MANAGEMENT SERVICES AGREEMENT
This Agreement is made by and between ReliaStar Life Insurance Company of New
York ("RLNY"), an insurance company organized and existing under the laws of New
York, and ReliaStar Life Insurance Company ("ReliaStar Life"), an insurance
company organized and existing under the laws of the State of Minnesota.
WHEREAS, RLNY and ReliaStar Life are affiliates under the common control of
ReliaStar Financial Corp. pursuant to the insurance laws of the State of New
York;
WHEREAS, RLNY and ReliaStar Life each possess distinct expertise in certain
administrative, management, professional, advisory, consulting and other aspects
of their respective insurance businesses ("Services");
WHEREAS, RLNY desires to perform certain Services on behalf of ReliaStar Life,
and ReliaStar Life desires to perform certain Services on behalf of RLNY;
WHEREAS, RLNY and ReliaStar Life contemplate that such an arrangement will
achieve operating economies, synergies and expense savings, and improve services
to the benefit of both the insureds of RLNY and ReliaStar Life; and
WHEREAS, RLNY and ReliaStar Life wish to identify the respective Services to be
provided to one another and to provide a method for identifying the charges to
be assessed and the compensation to be paid for such Services so provided (as
described with particularity in Attachments A, B and C hereto), and to assure
that all charges for the Services are reasonable and in accordance with the
applicable laws and regulations of the states where each company is domiciled.
THEREFORE, it is agreed as follows:
1. PERFORMANCE OF SERVICES. All services described in Attachments A and B and
the respective exhibits thereto shall be provided as requested from time to
time. After receiving a request by the requesting party ("Requesting
Party"), the other party (the "Providing Party") shall undertake and
provide the Services requested.
2. CONTROL TO REMAIN WITH REQUESTING PARTY. All Services to be performed
hereunder shall ultimately be the responsibility of the Requesting Party.
In no event shall such Services involve control of the management of the
business and affairs of the Requesting Party. In the event any Services
provided hereunder require the exercise of judgment by the Providing Party,
it will perform such Services in accordance with written standards and
guidelines developed by the Requesting Party. RLNY will maintain at its
Home Office in the State of New York qualified personnel, including an
officer, knowledgeable of and responsible for the functions which will be
performed by ReliaStar Life. RLNY's officers and directors shall, in
accordance with New York Insurance Law Section 1507, retain all obligations
and liabilities to which they are otherwise subject by law and shall ensure
that RLNY maintains a separate operating identity consistent with Chapter
28 of the New York Insurance Law.
3. COSTS. Services performed hereunder shall be performed in accordance with
the methodology for determining costs set forth in Attachment C.
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4. BILLING. The Providing Party shall present a ▇▇▇▇ to the Requesting Party
detailing the costs with supporting documentation of the amount owed for
Services performed during the preceding calendar month on or before the
15th day following the end of the month and payment will be due ten (10)
days thereafter. The Providing Party shall be responsible for maintaining
full and accurate accounting records of all Services rendered and
facilities used pursuant to this Agreement and such additional information
as the Requesting Party may reasonably request for purposes of its internal
bookkeeping and accounting operations. The Providing Party shall keep such
accounting records, insofar as they pertain to the computation of charges
hereunder, available for audit, inspection and copying by the Requesting
Party or any governmental agency having jurisdiction over the Requesting
Party during all reasonable business hours.
5. RIGHT TO AUDIT. The Requesting Party shall have the right at any reasonable
time to make an audit of the Services rendered and the amounts charged by
the Providing Party performing Services hereunder.
6. EFFECTIVE DATE OF AGREEMENT. This Agreement shall be effective as of June
1, 1999, and it shall replace, as of that date, any and all administrative
or management services agreements then in effect between the parties for
the Services covered by this Agreement.
7. TERM OF AGREEMENT. The term of this Agreement shall be one year from the
effective date hereof and shall automatically be renewed for one year
periods thereafter.
8. TERMINATION OF AGREEMENT. Either party may terminate this Agreement by
providing written notice to that effect addressed to the other party. Any
Services provided following the date of written notice of termination which
by their nature continue after such termination shall be provided under the
same terms and conditions which prevailed at the time of such notice.
9. BOOKS AND RECORDS. All books, records, and files established and maintained
by the Providing Party by reason of its performance under this Agreement
which, absent this Agreement, would have been held by the Requesting Party,
shall be deemed the property of the Requesting Party, and shall be subject
to examination by the Requesting Party and persons authorized by it at all
times. All such books, records and files shall be promptly transferred to
the Requesting Party upon termination of this Agreement at the expense of
the Providing Party. All books, records and files shall be maintained in
compliance with New York Regulation 152.
10. LICENSING AND AUTHORITY. The parties represent that they will obtain and
maintain all such licenses, permits, authorizations or approvals as are
necessary for each party to perform its obligations under this Agreement.
11. COMPLIANCE WITH LAWS. The Providing Party represents that it will observe
all laws and regulations applicable to the Requesting Party in connection
with the rendering of Services.
12. ASSIGNMENT. This Agreement and any rights pursuant hereto shall not be
assignable by either party hereto without the other party's prior written
consent. 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 covenants and agreements contained in this Agreement shall
be binding upon, extend to and inure to the benefit of the parties hereto,
and each of their successors and assigns respectively.
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13. GOVERNING LAW. This Agreement is made pursuant to and shall be governed
by, interpreted under, and the rights of the parties determined in
accordance with, the laws of the state of New York.
14. DISPUTE RESOLUTION. Any unresolved difference of opinion between the
parties arising out of or relating to this Agreement, or the breach
thereof, shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association
and the Expedited Procedures thereof, and judgment upon the award
rendered by the Arbitrator may be entered in any Court having
jurisdiction thereof. The arbitration shall take place in the State of
New York and the arbitrator(s) shall be unaffiliated with the parties
hereto. The costs of any such arbitration shall be split equally among
the parties.
15. INDEMNIFICATION. RLNY and ReliaStar Life each agree to indemnify and
hold each other harmless against all civil liability or regulatory
penalties, including attorneys' fees and costs of investigation and
defense incident thereto, arising as a result of its respective errors,
omissions, negligence, misrepresentation, fault or wrongful action, or
that of its respective affiliates, agents, officers, directors or
employees, including but not limited to, failure to comply with any
applicable federal or state law or regulation, in the performance of
any obligations hereunder.
16. ENTIRE AGREEMENT. This Agreement and the Attachments hereto, together
with such amendments as may from time to time be expected in writing by
the parties, constitute the entire agreement between the parties in
respect to the transactions contemplated hereby and supersedes all
prior agreements, arrangements an understandings related to the subject
matter hereof.
17. CONFLICT. In the event of a conflict between provisions of this
Agreement and any Attachments hereto, the terms of the Agreement shall
govern.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of this 1st day of June, 1999.
RELIASTAR LIFE INSURANCE RELIASTAR LIFE INSURANCE COMPANY
COMPANY OF NEW YORK
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President & CEO By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President & COO
Its: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Its: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------- -----------------------------------
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ATTACHMENT A
SERVICES TO BE PERFORMED BY RELIASTAR LIFE INSURANCE COMPANY
For purposes of this Attachment A, the following predecessor corporations to
ReliaStar Life Insurance Company of New York ("RLNY") shall be referred to
collectively as the "Predecessor Company":
Bankers Security Life Insurance Society
Lincoln Security Life Insurance Company
North Atlantic Life Insurance Company
ReliaStar Bankers Security Life Insurance Company
ReliaStar Life Insurance Company ("ReliaStar Life") will perform the services
described in this Attachment A and Exhibits A-1 through A-13, attached hereto
and made a part hereof, for RLNY for the following products marketed on an
individual basis or on a group basis (hereinafter collectively referred to as
the "Products"):
General account individual life and health insurance and annuity products
issued by RLNY or any Predecessor Company.
Separate account individual life insurance and annuity products issued by
RLNY or any Predecessor Company.
Group life and health insurance products issued by RLNY or any Predecessor
Company.
Separate account and general account group annuities issued by RLNY or any
Predecessor Company.
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EXHIBITS
A-1. UNDERWRITING AND NEW BUSINESS PROCESSING SERVICES
A-2. LICENSING AND CONTRACTING SERVICES
A-3. POLICYOWNER AND CLAIMS PROCESSING SERVICES
A-4. FINANCIAL MANAGEMENT SERVICES
A-5. REINSURANCE MANAGEMENT AND ADMINISTRATION SERVICES
A-6. ACTUARIAL SERVICES
A-7. INFORMATION SERVICES
A-8. LEGAL, RISK MANAGEMENT AND COMPLIANCE SERVICES
A-9. PRINTING, RECORD, FILE, MAIL AND SUPPLY SERVICES
A-10. HUMAN RESOURCE SERVICES
A-11. SALES PROMOTION AND MARKETING SERVICES
A-12. TAX SERVICES
A-13. GENERAL CORPORATE SERVICES
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A-1. UNDERWRITING AND NEW BUSINESS PROCESSING SERVICES
ReliaStar Life will provide the following Underwriting and New Business
Processing Services to RLNY with regard to the Products:
1. Underwriting and risk consulting services.
2. Analysis of underwriting standards.
3. Assistance and advice in the development of appropriate underwriting
standards in accordance with all laws and regulations of each state.
4. Perform underwriting if requested.
5. Review individual applications for conformity with underwriting
criteria.
6. Medical and/or technical support and advice related to underwriting.
7. Make underwriting judgments as necessary for rating classification
purposes.
8. Approve for issue all individual applications which meet underwriting
criteria.
9. Process all approved applications, and issue and deliver policies to
policyholders.
10. Maintain Compliance with New York Regulation 60.
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A-2. LICENSING AND CONTRACTING SERVICES
ReliaStar Life will provide the following Licensing and Contracting Services to
RLNY with regard to the Products:
1. Assist with pre-appointment investigations of producers and producer
practices.
2. Administer producer licenses, contracts, and compensation and maintain a
computer database for license and contract status.
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A-3. POLICYOWNER AND CLAIMS PROCESSING SERVICES
ReliaStar Life will provide the following Policyowner and Claims Processing
Services to RLNY for the Products:
1. ▇▇▇▇ policyholders.
2. Collect premiums.
3. Respond to customer inquiries by phone or letter.
4. Administer policy changes.
5. Administration and support services for claims.
6. Process claims and/or render legal, medical or technical support and
advise RLNY relating to the processing, settlement and payment of
claims.
7. Surrender, lapse and maturity processing.
8. Distribute benefits.
9. Maintain compliance with New York Registration 60.
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A-4. FINANCIAL MANAGEMENT SERVICES
ReliaStar Life shall provide the following Financial Management Services to
RLNY:
1. Consultation and technical assistance in all matters relating to
corporate financing, cash management, financial analysis and
specialized financial systems and programming.
2. Investment accounting services, including documentation and updating of
electronic data processing records for investment transactions such as
investment income, realized gain/loss, carrying value and
acquisition/disposal of each investment, recording financial activity
in existing investments and compliance reporting.
3. Consultation and technical assistance in coordinating the external
audit process, including negotiating and paying audit fees and
communicating audit recommendations to management.
4. Management reporting services, both with respect to internal and
external reports, including coordination of the annual planning
process, consolidation of monthly operation results, management and
policyholder information reports (e.g., annual reports), maintenance of
reporting systems and provision of cost account reports and services.
5. Premium accounting.
6. Assisting in the development of budgets and business plans.
7. Preparation of books of account including general ledgers, transaction
ledgers and trial balances which will be reviewed for accuracy by
officers of RLNY.
8. Preparation of financial statements and reports, including annual,
quarterly and monthly financial statements on both a statutory and GAAP
basis.
9. Preparation and dissemination of filings with regulatory entities and
rating agencies.
10. Development of financial models.
11. Advisory services with respect to RLNY capital and surplus.
12. Arrangement for one or more lockboxes.
13. Enter data regarding customer records information related to premium or
annuity considerations sent to lockboxes, provided that RLNY will
verify that all such information is accurate and properly reflected.
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14. Arrangement of bank accounts in the name and control of RLNY, and
processing receipts and disbursements subject to the direction and
control of RLNY.
15. Commission accounting, including calculation of commissions and
generation and delivery of checks.
ReliaStar Life will provide for RLNY at RLNY's principal office in Woodbury, NY
computer access to RLNY reports from the general ledger and general ledger
financial statement reporting system (collectively, the "Ledger Reports") used
by ReliaStar Life for RLNY pursuant to this Agreement. Such computer access at
RLNY's principal office to the Ledger Reports shall be equivalent to the access
to the Ledger Reports which is available to ReliaStar Life at its home office in
Minneapolis, Minnesota. ReliaStar Life will maintain format integrity and
compatibility of such Ledger Reports to ensure that they are current and
accessible. ReliaStar Life shall verify that all accounting transactions kept by
ReliaStar Life on behalf of RLNY are accurately prepared and reflected in the
Ledger Reports. This shall be accomplished by ReliaStar Life through
reconciliations of bank and other accounting records and by review of general
ledgers.
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A-5. REINSURANCE MANAGEMENT AND ADMINISTRATION SERVICES
ReliaStar Life will provide the following Reinsurance Management and
Administration Services to RLNY:
1. Reinsurance retrocession consulting services and supervisory and
clerical support to process business, and coverage under retrocession
contracts purchased to cover ReliaStar Life and its subsidiaries.
2. Advice with respect to reinsurance retention limits.
3. Advice and support with respect to the negotiation of reinsurance
treaties.
4. Advice and support with respect to the management of reinsurer
relationships.
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A-6. ACTUARIAL SERVICES
ReliaStar Life will provide the following Actuarial Services to RLNY:
1. Actuarial services, including clerical, technical and product actuarial
support and product development support. The above functions will be
performed to provide actuarial support relative to the operations of
RLNY and to assist in the consolidation of the actuarial certification,
including valuations and cash flow testing, for RLNY.
2. Prepare actuarial reports, opinions and memoranda and assist with
asset/liability management and cash flow testing.
3. Conduct product experience studies.
4. Prepare reserve calculations and valuations.
5. Develop new products.
6. Evaluate product performance versus expectations.
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A-7. INFORMATION SERVICES
ReliaStar Life will provide the following Information Services to RLNY:
1. Professional, technical, supervisory, programming and clerical support
for information services.
2. Informational and computer services provided by ReliaStar Life may be
in the nature of applications and programming support, enhancing
existing systems, helping to install new systems and centralized
computer systems.
3. Develop data processing systems strategy.
4. Implement systems strategy.
5. Program computers.
6. Provide data center services, including maintenance and support of
mainframe and distribution process hardware and software.
7. Standard systems for product administration, accounts payable,
accounting and financial reporting, human resource management and
inventory control.
8. Manage voice communication systems.
9. Manage data communications.
10. Manage local area network, e-mail and other desktop software and
systems.
11. Provide data security. ReliaStar Life shall maintain an effective
disaster recovery program to recover RLNY's data in the event of the
loss of the physical data center.
12. Purchase hardware, software and supplies.
Upon termination of this Agreement, and subject to the terms (including any
limitations and restrictions) of any applicable software or hardware licensing
agreement then in effect between ReliaStar Life and any licensor, ReliaStar Life
shall grant to RLNY a license for any software developed or used by ReliaStar
Life in connection with the services provided to RLNY hereunder; provided,
however, that such software is not commercially available, and is necessary, in
RLNY's reasonable judgement, for RLNY's performance of the functions which have
been provided by ReliaStar Life hereunder.
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A-8. LEGAL, RISK MANAGEMENT AND COMPLIANCE SERVICES
ReliaStar Life will provide the following Legal, Risk Management and Compliance
Services to RLNY:
1. ReliaStar Life's Law Division, under the direction of ReliaStar Life's
Senior Vice President and General Counsel, will provide to RLNY or its
counsel, advice and assistance in any matter of law, corporate
governance and governmental relations, including advisory and
consulting services, in connection with maintenance of corporate
existence, licenses, dealings with regulatory agencies, acquisitions,
sale of assets, development of products, contracts and legal documents,
product approvals, registration and filing of insurance and securities
products, handling of claims and matters involving legal controversy,
assist with dispute resolution, select, retain and manage outside
counsel, and provide other legal services as reasonably required or
requested.
2. ReliaStar Life's Risk Manager, or other staff of ReliaStar Life, under
the direction of ReliaStar Life's Senior Vice President and General
Counsel, will provide to RLNY advice, and assistance in any matter
relating to risk management, including RLNY's procurement of fidelity
bond insurance, blanket bonds, general liability insurance, property
damage insurance, directors' and officers' liability insurance,
workmen's compensation, and any other insurance purchased either
directly by RLNY or under policies purchased by ReliaStar Life for
itself and its subsidiaries.
3. ReliaStar Life's Law Division, under the direction of ReliaStar Life's
Senior Vice President and General Counsel, will assist in the
development and maintenance of a corporate compliance program and a
state insurance fraud reporting program. ReliaStar Life personnel will
assist RLNY to maintain appropriate records and systems in connection
with RLNY's compliance obligations under applicable New York law and
regulations.
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A-9. PRINTING, RECORD, FILE, MAIL AND SUPPLY SERVICES
ReliaStar Life will provide the following Printing, Record, File, Mail and
Supply Services to RLNY:
1. Maintain policy files.
2. Document control.
3. Produce standard forms.
4. Distribute standardized forms and other materials.
5. Arrange for warehouse storage space.
6. Supply fulfillment.
7. Mail processing, delivery and shipping.
8. Participate in national purchase agreements.
9. Retrieve and produce documents for federal and state regulatory
examinations and for litigation.
10. Develop and administer a records retention program.
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A-10. HUMAN RESOURCES SERVICES
ReliaStar Life will provide the following Human Resources Services to RLNY:
1. Personnel recruiting and support services.
2. Design and implementation of human resources training.
3. Compensation studies and benefits consulting.
4. Support employee communications.
5. Payroll services.
6. Benefits compensation design and administration.
7. Employee relations.
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A-11. SALES PROMOTION AND MARKETING SERVICES
ReliaStar Life will provide the following Sales Promotion and Marketing Services
to RLNY with regard to the Products:
1. Prepare sales promotional items, advertising materials and art work,
design, text and articles relevant to such work, including clerical,
technical and supervisory support and related communications.
2. Support general communications with producers.
3. Conduct formal insurance market research.
4. Develop sales illustrations, advertising materials, and software for
the Products in compliance with all applicable state laws and
regulations.
5. Design and implement training programs, including product and industry
developments and legal compliance.
6. Plan producer conferences.
7. Distribute to employees and/or agents underwriting guidelines for the
Products, where applicable.
8. Analyze and develop compensation and benefit plans for general agents
and agents.
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A-12. TAX SERVICES
ReliaStar Life shall provide RLNY the following Tax Services:
1. Maintenance of tax compliance, including tax return preparation and
consolidation, review of separate returns, and financial statement tax
provisions.
2. Management of tax audit and appeals, including processing information
requests, protest preparation, and participation in any appeals
conference.
3. Direction of tax research and planning, including research of
compliance issues for consistency, development of tax strategies for
consolidation, and working with new legislative proposals.
4. Administration of tax liens, levies and garnishment of wages of RLNY
employees and independent contractors.
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A-13. GENERAL CORPORATE SERVICES
ReliaStar Life, through its Chairman, President, Senior Executive Vice
President, Senior Vice Presidents, Vice Presidents, General Counsel and
Secretary, or through the staff of any of these officers, shall provide the
following General Corporate Services to RLNY:
1. Consultative and advisory services to RLNY's senior executive officers
and staff with respect to the conduct of RLNY's business operations
and the execution of directives and resolutions of RLNY's Board of
Directors pertaining to business operations and functions.
2. Consultation and participation in RLNY's strategic planning process,
including the development of business goals, objectives and policy,
the development of operations, administrative and quality programs,
and the coordination of such processes, goals, objectives, policy and
programs and those of the holding company's systems.
3. Common and shared management, including executive officers and other
senior management.
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ATTACHMENT B
SERVICES TO BE PERFORMED BY RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
ReliaStar Life Insurance Company of New York ("RLNY") will perform the services
described in this Attachment B and Exhibits B-1 through B-5, attached hereto and
made a part hereof, as well as other administrative services, for ReliaStar Life
Insurance Company ("ReliaStar Life") for the following products (hereinafter
collectively referred to as the "ReliaStar Life Products"):
Group or individual insurance products issued by ReliaStar Life and
marketed as payroll deduction products at the worksite.
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EXHIBITS
B-1. UNDERWRITING AND NEW BUSINESS PROCESSING SERVICES
B-2. LICENSING AND CONTRACTING SERVICES
B-3. POLICYOWNER AND CLAIMS PROCESSING SERVICES
B-4. INFORMATION SERVICES
B-5. SALES PROMOTION AND MARKETING SERVICES
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B-1. UNDERWRITING AND NEW BUSINESS PROCESSING SERVICES
RLNY will provide the following Underwriting and New Business Processing
Services to ReliaStar Life with regard to the ReliaStar Life Products:
1. Underwriting and risk consulting services.
2. Analysis of underwriting standards.
3. Assistance and advice in the development of appropriate underwriting
standards in accordance with all laws and regulations of each state.
4. Perform underwriting if requested.
5. Review applications for conformity with underwriting criteria.
6. Medical and/or technical support and advice related to underwriting.
7. Designate as ready for issue all applications that clearly fall within
underwriting criteria.
8. Process all applications and deliver policies to policyholders.
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B-2. LICENSING AND CONTRACTING SERVICES
RLNY will provide the following Licensing and Contracting Services to ReliaStar
Life with regard to the ReliaStar Life Products:
1. Assist with due diligence investigations of producers and producer practices.
2. Administer producer licenses, contracts, and compensation.
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B-3. POLICYOWNER AND CLAIMS PROCESSING SERVICES
RLNY will provide the following Policyowner and Claims Processing Services for
the ReliaStar Life Products to ReliaStar Life with the ReliaStar:
1. ▇▇▇▇ policyholders.
2. Collect premiums.
3. Respond to customer inquiries by phone or letter.
4. Administer policy changes.
5. Administration and support services for claims.
6. Process claims and/or render legal, medical or technical support and
advise ReliaStar Life relating to the processing, settlement and
payment of claims.
7. Surrender, lapse and maturity processing.
8. Distribute benefits.
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B-4. INFORMATION SERVICES
RLNY shall provide the following Information Services to ReliaStar Life:
1. Professional, technical, supervisory, programming and clerical support
for information services.
2. Informational and computer services provided by RLNY may be in the
nature of applications and programming support, enhancing existing
systems, helping to install new systems and centralized computer
systems.
3. Develop data processing systems strategy.
4. Implement systems strategy.
5. Program computers.
6. Provide data center services, including maintenance and support of
mainframe and distribution process hardware and software.
7. Standard systems for product administration, accounts payable,
accounting and financial reporting, human resource management and
inventory control.
8. Manage voice communication systems.
9. Manage data communications.
10. Manage local area network, e-mail and other desktop software and
systems.
11. Provide data security. RLNY shall maintain an effective disaster
recovery program to recover ReliaStar Life's data in the event of the
loss of the physical data center.
12. Purchase hardware, software and supplies.
Upon termination of this Agreement, and subject to the terms (including any
limitations and restrictions) of any applicable software or hardware licensing
agreement then in effect between RLNY and any licensor, RLNY shall grant to
ReliaStar Life a license for any software developed or used by RLNY in
connection with the services provided to ReliaStar Life hereunder; provided,
however, that such software is not commercially available, and is necessary, in
ReliaStar Life's reasonable judgement, for ReliaStar Life's performance of the
functions which have been provided by RLNY hereunder.
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B-5. SALES PROMOTION AND MARKETING SERVICES
RLNY will provide the following Sales Promotion and Marketing Services to
ReliaStar Life with regard to the ReliaStar Life Products:
1. Prepare sales promotional items, advertising materials and art work,
design, text and articles relevant to such work, including clerical,
technical and supervisory support and related communications.
2. Support general communications with producers.
3. Conduct formal insurance market research.
4. Develop sales illustrations, advertising materials, and software in
compliance with all applicable state laws and regulations.
5. Design and implement training programs, including product and industry
developments and legal compliance.
6. Distribute to employees and/or agents underwriting guidelines, where
applicable.
7. Analyze and develop compensation and benefit plans for general agents
and agents.
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ATTACHMENT C
COST ALLOCATION
Services performed under this Management Services Agreement shall be performed
for the costs set forth as follows:
A. Direct costs incurred by the Providing Party in providing the Services
and the cost of materials purchased for the benefit of the Requesting
Party shall be reimbursed by the Requesting Party at such cost.
B. Costs incurred by the Providing Party service areas, which allocate
cost among the various users of such services in proportion to the
services actually rendered to each user, shall be determined monthly
by the appropriate Providing Party servicing unit based on the
assessment of a mutually agreed upon operational or maintenance
servicing unit cost multiplied by the number of hours billed to, or
the volume of activity incurred by, the Providing Party service areas.
Such costs shall be reimbursed by the Requesting Party during the
month for Services rendered.
The determination of charges hereunder by the Providing Party shall be presented
to the Requesting Party, and if the Requesting Party objects to any such
determination, it shall so advise the Providing Party 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 the Requesting Party and shall, within a reasonable time, submit
such determination, together with the basis therefor, in writing to the
Providing Party and the Requesting Party, whereupon such determination shall be
binding. The expenses of such a determination by a firm of independent certified
accountants shall be borne equally by ReliaStar Life and RLNY.
Each party shall from time to time perform cost analyses to determine, as
closely as possible, the actual cost of services rendered and facilities made
available pursuant to this Management Services Agreement. Each party shall
forward to the other information developed by these analyses, and such
information shall be used to develop bases for the distribution of expenses
which more currently reflect actual costs incurred.
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