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Exhibit 8 (b)
Service Agreement
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SERVICE AGREEMENT
WHEREAS Canada Life Insurance Company of New York (hereinafter called
"the Company") has filed a Plan of Operation with the New York Insurance
Department dated December 13, 1971.
AND WHEREAS it is contemplated that the Canada Life Assurance Company
(hereinafter called "the Servicer") will perform all or part of certain
functions for the Company, which functions, without limiting the generality of
the foregoing, include
1. Marketing functions
2. Field Service functions
3. Underwriting and Policy Issue Functions
4. Actuarial functions
5. Investment functions
6. Policyholder Service functions
7. Policy Accounting functions
8. General Accounting functions
9. Death Claim functions
all as more particularly described in said Plan of Operation, a copy of which is
annexed hereto and shall form part of this agreement,
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IT IS NOW HEREBY AGREED by and between the Company and the
Servicer that
A. The Servicer shall perform the functions contemplated in the said
Plan of Operation and such other functions as may be agreed upon
between the parties hereto, all hereinafter referred to as
"service functions",
B. Activities carried out by the Company which are in the nature of
auditing and verification of service functions performed by the
Servicer hereunder shall be at the sole expense of the Company.
C. The method of allocating costs hereunder shall be in accordance
with Regulation 33 of the New York State Insurance Department and
shall be determined in the following manner,
(1) The cost of service functions performed by the Servicer
which are identifiable as expenses incurred directly and
exclusively for the benefit of the Company shall be charged
to the Company,
(2) The cost of service functions performed by the Servicer
which are not identifiable as expenses incurred directly
and exclusively for the benefit of the Company shall be
determined by a
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cost accounting division of the Home Office expenses of the
Servicer in accordance with the principles set forth in
Appendix A attached to this Agreement. At the request of
the Company, and at its expense, the Servicer shall produce
records and provide access to enable the Company to verify
that the said cost accounting division is in accordance
with the said principles.
D. The Company shall reimburse the Servicer the total of the costs of
the service functions performed by the Servicers periodically
throughout each fiscal year at the request of the Servicer based
upon the Servicer's estimates of such total costs. A final
adjustment shall be made within 30 days after completion of the
Servicer's annual cost analysis.
E. Either party to this Agreement may terminate this Agreement
(a) with respect to "service functions" to be performed by the
Servicer which involve the use of its electronic data
processing equipment, by giving six months' notice in
writing and
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(b) with respect to other "service functions" by giving 30
days' notice in writing.
IN WITNESS WHEREOF this agreement is signed in duplicate, on the dates
indicated, at the home office of each company.
CANADA LIFE INSURANCE COMPANY OF NEW YORK
Date December 14, 1971 By /s/ Xxxxxx X. Xxxxx
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Vice-President
THE CANADA LIFE ASSURANCE COMPANY
Date December 9, 1971 By /s/ X. X. Xxxxx
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Senior Vice-President and Secretary
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APPENDIX A
With respect to the service functions performed by the Servicer, the
costs to be charged to the Company shall be determined and calculated as
follows:
1. The Servicer shall follow, in general, its long-established procedures
and practices in the allotment of expenses by line of business and
country in respect to annual statements to Canadian and United States
governments, tax calculations and internal Company statements, making use
of cost accounting procedures, work studies, and analysis of accounts, to
divide its Home Office expenses between Individual Ordinary, Individual
Health and Group lines of business, and into various functions.
2. There shall be deducted from the total Home Office expenses of the
Servicer all expenses which are identifiable with or attributable to the
Servicer's business in the United Kingdom and Ireland.
3. Pursuant to the Servicer's procedures and practices above mentioned, the
balance of the Servicer's Home Office expenses shall be divided between
(a) Individual Ordinary business functions, divided into 21 sections,
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(b) Investment functions,
(c) Individual Health business functions, and
(d) Group life and health lines of business.
4. From the total expenses for each function or line of business performed
by the Servicer, as measured in 3 above, there shall be deducted
(a) expenses which are directly identifiable with or attributable
to services performed by the Servicer for the exclusive benefit of
the Company, and
(b) expenses which are directly identifiable with or attributable to
services performed by the Servicer for the exclusive benefit of
the Servicer.
5. The portion attributable to the Company of the said balances of the
Servicer's Home Office expenses will be found by proration as set out in
the Table following:
Function Basis of Proration
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Acquisition - On new business credit, a measure
of production roughly equivalent to
new commissions.
Selection - 25% of total prorated on new sums
assured issued and paid for.
- 75% of total prorated on number of
new policies issued and paid for.
Policy Issue - On number of new policies issued and
paid for.
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Function Basis of Proration
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Premium Collection - On number of premium payments.
Commission Accounting - On number of premium payments.
Dividend Work - On mean number of participating
contracts in force.
Policy Changes - On mean number of contracts in force.
Death Benefits - "
Matured Endowments - "
Cash Surrenders - "
Lapses, Cancelled by
Auto Loan, Expiries - "
Disability Claims - "
Reinstatements - "
Policy Valuation - "
Preparation of Special
Settlements - "
Annuity & Option
Payments - On mean vested annuities in force.
Conservation - On mean number of premium-paying
contracts in force.
Taxation Work - On mean number of contracts in force.
General Insurance - On total direct insurance maintenance
Maintenance expenses.
Insurance Overhead - On total insurance expenses.
Investment Work including
Investment Overhead
(a) Securities - On mean dollar amount of securities
asset.
(b) Mortgages - On mean dollar amount of mortgage
asset.
(c) Policy Loans - On mean dollar amount of policy loan
asset.
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Function Basis of Proration
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Individual Health
(a) Acquisition - On new business credit.
(b) Maintenance - On mean number of contracts in force.
(c) Claims and - On mean number of contracts in force.
Payments
