EXHIBIT (8) (H): ADMINISTRATIVE SERVICES AGREEMENT WITH VANTAGE COMPUTER SYSTEMS
FULL SERVICE AGREEMENT
AGREEMENT made as of the 1st day of February, 1994, by and between MUTUAL OF
OMAHA INSURANCE COMPANY ("CLIENT"), Mutual of Xxxxx Xxxxx, Xxxxx, Xxxxxxxx,
00000, and VANTAGE COMPUTER SYSTEMS, INC. ("VANTAGE"), 000 X. 00xx Xxxxxx,
Xxxxxx Xxxx, Xxxxxxxx 00000.
SECTION 1 DEFINITIONS
Throughout this Agreement, the definitions set forth below shall apply to both
singular and plural versions of the defined term.
1.01 "VANTAGE System" is the computerized data processing recordkeeping system
designed to issue, provide reporting on, administer and maintain certain life
insurance and annuity products.
1.02 "Facilities" or "VANTAGE's Facilities" means the necessary data processing
equipment and administrative support personnel required to issue, provide
reporting on, administer and maintain certain life insurance and annuity
products.
1.03 "Contracts" means certain life insurance or annuity products of CLIENT or
its subsidiaries as described in Exhibit A.
1.04 "Model Office" refers to a pre-production version of the VANTAGE System as
modified for CLIENT running in a test environment at VANTAGE's Kansas City
facility.
SECTION 2 TERMS OF APPOINTMENT
2.01 Subject to the conditions set forth in this Agreement, CLIENT hereby
appoints VANTAGE as Recordkeeping Service Agent for the Contracts.
2.02 VANTAGE hereby accepts such appointment and agrees that on and after the
effective date of its appointment it will act as CLIENT's Recordkeeping Service
Agent for the Contracts.
2.03 VANTAGE agrees to provide the necessary facilities, equipment, and
personnel to perform its duties and obligations hereunder in accordance with
this Agreement and the standard industry practice.
2.04 VANTAGE agrees that it will perform, at the direction of CLIENT, those
Recordkeeping Service Functions as set forth in Exhibit B attached.
2.05 VANTAGE agrees to use its best efforts to provide requested training for
CLIENT personnel at VANTAGE's Facility or at CLIENT's offices in connection with
the use and operation of the VANTAGE System. If this training is provided at
VANTAGE's Facility as part of the Model Office (as defined in the Implementation
Schedule), then there shall be no additional cost. Training at Client's offices
will be provided at current education rates not to exceed $7,500.00 per standard
class of up to five days. All travel and out-of-pocket expense incurred by
VANTAGE or Client personnel in connection with and during training shall be
borne by Client. Except as provided above, this training will be provided at
current education rates.
2.06 If requested to do so, VANTAGE will make on-line access to the VANTAGE
System available to CLIENT between the hours of 7 a.m. and 7 p.m., Central Time,
Monday through Friday, except for such holidays as are observed by the New York
Stock Exchange. Access to the VANTAGE System at other times will be by mutual
agreement.
SECTION 3 TERM
3.01 Subject to termination as hereinafter provided, this Agreement shall remain
in force and effect for a period of 3 years, the initial term of this Agreement.
3.02 This Agreement shall be renewed automatically for additional successive
terms of one year at the end of the initial term and the end of each renewal
term unless terminated by either party by prior written notice to the other at
least one hundred eighty (180) days prior to the end of the initial term or the
renewal term.
3.03 Not more than 240 nor less than 210 days prior to the expiration of the
term or any renewal term, VANTAGE shall give notice to CLIENT of such
expiration, which notice shall state the date of expiration and that if not
cancelled by CLIENT not less than 180 days prior thereto, the Agreement will be
automatically renewed. If VANTAGE fails to give such notice during the permitted
period, then CLIENT shall thereafter have the right to cancel the Agreement at
any time, whether or not cancellation date shall be the expiration of the term
or any renewal, upon 60 days notice to VANTAGE, which right shall lapse only
upon VANTAGE's giving timely and proper notice hereunder to CLIENT of the next
scheduled expiration date, assuming this Agreement shall not have been
theretofore cancelled by VANTAGE.
3.04 VANTAGE shall have no right to terminate this Agreement except upon six
months notice as described in Paragraph 3.02 or pursuant to Paragraph 9.01. If
VANTAGE elects to provide such notice and terminate this Agreement for other
than CLIENT'S recurring nonpayment of fees and charges and if CLIENT shall so
request in writing, then VANTAGE shall continue to provide the services
described herein to CLIENT for a period of six (6) months following such
termination, such service to be provided in accordance with the terms of this
Agreement and at 110% of those fees and expenses in effect for the term
immediately preceding such six (6) months period.
3.05 In the event that this Agreement is terminated, VANTAGE agrees that, in
order to assist in providing uninterrupted service to CLIENT, VANTAGE shall use
reasonable efforts to assist CLIENT in converting the records of CLIENT from the
VANTAGE System to whatever service or system is selected by CLIENT, subject to
reimbursement to VANTAGE for such assistance at its standard rates and fees in
effect at that time.
SECTION 4 FEES AND EXPENSES
4.01 During the initial term of this Agreement, CLIENT shall pay to VANTAGE upon
receipt of VANTAGE's statement the fees and charges in the amounts as set out in
Exhibit A attached hereto and made a part of hereof. VANTAGE may impose a 1.5%
per month late payment charge on balances outstanding for over 30 days.
4.02 CLIENT shall also reimburse VANTAGE for all reasonable out-of-pocket
expenses described on Exhibit A attached hereto and made a part hereof, which
are incurred by VANTAGE in the performance of this Agreement. VANTAGE may impose
a 1.5% per month late payment charge on balances outstanding for over 30 days.
4.03 No fees or expenses may be increased during the initial term of this
Agreement. During any renewal term of this Agreement, fees under this Agreement
may be increased only if such increase is imposed generally upon all of
VANTAGE's customers. In addition:
(a) If the number of Active policies of CLIENT (regardless of policy
type now or hereafter administered pursuant to this Agreement and
Amendments hereto) equals or exceeds 30,000, then in no event
shall the aggregate of any price increases during any annual term
of this Agreement exceed the previous year's fee by the greater
of either:
(1) 5% percent; or,
(2) the percentage change in the Consumer Price Index for the
U.S. City average as compiled and calculated by the Bureau
of Labor Statistics of the United States Department of
Labor, in "Consumer Price Index, All Urban Consumers" (or
its appropriate successor Index) for the year immediately
preceding the effective date of such increase.
(b) If the number of Active policies of CLIENT (regardless of policy
type now or hereafter administered pursuant to this Agreement and
Amendments hereto) is less than 30,000, then in no event shall
the aggregate of any price increases during any annual term of
this Agreement exceed the previous year's fee by the greater of
either:
(1) 10% percent; or,
(2) the percentage change in the Consumer Price Index for the
U.S. City average as compiled and calculated by the Bureau
of Labor Statistics of the United States Department of
Labor, in "Consumer Price Index, All Urban Consumers" (or
its appropriate successor Index) for the year immediately
preceding the effective date of such increase.
4.04 CLIENT will pay Nebraska state and Omaha city sales or use taxes arising
out of the transaction contemplated by this Agreement. Such taxes will be
invoiced separately by VANTAGE for payment by CLIENT. VANTAGE shall promptly
notify CLIENT as soon as VANTAGE becomes aware of other taxes to be levied upon
this transaction; the parties agree to negotiate in good faith the issue of the
extent of each party's obligation to bear the financial obligation for such
taxes.
4.05 Except for the charges (whether or not on a fixed or on a time and
materials basis) and expenses expressly stated and agreed upon in this
Agreement, any amendment hereto, or in any Schedule or Exhibit hereto, CLIENT
shall not be billed for, or be obligated to pay, VANTAGE for any charges,
expenses, or other amounts for the products and related services covered by this
Agreement.
SECTION 5 PAYMENTS AND COLLECTIONS
5.01 Receipt by VANTAGE of any premiums or charges for insurance by or on behalf
of an insured shall be deemed to have been received by CLIENT. Payment of return
premiums or claims by the CLIENT to VANTAGE shall not be deemed payment to the
insured or claimant until such payments are received by such insured or
claimant.
5.02 VANTAGE will hold in a fiduciary capacity all insurance charges or premiums
collected by it on behalf of or for CLIENT with respect to insureds, and return
premiums received from CLIENT. VANTAGE will immediately remit such funds to the
person or persons entitled thereto, or shall promptly deposit them in a
fiduciary account established and maintained by VANTAGE in the name of CLIENT.
VANTAGE shall require the bank in which such fiduciary account is maintained to
keep records clearly recording the deposits in and withdrawals from such account
on behalf of or for each insurer for which VANTAGE may collect charges or
premiums. VANTAGE shall promptly obtain and keep copies of all such records and,
upon request of CLIENT, furnish CLIENT with copies of such records pertaining to
deposits and withdrawals on behalf of or for CLIENT. VANTAGE may make
withdrawals from such account for:
(a) remittance to CLIENT when entitled thereto;
(b) transfer to and deposit in a claims paying account, with claims
to be paid as provided in paragraph 5.03 below;
(c) remittance of return premiums to the person or persons entitled
thereto.
5.03 All claims paid by VANTAGE from funds collected on behalf of CLIENT shall
be paid only on checks or drafts of and as authorized by CLIENT.
5.04 To the extent required by applicable law VANTAGE shall provide a written
notice to the insured advising them of the identity of and relationship among
VANTAGE, the insured and CLIENT. If VANTAGE collects funds from the insured,
VANTAGE will provide the insured with written notice of the premium charged by
CLIENT for such insurance coverage.
SECTION 6 MODIFICATIONS AND CUSTOM OUTPUT.
6.01 VANTAGE has reviewed the Contracts, Prospectus and other documentation for
the life and annuity products as identified in Exhibit A.
6.02 VANTAGE and CLIENT have determined that certain modifications need to be
made to the VANTAGE System and its Facilities in order to be able to
successfully issue, administer, provide reporting on and maintain the life and
annuity products identified in Exhibit A and otherwise perform the functions set
forth in this Agreement.
6.03 Those modifications are identified in Exhibit G.
6.04 VANTAGE has agreed to provide and CLIENT has agreed to purchase Vantage's
services to develop those modifications as identified in Exhibit G at a cost set
forth in Exhibit A.
6.05 It is recognized that the CLIENT may make additional changes to its
requirements which will result in an increased cost for the modifications or
which could result in a deviation from the Implementation Schedule. The project
change control procedures set forth in Exhibit H will be followed in order to
estimate the proposed impact on the costs of modifications and the
Implementation Schedule.
SECTION 7 REPRESENTATIONS AND WARRANTIES OF VANTAGE
VANTAGE represents and warrants to CLIENT as follows:
7.01 It is a corporation duly organized and existing and in good standing under
the laws of the State of Delaware. It is empowered under applicable laws and by
its charter and bylaws to enter into and perform the services contemplated in
this Agreement.
7.02 VANTAGE will secure and keep in effect all licenses required to perform its
services under this Agreement. VANTAGE will provide copies of such licenses and
appointments to CLIENT upon request.
7.03 All requisite corporate proceedings have been taken to authorize it to
enter into and perform the services contemplated in this Agreement.
7.04 It has and will continue to have and maintain the necessary facilities,
equipment, and personnel to perform its duties and obligations under this
Agreement.
7.05 All services provided under this Agreement shall:
(a) Conform to appropriate written specifications and documentation
developed by VANTAGE or mutually agreed to by VANTAGE and CLIENT
and as further defined in Exhibits B, E, F and G:
(b) Comply with standard industry practice; and
(c) Be performed in a professional and workmanlike manner.
Wherever possible, the above shall be construed as being consistent with each
other. When such construction is unreasonable, the order of preference shall be
as set forth above.
SECTION 8 REPRESENTATIONS AND WARRANTIES OF CLIENT
CLIENT represents and warrants to VANTAGE as follows:
8.01 It is a corporation duly organized and existing and in good standing under
the laws of the State of Nebraska.
8.02 It is empowered under the applicable laws and regulations and by its
charter and bylaws to enter into and perform this Agreement.
8.03 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
8.04 All of the prospectuses, Contracts and other forms provided or required by
CLIENT shall have been approved by all required regulatory agencies and shall be
in compliance with all Federal, state, and local laws and regulations.
8.05 It has and will continue to comply with all laws with respect to the
Contracts and its has and will continue to make all required filings with
regulatory agencies in connection with the offer, sale, or administration of the
Contracts.
SECTION 9 BREACH, REMEDY AND LIMITATION OF DAMAGES
9.01 EVENTS OF DEFAULT:
(a) BY CLIENT:
(1) Failure or breach of any warranty set forth in provisions
8.04 and 8.05.
(2) Material failure to timely perform any duty, obligation,
or undertaking required by this Agreement.
(3) Making of a written warranty, representation, statement or
response in connection with this Agreement which was
knowingly untrue in any material respect on the date it
was made.
(4) Ceasing to conduct business in the normal course,
insolvency, the making of a general assignment for the
benefit of creditors, suffering or permitting the
appointment of a receiver or similar officer for its
business or assets or availing itself of, or becoming
subject to, any proceeding under the Federal Bankruptcy
Act or any federal or state statute relating to solvency
or the protection of rights of creditors.
(b) BY VANTAGE:
(1) Failure to successfully complete Model Office if due to
the fault of Vantage.
(2) Failure to meet the performance standards in Exhibit E.
(3) Material failure to provide the services or functions
set forth in Exhibit B.
(4) Failure or breach of any warranty set forth in provisions
7.02 through 7.05.
(5) Material failure to timely perform any duty, obligation,
or undertaking required by this Agreement.
(6) Making of a written warranty, representation, statement or
response in connection with this Agreement which was
knowlingly untrue in any material respect on the date it
was made.
(7) Ceasing to conduct business in the normal course,
insolvency, the making of a general assignment for the
benefit of creditors, suffering or permitting the
appointment of a receiver or similar officer for its
business or assets or availing itself of, or becoming
subject to, any proceeding under the Federal Bankruptcy
Act or any federal or state statute relating to solvency
or the protection of rights of creditors.
(c) REMEDIES FOR DEFAULT. In the event of a default, the
non-defaulting party may demand such default be cured within
thirty (30) days. If such default is not cured within thirty (30)
days, then the non-defaulting party may, without further notice,
take any or all, or any combination of the following actions:
(1) Immediately terminate this Agreement without further
obligation.
(2) Cover such default by obtaining performance from a third
party or performance on the part of non-defaulting party
and either offset or recover the costs of such performance
from the defaulting party.
(3) Exercise the right of setoff, recoupment, counterclaim
or offset for such default.
(4) Exercise any other right or remedy which may be available
under the law.
(d) FAILURE TO EXERCISE REMEDY. The remedies set forth above are
cumulative, but the non-defaulting party is under no obligation to
exercise any such remedy. The exercise of, or failure to exercise, any
such remedies shall not prevent any future exercise of the same or any
other remedies, or release the defaulting party from its obligations
under this Agreement. The defaulting party shall additionally pay or
allow the offset of all reasonable attorneys fees and expenses
incurred in the endorsement of any of the rights or privileges
hereunder.
9.02 IN NO EVENT AND UNDER NO CIRCUMSTANCES, HOWEVER, SHALL EITHER PARTY UNDER
THIS AGREEMENT BE LIABLE TO THE OTHER PARTY UNDER ANY PROVISIONS OF THIS
AGREEMENT FOR LOST PROFITS OR FOR EXEMPLARY, SPECIAL, PUNITIVE OR CONSEQUENTIAL
DAMAGES. FURTHER, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR AN
AMOUNT WHICH EXCEEDS THE AMOUNT PAID BY CLIENT TO VANTAGE UNDER THIS AGREEMENT
FOR THE PAST ONE YEAR.
9.03 In the event VANTAGE is unable to perform its obligations under the terms
of this Agreement because of strikes, equipment or transmission failure or
damage, or other causes without fault or negligence on the part of VANTAGE and
beyond its control, VANTAGE will use its best efforts to assist CLIENT to obtain
alternate sources of service. VANTAGE will not be liable for any damages
resulting from such causes.
9.04 At any time VANTAGE may apply to a person indicated on CLIENT's "Schedule
of Authorized Personnel", attached hereto as Exhibit C, as a person authorized
to give instructions under this Section with respect to any matter arising in
connection with this Agreement. VANTAGE shall not be liable for, and shall be
indemnified by CLIENT against, any loss arising from any action taken or omitted
by VANTAGE in good faith in reliance upon such instructions for which VANTAGE
has maintained a written record, either in its own file notations or received
from CLIENT.
9.05 CLIENT shall immediately provide VANTAGE with written notice of any change
of authority of persons authorized and enumerated in Exhibit C to provide
VANTAGE with instructions or directions relating to services to be performed by
VANTAGE under this Agreement.
9.06 In the event malfunction of the VANTAGE System causes an error or mistake
in any record, report, data, information or output under the terms of this
Agreement, VANTAGE shall at its expense correct and reprocess such records,
provided that CLIENT shall notify VANTAGE in writing of such error or mistake as
soon as practical after its discovery.
SECTION 10 COVENANTS OF VANTAGE AND CLIENT
10.01 This Agreement shall be retained as part of the official records of both
parties for its duration and six years thereafter.
10.02 Where a policy is issued to a trustee or trustees, CLIENT will require a
copy of the trust agreement and any amendments thereto to be furnished to it and
CLIENT will provide a copy to VANTAGE. Both parties will retain such documents
as part of their official records for the duration of the policy and six years
thereafter.
10.03 VANTAGE shall establish and maintain facilities and procedures for the
safekeeping of policy forms, check forms and facsimile signature imprinting
devices, if any, and all other documents, reports records, books, files, and
other materials relative to this Agreement. VANTAGE shall maintain at its
principal administrative office, for the duration of this Agreement and six
years thereafter, and in accordance with prudent standards of insurance
recordkeeping, adequate books and records of all transactions between VANTAGE,
CLIENT and insureds.
10.04 CLIENT shall have full and free access, during ordinary business hours, to
all documents, records, reports, books, files, and other materials relative to
this Agreement and maintained by VANTAGE.
10.05 All information furnished by CLIENT or furnished to VANTAGE on CLIENT's
behalf, including but not limited to all documents, reports, records, books,
files and other materials relative to this Agreement, shall be the sole property
of CLIENT and such property shall be held by VANTAGE in confidence and trust for
CLIENT. VANTAGE shall not disclose such information directly or indirectly to
any third party except to the extent that VANTAGE is required by law to make
such disclosure or otherwise authorized in writing by CLIENT.
10.06 Any policies, certificates, booklets, termination notices or other written
communications delivered by the CLIENT to VANTAGE for delivery to its
policyholders shall be delivered by VANTAGE promptly after receipt of
instructions from the CLIENT to do so.
10.07 VANTAGE shall exercise its best efforts to continue in effect the
insurance coverage described in Exhibit D attached hereto; provided, however,
that such coverage is available from a domestic insurance carrier at a
reasonable cost to VANTAGE.
10.09 VANTAGE shall maintain backup computer tape files on a daily basis stored
in an off-premises location. The purpose of back-up and recovery procedures is
to permit file recovery in the event of destruction of normal processing files.
CLIENT may review the procedures in effect and inspect the storage facility upon
demand.
10.10 CLIENT shall, from time to time, provide VANTAGE with current forms of
contracts, prospectuses, and applications, names and states of license of all
insurance and/or broker-dealer agents and representatives authorized to sell the
Contracts.
10.11 CONFIDENTIAL INFORMATION.
(a) Confidential Information shall mean the Vantage System and all
information disclosed or authorized to be disclosed by VANTAGE to
CLIENT which, at the time it was communicated to CLIENT, was not
rightfully in CLIENT's possession (or provided to CLIENT pursuant to a
confidentiality agreement between CLIENT and VANTAGE) and was not
common general knowledge. Such information shall remain Confidential
Information as long as it does not become general knowledge except by
disclosure of CLIENT in contravention of its obligations under this
Section.
(b) CLIENT shall exercise at least the same degree of care to protect the
confidentiality of VANTAGE's Confidential Information which CLIENT
exercises to protect the confidentiality of its own similar
Confidential Information. As long as Customer meets this standard of
care, Customer shall have no additional obligations nor liability
regarding confidentiality.
10.12 The insurance policies subject to services performed under this Agreement
are underwritten by CLIENT.
10.13 VANTAGE may use only such advertising pertaining to the business
underwritten by CLIENT as has been approved in writing by CLIENT in advance of
their use.
10.14 Whenever required by a state, VANTAGE shall maintain a deposit or a bond
in favor of such state to be held in trust for the benefit and protection of
insureds and insurers whose monies VANTAGE handles.
10.15 With respect to Wyoming residents, VANTAGE will not:
(a) solicit applications for insurance of annuities for CLIENT,
negotiate insurance or annuities on behalf of CLIENT, or carry
out and countersign insurance policies unless licensed in Wyoming
as an agent;
(b) on behalf of CLIENT, for compensation or fee, solicit, negotiate
or procure insurance or the renewal or continuance thereof for
Wyoming insureds or prospective insureds unless licensed in
Wyoming as a broker;
(c) adjust claims in Wyoming for CLIENT by investigating and
negotiating settlements unless licensed in Wyoming as an
adjuster, or an agent or broker who adjusts or assists in the
adjustment of losses arising under policies issued by the
insurers represented by that agent or through that broker.
Nothing herein shall be interpreted as to prohibit VANTAGE from
engaging in ministerial or clerical activities relating to the
payment of claims.
SECTION 11 ASSIGNMENT
11.01 Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party hereto without the prior written consent of the other.
11.02 This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
SECTION 12 OPTION TO LICENSE VANTAGE SYSTEM
12.01 At any time after the first anniversary of this Agreement and for ninety
(90) days after termination of this Agreement, and upon 180 days advance notice
by CLIENT to VANTAGE, CLIENT shall have the option to license the Vantage System
for a one-time license fee, as set forth in Exhibit I, payable as specified in
the System License Agreement. Both parties agree they shall negotiate in good
faith the terms of the System License Agreement governing such option.
12.02 The Vantage System licensed pursuant to this Section shall include, at no
additional cost to CLIENT beyond a one-time cost set forth in Exhibit J,
attached hereto, and those charges expressly identified therein, the following
changes to the Vantage System made between the effective date of this Agreement
and the effective date of a System License Agreement with CLIENT for the Vantage
System:
(a) any enhancements and modifications generally available through
Vantage System enhancement and support; and
(b) enhancements and modifications made by VANTAGE for CLIENT during
the term of this Agreement, retrofitted to function within the
base Vantage System.
SECTION 13 MISCELLANEOUS
13.01 CLIENT or its duly authorized independent auditors have the right under
this Agreement to perform on-site audits of records and accounts directly
pertaining to the Contracts serviced by VANTAGE's Facilities hereunder at
VANTAGE's Facilities in accordance with reasonable procedures and at reasonable
frequencies. CLIENT shall reimburse VANTAGE for all of is costs and expenses
(including Time and Materials) incurred in connection with such audits. At the
request of CLIENT, VANTAGE will make available to CLIENT's auditors and
representatives of the appropriate regulatory agencies all reasonable requested
records and data.
13.02 The parties hereto agree that all tapes, books, reference manuals,
instructions, records, information, and data pertaining to the business of the
other party, VANTAGE's System and the policyowners serviced by CLIENT hereunder
which are exchanged or received pursuant to the negotiation of and/or the
carrying out of this Agreement shall remain confidential and shall not be
voluntarily disclosed to any other person and that all such tapes, books,
reference manuals, instructions, records, information and data in the possession
of each of the parties hereto shall be returned to the party from whom it was
obtained upon the termination or expiration of this Agreement.
13.03 VANTAGE shall have the right, at any time, and from time to time, to alter
and modify the VANTAGE System and any systems, programs, procedures or
facilities used or employed in performing its duties and obligations hereunder,
provided that no such alterations or modifications shall materially change or
affect the operations and procedures of CLIENT in using or employing VANTAGE's
System or Facilities hereunder without the consent of CLIENT, which such consent
shall not be unreasonably withheld.
13.04 It is understood and agreed that all services performed hereunder by
VANTAGE shall be as an independent contractor and not as an employee of CLIENT.
13.05 This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject matter hereof,
whether oral or written, and this Agreement may not be modified except in a
written instrument executed by both of the parties hereto.
13.06 All notices and requests in connection with this Agreement shall be given
or made upon the respective parties in writing and shall be deemed as given as
of the date deposited in the U.S. mails, postage prepaid, certified or
registered, return receipt requested, and addressed as follows:
FOR CLIENT FOR VANTAGE COMPUTER SYSTEMS, INC.
Xxxxxx X. Xxxxxxxx President
Sr. Executive Vice President, Operations 0000 Xxxxxxxxx Xxxxxx
Xxxxxx xx Xxxxx Life Ins. Co. Xxxxxx Xxxx, XX 00000
Mutual of Xxxxx Xxxxx
Xxxxx, XX 00000
or to such other address as a party to receive the notice or request so
designates by written notice to the other.
13.07 VANTAGE and CLIENT understand and agree that the implementation of this
Agreement will be enhanced by the timely and open resolution of any disputes or
disagreements between such parties.
(a) Each party hereto agrees to use its best efforts to cause any disputes
or disagreements between such parties to be considered, negotiated in
good faith, and resolved as soon as possible.
(b) In the event that any dispute or disagreement between the parties
cannot be resolved to the satisfaction of VANTAGE's project manager
and the CLIENT's project manager within ten (10) days after either
such project manager has notified the other in writing of the need to
resolve the specific dispute or disagreement within such ten (10) day
period, then the dispute or disagreement shall be immediately referred
in writing to the HEAD OF OPERATIONS of CLIENT and the HEAD OF
PROCESSING SERVICES of VANTAGE (or their respective successors) for
consideration. In the event that such officers of CLIENT and VANTAGE
cannot resolve such dispute or disagreement to their mutual
satisfaction within ten (10) days after the latter person has received
written notice of the need to resolve the specific dispute or
disagreement within such ten (10) day period, then the dispute or
disagreement shall be immediately referred to in writing to the
PRESIDENT of CLIENT and the LIFE OPERATIONS MANAGER of VANTAGE (or
their respective successors) for consideration.
(c) No resolution or attempted resolution of any dispute or disagreement
pursuant to this Article shall be deemed to be a waiver of any term or
provision of this Agreement or consent to any breach or default unless
such waiver or consent shall be in writing and signed by the party
claimed to have waived or consented.
13.09 This Agreement is to be construed in accordance with the laws of the State
of Missouri, without regard to conflicts of law principals.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized officers
as of the day and year first above written.
VANTAGE COMPUTER SYSTEMS, INC. MUTUAL OF OMAHA INSURANCE COMPANY
By: By:
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President Title: Sr. Executive Vice President,
Operations
Date: Date:
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EXHIBIT A
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FULL SERVICE FEE SCHEDULE
[CONFIDENTIAL]
EXHIBIT B
ANNUITY RECORDKEEPING SERVICE AGENT FUNCTIONS
PERFORMED BY VANTAGE COMPUTER SYSTEMS, INC.
FOR CLIENT Contract # 6016L-0194
NOTE: This exhibit pertains to the above referenced Contract series only.
Annuity Recordkeeping Service Agent Functions for other products as mutually
agreed by the Parties will be added by addendum to this Exhibit.
NOTE: This exhibit reflects standard VANTAGE practice. All actual services are
under procedures and time standards mutually agreed to by VANTAGE and the
CLIENT. The CLIENT and VANTAGE may, from time to time, change respective
procedures by mutual agreement. This will not require change to the Service
Agreement.
I. CONTRACT ISSUE
A. Reviews form of application, applies issue criteria to application for
annuity contract. Causes to have printed and maintains supply of
annuity contracts.
B. Prepares contract data page and issues contract for paid business and
mails to contract owners or agents as directed by CLIENT.
C. Establishes and maintains all participant, annuitant, and contract
owner records, as applicable, on computer and microfilm systems.
D. Notifies dealer/agent of any error or missing data needed to establish
participant, annuitant or contract owner records.
E. Causes to have printed and maintains supply of confirmation
statements. Prepares and mails confirmation statements of purchases to
contract owners with copies to dealer/agents.
F. Deposits monies received with application into depository account of
CLIENT.
G. Causes to have printed and maintains inventory of all issue-related
forms, contracts, endorsements and adoption agreements.
II. BILLING AND COLLECTION
A. Receives purchase payments reconciles amount paid with returned
billing statements or other remittance media.
B. Prepares and mails confirmation statement for variable annuity
purchase payments to contract owners with copies to dealer/agents as
directed by CLIENT.
C. Prepares pre-authorized checks ("PAC"), individual bills, or group
billing lists for all periodic payment contracts. Causes to be printed
and maintains supply of PAC authorization forms.
D. Generates and deposits pre-authorized checks on appropriate schedule.
E. Updates the contract owner master records to reflect payments
received, and performs accounting distribution of each payment
received.
F. Deposits all cash received under the contracts into a designated bank
account.
G. Transmits daily accounting and bank transfer authorization summaries
prepared for each valuation period.
III. BANKING
A. Balances, edits, endorses and prepares daily deposit. Generates
pre-authorized checks on scheduled basis.
B. Deposits are placed into a depository account.
C. Transfers funds from the depository account to one of the following:
a. General Account of XXXXXX
x. Investment Vehicle(s) Custodian Account(s)
c. Disbursement Account of CLIENT
D. Prepares daily cash journal summary reports
E. Prepares checks for annuitants in "payout" phase. Checks are prepared
for partial and full surrenders, as well as for death claims as
directed by CLIENT.
F. Transfers funds from the appropriate accounts in the event checks are
to be drawn on an account with insufficient funds.
G. On dishonored items, reverses all transactions, prepares reports and
communicates with contract owner.
IV. ACCOUNTING/AUDITING
A. Prepares daily accounting reports for transactions processed.
B. Generates accounting information necessary to post entries to CLIENT
general ledger.
C. Retains systems generated reports in accordance with a retention
schedule mutually established. Provides access to such reports for
internal and external auditing.
D. Determines the "Net Amount Available for Investment".
E. Cooperates in annual audit of separate account financials conducted
for purposes of financial statement certification and publication and
accommodates other client or regulatory audits, as required.
V. VALUATION
A. Performs valuation of all reserves associated with the variable
annuity contracts.
VI. CONTRACT OWNER SERVICE/RECORD MAINTENANCE
A. Receives and implements all contract owner service requests including
information requests, beneficiary changes, transfer of assets between
eligible investment vehicles, and changes of any other information
maintained on the system.
B. Researches all inquiries using both data stored in the system and
microfilm records. Responds directly to any questions or inquiries as
directed by CLIENT.
C. Prepares a set of daily reports confirming all changes made to
participant, annuitant or contract owner accounts. Microfilms all
copies of communications from participants, annuitants and contract
owners.
D. Reviews forms, causes to be printed and maintains adequate supply for
field use.
VII. DISBURSEMENT (SURRENDERS, CLAIMS)
A. Receives requests for partial or full surrenders and death claims from
contract owners and beneficiaries. Retains and accounts for any
contract administrative changes.
B. Processes all surrender requests and death claims against the
participant master files as directed by CLIENT.
C. Prepares checks for surrenders and death claims and forwards to
contract owner or beneficiary as directed by CLIENT.
D. Prepares and mails confirmation statements of disbursement
transactions to contract owners with copies to dealer/agents.
E. Prepares report on surrenders and death claims.
F. Reviews, causes to have printed, and maintains adequate supply of
checks.
VIII. COMMISSIONS
A. Receives application and payment from field. Verifies validity of
application and license status of both writing and general agents.
B. Creates and maintains detailed commission transaction records for each
financial transaction processed.
C. Creates commission adjustment transactions as necessary.
D. Prepares commission statements and checks including overrides to three
levels.
E. Prepares commission interface to CLIENT in machine readable form as
required.
F. Creates agent tax reporting forms.
IX. ANNUITY BENEFIT PROCESSING
A. Receives information for Annuitants going into the annuity (payout)
phase.
B. Calculates the amount of the initial annuity payment for payout based
on tables supplied by CLIENT.
C. Deducts applicable premium taxes, and calculates annuity reserves.
D. Establishes and maintains annuitant records.
E. Withholds appropriate Federal Income Tax, prepares journal entries for
CLIENT's general ledger. Establishes and maintains ledger account
liability for accruing any amounts withheld from annuity payments for
payment of Federal Income Taxes.
F. Provides information for general account ledger maintenance.
X. PROXY PROCESSING
A. Receives record date information and proxy solicitation from
underlying investment vehicle(s).
B. Prepares proxy cards.
C. Mails solicitation and re-solicitations, if necessary.
D. Maintains all proxy registers and other required proxy material.
XI. PERIODIC REPORTS TO CONTRACT OWNERS
A. Collates all information necessary to prepare semi-annual reports for
separate accounts.
B. Prepares and mails statement of account to each participant, annuitant
or contract owner. Mails on required schedule.
C. Inserts and mails all semi-annual reports to contract owners, both
underlying fund and separate account reports.
XII. REGULATORY STATEMENT REPORTS
A. Collates relevant financial information for preparation of separate
account convention blanks.
B. Prepares IRS Reports 1099-R and W-2P for contract owners who received
annuity payments or distributions. Mails to contract owners and IRS.
C. Responds to any request from plan administrators or trustees for
information affecting the plan or participants for qualified plans.
D. Responds to requests for calculations applicable to annuity payments
as may be necessary to tax calculations.
E. Provides relevant financial data for preparation of the Annual SEC
Report for registered investment companies.
XIII. PREMIUM TAXES
A. Collects and accounts for premium taxes as appropriate.
B. Maintains all premium tax records by contract owner and by state.
XIV. FINANCIAL AND MANAGEMENT REPORTS
Provides, on the time schedule agreed upon, reports listed below:
A. Reserve Reports
B. Premium Tax Reports
XV. AGENT LICENSE RECORDKEEPING
A. Receive agent license status information from CLIENT.
1. New Agents
2. Changes in Status
3. Agents Terminated
B. Establishes, maintains or deletes agent records on computer system.
EXHIBIT C
SCHEDULE OF AUTHORIZED PERSONNEL
The following individuals are authorized to give instructions or direction to
VANTAGE with respect to matters arising in connection with the servicing to be
performed under the Service Agreement:
See Attached
EXHIBIT D
INSURANCE COVERAGE
Insurance Coverages Maintained by Vantage Computer Systems, Inc.
1. Broker's Blanket Bond - Covers losses caused by dishonesty of employees,
physical loss of securities on or outside of VANTAGE premises while in the
possession of an authorized person and losses caused by forgery or alteration of
checks or similar instruments.
Coverage: $1,000,000
2. Errors and Omissions Insurance - Indemnifies against loss in providing
policyholder recordkeeping services by reason of neglect, error or omission.
Coverage: $1,000,000
3. Mail Insurance - Provides indemnity for securities mailed from offices
of VANTAGE and lost in the mail.
Coverage:
$1,000,000 Non-Negotiable Securities mailed to domestic locations via
Registered Mail.
$1,000,000 Non-Negotiable Securities mailed to domestic locations via
First-Class or Certified Mail.
$1,000,000 Non-Negotiable Securities mailed to foreign locations via
Registered Mail.
$1,000,000 Non-Negotiable Securities mailed to all locations via Registered
Mail.
4. Electronic and Computer Crime Insurance - Covers losses due to computer
related crime which is not covered under the Broker's Blanket Bond.
Coverage: $1,000,000
EXHIBIT E
PERFORMANCE STANDARDS
SEE ATTACHED
EXHIBIT F
IMPLEMENTATION SCHEDULE
See Attached
EXHIBIT G
MODIFICATION SCHEDULE
See Attached
EXHIBIT H
PROJECT CHANGE CONTROL PROCEDURE
The following describes the process to be followed of the change to the VANTAGE
System or the Facilities as required:
1. A Project Change Request (PCR) will be the vehicle for
communicating change. The PCR must describe the change, the
rationale for the change, and the effect the change will have on
both the costs of the modifications and the Implementation
Schedule.
2. A designated Project Manager of the requesting party will review
the proposed change and determine whether to submit the request
to the other party.
3. The responsible VANTAGE Project Manager and the Mutual Project
Manager will review the proposed change and approve it for
further investigation. The investigation will determine the
effect that the implementation of the PCR will have on price,
schedule and other terms and conditions of the Full Service
Agreement. After investigation has been completed, the
responsible VANTAGE Project Manager and the Mutual Project
Manager will approve, reject or defer implementation of the
proposed change.
SCHEDULE I
SYSTEM LICENSE FEE
COMPONENTS: The mainframe version of the VANTAGE-ONE System has four base
components:
- Interest Sensitive Whole Life - Traditional - Universal Life
- Annuities.
In addition, CLIENT can license pursuant to the option any of the following
mainframe version components:
- New Business/Underwriting - Distribution Support System - Repetitive Payment
System.
For purposes of this Schedule A, "component" shall be any of the seven
components listed above.
FEE OPTIONS: Pursuant to Section 12 of the Full Service Agreement, CLIENT
has the option to purchase a license to the mainframe version of the VANTAGE
System.
[CONFIDENTIAL]
