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ADMINISTRATIVE SERVICE AGREEMENT
Between: Investors Marketing Group, Inc.*
Jacksonville, Florida
known as IMG
and: Republic-Vanguard Life Insurance Company
Dallas, Texas
known as RVL
Effective: September 24, 1996
* In California - dba IMG of Florida Insurances Services
In Utah - dba Investors Marketing Group Insurance Agency
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THIS AGREEMENT is effective 9/24/96, and is by and between IMG and RVL.
WHEREAS, IMG is in the business of marketing and administering Annuity
Insurance.
WHEREAS, RVL intends to issue Annuity Policies with IMG serving as
Administrator.
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement and upon the terms and conditions contained in this Agreement, RVL
and IMG agree as follows:
1. RVL hereby appoints IMG as exclusive Administrator to perform the duties
described in this agreement and IMG hereby accepts such appointment. Such
appointment shall extend to Annuity policies. This appointment will
hereinafter be referred to as the Program.
2. IMG will handle all functions relating to issuance and servicing of RVL's
Annuity policies, including, but not limited to, marketing and agency
support, licensing and contracting of agents, policy issue and
policyowner service, claims and disbursements, and processing of
pertinent accounting and actuarial data. Officers of IMG (as designated
by RVL) shall have authority to execute such Annuity policies on behalf
of RVL. Operating procedures will be mutually agreed upon by IMG and
RVL.
3. IMG shall maintain adequate records sufficient to enable RVL to determine
plans and other pertinent data for insurance in effect.
4. IMG will forward to RVL monthly settlement reports with appropriate net
check by the tenth (10th) of the month for the preceding month showing
premiums collected, disbursements made, fees due IMG, and any other
information agreed upon beween RVL and IMG.
5. IMG shall allow RVL to monitor IMG operations through mail audits, and
on-site inspections by RVL. IMG shall cooperate with RVL with respect to
any such inspections and audits. RVL shall assume all financial
responsibilities for such inspections and audits except IMG agrees to be
responsible for all cost and expenses associated with the use of IMG
employees for such in-house inspections and audits.
6. IMG shall conform to the reasonable rules of RVL in its method of
conducting business which are communicated in writing. IMG shall comply
with all state insurance department regulations
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and laws pertaining to the Program and maintain the necessary licenses as
may be required.
7. All documents, books, and records pertaining to the Program shall be the
sole property of RVL, and they will be maintained at the IMG principal
office for the duration of this Agreement and for a period of six (6)
months following the termination of the Agreement. IMG and RVL agree
that RVL shall at all times have access to all records that are the
property of RVL and which are the subject matter of this Agreement. They
shall be open for inspection by RVL and any Insurance Regulators
authorized by law at all reasonable times during the continuation of the
Annuity Agreement and, in the event of termination of this Agreement,
they shall be available for inspection until all matters related to the
administration of the Annuity policies are resolved to the satisfaction
of RVL and IMG. RVL may make copies of the files on the policyholders as
to whom any problems or questions have arisen regarding coverage,
premiums or any other matter pertaining to the coverage of a particular
policyholder.
8. IMG shall submit for RVL's prior written approval or rejection, all
printed materials which relate to or could affect RVL obligations under
Annuity policies issued by RVL. Reference in this Agreement to "prior
written approval" of RVL shall be deemed to mean approval by an officer
of RVL.
9. Each party hereby agrees to indemnify and hold the other party harmless
from and against all losses, costs, damages and expenses (including
attorney's fees and extra-contractual damages, subject to the provision
below) which the other party may incur by reason of any demand or action
by any person arising out of the indemnifying party's negligence in the
performance of its duties hereunder. IMG shall indemnify and hold RVL
harmless from any liabilities, fines or causes of action made or brought
against RVL as a result of IMG's failure to comply with applicable state
laws or maintain necessary licenses as may be required.
10. Notwithstanding anything to the contrary, any contract or agreement made
by IMG with parties other than RVL shall not be binding upon nor involve
RVL unless RVL specifically agrees to it in writing.
11. IMG, with prior written approval from RVL, may contract with any third
party(ies) for performance of administrative functions required of IMG
under this Agreement provided that:
a. No such contract shall constitute an assignment or transfer of this
Agreement in its entirety; and
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b. No such contract shall relieve IMG of primary responsibility for
compliance with all terms and conditions of the Agreement.
12. As consideration for IMG's performance of the duties set forth in this
Agreement, IMG shall be entitled to the administrative allowances/fees
shown in the attached Exhibit A. These allowances are subject to review
and negotiation as mutually agreed upon.
13. Effective dates of this Agreement are from 9/24/96, through 12/31/96.
This Agreement shall automatically renew for subsequent terms of one year
beginning 1/1/97 unless terminated as follows:
a. RVL shall have the right to terminate this Agreement upon the
bankruptcy, reorganization or receivership of IMG; or
b. IMG shall have the right to terminate this Agreement upon the
bankruptcy, reorganization or receivership of any insurance company
which constitutes RVL; or
c. Either party shall give to the other party one hundred eighty (180)
days notice prior to the end of the initial or any subsequent term.
14. Upon termination in accordance with paragraph 16 of this Agreement,
IMG shall cooperate with RVL in transferring to RVL copies of all
documents, books and records pertaining to the Annuity policies if such
are determined by RVL to be necessar y. RVL agrees to bear the
reasonable cost of any such transfer of information.
15. Whenever this Agreement is terminated for any reason, RVL and IMG shall
be entitled to all fees and investments relative to the services provided
hereunder.
16. Should the parties to this Agreement engage in a dispute concerning the
terms of the Agreement, then the following arbitration rules will apply:
a. It is the intention of the parties that the customs and usages of
the business of insurance shall be given full effect in the
interpretation of this Agreement. The parties shall act in all
things with the highest good faith. A dispute or difference between
the parties with
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respect to the operation or interpretation of this Agreement on
which an amicable understanding cannot be reached shall be decided
by arbitration. The arbitrators are empowered to decide all
questions or issues and shall be free to reach their decisions from
the standpoint of equity and customary practices of the insurance
and reinsurance industry rather than from that of strict law. The
board of arbitration shall meet in Jacksonville, Florida.
b. To initiate arbitration, a party shall send by certified mail,
return receipt requested, to the other party's home office a notice
demanding arbitration. The notice shall include the issues for
decision and the remedies sought. The party receiving the notice
shall thereafter have thirty days within which to respond in
writing.
c. There shall be three arbitrators who shall be active or retired
officers of life insurance companies other than the contracting
companies or their affiliates. An arbitrator may not be a present
or former employee, officer, attorney, or consultant of either of
the contracting companies or their affiliates.
d. Each of the contracting companies shall appoint one of the
arbitrators and these two arbitrators shall select the third. In
the event that either contracting company should fail to choose an
arbitrator within thirty days after the response to the demand for
arbitration, the other contracting company may choose two
arbitrators, who shall in turn choose a third arbitrator before
entering arbitration. If the two arbitrators are unable to agree
upon the selection of a third arbitrator within thirty days
following their appointment, each arbitrator shall nominate three
candidates within ten days thereafter, two of whom the other shall
decline and the decision shall be made by drawing lots.
e. If more than one insurer/reinsurer is involved in the same dispute,
all such insurers/reinsurers shall constitute and act as one party
for purposes of the arbitration, and communication shall be made by
Investors Marketing Group, Inc. to each of the insurers/reinsurers
constituting the one party, provided that nothing therein shall
impair the rights of such insurers/reinsurers to assert several,
rather than joint, defenses or claims, nor be construed as changing
the liability of the insurers/ reinsurers under the terms of this
Agreement from several to joint.
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f. The arbitrators shall decide by a majority of votes and from their
written decision there can be no appeal. The cost of arbitration,
including the fees of the arbitrators, shall be borne by the losing
party unless the arbitrators dec ide otherwise.
17. This Agreement shall be governed by the laws of the State of Florida.
IN WITNESS WHEREOF, the parties have had their respective officers execute
this Agreement in duplicate below.
Investors Marketing Group, Inc. Republic-Vanguard Life Insurance Jacksonville,
Florida Company,
Dallas, Texas
9/26/96 9/26/96
______________________________ ________________________________
Date Date
/s/ Xxxxx X. Xxxxxx /s/ Xxxx Xxxxx
______________________________ _________________________________
By Xxxxx X. Xxxxxx By Xxxx Xxxxx
Executive Vice President Senior Vice President
______________________________ ________________________________
Title Title
/s/ Xxxxx Xxxxxxx /s/ Xxxxxx Xxxxx
______________________________ ________________________________
Witness Witness
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SCHEDULE A
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TO BE DETERMINED
