remain the
property of Scottish Life, and at the expense of Scottish Life,
including personnel time, IRMG shall prepare all such documents and
records in its possession with reasonable promptness for shipment to
the location directed by Scottish Life's Supervisors;
(f) this Agreement shall be governed by and construed under the laws of
the Cayman Islands; IRMG and Scottish Life shall comply in all
respects with the laws of the Cayman Islands; in particular, Scottish
Life recognizes the obligations of IRMG as the holder of an Insurance
Manager's License under the The Insurance Law (24 of 1979) (1998
Revision) and subsequent amendments and hereby grants to IRMG a
general waiver of its confidentiality obligations and authorizes IRMG
to make such disclosures, in the opinion of IRMG, as may be
necessary, desirable or required for the purposes of compliance with
any law or in and about the performance of its functions under this
Agreement; provided, however, that any disclosure not required under
the laws of the Cayman Islands as aforesaid, shall be made only with
the consent of Scottish Life; it is expressly understood that the
waiver granted in paragraph 3(e) herein is limited to enquiries by
Cayman Island Government authorities and no other disclosures shall
be made without the prior consent of Scottish Life;
(g) any dispute arising out of this Agreement, whether arising before or
after
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INSURANCE MANAGEMENT AND ADVISORY SERVICES AGREEMENT
termination, shall be submitted to the decision of a board of
arbitration composed of two arbitrators and an umpire, meeting in
Xxxxxx Town, Grand Cayman, B.W.I. and subject to the Arbitration Law
of the Cayman Islands, unless otherwise agreed;
(h) except for contracts or commitments directly related to obtaining
reinsurance of risks insured by Scottish Life, IRMG shall have no
authority to make any contract or commitment on behalf of Scottish
Life or to cause Scottish Life to make any contract or commitment
unless expressly authorized to do so by Scottish Life's Supervisors.
4. All notices, requests and communications in respect of this Agreement shall
be comfirmed in writing (including telecopier or similar wording) and
shall be given:
If to Scottish Life, to:
Scottish Life Assurance (Cayman) Ltd.
X.X. Xxx 00000 XXX
Xxxxx Xxxxxx, X.X.X.
Telecopier: 000-000-0000
If to IRMG, to:
International Risk Management (Cayman) Ltd.
P.O. Box 69GT
Grand Cayman, B.W.I.
Attention: President
Telecopier: 000-000-0000
or such other address or telecopier number as such party may hereafter
specify by notice to the other party. Each such notice, request or other
communication in respect of this Agreement shall be deemed given or made
(i) if sent by registered or certified mail, with postage prepaid, one
hundred and forty-four hours after being deposited in the pertinent
national postal system, (ii) if given or made by telecopier, when such
telecopy is transmitted to the telecopier number specified above and the
appropriate answer back is received, or (iii) if delivered by hand or in
any other manner, when such notice is actually received at the address to
which it was directed. Any other notice, request or other communication,
which is not in specific respect of this Agreement, between the parties
shall be deemed given or made when such notice, request or
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communication is actually received by the party to whom it is directed.
5. IRMG warrants and represents that it is a corporation duly organized,
validly existing and in good standing under the laws of the Cayman Islands,
and that the execution and performance of this Agreement are within IRMG's
corporate power, have been duly authorized by all necessary corporate
action, and do not require any governmental permits, licenses or the like
other than those which IRMG now has.
6. IRMG shall not assign any rights nor delegate any obligations hereunder,
other than to its associated or subsidiary companies without prior notice
to Scottish Life's Supervisors.
7. This Agreement represents the entire understanding between IRMG and
Scottish Life as to the matters herein provided for and supersedes all
other written or oral agreements heretofore made and may be changed only by
a mutual agreement in writing established as an amendment hereto signed on
behalf of both parties; if at any time one or more of the provisions of
this Agreement, or any part thereof, is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions hereof shall not in any way be affected or
impaired thereby.
IN WITNESS WHEREOF, the parties have hereunto set their hands to duplicate
originals hereof.
Date: 7 Aug 1998 INTERNATIONAL RISK MANAGEMENT (CAYMAN) LTD.
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Attest: /s/ K XXXXXX By: /s/ ILLEGIBLE
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Title: President
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Date: August 12, 1998 SCOTTISH LIFE ASSURANCE (CAYMAN) LTD.
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Attest: By: /s/ XXXXXXX X. XXXXXX
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Title: Chairman of the Board and Chief Executive
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Officer
