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EXHIBIT 1.A.(9)
SERVICE AGREEMENT
BETWEEN
XXXXXXX XXXXX INSURANCE GROUP, INC.,
FAMILY LIFE INSURANCE COMPANY
AND
XXXXXXX XXXXX LIFE INSURANCE COMPANY
This Service Agreement is entered into as of the 29th day of November,
1990 between Family Life Insurance Company, a Washington corporation ("FLIC"),
Xxxxxxx Xxxxx Life Insurance Company, a Washington corporation ("MLLIC") and
Xxxxxxx Xxxxx Insurance Group, Inc., a Delaware corporation, for itself and for
its affiliates other than FLIC and MLLIC ("MLIG").
W I T N E S S E T H:
WHEREAS, FLIC is a wholly-owned subsidiary of MLIG, and MLLIC is a
wholly-owned subsidiary of FLIC, and
WHEREAS, each party to this Agreement desires to utilize certain
services to be provided by the other parties in carrying out certain of their
respective corporate functions, and
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WHEREAS, each party is willing to furnish, or cause its affiliates to
furnish, such services on the terms and conditions hereinafter set forth;
NOW THEREFORE, the parties do hereby mutually agree as follows,
effective as to FLIC and MLLIC respectively, only so long as it is an affiliate
of MLIG:
1. Each party will provide or contract or arrange with any of its
affiliates for the providing of, as available, services as listed in Exhibit I
hereto, if and to the extent requested by the other. Exhibit I may be
modified from time to time by agreement between the parties.
2. For services provided, the service recipient agrees to pay the
service provider:
(a) the amounts as may be specified in one or more
Schedules, pertaining to particular categories of services, as may be executed
by the parties and attached to and incorporated into this Agreement; or
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(b) if not so specified, to pay those charges (direct and
indirect) and expenses incurred by the service provider which, as reasonably
determined by the service provider and demonstrated to the reasonable
satisfaction of service recipient, reflect actual cost of such services to the
service provider, provided that
(1) charges and expenses for personnel shall be
based on a reasonable allocation of the time
spent on service recipient matters relative
to time spent on other matters;
(2) charges and expenses for property or other
services shall be based on a reasonable
allocation of the proportion of and period of
time such property or services is utilized
for service recipient matters relative to
that utilized for other matters, and;
(3) no charges or expenses shall exceed those
charged by the service provider in the
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relevant market for comparable personnel,
property or services as the case may be.
After the end of each month, the service provider will send the service
recipient a xxxx covering service charges and expenses which have been
incurred, or the amount of which has been ascertained, during such month, and
the service recipient will pay for such charges and expenses upon receipt of
the xxxx.
3. The books, accounts and records of MLIG, its affiliates
providing services hereunder, FLIC and MLLIC as to all transactions hereunder
shall be maintained so as to clearly and accurately disclose the nature and
details of the transactions, including such accounting information as is
necessary to support the reasonableness of the charges, expenses or fees
hereunder. The service recipient shall have the right, at its own expense, and
at any reasonable time, to make an audit of the services rendered and the
amounts charged therefor.
4. The term of this Agreement shall commence as of the date
hereinabove indicated and continue until December 31, 1990, and thereafter
shall be deemed to be renewed automatically, upon
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the same terms and conditions, for successive periods of one year each, until
any party, at least 60 days prior to the expiration of the original term or of
any extended term, shall give written notice to the other parties of its
intention not to renew the Agreement, provided that, notwithstanding the
foregoing, electronic data processing services will be made available to the
service recipient for up to six months following any such termination, if the
service recipient shall so request.
5. It is understood that (a) MLIG, any of its affiliates or
subsidiaries, will invest for their own account and may act as investment
advisor for others and that MLIG or such others or persons or organizations
affiliated with MLIG could have investment interests adverse to the interests
of FLIC or MLLIC in the same or related investments; (b) MLIG is not obligated
to make available to FLIC or MLLIC any particular investment opportunity which
comes to MLIG or its subsidiaries or affiliates, regardless of whether such
opportunity is consistent with the investment policies of FLIC or MLLIC; and
(C) FLIC and MLLIC shall retain full control over their respective investment
activities, and MLIG or any of its affiliates or subsidiaries shall have no
power or authority by virtue of this Agreement,
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whether as agent or otherwise, to obligate or commit FLIC or MLLIC for the
acquisition or disposition of any investment.
6. All differences between MLIG, FLIC and MLLIC on which
agreement cannot be reached will be decided by arbitration. The arbitrators
will interpret this Agreement in accordance with the usual business practices,
rather than strict technicalities or rules of law. Three arbitrators will
decide any differences. They must be officers of life insurance companies
other than the parties to this agreement, their parents, subsidiaries and
affiliates. One of the arbitrators is to be appointed by service provider and
one by the service recipient, and these two will select a third. If the two
are unable to agree on a third, the choice will be left to the President of the
American Council of Life Insurance or its successor organization. The
arbitrators' decision will be by majority vote and no appeal will be taken from
it. The costs of the arbitration will be borne by the losing party unless the
arbitrators decide otherwise.
7. No assignment of this Agreement shall be made by any party
without the consent of the other parties.
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8. Subject to the foregoing Clause 7, this Agreement shall inure
to the benefit of and be binding upon the successors and assigns of the parties
hereto.
9. This Agreement shall supersede the Management Services
Agreement between FLIC and MLLIC dated April 28, 1986.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
XXXXXXX XXXXX INSURANCE GROUP, INC.
By: /s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxxx
FAMILY LIFE INSURANCE COMPANY
By: /s/ XXXXX X. XXXXXXXXX
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Xxxxx X. Xxxxxxxxx
XXXXXXX XXXXX LIFE INSURANCE COMPANY
By: /s/ XXXXX X. XXXXXXXXX
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Xxxxx X. Xxxxxxxxx
0000XX0
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XXXXXXX I
To Service Agreement
Between MLIG, FLIC and MLLIC
Personnel, Property and Services (except as provided under separate agreements
of Schedules):
1. Accounting and auditing.
2. Actuarial.
3. Administration.
4. Advertising, marketing and public relations.
5. Claims (pursuant to the service recipient's
guidelines and subject to final approval by the
service recipient.
6. Corporate Secretary.
7. Development of software programs.
8. Electronic data processing.
9. Financial and cash advice or management.
10. Investment advisory or management.
11. Legal.
12. Office and general supplies.
13. Payroll services.
14. Personnel.
15. Premium billing and collection.
16. Printing.
17. Product design and development.
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18. Regulatory filings and reports.
19. Storage.
20. Underwriting (pursuant to the service recipient's
guidelines and subject to final approval by the
service recipient).
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