MIDDLE MARKET CLAIMS SERVICE AGREEMENT Between LIBERTY MUTUAL INSURANCE COMPANY AND PEERLESS INSURANCE COMPANY Dated: January 1, 2010
Exhibit 10.66
LIBERTY MUTUAL INSURANCE COMPANY
AND
PEERLESS INSURANCE COMPANY
Dated:
January 1, 2010
TABLE OF CONTENTS
| Article | ||||
ARTICLE I APPOINTMENT; REGULATORY APPROVALS |
1 | |||
Section 1.1 Appointments |
1 | |||
Section 1.2 Regulatory Approvals |
1 | |||
ARTICLE II SERVICES PROVIDED BY AGENCY MARKETS |
1 | |||
ARTICLE III PERFORMANCE ON SERVICES |
2 | |||
ARTICLE IV COMPANY’S RESPONSIBILITIES |
3 | |||
Section 4.1 Duty to Oversee |
3 | |||
ARTICLE V BOOKS AND RECORDS |
3 | |||
Section 5.1 Books and Records Maintained by Agency Markets |
3 | |||
Section 5.2 Property of Liberty Mutual |
3 | |||
ARTICLE VI THE RELATIONSHIP BETWEEN LIBERTY MUTUAL
AND AGENCY MARKETS |
3 | |||
ARTICLE VII SERVICE FEES AND EXPENSES |
4 | |||
Section 7.1 Fees and Expenses |
4 | |||
Section 7.2 Cost Recovery by Agency Markets |
4 | |||
Section 7.3 Accounts and Disbursements |
4 | |||
ARTICLE VIII INDEMNIFICATION |
4 | |||
Section 8.1 Dispute Resolution |
4 | |||
Section 8.2 Indemnification by Agency Markets |
7 | |||
Section 8.3 Indemnification by Liberty Mutual |
7 | |||
Section 8.4 Indemnification Procedure |
7 | |||
Section 8.5 Insurance |
7 | |||
ARTICLE IX TERMINATION |
7 | |||
Section 9.1 Mutual Agreement |
7 | |||
Section 9.2 Termination by Agency Markets |
7 | |||
Section 9.3 Termination by Liberty Mutual |
7 | |||
Section 9.4 Return of Books and Records |
7 | |||
Section 9.5 No Prejudice |
7 | |||
Section 9.6 Transition Period |
7 | |||
ARTICLE X CONFIDENTIALITY |
8 | |||
ARTICLE XI MISCELLANEOUS |
10 | |||
Section 11.1 Assignment |
10 | |||
Section 11.2 Amendments and Waivers |
10 |
Section 11.3 Entire Agreement |
10 | |||
Section 11.4 Governing Law |
10 | |||
Section 11.5 Notices |
10 | |||
Section 11.6 No Third Party Beneficiaries |
11 | |||
Section 11.7 Counterparts |
11 | |||
Section 11.8 Interpretation |
12 | |||
Section 11.9 Legal Enforceability |
12 |
THIS
CLAIMS SERVICE AGREEMENT, effective as of January 1, 2010 (“Service Agreement”), is
made and entered into by and between Liberty Mutual Insurance Company, a Massachusetts insurance
company with offices at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, on behalf of itself and its
affiliates when operating as the Middle Market strategic business unit (“Liberty Mutual”) and
Peerless Insurance Company a New Hampshire insurance company with offices at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ operating on behalf of itself, its subsidiaries and affiliates as Liberty Mutual
Agency Markets (“Agency Markets”).
WITNESSETH
WHEREAS, Liberty Mutual is a business unit within the Liberty Mutual Group, a group of
insurers and associated companies engaged in the transaction of insurance and other related
enterprises (“Liberty Mutual Group”); and
WHEREAS, Agency Markets is also a member of the Liberty Mutual Group engaged in the
transaction of property and casualty insurance business in the United States; and
WHEREAS, the parties believe it is mutually beneficial to have Agency Markets provide certain
claims adjusting and related services for and on behalf of Liberty Mutual.
NOW, THEREFORE, in consideration of the mutual promises and undertakings hereinafter set forth, the
parties do agree as follows:
ARTICLE I
APPOINTMENT;
REGULATORY APPROVALS
APPOINTMENT;
REGULATORY APPROVALS
Section 1.1 Appointment. Liberty Mutual hereby appoints Agency Markets as a
non-exclusive contractor to provide Liberty Mutual with the Services (as defined herein), on the
terms and subject to the conditions set forth herein. Agency Markets hereby accepts such
appointment, on such terms and subject to such conditions.
Section 1.2 Regulatory Approvals. It shall be a condition to the effectiveness of
this Service Agreement that Liberty Mutual shall have obtained approval of this Service Agreement
from those state insurance departments or other regulatory authorities, the approval of which is
required for the effectiveness of this Service Agreement.
ARTICLE II
SERVICES PROVIDED BY AGENCY MARKETS
SERVICES PROVIDED BY AGENCY MARKETS
At the direction of the management of Liberty Mutual, Agency Markets shall provide services
requested by Liberty Mutual and agreed to by Agency Markets (the “Services”), including without
limitation:
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(a) Claims Management Services: including (i) receipt, processing, settlement and payment of
claims in the states of Alaska, Idaho, Montana, Oregon and Washington under the policies and
contracts of workers compensation insurance issued by Liberty Mutual pursuant to requests from
Liberty Mutual (the “Portfolio”); (ii) acknowledgement of the receipt of notices received from
policyholders in connection with any claims; (iii) investigation of any claim, as necessary, to
determine its validity and compensability, including verification of coverage and status
information and utilization of any relevant documents and/or information made available to Agency
Markets and advice to the appropriate person of the results of such investigation; (iv)
notification to policyholders of declined claims and the reasons for such declinations; (v)
response to any inquiry, complaint or request received from any policyholder, agent, broker,
regulator or other interested party pertaining to or regarding any such claim, and recordation of
such complaints in complaint logs to be maintained by Agency Markets on Liberty Mutual’s behalf;
(vi) compliance with claims file maintenance, record retention and reconciliation requirements in
conformity with the standards for performance set forth in this Service Agreement or as otherwise
agreed by the parties; (vii) engagement and direction, as necessary, of attorneys, consultants or
other professionals in connection with the processing, defense and handling or any such claims;
(vii) defense of disputed claims; (ix) delivery of notices and other communications to
policyholders; and (x) generally, all such other acts and things as are reasonably necessary or
otherwise required in the administration of all such claims relating to the Portfolio;
(b) Additional Services; Curtailed Services. If Liberty Mutual requires from Agency Markets
additional services that are not otherwise contemplated under this Service Agreement, the parties
shall negotiate in good faith to reach a mutually acceptable arrangement under which such additional services shall be provided by Agency Markets. Such
arrangements shall provide for Liberty Mutual to provide reasonable compensation to Agency Markets
for such additional services. If Liberty Mutual curtails its requirement that Agency Markets
provide certain of the Services that are contemplated under this Service Agreement, the parties
shall negotiate in good faith to reach a mutually acceptable arrangement under which such curtailed
services shall no longer be provided by Agency Markets. Such arrangement shall provide for Liberty
Mutual to no longer provide compensation to Agency Markets for such curtailed services.
ARTICLE III
PERFORMANCE OF SERVICES
PERFORMANCE OF SERVICES
Agency Markets shall utilize its employees or employees of its affiliates within the Liberty
Mutual Group to perform the Services; provided, however, that Agency Markets may retain such legal,
financial, actuarial and other advisors and service providers, as Agency Markets reasonably deems
necessary in its reasonable discretion to perform the Services in compliance with the terms and
conditions of this Service Agreement. Agency Markets shall act in good faith, in a commercially
reasonably manner, and in accordance with customary industry standards and applicable laws for the
provision of the Services.
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ARTICLE IV
LIBERTY MUTUAL’S RESPONSIBILITIES
LIBERTY MUTUAL’S RESPONSIBILITIES
Section 4.1 Duty to Oversee; Ultimate Responsibility; Hold Harmless. All Services
provided by Agency Markets to Liberty Mutual shall be subject to oversight by Liberty Mutual.
Liberty Mutual shall have the right to direct and control the business which is being serviced by
Agency Markets on behalf of Liberty Mutual.
ARTICLE V
BOOKS AND RECORDS
BOOKS AND RECORDS
Section 5.1 Books and Records Maintained by Agency Markets; Inspection Rights.
Agency Markets shall maintain and retain for applicable periods, consistent with Liberty
Mutual’s current policies and procedures or as required by law, books and records relating to the
Portfolio and the Services provided hereunder (the “Books and Records”). Liberty Mutual, insurance
regulatory authorities and their respective designated representatives shall have the right to
inspect the Books and Records upon reasonable notice during Agency Markets’ normal business hours.
Section 5.2 Property of Liberty Mutual; Return After Termination; Inspection Rights.
Agency Markets acknowledges and agrees that the Books and Records are and shall remain the
property of Liberty Mutual. Agency Markets shall promptly return the Books and Records to Liberty
Mutual upon the termination of this Service Agreement in accordance with Article 9.4; provided,
however, that in the event that a dispute arises between Liberty Mutual and Agency Markets, Agency
Markets shall have the right at any time after the termination of this Service Agreement and with
reasonable prior notice to inspect the Books and Records returned to Liberty Mutual insofar as the
Books and Records relate to such dispute, and to make copies thereof or extracts therefrom; and
provided, further, that nothing in this Article V shall supersede, preclude or otherwise limit any discovery rights otherwise
available to Agency Markets or Liberty Mutual.
ARTICLE VI
THE RELATIONSHIP BETWEEN LIBERTY MUTUAL AND AGENCY MARKETS
THE RELATIONSHIP BETWEEN LIBERTY MUTUAL AND AGENCY MARKETS
Agency Markets and Liberty Mutual agree that:
(a) Liberty Mutual and Agency Markets are not partners or joint venturers with each other, and
nothing herein shall be construed so as to make them partners or joint venturers with each other,
or to impose any liability as such on either of them. Agency Markets shall perform its duties
hereunder as an independent contractor and not as an employee or agent of Liberty Mutual. Except as
expressly granted in this Service Agreement or otherwise by the other party in writing, or as may
be required by law, or as is necessary to perform the Services to be provided hereunder, no party
shall have any authority, express or implied, to act on behalf of the other party or its
subsidiaries.
(b) Agency Markets shall hold any amounts collected by it with respect to the
Portfolio for the benefit of Liberty Mutual. Funds held in such account shall be remitted to
Liberty Mutual, or
3
transferred to a Liberty Mutual account, as directed by Liberty Mutual.
(c) Each party agrees to notify the other party within a reasonable time upon receipt of any
written or oral communication from any state insurance department or
any other government or
regulatory department or agency of such department’s or agency’s intention to proceed with any
administrative action, such as a hearing, fine, license suspension or revocation or similar action,
against Liberty Mutual or Agency Markets, which administrative action relates in any way to Liberty
Mutual’s or Agency Markets’ performance under this Service Agreement or which otherwise relates to
the Portfolio.
(d) In the event that Liberty Mutual or Agency Markets or both are made parties to, or
threatened with, any legal or regulatory proceeding arising out of or in connection with the
Services or the Portfolio, it is agreed that they will promptly notify and cooperate fully with
each other to defend, settle, compromise or otherwise resolve such legal or regulatory proceeding
consistent with the intent of this Service Agreement.
(e) Agency Markets shall reasonably cooperate with Liberty Mutual in connection with the
provision of the Services under this Service Agreement. Notwithstanding anything in this Service
Agreement to the contrary, Liberty Mutual shall retain the ultimate authority to make all decisions
with respect to the Services.
ARTICLE VII
SERVICE FEES AND EXPENSES
SERVICE FEES AND EXPENSES
Section 7.1 Fees and Expenses. Charges, fees and expenses to be charged by
Agency Markets and paid by Liberty Mutual hereunder for services rendered on the Portfolio until
December 31, 2010 are set forth in “Fee Schedule — 2010” attached. Thereafter successive Fee Schedules will be negotiated and agreed by the parties and attached hereto. Fees for
losses or loss adjustment expense are not included in this Agreement and will be billed directly to
the file.
Section 7.2 Cost Recovery By Agency Markets. Notwithstanding anything herein to
the contrary, Agency Markets shall be entitled to receive from Liberty Mutual, the amount of Agency
Markets’ full actual cost of providing the Services hereunder, and therefore, if the fees charged
do not equal Agency Markets’s full actual cost of providing the Services during the term hereof,
then Liberty Mutual shall pay Agency Markets the amount of such deficiency as an additional fee
hereunder.
Section 7.3 Accounts and Disbursements. Amounts owing between the parties shall
be settled on a quarterly basis and payment of amounts owing shall be made within 45 days after the
end of the calendar quarter.
ARTICLE VIII
DISPUTE RESOLUTION & INDEMNIFICATION
DISPUTE RESOLUTION & INDEMNIFICATION
Section 8.1 Dispute Resolution.
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i) Any controversy, claim or dispute arising out of
or relating to this Agreement, or the breach, termination or validity thereof (each, a “Dispute”)
shall be resolved as set forth in this Article VIII.
(a) Within ten (10) days or as soon as reasonably practicable after any party’s receipt of a
notice of Dispute from the other party setting forth in detail and together with supporting
documentation, if any, the nature and basis of the Dispute (the “Dispute Notice”), to the general
counsel and the chief financial officer of Liberty Mutual and the general counsel and the chief
financial officer of Agency Markets shall meet in person at a mutually acceptable time and place,
and thereafter as often as they reasonably deem necessary, to attempt in good faith to resolve the
Dispute.
(b) If either the chief financial officer of Liberty Mutual or Agency Markets declares an
impasse then within thirty (30) days after receipt of the Dispute Notice, the respective chief
executive officers of Liberty Mutual or Agency Markets shall meet in person at a mutually
acceptable time and place, and thereafter as often as they reasonably deem necessary, to attempt in
good faith to resolve the Dispute.
(c) If either the chief executive officer of Liberty Mutual or Agency Markets declares an
impasse no earlier than sixty (60) days after receipt of the Dispute Notice (or such shorter
period, if the parties so agree in writing), then, at the instruction of either party’s chief
executive officer, the Dispute shall be referred to, and finally settled by, confidential and
binding arbitration in accordance with the then-prevailing JAMS Streamlined Arbitration Rules and
Procedures as modified as follows (the “Rules”):
(i) There shall be three (3) neutral arbitrators of whom each party shall select
one. The claimant shall select its arbitrator in its demand for arbitration and the
respondent shall select its arbitrator within thirty (30) days
after receipt of the
demand for arbitration. The two (2) arbitrators so appointed shall select a third
arbitrator to serve as chairperson within fourteen (14) days of the designation of the
second of the two (2) arbitrators. If any arbitrator is not timely appointed, at the
request of any party such arbitrator shall be appointed by JAMS pursuant to the listing,
striking and ranking procedure in the Rules.
(ii) Each arbitrator appointed by a party shall be either an attorney with substantial
experience with the property and casualty reinsurance and insurance industry and at least
ten (10) years admission to the bar, or a property and casualty reinsurance and insurance
industry professional of at least ten (10) years standing. The chair of the arbitral
tribunal shall either be a practicing attorney with no less than ten (10) years of practice
and experience as an arbitrator, with, if possible, experience relating to insurance or
reinsurance disputes, or be a retired judge.
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(iii)The place of arbitration shall be Boston,
Massachusetts, unless some other place is mutually selected by the parties. The
arbitral tribunal shall be required to follow the law of the Commonwealth of
Massachusetts. The decision of the arbitral tribunal shall be final and binding on the
parties and shall be the sole and exclusive remedy between the parties regarding the
matter presented to the arbitral tribunal, including any claims, counterclaims, issues or
accounting presented to the tribunal. Judgment upon the decision may be entered in any
court having jurisdiction. The arbitral tribunal is empowered to award any remedy
provided for under applicable law and the terms of this Agreement, including injunction,
specific performance or other forms of equitable relief. The arbitral tribunal is not
empowered to award damages in excess of compensatory damages. Each party hereby
irrevocably waives any right to recover punitive, exemplary or similar damages with
respect to any Dispute.
(iv)Any arbitration proceedings, decision or award rendered hereunder and the
validity, effect and interpretation of this arbitration agreement shall be governed by
the Federal Arbitration Act, 9 U.S.C. Section 1 et seq.
(d) Each party shall bear its own costs in any negotiations pursuant to Section 9(b) or
Section 9(c) and any arbitration, provided that the parties shall share the fees and expenses of
the arbitrators equally as well as any JAMS fees and expenses.
(e) All negotiations conducted pursuant to Section 9(b) or Section 9(c) shall be confidential
and shall be treated as compromise and settlement negotiations and may not be introduced as
evidence of an admission against interest of either party.
(f) Notwithstanding the foregoing provisions, either party may seek the
provisional judicial remedy of a preliminary injunction or specific
performance, if in its
reasonable judgment such action is necessary to avoid irreparable harm. Without prejudice to such
provisional remedies as may be available under the jurisdiction of such court, the arbitral
tribunal shall have full authority to grant provisional remedies and to direct the parties to
request that any court modify or vacate any temporary or preliminary relief issued by such court,
and to award damages for the failure of any party to respect the arbitral tribunal’s orders to that
effect.
(g) The parties hereby submit to the jurisdiction of the courts of the Commonwealth of
Massachusetts located in Boston, Massachusetts, for the purpose of seeking any provisional remedies
as contemplated by Section 9(g). In any such action, suit or proceeding, each of the
parties irrevocably and unconditionally waives, and agrees not to assert by way of motion, as a
defense or otherwise, any claim that the party is not subject to the jurisdiction of the above
courts, that such action or suit is brought in an inconvenient forum or that the venue of such
action, suit or other proceeding is improper. To the fullest extent
permitted by applicable law,
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each of the parties irrevocably waives all rights to trial by jury in any such action, suit
or other proceeding.
Section 8.2 Indemnification by Agency Markets. Notwithstanding anything to the contrary in
this Service Agreement, Agency Markets shall indemnify Liberty Mutual and its directors, officers,
employees and agents against all claims, losses and reasonable costs and expenses (including, but
not limited to, reasonable attorneys’ fees and costs) arising out of any action or inaction taken
or omitted to be taken by Agency Markets or its agents, employees or subcontractors in connection
with its obligations under this Service Agreement; provided, however, under no circumstances shall
Agency Markets be liable or responsible for costs, fees or expenses associated with Portfolio
claims.
Section 8.3 Indemnification by Liberty Mutual. Notwithstanding anything to the contrary in
this Service Agreement, Liberty Mutual shall indemnify Agency Markets and its directors, officers,
employees and agents against all claims, losses and reasonable costs and expenses (including, but
not limited to, reasonable attorneys’ fees and costs) arising out of any action or inaction taken
or omitted to be taken by Liberty Mutual or its agents, employees or subcontractors in connection
with its obligations under this Service Agreement.
Section 8.4 Indemnification Procedure. Any payment to be made under this Article VIII shall be
made within twenty (20) Business Days (as defined herein) of the delivery of notice of an
uncontested claim for indemnification or, in the case of a contested claim, within twenty (20) Business Days of final determination of the amount for which indemnification will
be made hereunder. Any amount not paid within such twenty (20) Business Day period shall bear
simple interest at the 30-Day C.P. Rate from the twentieth (20th) day until the date of
payment. As used in this Service Agreement, the term “Business Day” shall mean any day that is not
a Saturday or Sunday or a day on which the principal place of business of Agency Markets is closed
or a day on which banking institutions in the City of Boston are generally authorized or obligated
by law or executive order to close.
Section 8.5 Insurance. Each party agrees to maintain at its own expense during the term of
this Service Agreement reasonable amounts of the following types of insurance: workers compensation
and employees liability, general liability, business automobile liability, professional liability
and fidelity bonds.
ARTICLE IX
TERMINATION
TERMINATION
Section 9.1 Mutual Agreement. This Service Agreement may be terminated by mutual consent of
Liberty Mutual and Agency Markets.
Section 9.2 Termination by Agency Markets. This Service Agreement may be terminated by Agency
Markets:
(a) (i) upon ninety (90) days written notice, or (ii) upon forty-five (45) days written notice
by Agency Markets if (1) Liberty Mutual becomes insolvent or files a voluntary petition in
7
bankruptcy, rehabilitation or liquidation, or makes an assignment for the benefit of creditors, or
(2) if a committee of creditors or other representatives is appointed to represent its business or
an involuntary petition in bankruptcy, rehabilitation or liquidation is filed against it, and
Liberty Mutual fails within thirty (30) days following the appointment of such committee or
representative to cause the discharge of such committee or representatives or the dismissal of such
petition, except to the extent that the receiver, liquidator or trustee confirms a part or all
of the services to be provided by Agency Markets under this Service Agreement and continues to make
payment in accordance with Article VII for the services so confirmed; or
(b) upon written notice by Agency Markets if Liberty Mutual fails to make payment of any fees
or expenses in accordance with Article VII and such failure has not been cured within thirty (30)
days after the date such payment was due.
Section 9.3 Termination by Liberty Mutual. This Service Agreement may be
terminated by Liberty Mutual (i) upon ninety (90) days written notice, (ii) upon forty-five (45)
days written notice if (l) Agency Markets becomes insolvent or files a voluntary
petition in bankruptcy or liquidation, or makes an assignment for the benefit of creditors, or (2)
if a committee of creditors or other representatives is appointed to represent its business or any
involuntary petition in bankruptcy or liquidation is filed against it, and Agency Markets files
within thirty (30) days following the appointment of such committee or representative to cause the discharge of such committee or representatives or the dismissal of such petition, or (iii)
Agency Markets materially breaches the terms and conditions of this Service Agreement and such
breach has not been cured within forty-five (45) days following written notice by Liberty Mutual
setting forth the breach.
Section 9.4 Return of Books and Records to Liberty Mutual. In the event of
termination of this Service Agreement by Liberty Mutual, (i) Liberty Mutual shall promptly arrange,
at its sole cost, for the return to Liberty Mutual or transfer to another party of all of the Books
and Records of Liberty Mutual provided to Agency Markets or created in the the provision of the
Services, and (ii) Agency Markets shall cooperate fully with Liberty Mutual in such
return or transfer.
Section 9.5 No Prejudice. The termination of this Service Agreement shall be
without prejudice to any rights or liabilities of any party hereunder which shall have accrued
prior to such termination, and shall not affect any provisions of this Service Agreement that are
expressly or by necessary implication intended to survive such termination.
Section 9.6 Transition Period In the event of termination of this Service
Agreement, Agency Markets shall continue to provide the Services at the then current Fee Schedule
for a period that is reasonably necessary to enable the performance of the Services to be
transferred to another party not to exceed ninety (90) days.
ARTICLE X
CONFIDENTIALITY
CONFIDENTIALITY
(a) As used in this Agreement, the term “Confidential Information” shall mean any and all
information concerning the business, property, operations, policies of insurance, software,
finances, claims information, practices and procedures, policyholder/client data, underwriting
8
information, and reinsurance arrangements (including summaries, analyses, studies, or other
compilations of such information) of Liberty Mutual derived in connection with the provision of the
Services by Liberty Mutual, except such information which is or becomes available to the public
other than as a result of disclosure by Agency Markets or the directors, officers, employees,
agents, or representatives of Agency Markets, and shall include not only written information but
also information stored or transferred orally, visually, electronically, or by an other means.
(b) Agency Markets will hold all Confidential Information confidential and will not disclose
any Confidential Information to any party which is not an affiliate, except as may be required to
provide the Services, as authorized in advance by Agency Markets in writing or otherwise, or as may
be required by law, in which case Agency Markets shall promptly provide notice to Agency Markets
that such Confidential Information has been so required by law so that Agency Markets may seek a
protective order or other appropriate remedy. Agency Markets will use its commercially reasonable
best efforts (but without out-of-pocket costs or expenses) to obtain or assist Agency Markets in
obtaining such protective order or other appropriate remedy.
(c) Customer Data. Agency Markets agrees that should Liberty Mutual provide or allow access to
information or identity of persons and entities insured by Liberty Mutual or to whom services are
rendered by Liberty Mutual including non-public personally identifiable information of individuals
and all of this material shall be treated as highly sensitive Confidential Information by Agency
Markets. Agency Markets agrees: (1) to hold such information and/or materials as
Confidential Information hereunder; (2) to use such materials and/or information only to perform
Services on behalf of Liberty Mutual; (3) to delete, destroy, and/or return such material and
information upon completion of the Services rendered to Liberty Mutual. Except for the purposes of
carrying out this Agreement, Agency Markets shall not disclose or use any non-public personally
identifiable information about an insured or claimant provided by Liberty Mutual to Agency Markets.
“Non-public personally identifiable information” is financial or medical information of or
concerning a private person, which has been obtained from sources that are not available to the
general public or obtained from the person who is the subject and may include data elements such as
names and addresses of individuals. Such information shall not be reproduced or shared with any
other party except those entities with which Agency Markets may from time to time contract in
accordance with the fulfillment of the terms of this Agreement and which disclosure shall comply
with all state and federal statutes and regulations governing the disclosure of medical records and
non-public personally identifiable information, including any state or federal laws pertaining to
the confidentiality of medical records. Agency Markets shall promptly adopt and implement security
procedures to protect Liberty Mutual/Claimant Information from improper disclosure or use, such
procedures to be in compliance with all applicable federal and state regulatory requirements and
will immediately notify Liberty Mutual of any breach or suspected breach of data security.
(d) Exclusions. For purposes hereof, “Confidential Information” will not include any
information that the Receiving Party can establish by convincing written evidence: (i) was
independently developed by the Receiving Party without use of or reference to any Confidential
Information belonging to the Disclosing Party; (ii) was acquired by the Receiving Party from a
third party having the legal right to furnish same to the Receiving Party; or (iii) was at the time
in
9
question (whether at disclosure or thereafter) generally known by or available to the
public (through no fault of the Receiving Party).
(e) Required Disclosures. These confidentiality obligations will not restrict any disclosure
required by order of a court or any government agency, provided that the Receiving Party gives
prompt notice to the Disclosing Party of any such order and reasonably cooperates with the
Disclosing Party at the Disclosing Party’s request and expense to resist such order or to obtain a
protective order.
ARTICLE XI
MISCELLANEOUS
MISCELLANEOUS
Section 11.1 Assignment. None of the parties hereto shall assign or transfer or
permit the assignment or transfer of this Service Agreement without the prior written consent of
the other, which consent shall not be unreasonably withheld. All such assignments shall be subject
to all necessary regulatory approvals.
Section 11.2 Amendments and Waivers. This Service Agreement may not be amended,
and none of its provisions may be modified, except expressly by a written instrument signed by the
parties hereto. No failure or delay of a party in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any such right or power,
or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power. No waiver by a party of
any provision of this Service Agreement or consent to any departure therefrom shall in any event be
effective unless the same shall be in writing and signed by such party, and then such
waiver or consent shall be effective only in the specific instance and for the specific purpose for
which it is given.
Section 11.3 Entire Agreement. This Service Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and supersedes all other
prior negotiations, commitments, agreements, and understandings, both written and oral, between the
parties or any of them with respect to the subject matter hereof.
Section 11.4 Governing Law. This Service Agreement shall be deemed to have been
made under and governed by the laws of the Commonwealth of Massachusetts, except for the portion of
such laws having to do with conflicts of law.
Section 11.5 Notices. All notices and other communications under this Service
Agreement shall be in writing and shall be delivered personally, or
sent by confirmed facsimile
transmission or nationally recognized overnight delivery service. Any such notice or other
communication shall be deemed given upon actual delivery in each case to the following addresses:
(a) If to Liberty Mutual to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Financial Officer
Financial Officer
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Liberty Mutual, Middle Markets
Liberty Mutual Group
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Liberty Mutual Group
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇ ▇▇▇▇▇, Counsel
Liberty Mutual, Commercial Markets
Liberty Mutual Group
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Liberty Mutual, Commercial Markets
Liberty Mutual Group
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(b) If to Agency Markets to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Financial Officer
Liberty Mutual Agency Markets
Liberty Mutual Group
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Liberty Mutual Agency Markets
Liberty Mutual Group
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With a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President and General Counsel
Liberty Mutual Agency Markets
Liberty Mutual Group
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Liberty Mutual Agency Markets
Liberty Mutual Group
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Section 11.6 No Third Party Beneficiaries. Nothing in this Service Agreement is intended to
confer any rights or remedies under or by reason of this Service Agreement on any parties other
than Liberty Mutual, Agency Markets, a party entitled to identification under Article IX and their
respective heirs, executors, successors, and assignees. Nothing in this Service Agreement is
intended to relieve or discharge the obligations or liability of any third parties to Liberty
Mutual or Agency Markets. No provision of this Service Agreement shall give any third parties any
right of subrogation or action over or against Liberty Mutual or Agency Markets.
Section 11.7 Counterparts. This Service Agreement may be executed in two or more counterparts,
each of which shall be deemed to be original, but all of which shall constitute one and the same
instrument.
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Section 11.8 Interpretation. The descriptive headings are inserted for
convenience of reference only and are not intended to be part of, or to affect the meaning or
interpretation of this Service Agreement.
Section 11.9 Legal Enforceability. Any term or provision of this Service Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Service Agreement or affecting the
validity or enforceability of any of the terms or provisions of this Service Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as to be unenforceable,
that provision shall be interpreted to be only so broad as is enforceable.
IN WITNESS WHEREOF, this Service Agreement has been duly executed.
| LIBERTY MUTUAL INSURANCE COMPANY | ||||
By:
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/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||
Name:
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▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||
Title:
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Chief Financial Officer, Commercial Markets | |||
| PEERLESS INSURANCE COMPANY | ||||
By:
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
Name:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
Title:
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Chief Financial Officer | |||
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Fee Schedule -2010
Service Fees payable by Liberty Mutual to Agency Markets for the service period
December 31, 2009 to December 31, 2010 are set forth below. Amounts payable hereunder will be direct
charges between the parties.
| Middle | ||||
| Markets | ||||
Fee Based on Projected
Number of New Claims
Reported in 2010
|
$ | 1,331,692 | ||
If the aggregate number of new Liberty Mutual claims actually reported to Agency Markets
pursuant to this Agreement is greater than 105% of the number of new claims projected for 2010,
Liberty Mutual will pay the reconciliation rate per claim shown below for each claim in excess of
105% of the number of new claims projected for 2010:
Indemnity Claims: $721
Medical Only Claims: $168
Medical Only Claims: $168
If the aggregate number of new Liberty Mutual claims actually reported to Agency Markets
pursuant to this Agreement is less than 95% of the number of new claims projected for 2010, Agency
Markets will refund the reconciliation rate per claim shown below for the difference between the
number of claims actually reported and 95% of the number of new claims projected for 2010:
Indemnity Claims: $721
Medical Only Claims: $168
Medical Only Claims: $168
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