Exhibit 8c
AMENDED AND RESTATED
SERVICE AGREEMENT
for
services rendered to
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
by
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
ADMINISTRATIVE SERVICES AGREEMENT
---------------------------------
This Administrative Services Agreement ("Agreement") is made effective as of
12:01 a.m. Eastern Standard Time, on the lst day of January, 1998 ("Effective
Date") by and between The Lincoln National Life Insurance Company, an Indiana
corporation with offices at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxx
00000 ("Lincoln") and Lincoln Life & Annuity Company of New York, a New York
corporation with offices at 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxx Xxxx,
00000 ("LLANY").
WHEREAS, Lincoln has extensive experience in the operation of the life insurance
and annuity business; and
WHEREAS, Lincoln and LLANY are currently parties to other administrative
services agreements; and
WHEREAS, Lincoln and LLANY desire to terminate those other services agreements
and have this Agreement supersede them; and
WHEREAS, pursuant to an Administrative Services Agreement between Connecticut
General Life Insurance Company ("Seller") and LLANY that is being executed
concurrently with this Agreement (the "Administrative Services Agreement"),
LLANY has agreed to provide all
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administrative services with respect to the Coinsured Contracts as that term is
defined in the Administrative Services Agreement ("CG Services"); and
WHEREAS, LLANY has previously underwritten and sold and desires to underwrite
and sell in the future insurance policies and annuity contracts including the
types of policies and contracts for which LLANY is providing CG Services
(the "LLANY Business"); and
WHEREAS, LLANY desires Lincoln to perform LLANY's CG Services and to provide
services to LLANY with respect to the LLANY Business (collectively, the
"services") and desires further to make use in its day-to-day operations of
certain property, equipment and facilities (collectively, the "facilities") of
Lincoln as LLANY may request with respect to the services; and
WHEREAS, Lincoln and LLANY contemplate that such an agreement for services will
achieve certain operating economies and improve services to the benefit of both
of the companies and with respect to the CG Services to Seller's policyholders,
and with respect to the LLANY Business to LLANY's policyholders; and
WHEREAS, Lincoln and LLANY wish to assure that all charges for services and the
use of facilities incurred hereunder are reasonable and in accordance with all
applicable legal requirements, including 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
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WHEREAS, Lincoln and LLANY wish to identify the services to be rendered to LLANY
by Lincoln and the facilities to be used by LLANY, and to provide a method of
fixing bases for determining the charges to be made to LLANY;
NOW, THEREFORE, in consideration of the premises and of the mutual promises set
forth herein, and intending to be legally bound hereby, Lincoln and LLANY agree
as follows:
1. PERFORMANCE OF SERVICES AND USE OF FACILITIES. Subject to the terms,
conditions and limitations of this Agreement, Lincoln agrees to the extent
requested by LLANY to perform diligently and in a professional manner such
services as set forth in this Agreement as LLANY determines to be
reasonably necessary in the conduct of its insurance and annuity
operations.
Subject to the terms, conditions and limitations of this Agreement, Lincoln
agrees to the extent requested by LLANY to make available to LLANY such of
its facilities as LLANY may determine to be reasonably necessary in the
conduct of its insurance and annuity operations, including data processing
equipment, business property (whether owned or leased) and communications
equipment.
Lincoln agrees at all times to maintain sufficient facilities and trained
personnel of the kind necessary to perform this Agreement.
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(a) CAPACITY OF PERSONNEL AND STATUS OF FACILITIES. Whenever Lincoln utilizes
its personnel to perform services for LLANY pursuant to this Agreement,
such personnel shall at all times remain employees of Lincoln subject
solely to its direction and control, and Lincoln shall alone retain full
liability to such employees for their welfare, salaries, fringe benefits,
legally required employer contributions and tax obligations.
No facility of Lincoln used in performing services for or subject to use by
LLANY 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 Lincoln, Lincoln shall
perform any such service in accordance with any standards and guidelines
LLANY develops and communicates to Lincoln. In performing any services
hereunder, Lincoln shall at all times act in a manner reasonably calculated
to be in or not opposed to the best interests of LLANY.
(c) CONTROL. The performance of services by Lincoln for LLANY pursuant to this
Agreement shall in no way impair the absolute control of the business and
operations of Lincoln or LLANY by their respective Boards of Directors.
Lincoln shall act hereunder so as to assure the separate operating identity
of LLANY.
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2. SERVICES. The performance of Lincoln under this Agreement with respect to
the business and operation of LLANY shall at all times be subject to the
direction and control of the Board of Directors of LLANY. In providing
services with respect to this Agreement, Lincoln agrees that any and all
personal contact or communication, both oral and written, with LLANY's or
Seller's policyholders and beneficiaries will be done in the name of and on
behalf of LLANY or Seller, as the case may be. No mention of Lincoln will
be made in any such personal contact or communication with LLANY's or
Seller's policyholders and beneficiaries. Lincoln agrees to use LLANY's
letterhead for all written communication with LLANY's policyholders and
beneficiaries. Lincoln further agrees to use LLANY's letterhead for all
written communication with Seller's policyholders and beneficiaries and
such communication will (i) show the name, address and telephone number of
Seller, (ii) disclose in the letterhead of such correspondence that LLANY
is acting as the administrative agent of Seller in connection with the
Coinsured Contracts, as, that term is defined in the Administrative
Services Agreement, and (iii) confirm that Seller remains as their insurer
and is responsible for the payment of all benefits under the Coinsured
Contracts. Lincoln further agrees that if any of its employees who have
direct contact with LLANY's or Seller's policyholders and beneficiaries
perform such services from a location outside the State of New York-,
Lincoln will establish and maintain a toll-free 800 telephone number for
use by LLANY's or Seller's policyholders and beneficiaries.
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Subject to the foregoing and to the terms, conditions and limitations of
this Agreement, Lincoln shall perform on LLANY's behalf the CG Services and
in particular shall perform on LLANY's behalf, all of LLANY's obligations
and duties to Seller as those duties and obligations are specified in the
Administrative Services Agreement.
Subject to the foregoing and to the terms, conditions and limitations of
this Agreement, Lincoln shall also provide to LLANY, at LLANY's request,
insurance related services typically performed by a life insurance company,
including the services set forth below with respect to the LLANY Business.
(a) ACCOUNTING, DATA PROCESSING, TAX AND AUDITING. Under the general
supervision of the Board of Directors and management of LLANY, and provided
that (i) the records and transactions are reviewed by LLANY, (ii) the final
product is verified by LLANY and (iii) Lincoln shall cause LLANY's Chief
Administrative Officer or his designee to be familiar with all of the
details of the Services provided, including accounting and adjusting
entries, Lincoln shall provide accounting services including but not
limited to the following: (x) preparation of the financial statements and
reports, including annual statements, on both statutory and GAAP bases, and
tax returns, (y) maintenance of the related financial records, and (z)
processing financial transactions of LLANY. Lincoln shall also provide such
assistance as may be required with respect to tax and auditing services.
Such auditing services shall include not only review of financial records
but may also include review of specific functions and activities in order
to ensure compliance with LLANY's established policies. This auditing
provision shall
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not apply to LLANY's audit of Lincoln's services pursuant to this
Agreement.
(b) FUNCTIONAL SUPPORT SERVICES. Lincoln, when requested by LLANY, shall
provide functional support services including but not limited to: (i)
actuarial services, including rate and profit share analysis, product
research and development, counseling on reserving requirements, work
required for or in support of rate and/or form submissions, actuarial
certifications and advice with respect to reinsurance, (ii) services
associated with the establishment, maintenance, registration with
appropriate government agencies, and administration of separate accounts,
including calculation of the net asset value of units of the separate
accounts, (iii) services associated with the generation and mailing of Form
1099, (iv) services in support of the ERISA, 403(b) and 401 (k) plans, (v)
services in connection with the management of bank accounts, (vi)
telecommunications services and electronic data processing services,
facilities and integration, including software programming and
documentation and hardware utilization, (vii) legal services, including
representation of LLANY in the prosecution or defense of actions and in the
negotiation and preparation of contracts and other 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, (viii) purchasing, (viv) printing, forms management,
distribution, mailings and bulk handling, (x) employee relations services,
including payroll processing, employee benefit plan design and
administration, compensation design and administration, and recruiting of
personnel other than agents, (xi) reinsurance administration services, and
(xii) other corporate services including but not limited to escheat
processing, property and casualty insurance
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evaluation and procurement, office design services and lease negotiation.
(c) POLICYHOLDER SERVICE. Lincoln, when requested by LLANY, shall provide
policyholder services including but not limited to activities involving
personal contact or communication with a policyholder or beneficiary,
activities relating to policy loan applications and payments, surrender
requests including computation of benefits payable, policy conversions,
beneficiary changes, policy changes, requests for general information,
preparation and mailing of disbursements, preparation and mailing of
periodic reports and statements, dividend computations, premium payments,
policy lapses, expires, nonforfeitures, reinstatements, consumer complaints
and other related policyholder services.
In addition, when requested by LLANY, Lincoln shall provide advice on
unique or complex policyholder services issues with respect to insurance
and annuity products transacted by LLANY.
(d) COLLECTION SERVICES. With regard to the collection of premiums, deposits
and other remittances from policyholders (including payments of principal
or interest on contract loans) and from any collection facility, including
Intermediaries and other persons or institutions that receive remittances
with respect to LLANY Business, LLANY shall either perform these services
on its own behalf or shall establish a lock-box bank arrangement in its
name for the deposit of amounts collected. If a lock-box arrangement is
used, LLANY may authorize Lincoln to disburse funds from the lock-box
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arrangement.
(e) UNDERWRITING AND ISSUE SUPPORT. Lincoln, when requested by LLANY, shall
provide underwriting functions and services including but not limited to
review of applications for policies and policy amendments, MIB review,
medical review, review of rates, advice regarding issuance of policies and
amendments and other related services.
In addition, when requested by LLANY, Lincoln shall provide to LLANY advice
with respect to complex or unique underwriting and risk management issues
and issues concerning issuing insurance and annuity contracts in accordance
with the terms of their respective applications.
With respect to any underwriting services that are provided to LLANY by
Lincoln pursuant to this Agreement, it is understood that: (i) Lincoln
shall provide such services in accordance with the underwriting guidelines
and procedures of LLANY; and (ii) LLANY shall retain all final underwriting
authority.
(f) CLAIMS ASSISTANCE. Lincoln, when requested by LLANY, shall assist LLANY by
processing, examining and investigating claims. In addition, when requested
by LLANY, Lincoln shall provide advice to LLANY concerning LLANY's claims.
It is understood that: (i) Lincoln shall provide such services in
accordance with the claims guidelines and procedures of LLANY; and (ii)
LLANY shall retain final approval authority for all claims. In performing
claims services for LLANY pursuant to this
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agreement, Lincoln shall obtain and maintain all necessary licenses and
permits required in order to comply with applicable laws and regulations.
(g) PUBLIC RELATIONS, ADVERTISING, SALES AND MARKETING PROMOTIONAL SERVICES.
Lincoln, when requested by LLANY, shall provide marketing assistance and
services, including sales aids, rate guides, sales brochures, solicitation
materials and such other promotional materials, information, assistance and
advice as shall assist the sales, public relations and advertising efforts
of LLANY, as well as services in connection with and in support of broker
and distributor licensing, contracts and compensation. In addition, when
requested by LLANY, Lincoln shall provide to LLANY advice with respect to
issues regarding public relations, advertising, sales and marketing.
3. CHARGES. LLANY agrees to reimburse Lincoln for services and facilities
provided by Lincoln to LLANY pursuant to this Agreement. The charge to
LLANY for such services and facilities shall be at cost and shall include
all direct and directly allocable expenses, reasonably and equitably
determined to be attributable to LLANY by Lincoln, 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 3, the bases for
determining such charges to LLANY shall be those used by Lincoln for
internal cost distribution including, where appropriate, time records
prepared at least annually for this purpose.
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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 Lincoln on behalf of LLANY.
Cost analyses will be made at least annually by Lincoln to determine, as
closely as possible, the actual cost of services rendered and facilities
made available to LLANY hereunder. Lincoln shall forward to LLANY 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 Lincoln on behalf of
LLANY.
Lincoln's determination of charges hereunder shall be in accordance with
New York Insurance Department Regulation 33 to the extent applicable and
shall be presented to LLANY, and if LLANY objects to any such
determination, it shall so advise Lincoln 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 LLANY and shall, within a reasonable time, submit
such determination, together with the basis therefor, in writing to Lincoln
and LLANY, 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 Lincoln and LLANY.
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4. PAYMENT. Lincoln shall submit to LLANY within thirty (30) days of the
end of each calendar month a written statement of the amount estimated to
be owed by LLANY for services and the use of facilities pursuant to this
Agreement in that calendar month, and LLANY shall pay to Lincoln 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, Lincoln
will submit to LLANY a detailed written statement of the charges due from
LLANY to Lincoln 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 LLANY.
5. STANDARD OF CARE. The parties shall use that degree of ordinary care and
reasonable diligence in the performance of services hereunder that an
experienced and qualified provider of similar services under a similar
services agreement would use acting in like circumstances and familiar with
such matters and in accordance with such additional standards as may be
adopted by LLANY from time to time and communicated to Lincoln, including
industry standards and applicable laws. Furthermore, the parties agree to
maintain backup systems and contingency plans to assure that work
stoppages, fires, riots, equipment, utility or transmission failures,
shortage or damage, acts of God or other similar occurrences do not
jeopardize the integrity of the data maintained on behalf
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of the other party. Each party warrants it will maintain such systems in
conformity with corporate and prudent business standards.
6. ACCOUNTING RECORDS AND DOCUMENTS. Lincoln 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 LLANY may reasonably request for purposes of its internal
bookkeeping and accounting operations. Lincoln shall keep copies of 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 LLANY and persons authorized by it or any governmental agency
having jurisdiction over LLANY during all reasonable business hours.
With respect to accounting and statistical records prepared by Lincoln by
reason of its performance under this Agreement, such records shall be
delivered to LLANY within thirty (30) days from the end of the month to
which the records pertain.
7. OTHER RECORDS AND DOCUMENTS. All books, records, and files established and
maintained by Lincoln by reason of its performance under this Agreement
which, absent this Agreement, would have been held by LLANY, shall: (i) be
deemed the property of LLANY; (ii) be maintained in accordance with
applicable law and regulation, including, but not limited to, New York
Insurance Department Regulation 152 (11 NYCRR Part 243); and (iii) be
subject to examination at all times by LLANY and persons authorized
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by it or any governmental agency having jurisdiction over LLANY.
With respect to original documents which would otherwise be held by LLANY
and which may be obtained by Lincoln in performing under this Agreement,
Lincoln shall deliver such documents to LLANY within thirty (30) days of
their receipt by Lincoln, except where continued custody of such original
documents is necessary to perform hereunder.
8. RIGHT TO CONTRACT WITH THIRD PARTIES. Nothing herein shall be deemed to
xxxxx Xxxxxxx an exclusive right to provide services to LLANY, and LLANY
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 LLANY pursuant to this
Agreement.
9. CONTACT PERSON(S). LLANY and Lincoln 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.
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10. TERMINATION. This Agreement shall remain in effect until terminated by
either Lincoln or LLANY upon giving thirty (30) days or more advance
written notice, provided that LLANY 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, Lincoln shall promptly deliver to
LLANY all books and records that are, or are deemed by this Agreement to be
the property of LLANY.
Application software and all copies thereof developed by Lincoln for
LLANY's use shall become, and that developed by LLANY and provided to
Lincoln for LLANY's exclusive use shall remain, the property of LLANY in
perpetuity. To the extent allowed by applicable law, LLANY shall have the
same rights as Lincoln in any other software or copies thereof obtained by
Lincoln under license from third party vendors. LLANY may purchase other
software or copies thereof from third party vendors for its exclusive use
on Lincoln's equipment if LLANY so desires. Lincoln agrees that any
software or copies thereof purchased by LLANY and used by Lincoln in
connection with this Agreement shall remain the property of LLANY.
11. SETTLEMENT ON COMPLETE TERMINATION. No later than thirty (30) days after
the effective date of Complete Termination of this Agreement, Lincoln shall
deliver to LLANY 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
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refunded hereunder shall be due and payable within thirty (30) days of
receipt of such statement.
12. 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.
13. 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.
14. 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
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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.
15. INDEMNIFICATION. LLANY and Lincoln agree to hold each other harmless and to
indemnify each other against any and all extra-contractual liability and
any related loss, damage, expense, costs, cause of action, demand, penalty,
fine or claim (including cost of litigation or administrative proceeding
and counsel fees) arising out of or related to any of the services provided
hereunder to the extent the same are caused by the act or failure to act of
the indemnifying party.
16. 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 Lincoln, to:
The Lincoln National Life Insurance Company
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
(b) If to LLANY, to:
Lincoln Life & Annuity Company of New York
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxx Xxxx 00000
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or to such other persons or places as each party may from time to time
designate by written notice sent as aforesaid.
17. 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. For
the avoidance of doubt, all previous administrative services agreements
between LLANY and Lincoln are hereby terminated and superseded in their
entirety by this Agreement.
18. SECTION HEADINGS. Section headings contained herein are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
19. 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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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in
duplicate by their respective officers duly authorized to do so, as of the date
and year first above written.
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
By /s/ Xxxxx X. Xxxx
-------------------------------------------
Xxxxx X. Xxxx
Vice President and Chief Financial Officer
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
By /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
President
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APPENDIX A
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CONTACT PERSON(S) FOR Lincoln
President
CONTACT PERSON(S) FOR LLANY
President
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