ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement (this "Agreement") is
made effective as of June 1, 1997 ("Effective Date"), by and between
First Golden American Life Insurance Company of New York ("Company")
and Equitable Life Insurance Company of Iowa("Provider").
WHEREAS, Provider has extensive experience in life insurance
business operations; and
WHEREAS, Company desires Provider to perform certain
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 economies 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 are 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 basis 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 and as set forth in Section 2 of this
Agreement.
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 may
determine to be reasonably necessary in the conduct of it
insurance operations, including data processing equipment,
business property (whether owned or leased) and communications
equipment.
Provider agrees at all times to maintain sufficient facilities
and trained personnel of the kind necessary to perform this
Agreement.
(a) 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.
(b) 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 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.
(c) 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.
(d) USE OF DATA PROCESSING FACILITIES. 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, with payment of a reasonable 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.
2. 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.
(a) ACCOUNTING, DATA PROCESSING, TAX AND AUDITING. Under
the general supervision of the Board of Directors of
Company, and provided that the records and transactions are
initiated by Company, the final product is verified by
Company and Provider shall cause Company's Chief
Administrative Officer (or his or her designee within
Company) to be familiar with all details of services
provided, including, but not limited to, accounting and
adjusting entries, Provider shall provide the following
accounting services: preparation and maintenance of the
financial statements and reports including annual
statements on both statutory and GAAP bases and tax
returns, and processing of the related financial records
and transactions of Company. Provider shall also provide
such assistance as may be required with respect to
corporate tax and auditing services.
(b) UNDERWRITING. Subject to underwriting standards
established by Company and communicated to Provider,
Provider shall provide underwriting services, including
review of policy applications, MIB review and medical
review. All final underwriting decisions will be made by
Company.
(c) CLAIMS. Subject to claims settlement procedures
established by Company and communicated to Provider,
Provider shall provide claims consulting services. Company
shall exercise final approval authorization for all claims
settlements.
(d) ADVERTISING AND SALES PROMOTIONAL SERVICES. Under the
general supervision of the Board of Directors of Company
and subject to the direction, control and prior approval of
the responsible officers of Company, Provider shall provide
typesetting of promotional materials and assistance in
fulfillment.
(e) FUNCTIONAL SUPPORT SERVICES. Provider shall provide
(i) actuarial services, including periodic review of
reserves by line of business, periodic audit of annuity
benefit payment calculations, rate and profit share
analysis, counseling on reserving requirements, work
required for or in support of rate and/or form submissions
and actuarial certifications, (ii) legal services regarding
general corporate matters, and (iii) employee relations
services, payroll and benefits.
(f) DISASTER RECOVERY PROGRAM. Provider agrees to
maintain back-up systems and contingency plans to assure
that any work stoppages, interruptions, or other failures
resulting from any types of disaster will not jeopardize
the integrity of data or records maintained by Provider
under this Agreement
on behalf of the Company. Provider warrants that it will
maintain such systems and plans in conformity with prudent
business practices.
3. CHARGES. Company agrees to reimburse Provider for services and
facilities provided by Provider to Company pursuant to this
Agreement. The charge to Company 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 including, where
appropriate, time records prepared at least annually for this
purpose. 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 at least annually 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 by a firm of independent certified public
accountants shall be borne equally by Provider and Company.
4. PAYMENT. Provider shall submit to Company within thirty (30)
days of the end of each calendar month 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
month, and Company shall pay to Provider within thirty (30) days
following receipt of such written statement the amount set forth
in the statement.
Within thirty (30) days after the end of each calendar quarter,
Provider will submit to Company a detailed written statement of
the charges due from Company to Provider in the preceding
calendar quarter, 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.
5. 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.
With respect to accounting and statistical records prepared by
Provider by reason of its performance under this Agreement, such
records shall be delivered to Company within thirty (30) days
from the end of the month to which the records pertain.
6. 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.
7. 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.
8. 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
as to the matters pertaining to this Agreement. Effective upon
execution of this Agreement, the initial contact person(s) shall
be those set forth in Appendix A.
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.
9. 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 one
year from the date of such notice. 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.
10. SETTLEMENT ON TERMINATION. No later than ninety (90) days after
the effective date of Complete 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
thirty (30) days of receipt of such statement.
11. 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.
12. 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.
13. ARBITRATION. In the event of any irreconcilable dispute between
the parties in connection with this Agreement, the dispute shall
be submitted to arbitration. Either party may submit the
dispute to arbitration by notifying the other of its submission
and naming its arbitrator. The other party shall name its
arbitrator within 30 days after receiving such notice. If the
arbitrators cannot agree, they shall choose an umpire through
the nomination of three persons by each arbitrator, the
declination by each arbitrator of two of the nominees named by
the other arbitrator and the drawing of lots to choose between
the two arbitrators within thirty days after the arbitrators and
umpire, if any, are chosen. The arbitrators and umpire shall be
disinterested insurance company executives. The arbitrators are
relieved from judicial formalities and may refrain from following strict
rules of evidence. The decisions of the arbitrators and umpire,
or the majority of them, shall be final and binding upon the parties.
Each party shall bear the expense of its own arbitrator and one-half
the other expenses of the arbitration proceedings. Any arbitration
shall take place in New York, New York, unless otherwise mutually agreed.
14. 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 Company:
Xxxx Xxx Xxxxxxxxx
First Golden American Life Insurance Company of
New York
230 Park Avenue, Suite 000
Xxxxxxxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
(b) if to Provider:
Xxxx Xxxxxxxx
Equitable Life Insurance Company of Iowa
000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
or to such other persons or places as each party may from time
to time designate by written notice sent as aforesaid.
15. 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 and
supersedes all prior agreements, arrangements and understandings
relating to the subject matter hereof. Any amendments to this
Agreement are subject to prior approval by the Superintendent,
State of New York, Department of Insurance.
16. SECTION HEADINGS. Section headings contained herein are for
reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
17. 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.
18. ADDITIONAL PROVISIONS. Appendix A, attached hereto, is hereby
incorporated into and made a part 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.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
/s/Xxxxx X. Xxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxx, Xx. Vice President (Seal)
Attest: /s/Xxxxx X. Xxxxxxx
----------------------------
Xxxxx X. Xxxxxxx, Secretary
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
/s/Xxxx Xxxxxxxx
------------------------
Xxxx Xxxxxxxx (Seal)
Attest:_______________________________
APPENDIX A
CONTACT PERSON(S) FOR PROVIDER
Xxxx Xxxxxxxx
CONTACT PERSON(S) FOR COMPANY
Xxxx Xxx Xxxxxxxxx
