ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement (this "Agreement") is made effective
as of 12:01 a.m. Eastern Standard Time, on the 1/st/ day of January, 2001
("Effective Date"), by and between THE MANUFACTURERS LIFE INSURANCE COMPANY
(U.S.A.) a Michigan stock insurance corporation ("Provider") and THE
MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK, a New York stock life
insurance corporation ("Company").
WHEREAS, Company is currently receiving services pursuant to an
Administrative Services agreement effective as of the 1/st/ day of October,
1997 between Company and THE MANUFACTURERS LIFE INSURANCE COMPANY (the "Prior
Agreement"); and
WHEREAS, Company wishes to terminate the Prior Agreement and desires
Provider to perform administrative and special services (collectively,
"services") for Company in its insurance operations and desires further to make
use in its day-to-day operations of certain property, equipment and facilities
(collectively, "facilities") of Provider as Company may request; and
WHEREAS, Provider and Company contemplate that such an arrangement will
achieve certain operating economics and improve services to the mutual benefit
of both; and
WHEREAS, Provider and Company wish to assure that all charges for services
and the use of facilities incurred hereunder are reasonable and in accordance
with the requirements of New York Insurance Department Regulation No. 33 and to
the extent practicable
reflect actual costs and arc arrived at in a fair and equitable manner, and
that estimated costs, whenever used, are adjusted periodically, to bring them
into alignment with actual costs; and
WHEREAS, Provider and Company wish to identify the services to be rendered
to Company by Provider and the facilities to be used by Company and to provide
a method of fixing bases for determining the charges to be made to Company:
NOW, THEREFORE, in consideration of the premises and of the mutual promises
set forth herein, and intending to be legally bound hereby, Provider and
Company agree as follows:
1. PERFORMANCE OF SERVICES AND USE OF FACILITIES. Subject to the terms,
conditions and limitations of this Agreement, Provider agrees to the extent
requested by Company to perform diligently and in a professional manner such
services for Company as Company determines to be reasonably necessary in the
conduct of its insurance operations.
Subject to the terms, conditions and limitations of this Agreement, Provider
agrees to the extent requested by Company to make available to Company such of
its facilities as Company and Provider may mutually determine to be reasonably
necessary in the conduct of its insurance operations, including but not limited
to data processing equipment, business property (whether owned or ceased) and
communications equipment.
Provider agrees at all times to maintain sufficient facilities and trained
personnel of the kind necessary to perform this Agreement.
With the Company's prior written consent, Provider may arrange to furnish
such services through one or more of its affiliates, subject to the terms,
conditions and limitations set
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forth herein. The Provider shall furnish the Company with written confirmation
of the nature and extent of services to be provided to the Company by such
affiliates and the location(s) at which such services shall be performed. Any
such affiliate shall agree in writing to observe and be bound by all terms and
conditions of this Agreement in performing such services and its records shall
be subject to inspection, audit and examination by the Company in accordance
with Section 5 and 6 hereof. Charges for such services shall be determined
consistent with the requirements of Section 3, and shall be included in the
statement furnished by the Provider to the Company pursuant to Section 4.
Provider shall, at all times, remain liable to the Company for the performance
of services by such affiliates to the same extent as if they had been performed
by Provider itself. Exhibit A lists the services to be provided directly by
Provider and those to be delegated to affiliates of Provider pursuant hereto as
of the Effective Date of this Agreement
2. CAPACITY OF PERSONNEL AND STATUS OF FACILITIES. Whenever Provider
utilizes its personnel to perform services for Company pursuant to this
Agreement, such personnel shall at all times remain employees of Provider
subject solely to its direction and control, and Provider shall alone retain
full liability to such employees for their welfare, salaries, fringe benefits,
legally required employer contributions and tax obligations.
No facility of Provider used in performing services for or subject to use by
Company shall be deemed to be transferred, assigned, conveyed or leased by
performance or use pursuant to this Agreement.
3. EXERCISE OF JUDGMENT IN RENDERING SERVICES. In providing any services
hereunder which require the exercise of judgment by Provider, Provider shall
perform any such service in accordance with any standards and guidelines
Company develops
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and communicates to Provider. In performing any services hereunder, Provider
shall at all times act in a manner reasonably calculated to be in or not
opposed to the best interests of Company.
4. CONTROL. The performance of services by Provider for Company pursuant to
this Agreement shall in no way impair the absolute control of the business and
operations of Provider or Company by their respective Boards of Directors.
Provider shall act hereunder so as to assure the separate operating identity of
Company, consistent with the provisions of Section 1507 of the New York
Insurance Law.
5. SERVICES. The performance of Provider under this Agreement with respect
to the business and operations of Company shall at all times be subject to the
direction and control of the Board of Directors of Company.
Subject to the foregoing and to the terms, conditions and limitations of
this Agreement. Provider shall provide to Company the services set forth below
in connection with the insurance business of the Company.
(a) UNDERWRITING. Subject to underwriting standards established by
Company and communicated to Provider, Provider shall provide underwriting
services, including review of policy applications, assignment of policy
numbers, MIB review, medical review and other investigations and actual policy
issue, all subject to final approval of Company. Provider shall provide
assistance to the Company in the development of all underwriting criteria
pursuant to which all new business applications and policyowner service
transactions requiring underwriting decisions will be processed and acted upon.
All new applications will initially be sent to Provider. All policyowner
service transactions requiring any underwriting decisions shall
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be determined by Provider personnel. The Company shall retain the final
authority to make underwriting decisions.
(b) POLICY OWNER SERVICES. Provider shall provide automated systems and
personnel to assist with policyowner services, from the point of issue through
termination of coverage. Policyowner records of the Company shall be maintained
at the home offices of the Company. Where such services include assistance in
the collection and processing of premiums on behalf of the Company, the Company
shall maintain a lockbox with one or more financial institutions of its choice
for the receipt of premiums All forms utilized in connection with the Company's
business and all correspondence with policyholders shall bear its name and
contain its New York address and all communications with policyowners shall be
in the Company's name. Provider will at the Company's request establish and
maintain one or more toll-free numbers for policyowner service requests.
(c) CLAIMS. Subject to claims settlement procedures established by
Company and communicated to Provider, Provider shall provide claims services,
including verification that the policy was in force, and review and
investigation of claims, all subject to final approval of Company.
(d) MARKETING. Upon request of the Company, Provider shall assist the
Company in preparation of marketing material, assist in the recruitment and
product training of agents and provide other marketing support services.
However, all decisions regarding the approval of marketing material and the
acceptance, appointment or termination of agents shall be made by the Company.
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(e) ACCOUNTING. Preparation and maintenance of financial statements and
reports, including all required GAAP and statutory financial statements and all
federal, state or local tax returns.
(f) FUNCTIONAL SUPPORT SERVICES. Provider shall provide (i) actuarial
services, including rate and profit share analysis, product development,
counseling on reserving requirements, work required for or in support of rate
and/or form submissions and actuarial certifications, (ii) telecommunications
services and electronic data processing services, facilities and integration,
including software programming and documentation, hardware utilization related
to provision of certain policy owner services and administration, a system
facilitating access to Provider's electronic data processing system,
(iii) legal services, including representation of Company in the prosecution or
defense of actions and in the negotiation and preparation of contracts,
agreements and agency 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, (iv) purchasing and
employee relations services, and (v) consultation in negotiating banking,
accounting, and treasury arrangements.
(g) AGENT LICENSING. Upon request of the Company, Provider shall furnish
the Company with administrative and clerical services in connection with the
appointment, termination and licensing of the Company's insurance agents.
However, all decisions regarding acceptance, appointment or termination of
agents shall be made by the Company.
6. CHARGES. Company agrees to reimburse Provider for services and facilities
provided by Provider to Company pursuant to this Agreement. The charge to
Company
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for such services and facilities shall include all direct and directly
allocable expenses, reasonably and equitably determined to be attributable to
Company by Provider, 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 Company shall be those used by Provider 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 Provider on behalf of Company.
Cost analyses will be made from time to time by Provider to determine, as
closely as possible, the actual cost of services rendered and facilities made
available to Company hereunder. Provider shall forward to Company the
information developed by these analyses, and such information shall be used to
develop bases for the distribution of expenses which more currently reflect the
actual incidence of cost incurred by Provider on behalf of Company.
Provider's determination of charges hereunder shall be presented to Company,
and if Company objects to any such determination, it shall so advise Provider
within thirty (30) days of receipt of notice of said determination. Unless the
parties can reconcile any such objection, they shall agree to the selection of
a firm of independent certified public accountants which shall determine the
charges properly allocable to Company and shall, within a reasonable time,
submit such determination, together with the basis therefor, in writing to
Provider and Company whereupon such determination shall be binding. The
expenses of such a determination
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by a firm of independent certified public accountants shall be borne equally by
Provider and Company.
7. PAYMENT. Provider shall submit to Company within thirty (30) days of the
end of each calendar quarter a written statement of the amount estimated to be
owed by Company for services and the use of facilities pursuant to this
Agreement in that calendar quarter, and Company shall pay to Provider within
fifteen (15) days following receipt of such written statement the amount set
forth in the statement.
Within thirty (30) days after the end of each calendar year, Provider will
submit to Company a detailed written statement of the charges due from Company
to Provider in that calendar year, including charges not included in any
previous statements, and any balance payable or to be refunded as shown in such
statement shall be paid or refunded within fifteen (15) days following receipt
of such written statement by Company.
8. ACCOUNTING RECORDS AND DOCUMENTS. Provider shall be responsible for
maintaining full and accurate accounts and records of all services rendered and
facilities used pursuant to this Agreement and such additional information as
Company may reasonably request for purposes of its internal bookkeeping and
accounting operations. Provider shall keep such accounts and records insofar as
they pertain to the computation of charges hereunder available at its principal
offices for audit, inspection and copying by Company and persons authorized by
it or any governmental agency having jurisdiction over Company during all
reasonable business hours.
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With respect to accounting and statistical records prepared by Provider by
reason of its performance under this Agreement, summaries of such records shall
be delivered to Company within thirty (30) days from the end of the quarter to
which the records pertain.
9. OTHER RECORDS AND DOCUMENTS. All books, records, and files established
and maintained by Provider by reason of its performance under this Agreement
which, absent this Agreement, would have been held by Company, shall be deemed
the property of Company, and shall be subject to examination at all times by
Company and persons authorized by it or any governmental agency having
jurisdiction over Company, and shall be delivered to Company at least quarterly.
With respect to original documents other than those provided for in
Section 5 hereof which would otherwise be held by Company and which may be
obtained by Provider in performing under this Agreement, Provider shall deliver
such documents to Company within thirty (30) days of their receipt by Provider
except where continued custody of such original documents is necessary to
perform hereunder.
10. RIGHT TO CONTRACT WITH THIRD PARTIES. Nothing herein shall be deemed to
grant Provider an exclusive right to provide services to Company, and Company
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 Company pursuant to this Agreement.
11. CONTACT PERSON(S). Company and Provider each shall appoint one or more
individuals who shall serve as contact person(s) for the purpose of carrying
out this Agreement. Such contact person(s) shall be authorized to act on behalf
of their respective parties
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as to the matters pertaining to this Agreement. 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.
12. TERMINATION AND MODIFICATION. This Agreement shall remain in effect
until terminated by either Provider or Company upon giving thirty (30) days or
more advance written notice, provided that Company 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 180 days from
the date of such notice. Subject to the terms (including any limitations and
restrictions) of any applicable software or hardware licensing agreement then
in effect between Provider and any licensor, Provider shall, upon termination
of this Agreement, grant to Company a perpetual license, without payment of any
fee, in any electronic data processing software developed or used by Provider
in connection with the services provided to Company hereunder if such software
is not commercially available and is necessary, in Company's reasonable
judgment, for Company to perform subsequent to termination the functions
provided by Provider hereunder. Upon termination, Provider shall promptly
deliver to Company all books and records that are, or are deemed by this
Agreement to be, the property of Company.
13. SETTLEMENT ON COMPLETE TERMINATION. No later than sixty (60) days after
the effective date of termination of this Agreement, Provider shall deliver to
Company 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 fifteen (15) days
of receipt of such statement.
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14. 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.
15. GOVERNING LAW; SERVICE OF SUIT; FORUM SELECTION. 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.
16. ARBITRATION. Any unresolved dispute or difference between the parties
arising out of or relating to this Agreement, or the breach thereof, except as
provided in Section 3, shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association and the
Expedited Procedures thereof. The award rendered by the Arbitrator shall be
final and binding upon the parties, and judgment upon the award rendered by the
Arbitrator may be entered in any Court having jurisdiction thereof. The
arbitration shall take place in New York, New York.
17. 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
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when deposited with the U.S. Postal Service, as first class certified or
registered mail, postage prepaid, overnight courier service, telex or
telecopier, addressed
If to Provider to:
The Manufacturers Life Insurance Company (U.S.A.)
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
If to Company to:
The Manufacturers Life Insurance Company of New York
000 Xxxxxx Xxxx Xxxxx, 0xx xxxxx Xxxxxxxx, XX 00000
Attention: President
or to such other persons or places as each party may from time to time
designate by written notice sent as aforesaid.
18. ENTIRE AGREEMENT. This Agreement, together with such amendments as may
from time to time be executed in writing by the parties in accordance with
Section 1505 of the New York Insurance Law, constitutes the entire agreement
and understanding between the parties in respect of the transactions
contemplated hereby and supersedes the Prior Agreement, as well as any and all
other agreements, arrangements and understandings relating to the subject
matter hereof.
19. SECTION HEADINGS. Section headings contained herein are for reference
purposes only and shall not affect me meaning or interpretation of this
Agreement.
20. 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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21. TERMINATION OF PRIOR AGREEMENT. Company represents that the Prior
Agreement has been terminated as of the Effective Date of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in
duplicate by their respective officers duly authorized so to do, and their
respective corporate seals to be affixed hereto, as of the date and year first
above written.
THE MANUFACTURERS LIFEINSURANCE
COMPANY (U.S.A.)
BY Xxxx X. Xxxxxxx III
------------------------
/s/
Attest: -------------------
THE MANUFACTURERS LIFEINSURANCE
COMPANY OF NEW YORK
BY Xxxxx X. Xxxxxxxxx
------------------------
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