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EXHIBIT 10.93
CLAIM SERVICE AGREEMENT
This Agreement is entered into this 15th day of June, 1996, by and between
Claims Control Corporation, hereinafter referred to as "CCC," and United
Capitol Insurance Company, hereinafter referred to as "UCIC."
This Agreement shall constitute authorization for CCC to investigate and adjust
all claims on behalf of UCIC, subject to the following terms and conditions:
1. APPLICATION
Claim adjustment authority shall apply to all claims UCIC policies which are
referred by UCIC to CCC for adjustment.
2. SERVICES
CCC shall investigate, reserve, adjust, settle and process all claims and
losses to which this Agreement applies, in accordance with specified limits of
authority, attached hereto and made a part of this Agreement, and pursuant to
all rules, instructions and procedures hereafter supplied to CCC by UCIC. Any
or all such materials and/or instructional information may be amended or
supplemented by UCIC from time to time either by written or verbal notice.
3. INDEPENDENT CONTRACTOR
CCC shall perform these services as an independent contractor, and nothing
contained herein shall in any way be construed to constitute an employment
relationship between UCIC and either CCC or CCC's employees. CCC shall provide
whatever staff, office facilities and supplies necessary for the performance of
all services contemplated by this Agreement at its own expense.
4. DILIGENCE
CCC shall perform its duties hereunder faithfully and to the best of its
knowledge, skill and judgment, and shall comply with such reasonable
instructions as it may receive from time to time from UCIC relating to the
subject matter of this Agreement. CCC shall abide by all applicable laws, rules
and regualtions of all insurance regulatory authorities.
5. LITIGATION/ADJUSTER ASSIGNMENT
Legal services on claims will be provided only by qualified attorneys-at-law
who have substantial experience in the handling of claim litigation of the type
involved. Outside adjuster services on claims will be provided only by
qualified licensed insurance adjusters who have substantial experience in the
handling of claim adjusting of the type
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involved. Where possible, CCC will utilize legal counsel and claim adjusters
selected or authorized by UCIC.
6. RECORD MAINTENANCE
CCC shall accurately enter and keep current all information and all data
captured by CCC's automated claim system or contained in the claim file.
All costs associated with the maintenance of data will be the responsibility of
CCC. UCIC shall pay for any additional programming required to generate reports
that are not currently available through CCC's computer system. However, CCC
shall not incur such costs without the prior approval of UCIC.
CCC will provide UCIC with a monthly list of reported claims, including related
policy numbers, dates of loss, report dates, incurred and payment transactions
and such other reports and information as UCIC may reasonably request.
7. AUDIT
UCIC shall have the right to review and audit any or all claim files to which
this Agreement applies, whether open or closed, that are handled by CCC. Such
reviews and audits will take place not less than twice each calendar year, but
may, at UCIC's discretion, be conducted more frequently. CCC shall furnish
facilities in their office for such reviews and audits, or shall forward such
files that are requested to a designated UCIC office for review.
8. FINES AND PENALTIES
Payment of all penalties and fines assessed by a Department of Insurance, or
other applicable insurance regulatory authorities, that pertain to files handled
under this Agreement by CCC and are the result of CCC's failure to comply with
the requirements of any "Unfair Claims Settlement Practices" regulations or
other applicable laws and regulations, shall be the responsibility of CCC.
Payment of all penalties and fines assessed by a Department of Insurance, or
other applicable insurance regulatory authorities, that pertain to files handled
under this Agreement by CCC and are the result of UCIC's failure to comply with
the requirements of any "Unfair Claims Settlement Practices" regulations or
other applicable laws and regulations, shall be the responsibility of UCIC.
9. SUBROGATION
CCC shall have both the obligation and authority to identify and pursue
opportunities for subrogation on all appropriate claims in accordance with
UCIC's subrogation policies.
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10. LOSS AND EXPENSE PAYMENT
Loss and expense payment will emanate from CCC in accordance with the claim
accounting system established by UCIC.
CCC shall have check signing authority only as specifically authorized in
writing by UCIC.
CCC shall provide a list of payments, including claim number, payment amount,
payee, date of loss and payment type within two (2) working days of request by
UCIC.
11. REFERRAL TO UCIC
Notwithstanding the authority granted to CCC pursuant to this Agreement, the
following questions or issues must be referred to UCIC for prior approval before
further action or final settlement:
a. Catastrophic claims (head trauma; brain damage; spinal injuries resulting in
paraplegia, quadriplegia, or paralysis; xxxxx in excess of 35% of body);
b. Reinsurance reportable claims (claims with a combined loss and expense
incurred and incurred in excess of $750,000);
c. Fraud investigations where fraud related expense is likely to exceed
$10,000;
d. All civil filings against UCIC or its parent;
e. Actual or potential conflicts of interest of CCC.
12. ULTIMATE AUTHORITY
Notwithstanding, any other provision of this Agreement, UCIC shall retain and
have ultimate control and responsibility of the functions delegated to CCC
pursuant to this Agreement. Moreover, notwithstanding any other provision of
this Agreement, UCIC shall retain ultimate authority over the adjusting and
settling of claims and, with respect to any claim or loss of any amount, UCIC
may, at any time prior to the final settlement of such claim or loss, take over
the entire defense and control of such claim or loss.
13. HOLD HARMLESS
CCC shall be responsible for the acts and omissions of its employees, agents,
and subcontractors. CCC shall protect, defend, indemnify and hold harmless UCIC
from and against any and all claims and demands (including attorneys' fees
and/or costs in connection therewith) for damages, fines or penalties directly
or indirectly resulting from any act, omission, or negligence of CCC occurring
in the performance of its obligations under this Agreement.
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UCIC shall be responsible for the acts and omissions of its employees, agents,
and subcontractors (other than those who also are agents or subcontractors of
CCC). UCIC shall protect, defend, indemnify and hold harmless CCC from and
against any and all claims or demands (including attorneys' fees and/or costs
in connection therewith) for damages, fines or penalties directly, or
indirectly, resulting from any act, omission, or negligence of UCIC occurring
in the performance of its obligation under this Agreement.
14. ADDITIONAL INSURED
During the term of this Agreement and until all CCC's duties hereunder have
expired, CCC shall make UCIC an additional named insured under a Fidelity Bond
in an amount not less than $1,000,000, covering all employees, agents,
officers, and directors of CCC to the exclusive benefit of UCIC, and provide
UCIC at all times, with evidence that such Fidelity Bond is in force, with a
copy thereof. Further, CCC shall carry Errors and Omissions insurance in the
amount of $1,000,000.
15. SERVICE FEES
In consideration of CCC's satisfactory performance in processing claims, as
specified in this Agreement, UCIC shall pay CCC a per claim service fee based
upon the following fee schedule or as mutually agreed upon between UCIC and
CCC. Service fees are reviewed annually from the inception of this Agreement.
Changes in fees will be effective only based on an written addendum to this
Agreement.
Claim Manager/Examiner..................................$74.00/Hr.
Supervising Claim Manager (all supervisory/management)..$83.00/Hr.
Claims Deductible Processor.............................$50.00/Hr.
Clerical (including transcription)......................38% of total hours
billed for Claim
Manager/Examiner and
Supervising Claim
Manager
Travel..................................................Actual Expense
Mileage.................................................$ .31 (or IRS allowable)
Photos..................................................$3.00 each
Police/Fire/Indexes Bureau/Paramedic Reports and
other reports/items necessary to support the
development of a claim..................................Actual Cost
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16. TERMINATION
Either CCC or UCIC may terminate this Agreement at any time with not less than
sixty (60) days prior written notice to the other party, stating the date as of
which such termination shall be effective.
Upon termination of this Agreement, UCIC shall have the option of assuming
control and handling of all open, pending claims or continuing CCC
administration, at the agreed upon fee schedule, until claim resolution. Upon
termination of this Agreement, all files and all information and data stored in
CCC's automated claim system will be printed and promptly delivered to UCIC in
claim file format.
17. BINDING ARBITRATION
In the event of any dispute regarding the interpretation and enforcement of
this Agreement, CCC and UCIC shall seek remedy via binding arbitration, subject
to the rules and regulations of the American Arbitration Association.
Arbitration fees and costs of the prevailing party shall be borne by the
non-prevailing party.
18. ASSIGNMENT
Neither party to this Agreement may assign this Agreement without the express,
prior written permission of the other party.
19. OWNERSHIP OF ACCOUNTS AND RECORDS
Notwithstanding any other provision of this Agreement, UCIC shall own and have
custody of its general corporate accounts and records.
20. TERM
The term of this Agreement shall commence on the date first stated above and
shall remain in full force and effect for five (5) years, unless earlier
terminated as provided in Section 16 hereof.
Date: June 15, 1996
CLAIMS CONTROL CORPORATION UNITED CAPITOL INSURANCE COMPANY
a California corporation a Wisconsin corporation
By: [SIG] By: [SIG]
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Its: Secretary/General Counsel Its: President
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SCHEDULE OF LIMITS OF AUTHORITY RECORDS
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FILE SET UP
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Notice of new losses will be supplied to United Capitol Insurance Company
("UCIC") by monthly Bordeaux. Loss information will consist of the file number,
policy number, name of insured, date of loss, claimant name, loss reserve and
expense reserve.
REPORTING TO COMPANY
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- Pertinent parts of file
- Files with loss reserves in excess of $25,000
- All claims involving catastrophic injury
- All losses reported to reinsurers
- Fraud investigations where expense exceeds $10,000
- Any civil filings against UCIC
- Claims when coverage is being denied
ASSIGNMENT OF ADJUSTERS/ATTORNEYS
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UCIC will authorize the use of defense counsel except for those geographic
areas that have less than two case assignments per calendar year. Claims
Control Corporation is granted the authority to make assignments to Independent
Adjusters without prior approval by UCIC.
RESERVE AUTHORITY
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Claims Control Corporation shall not set any claim or claim expense reserve
exceeding the sum of $25,000 with UCIC's prior approval.
SETTLEMENT AUTHORITY
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Claims Control Corporation shall not pay or commit UCIC to pay a claim over the
sum of $25,000 net of reinsurance, without UCIC's prior approval.
COVERAGE/DECLINATION AUTHORITY
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Claims Control Corporation shall have the authority to issue reservation of
rights letters without the prior approval of UCIC. Claims Control Corporation
shall also have the authority without the prior approval of UCIC to decline
coverage where such declination of coverage involves the interpretation of
policy wording. All other declinations of coverage must have the prior written
approval of UCIC.
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CLAIMS PAYMENTS
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All payment vouchers or checks for payment of claims exceeding the sum of
$25,000 shall be signed by at least one officer of UCIC, and such signature
shall be deemed to be approved by UCIC of such claim payment.
CLAIM LISTING
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- Separate register
- Insured, claimant, loss + expense reserves
- Open/closed status, reserves and payments
