Exhibit 10.9
CLAIMS AGREEMENT
This CLAIMS AGREEMENT, dated as of December 16, 1993 (this "Agreement"), is
among INTEGRATED RUNOFF INSURANCE SERVICES CORPORATION, a New Jersey corporation
("IRISC"), and LASALLE RE LIMITED, a company incorporated and organized under
the laws of Bermuda (the "Customer").
WHEREAS, Customer desires to hire IRISC to perform audits, and to handle
and process claims emanating from the Portfolio (as defined herein); and
WHEREAS, IRISC is in the business of providing Claims Management, Audit and
other Services (collectively, "Services"), as more fully described herein; and
WHEREAS, Customer desires to engage IRISC for such Services;
NOW, THEREFORE, for good and valuable consideration, it is agreed by and
between Customer and IRISC as follows:
Section 1. Term.
(a) This Agreement shall be effective as of the date hereof, (the
"Effective Date") and shall remain in effect through December 31, 1996
(the initial "Term") unless terminated pursuant to Section 2 hereof or
extended pursuant to Section 1(b).
(b) Unless terminated, the Term of this Agreement shall automatically, and
without any further action of either party, be extended at the end of
each calendar year commencing on December 31, 1996, for an additional
year, unless either party shall give six months prior written notice
to the other of its election that this Agreement shall terminate on
such annual anniversary date. In the case of a termination the
Customer may nevertheless, on 90 days' notice to IRISC, extend the
term of this Agreement for an additional three months following the
date on which the termination would otherwise be effective.
Section 2. Cancellation/Termination.
(a) Customer or IRISC may terminate this Agreement immediately if the
other party (i) loses its corporate charter, (ii) is placed in
receivership, makes an assignment for the benefit of creditors, is
placed in a
proceeding for the purpose of winding up or liquidating its business
affairs or is the subject of any proceeding based upon its insolvency
or (iii) loses any license or permit which is then required in order
to engage in the business contemplated by this Agreement.
(b) Customer or IRISC may terminate this Agreement immediately upon
written notice based upon (i) fraud upon the terminating party by the
other party or (ii) a material breach of this Agreement by the party
being terminated which has not been corrected after thirty days
written notice.
(c) Unless prior written consent has been obtained, either Customer or
IRISC may terminate this Agreement upon ninety days written notice to
the other in the event that there has been a transfer or sale of a
controlling interest in the other party, except for transfers to a
parent, subsidiary or affiliate of the party whose stock is being
transferred.
(d) In the event of a termination of this Agreement, Customer agrees that
it will not, for a period of one year from the date of termination,
solicit or engage the services of employees of IRISC.
(e) Termination of this Agreement shall not relieve either party of its
liability for performance under the Agreement to the date of
termination. Following any termination, the parties will cooperate
with each other to satisfy any reasonable requests for information
concerning actions taken during the Term.
(f) In the event of cancellation or termination of this Agreement,
Customer shall immediately arrange for the return or transfer to a
succeeding administrator of copies of all its files and records at its
cost. IRISC will cooperate fully with Customer in this return or
transfer.
Section 3. IRISC Services and Obligations.
(a) During the Term of this Agreement, IRISC shall provide the following
Services for Customer related to the Portfolio:
(1) Claims Management Services, including the establishment of claims
handling procedures, the securing of sufficient documentation
concerning claims arising from the Portfolio, the adjustment,
agreement, and settlement of such claims, or
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otherwise the rejection and assertion of defense of uncovered
claims, each in accordance with the terms and conditions of the
policies, treaties, contracts, binders, or facultative
certificates of reinsurance underlying the Portfolio and in
accordance with applicable law and reasonable and customary
industry standards;
(2) AUDIT SERVICES, as may be required by the Customer, including
reviews of prospective reinsured's claim operations preliminary
to underwriting an account, and post-underwriting audits;
(3) ANCILLARY SERVICES, including review of slip and policy wordings,
evaluation of the reinsured's catastrophe response plan, and such
other services as Customer and IRISC agree that IRISC shall
provide.
(b) IRISC will adhere to applicable contractual, legal and regulatory
obligations and shall otherwise maintain standards at least equal, in
all material respects, to generally accepted reinsurance industry
practices.
(c) IRISC Services do not include any actuarial services or assessment of
the ultimate amount of loss and expense projected to develop from the
Portfolio.
(d) IRISC will maintain management and staffing at levels necessary to
provide the Services in accordance with Customer contractual
obligations, regulatory requirements and generally accepted industry
standards.
Section 4. Customer's Obligations. Customer shall:
(a) in no event require IRISC to provide Services that are not in
accordance with all applicable contractual, legal and regulatory
obligations;
(b) deliver and or make available all files, records, accounts, documents
and other information necessary for IRISC to carry out its obligations
under this Agreement.
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Section 5. Books and Records - Access and Ownership.
(a) IRISC shall keep and provide to Customer, in a manner and form
approved by and acceptable to Customer and IRISC, true and complete
records of all business conducted under and pursuant to this
Agreement, which (together with all other information related to
Customer) shall be separate and apart from other records and
information of IRISC, and shall make available for examination and
inspection to duly authorized representatives of the Customer, at any
time during ordinary business hours upon reasonable notice, all such
records and information.
(b) Any records and information maintained by IRISC pursuant to this
Agreement, whether in written or electronic form, shall, subject to
the property rights of any third person, remain the property of
Customer and shall be delivered to Customer or its designee
immediately upon termination of this Agreement, along with any and all
files, programs, systems, data, input materials and output materials,
the media upon which they are located (including cards, tapes, discs
and other storage facilities), and all software programs or packages
(together with any related documentation, source code or codes, object
codes, upgrades, revisions, modifications, and any related materials)
which may be necessary or useful to assist in the use of such records
and information. In the event that a dispute arises between Customer
and IRISC, IRISC shall have the right at any time after any
termination of this Agreement to inspect the relevant records and
information of Customer, in so far as they relate to the dispute, and
to make copies thereof or extracts therefrom; provided that the
foregoing shall not be deemed to supersede any discovery rights
otherwise available to IRISC or Customer.
Section 6. Service Fees and Expenses.
(a) Customer agrees to pay IRISC, in consideration of the Services
provided, fees as set forth in Schedule A.
(b) Customer also agrees to reimburse IRISC for reasonable Services-
related travel expenses at cost if such travel has been requested by
the Customer.
(c) Billing for the Base Level (as defined in Schedule A hereof) will be
transmitted to Customer on or before the fifteenth day of the month
preceding each quarter. Billing for Services performed in 1993 shall
be
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transmitted on the date hereof. Xxxxxxxx for expenses and Excess
Support (as defined in Schedule A hereof) will be transmitted to
Customer on or before the fifteenth business day after the end of the
month in which the Excess Support was rendered and expenses incurred
by IRISC. Remittance by Customer shall be due within thirty days of
transmission of the relevant billing (as described in Schedule A
hereof), by wire transfer to an account to be specified by IRISC.
Interest shall be payable on late payments at the rate of one half of
one percent per month for each subsequent month or fraction of month
thereof after the due date until payment has been received by IRISC.
Section 7. Loss & Allocated Expense. It is hereby understood and
agreed by Customer that the Fees and expenses described in Section 6 do not
include loss payments or Allocated Expenses. Loss and Allocated Expense
payments will be paid by the Customer.
Section 8. Reports to Customer. IRISC shall make periodic reports in
connection with the Services it provides for Customer, in a manner and form
approved by and acceptable to Customer and IRISC.
Section 9. Computer Software, Hardware. IRISC shall supply the
hardware and Customer shall provide the software necessary to process
information in order to provide the Services specified under Section 3(a)(1)
through (4). Customer will reimburse IRISC for hardwares and telecommunications
costs associated with services provided under this Agreement. Hardware
purchases shall be submitted to the Customer for a prior approval.
Section 10. Indemnification.
(a) If, in connection with any Services, IRISC or any of its employees or
agents becomes involved as a defendant in any action or legal proceeding
brought by a third party, Customer agrees to indemnify and hold IRISC, its
employees or agents harmless against all damages, claims, losses, fines,
penalties, disputes, and liabilities, whether legal or otherwise, including
reasonable attorney's fees and other costs of defense; provided, however,
that Customer shall not be liable under the foregoing indemnity agreement
to the extent that the conduct of IRISC, its employees or agents which is
the subject of the action or proceeding was wilfully negligent, reckless,
fraudulent or involved willful misconduct. The provisions of this
subsection shall survive the expiration or termination of this Agreement,
including any extension thereof.
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(b) If Customer, any of its affiliates or any director, officer or employee
of Customer or any of its affiliates (collectively, "Customer Parties")
becomes involved as a defendant in any action or legal proceeding brought
by a third party in connection with any services that are the subject of
this Agreement, IRISC agrees to indemnify and hold the Customer Parties
harmless against all damages, claims, losses, fines, penalties, disputes
and liabilities, including reasonable attorney's fees and other costs of
defense incurred by the Customer Parties in connection therewith; provided,
however, that IRISC shall be liable under the foregoing indemnity agreement
only to the extent that the action or proceeding is related to or arises
out of conduct of IRISC, its employees or agents that was wilfully
negligent, reckless or fraudulent or involved willful misconduct. The
provision of this subsection shall survive the expiration or termination of
this Agreement, including any extensions thereof.
Section 11. Assignment. Neither party may assign or transfer this
Agreement to any person, firm, or corporation other than a parent, subsidiary,
or affiliate without the written consent of the other party. This Agreement
shall be binding upon the parties, their heirs, legal representatives,
successors and assigns.
Section 12. Applicable Law. This Agreement will be construed under the
laws of Bermuda.
Section 13. Enforceability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if the invalid
or unenforceable provisions had been omitted.
Section 14. No Implied Waiver. The failure of any party to enforce any
of the provisions herein shall not be construed to be a waiver of the right of
such party to enforce any such provision.
Section 15. Independent Contractor. IRISC shall act as an independent
contractor in providing Services to Customer hereunder, and, except as expressly
provided herein, not as an agent of Customer. Neither this Service Agreement
nor the performance thereof by IRISC shall create nor be deemed to create any
employer-employee, joint venture or partnership relationship between any of
IRISC or any affiliate, officer, director or employee thereof, on the one hand,
and any of Customer or any affiliate, officer, director or employee thereof, on
the other hand.
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Section 16. Force Majeure. Neither party shall be liable for any delay
or failure to meet its obligations (other than payment of IRISC Service Fees and
Expenses) under this Agreement due to any cause outside its reasonable control
including (without limitation) Acts of God, war, riot, malicious acts of damage,
civil commotion, industrial dispute (other than a dispute involving solely the
employees of the party in question), refusal of license, power failure, fire,
explosion, or the lack of availability of materials.
Section 17. Conflicts of Interest. Customer acknowledges that IRISC and
its affiliates have interests, dealings and commitments that may conflict with
the interests of Customer or the duties owed by IRISC to the Customer in
connection with the Services to be provided under this Agreement. Customer
agrees that IRISC may without prior reference to Customer take action or refrain
from acting under this Agreement notwithstanding any such conflict. Neither
IRISC nor any affiliate will be liable to account to Customer for any profit or
remuneration made or received from or by reason of any appointment, dealings or
arrangements whatsoever that may give rise to any such conflict and IRISC's fees
under this Agreement shall not be abated thereby.
Section 18. Confidentiality.
(a) IRISC agrees that it will not disclose or use for any purpose outside
the scope of this Agreement proprietary and confidential information
provided to it by Customer unless and until such information (i)
becomes public knowledge other than through disclosure by IRISC or
(ii) is subpoenaed or otherwise required by an authorized governmental
authority. In the event that IRISC determines that it is required to
provide any such information, it shall promptly provide notice to
Customer.
(b) IRISC's obligations under this Section shall continue after this
Agreement terminates.
Section 19. Arbitration/Litigation. If any irreconcilable dispute shall
arise between the parties to this Agreement, such dispute shall be submitted to
binding arbitration upon the request of one of the parties. Each party will
choose one arbiter. The two arbiters will choose an umpire. The arbiters will
be active or retired, disinterested executive officers of insurance or
reinsurance companies. Each party will pay the fee of its arbiter and one-half
the fee of the umpire. Remaining costs of arbitration will be paid as the
written decision directs. Arbitration will take place in _______________
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in accordance with the rules and procedures of the American Arbitration
Association; provided, however, that, where a party to this Agreement is sued by
a third party, such party to this Agreement can assert a cross-complaint,
counterclaim, interpleader or other similar action against the other party to
this Agreement in the court where the third party suit is filed.
Section 20. Notices. Any notice required under this Agreement shall be
sent, in writing, by certified or registered mail, postage prepaid, return
receipt requested, by facsimile, by courier service or shall be hand delivered
to the respective parties as follows:
LASALLE RE LIMITED
Xxxxxxxxxx Xxxxx
0 Xxxxxxxx Xxxxxx
P.O. Box HM 1502
Xxxxxxxx XX CX
Bermuda
Attn: ___________________
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
INTEGRATED RUNOFF INSURANCE SERVICES CORPORATION
0 Xxxxxx Xxxxx
X.X. Xxx 000
Xxxxxxxxx, X.X. 00000
Attn: Xxxxx X. Xxxxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Section 21. Section Headings. The division of this Agreement into
sections and the addition of section headings are for convenience only and shall
not affect the interpretation or construction of this Agreement.
Section 22. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and one and the same
instrument. It shall not be necessary in making proof of this Agreement or any
counterpart hereof to provide or account for the other counterpart(s).
Section 23. Definitions.
"Allocated Expense" means fees, costs and expenses related to independent
adjusters and investigators, physical damage inspectors, experts,
witnesses, attorneys, taxed court costs, post-judgement interest, statutory
penalties, and other reasonable and necessary fees, costs and expenses
incurred in connection with the investigation, defense and settlement of
claims and pursuit of reinsurance recoveries,
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but does not include IRISC salaries, benefits, administrative or normal
overhead costs.
"Portfolio" means the book of excess and participating treaty and
facultative reinsurance agreements underwritten by Customer.
"Services" means administrative services provided by IRISC which fall into
the categories specified in Section 3(1) through (4).
Section 23. Entire Agreement. The provisions set out herein constitute
the whole and entire Agreement between Customer and IRISC, the parties hereto,
and may be altered only by mutual agreement, reduced to writing and executed by
authorized officers of both parties. There are merged herein all prior
representations, promises and conditions, whether oral or written, in connection
with the subject matter hereof. Any representation, promise or condition not
incorporated herein shall not be binding upon the parties.
IN WITNESS WHEREOF, the parties have duly executed this Agreement.
INTEGRATED RUNOFF INSURANCE SERVICES CORPORATION
Xxxxxxx X. X'Xxxxxxxx
By: ____________________________________________
Chairman
Its: ___________________________________________
LASALLE RE LIMITED
Xxxx X. Xxxxxx
By: ____________________________________________
Director
Its: ___________________________________________
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SCHEDULE A
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IRISC FEES
IRISC shall dedicate a base level of dedicated support (the "Base Level") to the
provision of Services for Customer. The Base Level shall constitute up to four-
hundred and fifty (450) hours of service per year. In respect of the Base Level,
the annual fee shall be U.S.$50,000, payable quarterly in advance. This fee
shall be subject to a 5.5% annual increase each January 1, commencing January 1,
1995. For Services performed in 1993, Customer shall pay IRISC the amount of
U.S.$ 4,166.66, the prorated fee at the rate of U.S.$50,000 per year from
December 1, 1993 to December 31, 1993.
In the event that additional IRISC resources are required, in excess of the Base
Level, to provide support following a loss, or to conduct audits, or to maintain
agreed service standards as a consequence of generally increased workloads
("Excess Support"), IRISC fees for such services shall be payable on an hourly
basis in accordance with Annex 1 to this Schedule. IRISC shall obtain Customer's
approval before providing such additional resources. IRISC shall provide a
reconciliation of any such Excess Support and the Base Level of support and the
calendar year ending during the term of this Agreement. The Customer shall pay
IRISC for any applicable Excess Support within 30 days of presentation of the
relevant billing.
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ANNEX 1
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EXCESS SUPPORT FEES
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A. Staffing level Hourly rate (U.S.$)
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Adjuster 90.00
Manager/AVP 115.00
Vice President 180.00
Senior Vice President 200.00
President/CEO 250.00
Clerical Support 45.00
B. Hourly fees shall increase by five and one half percent (5.5%) on each
anniversary date of this Agreement.
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