Exhibit 99.27(9)(b)
AMENDED AND RESTATED
SERVICE AGREEMENT
for
services rendered to
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
by
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Effective as of January 1, 2004
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ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement ("Agreement") is made effective as of
12:01 a.m. Eastern Standard Time, on the 1st day of January, 2004 ("Effective
Date") by and between The Lincoln National Life Insurance Company, an Indiana
corporation with offices at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxx 00000
("Lincoln") and Lincoln Life & Annuity Company of New York, a New York
corporation with offices at 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxx Xxxx,
00000 ("LNY").
WHEREAS, Lincoln has extensive experience in the operation of the life insurance
and annuity business; and
WHEREAS, Lincoln and LNY are currently parties to administrative services
agreements; and
WHEREAS, Lincoln and LNY desire to terminate the Amended and Restated Service
Agreement between LNY and Lincoln dated as of January 1, 1998 ("Old Agreement")
and have this Agreement supersede it; and
WHEREAS, coincident with the execution of this Agreement, Lincoln and LNY desire
to amend the Service Agreement for services rendered to Lincoln by LNY dated as
of March 1, 1998 ("Reverse Service Agreement"); and
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WHEREAS, pursuant to the Old Agreement, Lincoln has agreed to perform various
administrative services of behalf of LNY that relate to blocks of life insurance
and annuity businesses acquired by LNY via indemnity reinsurance arrangements
(collectively the "LNY Services for Acquired Businesses"). These blocks of
businesses include agreements with UNUM Life Insurance Company ("UNUM"),
Connecticut General Life Insurance Company (CGLIC"), Aetna Life Insurance
Company ("XXXX") and Aetna Life Insurance and Annuity Company ("ALIAC"). UNUM,
CGLIC, XXXX and ALIAC shall be referred to collectively as "Sellers" and
individually as "Seller"; and
WHEREAS, LNY underwrites and sells, and desires to underwrite and sell in the
future, life insurance policies and annuity contracts (the "LNY Business"); and
WHEREAS, LNY desires Lincoln to continue to perform LNY's Services for Acquired
Businesses and to continue to provide services to LNY with respect to the LNY
Business (collectively, the "Services") and desires further to make use in its
day-to-day operations of certain property, equipment and facilities
(collectively, the "facilities") of Lincoln as LNY may request with respect to
the Services;
NOW, THEREFORE, in consideration of the premises and of the mutual promises set
forth herein, and intending to be legally bound hereby, Lincoln and LNY agree as
follows:
1. PERFORMANCE OF SERVICES AND USE OF FACILITIES. Subject to the terms,
conditions, and limitations of this Agreement, Lincoln agrees to the extent
requested by
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LNY to perform diligently and in a professional manner such services as set
forth in this Agreement as LNY determines to be reasonably necessary in the
conduct of its insurance and annuity operations, provided however, that
Lincoln shall not perform such services for LNY where those services are
performed by another affiliate of Lincoln for LNY and where such services
are identified in a written service agreement filed with and approved by
the New York Insurance Department.
Subject to the terms, conditions and limitations of this Agreement, Lincoln
agrees to the extent requested by LNY to make available to LNY such of its
facilities as LNY may determine to be reasonably necessary in the conduct
of its insurance and annuity operations, including data processing
equipment, business property (whether owned or leased) and communications
equipment.
Lincoln agrees at all times to maintain sufficient facilities and trained
personnel of the kind necessary to perform this Agreement. Lincoln shall
comply with all laws, regulations and orders applicable to LNY or Lincoln
with respect to the Services provided hereunder.
(a) CAPACITY OF PERSONNEL AND STATUS OF FACILITIES. Whenever Lincoln utilizes
its personnel to perform services for LNY pursuant to this Agreement, such
personnel shall at all times remain employees of Lincoln subject solely to
its direction and control, and Lincoln shall alone retain full liability to
such employees for their welfare, salaries, fringe benefits, legally
required employer contributions and tax obligations.
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No facility of Lincoln used in performing services for or subject to use by
LNY shall be deemed to be transferred, assigned, conveyed or leased by
performance or use pursuant to this Agreement.
(b) EXERCISE OF JUDGMENT IN RENDERING SERVICES. In providing any services
hereunder which require the exercise of judgment by Lincoln, Lincoln shall
perform any such service in accordance with any standards and guidelines
LNY develops and communicates to Lincoln. In performing any services
hereunder, Lincoln shall at all times act in a manner reasonably calculated
to be in or not opposed to the best interests of LNY.
(c) CONTROL. The performance of services by Lincoln for LNY pursuant to this
Agreement shall in no way impair the absolute control of the business and
operations of Lincoln or LNY by their respective Boards of Directors.
Lincoln shall act hereunder so as to assure the separate operating identity
of LNY.
2. SERVICES. The performance of Lincoln under this Agreement with respect to
the business and operation of LNY shall at all times be subject to the
direction and control of the Board of Directors of LNY. In providing the
Services contained in this Agreement, Lincoln agrees that any and all
personal contact or communication, both oral and written, with LNY's
policyholders and beneficiaries, or with Sellers' policyholders and
beneficiaries, will be done in the name of and on behalf of LNY, or Sellers
name, as the
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case may be. No mention of Lincoln will be made in any such personal
contact or communication with LNY's policyholders and beneficiaries, or
with Sellers' policyholders and beneficiaries. Lincoln agrees to use LNY's
letterhead for all written communication with LNY's policyholders and
beneficiaries. Lincoln further agrees to use LNY's letterhead for all
written communication with Sellers' policyholders and beneficiaries and
such communication will (i) show the name, address and telephone number of
the Seller, (ii) disclose in the letterhead of such correspondence that LNY
is acting as the administrative agent of such Seller in connection with the
policies and contracts being so administered, and (iii) confirm that the
Seller remains as their insurer and is responsible for the payment of all
benefits under the policies and contracts. Lincoln further agrees that if
any of its employees who have direct contact with LNY's policyholders and
beneficiaries, or with Sellers' policyholders and beneficiaries, perform
such services from a location outside the State of New York, Lincoln will
establish and maintain a toll-free 800 telephone number for use by LNY's or
Seller's policyholders and beneficiaries.
Subject to the foregoing and to the terms, conditions and limitations of
this Agreement, Lincoln shall perform on LNY's behalf the LNY Services for
Acquired Businesses, and in particular shall perform on LNY's behalf, all
of LNY's obligations and duties to Sellers as those duties and obligations
are specified in the applicable administrative services agreement between
LNY and each Seller.
Subject to the foregoing and to the terms, conditions and limitations of
this Agreement,
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Lincoln shall also provide to LNY, at LNY's request, insurance related
services typically performed by a life insurance company, including the
services set forth below with respect to the LNY Business.
(a) ACCOUNTING, DATA PROCESSING, TAX AND AUDITING. Lincoln shall provide
accounting services including but not limited to the following: (x)
preparation of the financial statements and reports, including annual
statements, on both statutory and GAAP bases, and tax returns, (y)
maintenance of the related financial records, and (z) processing financial
transactions of LNY. Lincoln shall also provide such assistance as may be
required with respect to tax and auditing services. Such auditing services
shall include reviewing financial records, preparing audit policies and
procedures for approval by LNY, and may also include a review of specific
functions and activities in order to ensure compliance with LNY's
established policies. This auditing provision shall also apply to LNY's
audit of Lincoln's services pursuant to this Agreement. LNY and persons
authorized by it, or any governmental agency having jurisdiction over LNY,
shall have the right, at LNY's expense, to conduct an audit of the relevant
books, records and accounts of Lincoln that relate to the Services provided
hereunder, upon giving reasonable notice of its intent to conduct such an
audit. Lincoln shall, during normal business hours, give the party
conducting the audit reasonable cooperation and access to its books,
records and accounts that relate to this Agreement.
All records shall be maintained in accordance with New York Insurance
Department Regulation No. 152 (11 NYCRR 243). In addition to the foregoing,
a computer terminal,
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which is linked to the electronic system that generates the electronic
records that constitute LNY's books of account, shall be kept and
maintained at LNY's principal office in New York. During all normal
business hours, there shall be ready availability and easy access through
such terminal (either directly by New York Insurance Department personnel
or indirectly with the aid of LNY's employees) to the electronic media used
to maintain the records comprising LNY's books of account. The electronic
records shall be in a readable form.
Lincoln shall maintain format integrity and compatibility of the electronic
records that constitute LNY's books of account. If the electronic system
that created such records is to be replaced by a system with which the
records would be incompatible, Lincoln shall convert such pre-existing
records to a format that is compatible with the new system.
Lincoln shall maintain acceptable backup (hard copy or another durable
medium, as defined in Regulation No. 152, as long as the means to access
the durable medium is also maintained at LNY's principal office) of the
records constituting LNY's books of account. Such backup shall be forwarded
to LNY on a monthly basis and shall be maintained by LNY at its principal
office in New York.
(b) FUNCTIONAL SUPPORT SERVICES. Lincoln, when requested by LNY, shall provide
functional support services including but not limited to: (i) actuarial
services, including rate and profit share analysis, product research and
development, counseling on reserving requirements, work required for or in
support of rate and/or form submissions, actuarial certifications and
advice with respect to reinsurance, (ii) services associated with the
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establishment, maintenance, registration with appropriate government
agencies, and administration of separate accounts, including calculation of
the net asset value of units of the separate accounts, (iii) services
associated with the generation and mailing of Form 1099, (iv) services in
support of the ERISA, 403(b) and 401(k) plans, (v) services in connection
with the management of bank accounts, (vi) telecommunications services and
electronic data processing services, facilities and integration, including
software programming and documentation and hardware utilization, (vii)
legal services, including representation of LNY in the prosecution or
defense of actions and in the negotiation and preparation of contracts and
other documents, product development and drafting and filing of policies
and forms, governmental relations and advising on regulatory compliance and
rendering opinions on various legal matters, (viii) purchasing, (viv)
printing, forms management, distribution, mailings and bulk handling, (x)
employee relations services, including payroll processing, employee benefit
plan design and administration, compensation design and administration, and
recruiting of personnel other than agents, (xi) reinsurance administration
services, and (xii) other corporate services including but not limited to
escheat processing, property and casualty insurance evaluation and
procurement, office design services and lease negotiation.
(c) POLICYHOLDER SERVICE. Lincoln, when requested by LNY, shall provide
policyholder services including but not limited to activities involving
personal contact or communication with a policyholder or beneficiary,
activities relating to policy loan applications and payments, surrender
requests including computation of benefits payable, policy conversions,
beneficiary changes, policy changes, requests for general information,
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preparation and mailing of disbursements, preparation and mailing of
periodic reports and statements, dividend computations, premium payments,
policy lapses, expires, nonforfeitures, reinstatements, consumer complaints
and other related policyholder services. All such disbursements made
pursuant to this Agreement shall be on LNY check stock or through an LNY
account.
In addition, when requested by LNY, Lincoln shall provide advice on unique
or complex policyholder services issues with respect to insurance and
annuity products transacted by LNY.
(d) COLLECTION SERVICES. With regard to the collection of premiums, deposits
and other remittances from policyholders (including payments of principal
or interest on contract loans) Lincoln shall act in a fiduciary capacity
with respect to such payments, hold such payments for the benefit of LNY,
and after the required processing of such payments, will immediately
deposit such payments in one or more bank accounts established by LNY and
subject to the control of officers of LNY.
(e) UNDERWRITING AND ISSUE SUPPORT. Lincoln, when requested by LNY, shall
provide underwriting functions and services including but not limited to
processing applications for contracts and policies (and contract and policy
amendments), MIB review, medical review, review of rates, advice regarding
issuance of policies and amendments, and other related services.
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In addition, when requested by LNY, Lincoln shall provide to LNY advice
with respect to underwriting and risk management issues and issues
concerning issuing insurance and annuity contracts in accordance with the
terms of their respective applications.
With respect to any underwriting services that are provided to LNY by
Lincoln pursuant to this Agreement, it is understood that: (i) Lincoln
shall provide such services in accordance with the underwriting guidelines
and procedures of LNY; and (ii) LNY shall retain all final underwriting
authority.
(f) CLAIMS ASSISTANCE. Lincoln, when requested by LNY, shall assist LNY by
processing, examining and investigating claims. In addition, when requested
by LNY, Lincoln shall provide advice to LNY concerning LNY's claims. It is
understood that: (i) Lincoln shall provide such services in accordance with
the claims guidelines and procedures of LNY; and (ii) LNY shall retain
final approval authority for all claims. In performing claims services for
LNY pursuant to this agreement, Lincoln shall obtain and maintain all
necessary licenses and permits required in order to comply with applicable
laws and regulations.
(g) PUBLIC RELATIONS, ADVERTISING, SALES AND MARKETING PROMOTIONAL SERVICES.
Lincoln, when requested by LNY, shall provide marketing assistance and
services, including sales aids, rate guides, sales brochures, solicitation
materials and such other promotional materials, information, assistance and
advice as shall assist the sales, public relations and advertising efforts
of LNY, as well as
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services in connection with and in support of broker and distributor
licensing, contracts and compensation. In addition, when requested by LNY,
Lincoln shall provide to LNY other public relations, advertising, and sales
and marketing services. With respect to advertisement-related services, the
advertisements, and records pertaining thereto, shall be kept and
maintained in accordance with New York Insurance Department Regulation 34A.
3. CHARGES. LNY agrees to reimburse Lincoln for services and facilities
provided by Lincoln to LNY pursuant to this Agreement. The charge to LNY
for such services and facilities shall be at cost and shall include all
direct and directly allocable expenses, reasonably and equitably determined
to be attributable to LNY by Lincoln, plus a reasonable charge for direct
overhead, the amount of such charge for overhead to be agreed upon by the
parties from time to time.
Subject to New York Insurance Department Regulation 33, the bases for
determining such charges to LNY shall be those used by Lincoln for internal
cost distribution. Such bases shall be modified and adjusted by mutual
agreement where necessary or appropriate to reflect fairly and equitably
the actual incidence of cost incurred by Lincoln on behalf of LNY. The
documentation describing the rationale for the use of such bases shall be
reviewed and agreed to by Lincoln and LNY at least annually.
4. PAYMENT. Lincoln shall determine the expenses to be allocated to LNY
pursuant to this Agreement within 15 days of the end of each month. Within
15 days thereafter, LNY
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shall pay to Lincoln the amount of those expenses, less any costs due LNY
pursuant to the Reverse Service Agreement.
5. STANDARD OF CARE. The parties shall use that degree of ordinary care and
reasonable diligence in the performance of services hereunder that an
experienced and qualified provider of similar services under a similar
services agreement would use acting in like circumstances and familiar with
such matters and in accordance with such additional standards as may be
adopted by LNY from time to time and communicated to Lincoln, including
industry standards and applicable laws. Furthermore, the parties agree to
maintain backup systems and contingency plans to assure that work
stoppages, fires, riots, equipment, utility or transmission failures,
shortage or damage, acts of God or other similar occurrences do not
jeopardize the integrity of the data maintained on behalf of the other
party. Each party warrants it will maintain such systems in conformity with
corporate and prudent business standards.
6. ACCOUNTING RECORDS AND DOCUMENTS. Lincoln and LNY shall maintain their
books, records and accounts in such a way as to disclose clearly and
accurately the nature and detail of the transactions between them that are
the subject of this Agreement, including such accounting information as is
necessary to support the reasonableness of the charges hereunder, and such
additional information as LNY may reasonably request for purposes of its
internal bookkeeping and accounting operations. Lincoln shall keep copies
of such accounts and records insofar as they pertain to the computation of
charges
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hereunder available at its principal offices for audit, inspection and
copying by LNY and persons authorized by it or any governmental agency
having jurisdiction over LNY during all reasonable business hours.
7. OTHER RECORDS AND DOCUMENTS. All books, records, and files established and
maintained by Lincoln by reason of its performance under this Agreement
which, absent this Agreement, would have been held by LNY, shall: (i) be
deemed the property of LNY; (ii) be maintained in accordance with
applicable law and regulation, including, but not limited to, New York
Insurance Department Regulation 152 (11 NYCRR Part 243); and (iii) be
subject to examination at all times by LNY and persons authorized by it or
any governmental agency having jurisdiction over LNY. Copies of such books,
records and files shall be delivered to LNY on demand. Lincoln shall
promptly transfer such records, books and files to LNY upon termination of
this Agreement.
8. RIGHT TO CONTRACT WITH THIRD PARTIES. Nothing herein shall be deemed to
xxxxx Xxxxxxx an exclusive right to provide services to LNY, and LNY
retains the right to contract with any third party, affiliated or
unaffiliated, for the performance of services or for the use of facilities
as are available to or have been requested by LNY pursuant to this
Agreement.
9. CONTACT PERSON(S). LNY and Lincoln each shall appoint one or more
individuals who shall serve as contact person(s) for the purpose of
carrying out this Agreement. Such
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contact person(s) shall be authorized to act on behalf of their respective
parties as to the matters pertaining to this Agreement. Effective upon
execution of this Agreement, the initial contact person(s) shall be the
respective Presidents of Lincoln and LNY. Each party shall notify the
other, in writing, as to the name, address and telephone number of any
replacement for any such designated contact person.
10. TERMINATION. This Agreement shall remain in effect until terminated by
either Lincoln or LNY upon giving thirty (30) days or more advance written
notice, provided that LNY shall have the right to elect to continue to
receive data processing services and/or to continue to utilize data
processing facilities and related software for up to one year from the date
of such notice. Upon termination, Lincoln shall promptly deliver to LNY all
books and records that are, or are deemed by this Agreement to be, the
property of LNY.
Application software and all copies thereof developed by Lincoln for LNY's
use shall become, and that developed by LNY and provided to Lincoln for
LNY's exclusive use shall remain, the property of LNY in perpetuity. To the
extent allowed by applicable law, LNY shall have the same rights as Lincoln
in any other software or copies thereof obtained by Lincoln under license
from third party vendors. LNY may purchase other software or copies thereof
from third party vendors for its exclusive use on Lincoln's equipment if
LNY so desires. Lincoln agrees that any software or copies thereof
purchased by LNY and used by Lincoln in connection with this Agreement
shall remain the property of LNY.
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11. SETTLEMENT ON COMPLETE TERMINATION. No later than thirty (30) days after
the effective date of Complete Termination of this Agreement, Lincoln shall
deliver to LNY a detailed written statement for all charges incurred and
not included in any previous statement to the effective date of
termination. The amount owed or to be refunded hereunder shall be due and
payable within thirty (30) days of receipt of such statement.
12. ASSIGNMENT. This Agreement and any rights pursuant hereto shall not be
assignable by either party hereto, except as set forth herein or by
operation of law. Except as and to the extent specifically provided in this
Agreement, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto, or their respective
legal successors, any rights, remedies, obligations or liabilities, or to
relieve any person other than the parties hereto, or their respective legal
successors, from any obligations or liabilities that would otherwise be
applicable. The representations, warranties, covenants and agreements
contained in this Agreement shall be binding upon, extend to and inure to
the benefit of the parties hereto, their, and each of their, successors and
assigns respectively.
13. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York
applicable to contracts made and to be performed in that State without
regard to principles of conflict of laws.
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14. ARBITRATION. Any controversy arising from or relating to this Agreement, or
the breach, termination or validity thereof, shall be settled by
arbitration in New York City in accordance with the Center for Public
Resources Rules for Non-Administered Arbitration of Business Disputes then
in effect. A sole arbitrator shall conduct the arbitration, and judgment
upon the arbitrator's award may be entered by any court of competent
jurisdiction.
15. INDEMNIFICATION. LNY and Lincoln agree to hold each other harmless and to
indemnify each other against any and all extra-contractual liability and
any related loss, damage, expense, costs, cause of action, demand, penalty,
fine or claim (including cost of litigation or administrative proceeding
and counsel fees) arising out of or related to any of the services provided
hereunder to the extent the same are caused by the act or failure to act of
the indemnifying party.
16. NOTICE. All notices, statements or requests provided for hereunder shall be
deemed to have been duly given when delivered by hand to an officer of the
other party, or when deposited with the U.S. Postal Service, as first class
certified or registered mail, postage prepaid, overnight courier service,
telex or telecopier, addressed:
(a) If to Lincoln, to:
The Lincoln National Life Insurance Company
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
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(b) If to LNY, to:
Lincoln Life & Annuity Company of New York
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxx Xxxx 00000
or to such other persons or places as each party may from time to time
designate by written notice sent as aforesaid.
17. ENTIRE AGREEMENT. This Agreement, together with such amendments as may from
time to time be executed in writing by the parties, constitutes the entire
agreement and understanding between the parties in respect of the
transactions contemplated hereby. No other agreement, statement or promise
not contained in this Agreement shall be valid or binding in respect to the
transactions contemplated hereby.
18. SECTION HEADINGS. Section headings contained herein are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
19. COUNTERPARTS. This Agreement may be executed in separate counterparts, each
of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in
duplicate by their respective officers duly authorized to do so, as of the date
and year first above written.
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
By:
---------------------------------
Xxxx Xxxxxxxxxx
Chief Financial Officer
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
By:
---------------------------------
Xxxxx Xxxxxx
Chief Financial Officer
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