Exhibit 10.14
CLAIMS LIFE CYCLE
SERVICES AGREEMENT
This Claims Life Cycle Services Agreement ("Agreement") is effective as
of the 1st day of June, 1997 ("Effective Date") by and between Millers
Integrated Claims Resources, Inc. dba MiliRisk, a Texas corporation with
principal offices at 000 Xxxxxxx, Xxxx Xxxxx, Xxxxx 00000 ("MiliRisk"), and
Millers Casualty Insurance Company, a Texas corporation, having its principal
place of business at 000 Xxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxx 00000 ("Customer").
Whereas, Customer is desirous of MiliRisk providing Claims Life Cycle
Services for Customer as set forth in this Agreement;
Whereas, MiliRisk wishes to provide such Services for Customer; and
Whereas, the parties hereto wish to reduce their Agreement to writing;
Now, therefore, for and in consideration of the premises set forth
below and other good and valuable consideration, the receipt and sufficiency
of which is expressly acknowledged, Customer and MiliRisk hereby agree as
follows:
ARTICLE 1. SERVICES
The "Services" to be performed by MiliRisk are set forth in Exhibit I
to this Agreement.
ARTICLE 2. TERM
2.1 The term of this Agreement shall commence on the Effective Date and
shall have a "Minimum Term" of 36 full calendar months unless
terminated earlier pursuant to the provisions of this Agreement. The
Agreement shall automatically be renewed and extended after the
conclusion of the Minimum Term for an additional renewal term or
terms of 36 months unless terminated pursuant to the provisions of
Article 8.
2.2 The "Implementation Period" shall begin on the Effective Date of
this Agreement and shall end on the date MiliRisk notifies Customer
that MiliRisk is capable of receiving all future claims on behalf of
Customer. During the Implementation Period, MiliRisk shall prepare
an analysis of the lines of business for inclusion within the terms
of this Agreement. Customer shall assist MiliRisk during such
"Implementation Period" with the gathering of appropriate data,
information, background, and other facts as needed by MiliRisk to
enable MiliRisk to perform the Services enumerated in Exhibit I of
this Agreement.
ARTICLE 3. DUTIES OF MILIRISK
3.1 During the Implementation Period, MiliRisk shall design, construct
and implement software systems to provide claims administration,
management information, and other related services all of which are
as described in Exhibit I.
In addition, the Implementation Period will be used to assemble the
staff, arrange for furniture and fixtures and prepare for the start
of business. All procedures required to conduct business as well as
the requisite staff training will occur during this period.
3.2 MiliRisk shall dedicate the necessary human, equipment and computer
resources to provide and, during the term of this Agreement, will
provide Customer with the Services enumerated in Exhibit I of this
Agreement for the Lines of Business and States specified in Exhibit
I.
3.3 MiliRisk shall investigate, evaluate, and handle each claim reported
within the established authority for claims as set forth in Exhibit
I attached hereto and made part of the Agreement.
3.4 MiliRisk will designate an employee to act as liaison with Customer
to facilitate the provision of the Services.
3.5 MiliRisk shall maintain the confidentiality of data or information
which is the property of Customer and which is directly accessible
to MiliRisk in the implementation and performance of the Services.
3.6 MiliRisk shall maintain complete, accurate and orderly claim books,
files, records and accounts of all transactions in accordance with
generally accepted insurance and accounting practices.
3.7 MiliRisk shall maintain permanent copies of all claims and
correspondence related to the claims. MiliRisk shall not destroy
these permanent copies without the written permission of the
Customer for a period of at least five (5) years from the date of
the last file activity, or the period specified by the applicable
state statute regulating preservation of records, whichever is
longer. At the end of such five year period, upon MiliRisk's written
request for instructions, the Customer shall authorize MiliRisk to
either (a) destroy the closed files or (b) return such files to
Customer at Customer's expense. Notwithstanding the foregoing, any
claim file involving a minor shall be separately identified and
returned to Customer at the end of such five year period. Claim
files shall be the property of the Customer. Upon an order of
liquidation of Customer, the files shall become the sole property of
Customer or Customer's estate. MiliRisk may, at its discretion, use
magnetic, optical, and other types of technology to store such data.
3.8 All claims still open upon termination or cancellation of this
Agreement will require one of the following to occur:
a. All open claims will be handled on a pre-agreed annual fee per
claim; or
b. All open claims will be handled on a time and expense basis at
then current prevailing rates; or
c. All claims will be returned to Customer, with any holdover
reverting to a time and expense basis at then current
prevailing rates.
MiliRisk will make this determination at its discretion.
3.9 MiliRisk acknowledges and agrees that Customer, being at risk and
having ultimate responsibility for the claims to be administered by
MiliRisk, shall at all times have ultimate discretion with respect
to all matters pertaining to the claims.
3.10 MiliRisk will not assume the responsibility for direct notification
to any excess or quota share insurance carrier of a claim; however,
reports will be provided as required.
ARTICLE 4. DUTIES OF CUSTOMER
4.1 Customer agrees that all claims occurring during the term of this
Agreement will be reported to MiliRisk, unless otherwise notified by
the Customer and approved by MiliRisk. Customer will provide all
information relevant to claims to MiliRisk in order for MiliRisk to
fulfill its duties and obligations as set out in Exhibit I.
4.2 Customer shall appoint a Project Manager with sufficient authority
within Customer's organization to facilitate Customer's role as
MiliRisk performs the Services enumerated in Exhibit I of this
Agreement.
ARTICLE 5. AUDIT PROVISIONS
5.1 MiliRisk shall maintain records of amounts billable to and payments
made on behalf of Customer. In addition, MiliRisk shall maintain
records of the data utilized to perform the Services defined in
Exhibit I of the Agreement until five years following the date of
last file activity, or the period specified by the applicable state
statute, whichever is the later unless such records are earlier
returned to Customer. MiliRisk agrees to provide reasonable
supporting documentation concerning any disputed invoice amount to
Customer within 15 days after Customer provides written notification
of the dispute to MiliRisk. Customer and an auditor selected by
Customer shall have access to all such records upon mutually agreed
upon prior notice for the purposes of audit and verification during
normal business hours during the full term of this Agreement and
during the respective periods in which MiliRisk is required to
maintain such records.
MiliRisk shall provide access to its books, records and bank
accounts to the insurance department of the State of Florida in a
form usable by the department.
ARTICLE 6. PRICE AND PAYMENT
6.1 Customer agrees to pay Service Fees and Rates as specified in
Exhibit II hereto.
6.2 Except for Services Fees and Rates which are based upon a percentage
of incurred losses, the Services Fees and Rates in Exhibit II hereto
may be increased effective as of each anniversary of the Effective
Date during the existence of this Agreement by the percentage change
in the United States Consumer Price Index for all Urban Users
(CPI-U) published by the United States Bureau of Labor Statistics,
for the immediately preceding calendar year. In the event a vendor
supplying any service or product to MiliRisk required for MiliRisk
to provide the Services to Customer increases its rates charged to
MiliRisk, MiliRisk may increase the contracted rates set forth
herein to include such increased costs.
6.3 The Service Fees and Rates may increase if changes in the Services
mutually agreed to in writing substantially alter the servicing
personnel, equipment, or result in the servicing being done on a
different system.
6.4 When Customer requests MiliRisk personnel to travel to any location
for the purpose of performing work under this Agreement, the
Customer will, in addition to the charges specified for Services,
pay MiliRisk for all reasonable travel, living and out-of-pocket
expenses.
6.5 Customer agrees to pay all tariffs and taxes that are now or may
become applicable to the Services rendered hereunder, any equipment
used by MiliRisk solely for Customer communication line, its use,
lease, operation, control, transportation or value pursuant to this
Agreement, or as measured by payments made by Customer to MiliRisk
under this Agreement, or as required to be collected by MiliRisk or
paid by MiliRisk to tax authorities based on this Agreement. This
provision includes but is not limited to sales, use, and personal
property taxes, or any other form of tax based on Services
performed, equipment used, and the communicating or storage of data,
but does not include taxes based upon the net income of MiliRisk.
6.6 Service Fees and Rates for Services will be due and payable 15 days
after the close of a calendar month beginning the effective date of
the first policy issued.
6.7 Custom agrees that MiliRisk will have the right to renegotiate the
Service Fees in the event of statutory, regulatory, or judicial
changes that require additional activities not contemplated at the
inception of this Agreement.
ARTICLE 7. TRADE SECRET AND PROPRIETARY RIGHTS
7.1 Although MiliRisk from time to time may use its own proprietary
computer software products in the performance of the Services
enumerated in Exhibit I of this Agreement, this Agreement does not
grant a license to Customer for the use of any software products.
7.2 This Agreement grants to Customer no right to possess or reproduce,
or any other interest in, the computer software programs performing
all or any part of the Services or their specifications in any
tangible or intangible medium. Customer may not mortgage,
hypothecate, sell, assign, pledge, lease, transfer, license or
sublicense the computer software programs performing all or any part
of the Services, nor allow any person, firm, or corporation to
transmit, copy or reproduce the computer software programs
performing all or any part of the Services or their specifications
in whole or in part. In the event Customer shall come into
possession of the computer software programs performing all or any
part of the Services, Customer shall immediately notify MiliRisk and
return the computer software programs performing the Services and
all copies of any kind thereof to MiliRisk upon MiliRisk's request.
7.3 Customer promises and agrees not to disclose or otherwise make
computer software programs performing all or any part of the
Services available to any person other than employees of Customer
required to have such knowledge for normal use of them. Customer
agrees to obligate each such employee to a level of care sufficient
to protect the computer software programs performing all or any part
of the Services from unauthorized disclosure. THE OBLIGATION OF
CUSTOMER UNDER THIS ARTICLE SHALL CONTINUE AFTER THIS AGREEMENT IS
TERMINATED.
7.4 MiliRisk warrants and represents that it owns, or is licensed with
respect to, all software it will employ in the performance of this
Agreement. In the event this Agreement is terminated, MiliRisk will
grant a license, upon terms and conditions set forth in a licensing
agreement, to Customer and/or Clarendon to use the software which
MiliRisk employs in the performance of this Agreement to the extent
MiliRisk is not otherwise prohibited from doing so by contract or by
operation of law. MiliRisk shall use its best efforts to deliver the
software, as well as all necessary manuals, to the Customer
immediately upon delivery of data to the Customer.
ARTICLE 8. TERMINATION
8.1 Either party may terminate this Agreement without cause at the
expiration of the Minimum Term set forth in Section 2.1, provided
the other party receives at least six (6) months prior written
notice of termination. Termination without cause during any renewal
term would also require six months notice.
8.2 Either party may terminate this Agreement upon breach by the other
party of any one or more of the terms and conditions of this
Agreement or the related Exhibits, provided that the party in breach
is notified in writing by the other party of the breach and the
breach is not cured or a satisfactory resolution agreed upon in
writing within thirty (30) days of such written notification, or if
such breach is non-monetary and is of such a nature that it cannot
reasonably be cured within such time commenced to cure same and does
not diligently continue to and actually cure same within a
reasonable period thereafter. The terms and conditions of MiliRisk
referred to in this Section 8.2 shall include, but shall not be
limited to:
(a) the obligation to observe and comply with applicable laws,
regulations, rules and rates affecting the transaction of
business hereunder; and
(b) the obligation to provide any other Services under this
Agreement.
8.3 In the event either party makes a general assignment for the benefit
of creditors or files a voluntary petition in bankruptcy or
petitions for reorganization or arrangement under the bankruptcy
laws, or if a petition in bankruptcy is filed against either party
and remains undismissed for a period of thirty (30) days, or if a
receiver or trustee is appointed for all or any part of the property
and assets of either party, the other party may terminate the
Agreement immediately.
8.4 Rights Upon Termination. Upon expiration or termination of this
Agreement:
(a) The obligations of the Customer and MiliRisk to the date of
termination shall be discharged promptly.
(b) MiliRisk shall promptly return to the Customer any forms or
other supplies imprinted with the Customer's or Clarendon's
name, regardless of who incurred the cost for same.
(c) In any proceeding brought by the Customer to recover premiums
or return premiums or other funds due hereunder to Clarendon
or insureds under the policies (hereinafter called "trust
funds"), MiliRisk shall be obligated to account on its own
records for such trust funds and to pay all sums for which it
cannot account. In any such proceeding it shall be
conclusively presumed that MiliRisk is liable for trust funds
which have not been timely paid, and MiliRisk waives (i) any
right it may have to assert any counterclaim, crossclaim, or
set-off of any kind in the proceeding, and (ii) any claim or
defense based on or relating to its use of the Customer's
reporting procedures as provided for in this Agreement, or any
modification thereof. MiliRisk shall retain the right to
bring any separate proceeding it deems appropriate to recover
on any claims it may have as a creditor or otherwise, but the
pendency of any such proceeding shall not delay, hinder or
defeat the Customer's right to promptly recover any trust
funds then due or to levy upon any judgment therefore.
ARTICLE 9. LIMITATION OF LIABILITY AND REMEDIES
9.1 If data is processed in error due to an error or defect in the
Services provided by MiliRisk, then upon MiliRisk receiving notice
of such error or defect, MiliRisk shall reprocess such data without
charge to Customer.
9.2 MiliRisk shall indemnify, protect, defend and hold Customer, its
officers, directors, shareholders and employees harmless from and
against any and all losses, damages, liabilities, fines,
settlements, penalties and judgments (including reasonable costs and
attorney's fees) (herein "Damages") arising out of or resulting from
the negligent, wilful or intentional acts of MiliRisk performed in
connection with this Agreement or arising from a breach of this
Agreement by MiliRisk. Customer shall indemnify, protect, defend and
hold MiliRisk, its officers, directors, shareholders and employees
harmless from and against any and all Damages arising out of or
resulting from the negligent, willful or intentional acts of
Customer performed in connection with this Agreement or arising from
a breach of this Agreement by Customer. This indemnity shall survive
the earlier expiration or termination of this Agreement.
9.3 MiliRisk's liability to Customer for Damages arising from errors and
defects in performing the Services (whether the damage is based in
tort or contract, law or equity) is limited to an amount not to
exceed the usual and customary charges paid to MiliRisk under this
Agreement in any one month of this Agreement.
9.4 Customer's remedies and MiliRisk's liability for breaches of this
Agreement and errors or defects in the delivery of Services are
limited to the remedies and liabilities set forth in Sections 8.2,
9.1, 9.2 and 9.3 of this Agreement.
ARTICLE 10. GENERAL
10.1 The parties shall not be liable or deemed to be in default for any
delay or failure in performance under this Agreement or interruption
of Service resulting, directly or indirectly, from acts of God,
civil or military authority, labor disputes, shortages of suitable
parts, materials, labor or transportation or any similar cause
beyond the reasonable control of the parties.
10.2 All notices which are required to be given or submitted pursuant to
this Agreement shall be in writing and shall be either delivered in
person or sent by certified mail, return receipt requested, to the
address set forth herein or to such other address as the parties may
from time to time designate in writing for such purposes. Notices
shall be deemed to have been given at the time when personally
delivered or, if mailed in a certified post-paid envelope, upon the
fifth day after the date such notice shall be postmarked. All
notices to MiliRisk shall be addressed to the attention of the Chief
Financial Officer.
10.3 The parties covenant and promise not to disclose the terms and
conditions of this Agreement to any third party unless expressly
agreed to by the parties. Notwithstanding the foregoing, the parties
agree that disclosure may be made to any auditors, regulators,
carriers, or reinsurers on a need to know basis only without prior
consent.
10.4 This Agreement and any Exhibits made a part hereof: (a) constitute
the entire Agreement between the parties and supersede and merge any
and all prior discussions, representations, negotiations,
correspondence, writings and other Agreements and together state the
entire understanding and Agreement between MiliRisk and Customer
with respect to the Services described; (b) may be amended or
modified only in a written instrument agreed to and signed by
MiliRisk and Customer; and (c) shall be deemed to have been entered
into and executed in the State of Texas and shall be construed,
performed and enforced in all respects in accordance with the laws
of that state. For purposes of venue, this Agreement is performable
in Tarrant County, Texas.
10.5 Neither party hereto shall be deemed to have waived any rights or
remedies accruing to it hereunder unless such waiver is in writing
and signed by such party. No delay or omission by either party
hereto in exercising any right shall operate as a waiver of said
right on any future occasion. All rights and remedies hereunder
shall be cumulative and may be exercised singularly or concurrently.
10.6 The descriptive headings of this Agreement are intended for
reference only and shall not affect the construction or
interpretation of this Agreement.
10.7 Wherever the singular of any term is used herein it shall be deemed
to include the plural wherever the plural thereof may be applicable.
10.8 The parties shall not assign this Agreement or any of its rights
hereunder without the prior written consent of the other party which
consent shall not be unreasonably withheld unless the proposed
assignment is to a competitor of the other party.
10.9 If any provision of this Agreement or any Exhibit hereto or the
application thereof to any party or circumstances shall, to any
extent, now or hereafter be or become invalid or unenforceable, the
remainder of this Agreement shall not be affected thereby and every
other provision of this Agreement shall be valid and enforceable to
the fullest extent permitted by law.
10.10 In the event of any action between Customer and MiliRisk seeking
enforcement of any of the terms and conditions of this Agreement,
the prevailing party to such action shall be awarded its reasonable
costs and expenses, including its court costs and reasonable
attorney's fees.
10.11 The parties hereto are independent contractors of one another, and
they should not in any instance be construed as partners or joint
venturers.
MILIRISK AND CUSTOMER CERTIFY BY THEIR UNDERSIGNED AUTHORIZED AGENTS
THAT THEY HAVE READ THIS AGREEMENT, INCLUDING ALL EXHIBITS HERETO, AND AGREE
TO BE BOUND BY THEIR TERMS AND CONDITIONS.
EXECUTED to be effective the 30th day of June, 1997.
Millers Integrated Claims Millers Casualty Insurance
Resources, Inc. Company
By: /S/ XXXXXXX X. XXXXXXXX By: /S/ XXXXX X. MAY
--------------------------- -----------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxx X. May
Title: Vice President Title: Executive Vice President
EXHIBIT I
TO THE
CLAIMS LIFE CYCLE SERVICES AGREEMENT
BY AND BETWEEN
MILIRISK
AND
MILLERS CASUALTY INSURANCE COMPANY
A. SERVICES
During the term of this Agreement, MiliRisk shall provide the Claims Life
Cycle Services defined below for the Lines of Business (Section B of this
Exhibit I) for the States specified (Section C of this Exhibit I) written by
or through Customer. MiliRisk will, in accordance with guidance and direction
provided by the Customer, provide all Claims Life Cycle Services and general
management of these Services described herein for subject claims as follows:
1. Customer grants MiliRisk the authority to investigate, evaluate, and
handle each claim reported according to applicable state law, the terms
and conditions of the policy and any written standards provided by
Customer. MiliRisk shall not have any authority to alter or discharge
any policy or waive any policy provision or condition.
2. MiliRisk will set up a claims operation center that will function as a
control unit.
3. Loss reporting will be by toll free access provided to insureds and
agents.
4. Coverage will be verified on all cases.
5. MiliRisk will administer the appraisal/assessment process and will use
in this endeavor a combination of staff and vendors, adjusters, and
appraisers.
6. MiliRisk will perform all reasonable and necessary administrative and
clerical work in connection with claim or loss reports.
7. MiliRisk will establish and maintain a claim file for each reported
claim or loss with a copy of the policy for each reported claim. The
claim file will have a daily activity log which shall be reviewable at
any and all reasonable times by the Customer subject to the provisions
of Article V of the Agreement.
8. MiliRisk will provide the Customer with litigation management and will
have control of choice of counsel. MiliRisk will not abandon files to
the control and handling by defense counsel. MiliRisk will work with
counsel to determine the best course of action within a reasonable
budget and will continue to do best efforts adjusting/investigation
activities within the scope of authority granted by the Customer.
9. MiliRisk will record and report each claim promptly to the Customer
with a recommended reserve. MiliRisk shall consult with Customer with
respect to any of the following:
(a) Any loss or claim resulting in legal action being instituted
against MiliRisk or the Customer;
(b) Any loss or claim causing a complaint to be filed with any
regulatory authority;
(c) Any inquiry from any regulatory authority, including but not
limited to any insurance department, with respect to any claim or
claims, even if no complaint causes such inquiry;
(d) Any claim MiliRisk deems appropriate to deny policy coverage or
involves a coverage dispute;
(e) Any claim which might ultimately result in the payment(s) in
excess of the lesser of (i) Twenty-five thousand ($25,000)
dollars or (ii) an amount established by the Florida Department
of Insurance. In the event of such claim, MiliRisk shall forward
a copy of the claim file to Customer at its request;
(f) Any claim open for more than six months or involves an allegation
of extra contractual obligations;
(g) Any claim involving a fatality, amputation, spinal cord or brain
damage, loss of eyesight, extensive xxxxx, poisoning, or multiple
fractures; or
(h) Any claim involving a minor.
10. Within seven business days after the end of each calendar month,
MiliRisk will provide monthly, year-to-date and inception-to-date
reports on all claims activity, including new claims, claims closed
without payment, and changes to outstanding reserves as of the date
reported, all reported by Accident Year. The claim reports will include:
(a) Information and statistical data (i) required by Insurance
Services Office ("ISO"), and (ii) necessary for Clarendon to
prepare any reports required by the National Association of
Insurance Commissioners, or (iii) other reports reasonably
requested by Customer;
(b) Loss Runs with paid claims and outstanding reserves remaining at
the end of each monthly report period, categorized as indemnity,
medical payment, or loss adjustment expense, plus any other
information required by the Annual Statement instructions or
state regulatory agencies;
(c) Check Registers;
(d) Reserve Transaction Journal;
(e) Large Loss Listing, including cumulative paid and outstanding
reserves as of month end; and
(f) Aggregate Loss Runs (on a paid and incurred basis) by policy.
11. MiliRisk will perform a periodic review at mutually agreed upon
intervals of outstanding claim reserves, and recommend changes to
outstanding claim reserves.
12. MiliRisk will prepare checks and vouchers, compromises, releases,
agreements and any other documents reasonably necessary to finalize and
close claims. MiliRisk will issue payments of claims and allocate loss
adjustment expenses only on check of, and as authorized by, the
Customer.
For purposes of settling claims and paying claim related expenses,
Customer has agreed to establish, maintain and fund a separate bank
account from which MiliRisk may draw against as hereinafter set forth
(the "Claim Account"). MiliRisk shall not retain more than three months
estimated claims payments and allocated loss adjustment expenses in the
Claim Account.
Customer agrees to deposit additional funds into the Claims Account on
a weekly basis if necessary to maintain it at a level sufficient to
allow MiliRisk to carry out its obligations under this Agreement.
MiliRisk shall regularly provide information and estimates to Customer
to enable Customer to maintain the Claims Account at an appropriate
level. Customer shall provide to MiliRisk such information as is
necessary for MiliRisk to draw checks on the Claims Account.
MiliRisk hereby guarantees that any check it prepares will be signed
and issued only in accordance with the procedures adopted by Customer.
Any check prepared by MiliRisk on the Claims Account must be signed by
two authorized individuals.
MiliRisk shall maintain a daily register of checks drawn on the Claim
Account for each loss payment (the "Claim Register"). The Claim
Register shall include, for each claim and/or claimant, the claim
number, policy number, loss date, the name of payee, the date and check
number of the disbursement, and the amount and type or purpose of the
payment (i.e., indemnity, loss adjustment expense, etc.). MiliRisk
shall forward a copy of the Claim Register to Customer on a monthly
basis.
MiliRisk shall promptly deposit any monies collected through salvage
and subrogation to the Claim Account, and maintain a register of all
such collections and deposits (the "Salvage and Subrogation Register").
The Salvage and Subrogation Register shall include, but shall not be
limited to, the following information: date of deposit, date of receipt
of funds, the claim number, the payor, and the amount and purpose of
such payment.
MiliRisk shall reconcile the Claim Register and the Salvage and
Subrogation Register to the Claim Account on a monthly basis.
13. Service standards and claims documentation will be to standards set by
the Customer and agreed to by MiliRisk. At a minimum, MiliRisk will be
in compliance with all State regulations dealing with the adjusting and
handling of claims. MiliRisk will periodically review the development
of the claims handling procedure with the Customer to identify problems
and recommend corrective action.
14. MiliRisk will diligently pursue and prosecute Clarendon's salvage and
subrogation rights relating to any losses. MiliRisk will use all
reasonable efforts to collect and deposit funds arising from the
enforcement of such rights into the Claim Account. MiliRisk will report
monthly on salvage/subrogation receipts.
15. MiliRisk will provide Customer with a maximum of four (4) copies each
of the standard monthly Risk Management Information Reports (RMIS)
which are detail claims register, a loss run, check register, reserve
transaction journal, and a large loss listing. MiliRisk will also
provide Customer with data described in Exhibit III.
16. MiliRisk will produce 1099's per IRS regulations for vendors whose
services are not included within the basic fee for Claims Life Cycle
Services.
B. AUTHORIZED LINES OF BUSINESS:
Homeowners (HO3).
C. AUTHORIZED STATES:
Florida.
D. LOCATION OF PROVISION OF SERVICES:
MiliRisk shall provide the Services defined above at the MiliRisk
service center in Fort Worth, Texas and/or at a site in Florida.
EXHIBIT II
SERVICE FEES & RATES
CONSULTANT $125.00 per hour
PROGRAMMERS $125.00 per hour
CLAIMS LIFE CYCLE SERVICES
Fees will be based upon 7% of earned premium for non-catastrophe claims
and 5% of incurred loss for catastrophe claims.
IMPLEMENTATION PERIOD
Design, construction, and implementation of software systems to support
contract.
SPECIAL FEES
Claim system modifications will be charged to the Customer on a time
and materials basis utilizing the appropriate mix of service personnel
required to perform the modification. Additional reports or
modifications to agreed upon reports will also be charged to the
Customer on a time and materials basis utilizing the appropriate mix of
service personnel required to perform the modifications or produce new
reports. Hourly rates for such personnel are listed above.
LEGAL EXPENSES ARE EXCLUDED FROM ALL FEES AND WILL BE PASSED THROUGH TO
CUSTOMER.
GROSS DIRECT EARNED PREMIUM FOR THE BILLING MONTH AND INCURRED CATASTROPHE
LOSS, IF ANY, WILL BE THE BASIS OF FEES FOR THAT MONTH.
