ADMINISTRATIVE SERVICE AGREEMENT
Exhibit
10.12
THIS
AGREEMENT is made this 31st_____ day of December, 2006 by and between
Reserve National Insurance Company (hereinafter referred to as “Administrator”)
and Texas Imperial Life Insurance Company (hereinafter referred to as
“Insurer”).
RECITALS
WHEREAS,
Insurer is a stipulated premium insurance company licensed pursuant to Texas
Insurance Code (“Code”); and
WHEREAS,
Administrator is a capital stock insurance company domiciled in Oklahoma,
and
has registered or will register as a third party administrator to the extent
required by applicable law; and
WHEREAS,
Insurer and Administrator are desirous of entering into an agreement reflecting
the rights of the parties hereto with respect to the administration of the
insurance business of Insurer subject to the Coinsurance Agreement (“Coinsurance
Agreement”) which was entered into by and between Administrator and Insurer
effective on December 31, 2006.
WITNESSETH
NOW,
THEREFORE, for and in consideration of these premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto agree
as
follows:
1.
The Insurer agrees to provide Administrator with the information and support
reasonably required by the Administrator to perform its duties pursuant to
this
Agreement.
2.
The Administrator shall perform the following duties:
A.
Prepare and mail premium notices to the insureds reasonably in advance of
the
premium due dates in accordance with guidelines established by Insurer and
agreed to by Administrator. Xxxxxxxx shall be run and mailed at least once
a
month.
B.
Prepare and mail past due notices and lapse notices. With the cooperation
of
Insurer, prepare and send reinstatement applications consistent with policy
provisions. Upon receipt of completed reinstatement applications, Administrator
will perform appropriate underwriting and Administrator will proceed with
policy
issuance or denial in accordance with the underwriting guidelines applied
by
Administrator to its similar business including preparation and issuance
of
policies and policy certificates.
C.
Receive claims, verify coverage, request and collect proof of claim, review
and
pay claims in accordance with the Coinsurance Agreement. Administrator
agrees to be current in awareness of and compliance with the applicable prompt
payment laws.
D.
Collect and record premiums as provided in the Coinsurance Agreement.
Initial correspondence sent by Administrator to any policyholder shall notify
and summarize to said policyholder the relationship among Insurer,
Administrator, and the policyholder. The written notice must be approved
by
Insurer before distribution to policyholders and must state the amount of
premium specified. The payment of premiums to the Administrator by or on
behalf
of an insured is considered to have been received by the Insurer. However,
the
payment of return premium by the insurer to the Administrator is not considered
payment to the insured.
E.
Maintain administrative and statistical records which will determine the
insurance status of each insured or certificate holder including, but not
limited to, the effective dates, termination dates, nature of coverage, lapse
dates, benefit assignments, beneficiary designations (if applicable), and
appropriate address of record. This record keeping shall include the posting
of
premium payments.
F.
Maintain all licenses required by applicable statutes, rules and regulations.
Conduct its activities pursuant to this Agreement in compliance with all
applicable statutes, rules or regulations or pursuant to an exemption
therefrom.
G.
Handle all routine correspondence and other general clerical administration
of
the insurance plans subject to this Agreement, maintain all files relating
to
such correspondence and general clerical administration.
H.
Make available to Insurer all information necessary to maintain its general
ledger and prepare statutory financial statements.
3.
Insurer hereby agrees to remain solely liable for and covenants to indemnify
and
hold harmless Administrator against any and all loss, cost, expense, claims,
damages, liabilities and expenses including legal fees and costs (“Loss” or
“Losses”) assessed against or incurred by Administrator with respect to any
action, demand, proceeding, suit, settlement or compromise concerning claims
arising out of or related to: (i) the insurance administered under this
Agreement pursuant to actions or inactions of the Administrator taken or
not
taken in reliance upon instructions provided by the Insurer; or (ii) the
willful
misconduct, negligent or bad faith acts or omissions of the Insurer or the
Insurer’s agents, servants or employees. Administrator shall remain solely
liable for the willful misconduct, negligent or bad faith acts or omissions
of
Administrator and shall indemnify and hold harmless Insurer for any loss
or
losses Insurer may sustain by virtue of such acts.
4.
Administrator shall maintain adequate books and records of all transactions
among it, Insurer and the insureds under this Agreement and the business
being
administered in connection therewith to comply with regulatory examination
requirements and statutory retention requirements.
5.
It is understood and agreed that all records in any form including film or
electronic media, pertaining to each covered plan hereunder (including but
not
limited to, all individual applications, files and correspondence related
thereto) which are generated by Administrator are the property of Insurer.
It is
understood and agreed that Insurer shall have access to all records to the
extent necessary to fulfill contractual obligations to insureds, comply with
its
statutory and regulatory obligations, and conduct audits of Administrator.
6.
The initial term of this Agreement shall be for a period of one (1) year
and
shall commence on the effective date of this Agreement. Either party may
terminate the Agreement at any time on or after the expiration of the initial
term by giving ninety (90) days prior written notice. This Agreement will
automatically terminate in the event that Administrator’s obligations under the
Coinsurance Agreement are converted to assumption reinsurance with respect
to
those policies which are subject to assumption reinsurance. Unless otherwise
terminated, the Agreement shall be automatically renewed for additional one
year
terms. Notwithstanding anything to the contrary, in the event of fraud,
bankruptcy or insolvency of one party, this Agreement may be terminated
immediately by the other party upon written notice. Furthermore, in the event
of
a breach of any of the conditions or promises contained in this Agreement
or the
failure to perform any of the duties by one party, if the breach or failure
is
not cured within 30 days after written notice, this Agreement may be terminated
immediately by the other party upon written notice.
7.
No rights, interests or obligations arising hereunder shall be subject to
assignment by either party, except with written consent of the other party.
Any
assignment of rights, interests or obligations will be ineffective.
8.
No amendment or modification of, or supplement to, this Agreement shall be
binding unless in writing and duly executed and delivered by each party hereto
to the other party.
9.
It is understood and agreed that the Administrator shall be considered an
independent contractor. Nothing contained herein shall be construed as
constituting a partnership, employment relationship, or joint venture between
the Administrator and Insurer. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns.
10.
Pursuant to the provisions of the Health Insurance Portability and
Accountability Act of 1996 and federal regulations issued pursuant thereto,
and/or the Gramm‑Xxxxx‑Xxxxxx Act, the NAIC Insurance Information and Privacy
Protection Model Act, the NAIC Privacy of Consumer Financial and Health
Information Model Regulation and/or similar laws and regulations as enacted
in
various states, the parties recognize that, in the performance of their
respective obligations under this Agreement, they each may obtain from the
other
nonpublic personal or privileged information about individuals collected
or
received in connection with insurance transactions under the policies. Each
of
the parties agrees not to disclose such information to third-parties without
the
individual’s written authorization unless such disclosure is otherwise permitted
by law, and each of the parties shall also maintain the confidentiality of
all
other information related to the policies and all other information denominated
as confidential by the other party provided to it in connection with this
Agreement and shall not disclose such information to any third parties except
as
may be required by regulatory authorities, or pursuant to legal process;
provided however, if any state in which policies have been issued have more
restrictive confidentiality requirements, the parties will comply with those
laws to the extent applicable.
11.
This Agreement shall be construed in accordance with and governed by the
laws of
the State of Oklahoma.
12.
This Agreement contains the entire agreement of the parties regarding the
subject matter hereof and supersedes any prior or contemporaneous oral or
written agreement.
13.
If any clause(s) of this agreement shall be held invalid by a court of law,
the
remaining clauses shall survive and remain enforceable.
14.
Effectiveness of Notice - Notices mailed by registered or certified mail,
return
receipt requested are effective three days after mailing. Notices that are
mailed hereunder shall be given to the parties at the following addresses,
or at
such other address for a party as shall be specified by notice:
If to
Administrator:
Reserve National Insurance
Company
0000 Xxxxxxxxx Xxxxx
Xxxx.
Xxxxxxxx Xxxx, XX
00000
ATTN: Xxxx
Xxxxxxxx
If to Insurer:
Texas Imperial Life
Insurance Company
c/o UTG
0000 Xxxxx Xxxxx
Xxxxxx
Xxxxxxxxxxx, Xxxxxxxx
00000
ATTN: Xxx
Xxxxxx
or to such
other address as hereafter shall be furnished as provided in this Section
15 by
any of the parties hereto to the other parties hereto.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as
of the date and year first above written.
Reserve National Insurance Company
By: /s/ Xxxxxxx Xxx
Cole__________________
Kempner Xxx Xxxx, President
Kempner Xxx Xxxx, President
Texas Imperial Life Insurance
Company
By: /s/ Xxxxxxxx X.
Miller__________________
Xxxxxxxx X. Xxxxxx, Senior Vice-President
Xxxxxxxx X. Xxxxxx, Senior Vice-President
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