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EXHIBIT 10.93
EXECUTION COPY
ALLIANCE - MID-WEST
AMENDED AND RESTATED VENDOR AGREEMENT
This
agreement ("Agreement") is made and entered into effective as of
June
1, 2005 by and between Mid-West National
life Insurance Company of Tennessee, a
Tennessee domiciled life and health
insurance company ("CARRIER"), and the
Alliance for Affordable Services, a
membership organization that is organized
under the laws of the District of Columbia
(the "ALLIANCE").
WHEREAS,
the ALLIANCE is a membership organization that provides or/and
makes available to its members a variety of
services and benefits, including
health insurance products and other
insurance related products;
WHEREAS,
CARRIER is in the business of selling life and health insurance
and other insurance related products;
WHEREAS,
CARRIER currently has group insurance policies ("Group
Policies")
in force with to ALLIANCE Group Insurance
Trust Fund, an Alabama trust (the
"Trust"), pursuant to which certificates of
insurance have been and will be
issued to members of the ALLIANCE. CARRIER
has also issued individual insurance
policies ("Individual Policies") to members
of the ALLIANCE in states that do
not authorize the marketing and sale of
"association group" policies; and
WHEREAS,
effective June 1, 2004, CARRIER and the ALLIANCE entered into a
Vendor Agreement, pursuant to which, among
other things, the ALLIANCE agreed to
make available to its members such Group
Policies, Individual Polices and other
insurance related products;
WHEREAS,
CARRIER and the ALLIANCE desire to enter into this Amended and
Restated Vendor Agreement;
NOW,
THEREFORE, for and in consideration of the mutual covenants and
agreements hereinafter set forth, the
ALLIANCE and CARRIER hereby agree as
follows:
1. VENDOR RELATIONSHIP. The ALLIANCE agrees
that during the Term hereof and upon
the terms and conditions contained herein
it will make available to members of
the ALLIANCE such Group Policies,
Individual Polices and other insurance related
products (collectively, the "Products")
offered by CARRIER as the parties may
agree from time to time. CARRIER shall be
solely responsible for designing the
Products involved and for establishing the
prices to be charged for such
Products, subject to consultation with the
ALLIANCE. The ALLIANCE shall be
solely responsible for determining which
Products of CARRIER will be made
available through the ALLIANCE to its
members. The ALLIANCE may make such
Products available to its members through
its communications to members and
prospective members, through its catalog of
benefits or through newspaper,
television or other advertisements and
other means selected by the ALLIANCE in
its sole discretion. Nothing contained
herein and no performance by the ALLIANCE
of its obligations hereunder shall be
deemed to constitute an endorsement by the
ALLIANCE of CARRIER or of the Products, and
the ALLIANCE assumes no financial
responsibility for the operating results of
any Products sold by CARRIER to
members of the ALLIANCE.
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2. DEFINITIONS. For purposes of this
Agreement, the following terms shall have
the following meanings:
(a) Administrative Expense means, with respect to any period,
costs
incurred
in such period by CARRIER for policy issuance and policy
maintenance, but excluding the cost of investigating and paying
claims.
(b) Collected Premium means, with respect to any period,
insurance
premiums
actually received in cash by CARRIER in such period.
(c) Governmental Authority means any nation or government, any
state
or
political subdivision thereof and any entity exercising
executive,
legislative, judicial, regulatory or administrative functions of
or
pertaining
to government.
(d) Health Policies means Individual Policies and Association
Group
Policies
(but excluding ancillary products) issued by CARRIER, which are
the
principal Products that CARRIER will sell to members of the
ALLIANCE.
(e) Marketing Expense means, with respect to any period, the
insurance
commissions as a percentage of Collected Premiums paid to
outside
insurance agents in such period, plus any out of pocket
marketing
costs
incurred in such period by CARRIER, for selling and servicing
the
Health Policies
to members.
(f) Person means any individual, corporation, limited liability
company,
business trust, association, company, partnership, joint
venture,
Governmental Authority, or other entity.
3. LIMITATION ON CARRIER'S MARKETING AND
ADMINISTRATIVE EXPENSES. As partial
consideration for the ALLIANCE's agreement
to make the Products available to its
members, CARRIER agrees as follows:
(a) unless otherwise agreed to by the Parties, the Marketing
Expense
with
respect to Health Policies shall not exceed in any calendar year
the
following
amounts (expressed as a percentage of Collected Premiums): (i)
44.5% of
first year Collected Premiums, (ii) 30% of second year
Collected
Premiums
and (iii) 15% of all Collected Premiums after the second policy
year;
and
(b) unless otherwise agreed to by the Parties, Administrative
Expense
with respect to Health Policies shall not exceed 10% of
Collected
Premiums.
4. CARRIER'S REPORTS.
(a) Annual Reports. Except for the reports provided pursuant to
Section
4(a)(i), within 90 days after the end of each calendar year
during
the Term
hereof, CARRIER shall submit written reports to the ALLIANCE
setting forth the
following information:
(i) Financial Status of CARRIER Report, including CARRIER's
most recent annual audited statutory financial statements filed
with
the state insurance departments and CARRIER's current ratings
with
any rating agencies, which shall be submitted to the ALLIANCE on
or
before June 15 of each year for the most recent calendar year.
(ii) Health Insurance in Force Report, including, with respect
to members of the ALLIANCE, the number of policies issued, the
number of policies dropped, the number
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of policies in force and the amount of Earned Premiums thereon
for
the most recent calendar year.
(iii) Claims Report in substantially the form, and contain
substantially the information, as set forth in Schedule 4(a)
(iii)
hereto.
(iv) Complaints Report, including the number of complaints
received regarding claims handling and regarding agent conduct,
the
source of such complaints (department of insurance, a member of
the
ALLIANCE or other) and the number of claims disposed of during
the
most recent calendar year on Health Policies issued to members
of
the ALLIANCE.
(v) Litigation Report. The number of legal actions brought
against CARRIER with respect to any Products sold to members of
the
ALLIANCE, the number of such actions disposed of during the
most
recent calendar year and a brief description of any material
litigation pending at year-end.
(vi) Certificate of Compliance, containing the calculation of
CARRIER's compliance with the limitation on Marketing Expense
and
the limitation on Administrative Expense for the most recent
calendar year and, if CARRIER did not comply with either of
such
limitations, CARRIER's plan for curing such non-compliance.
(b) Quarterly Reports. Within 60 days following the end of each
calendar
quarter during the Term hereof (other than the fourth quarter
of
each
year), CARRIER shall provide to the ALLIANCE unaudited
statutory
financial
statements of CARRIER filed with the Oklahoma state insurance
department, and a Health Insurance in Force Report, as described
in
Section
4(a)(ii) above, in each case as of the end of and for such
calendar
quarter.
(c) Other Reports. CARRIER shall also provide such other reports
as
may
reasonably be requested by the ALLIANCE during the Term hereof.
5. NOTICE OF RATE INCREASES. CARRIER shall
provide to the ALLIANCE not less than
forty five (45) days' advance written
notice of any proposed rate increases for
the Health Policies, such notice to include
a statement that such premium rate
increase is deemed necessary based upon the
analysis of the actuarial department
of CARRIER. ALLIANCE shall have the right
to provide to CARRIER input with
respect to proposed rate decisions, and
CARRIER agrees to share claim
information and experience with ALLIANCE to
permit ALLIANCE to provide such
input. CARRIER agrees to consider
recommendations by ALLIANCE and to provide its
rationale to ALLIANCE for decisions
regarding rate increases that are contrary
to ALLIANCE's recommendations.
Notwithstanding the foregoing, CARRIER shall at
all times retain the right to determine in
its sole and absolute discretion the
amount and timing of any rate increase on
Health Policies.
6. MUTUAL DISCLOSURES. CARRIER and the
ALLIANCE each agree that they will
promptly notify the other Party of any
complaints or notices of investigations
that they receive which will or may involve
the other Party.
7. CONFIDENTIALITY: Each Party recognizes
that in the course of exercising its
rights and performing its obligations under
this Agreement it will come into
possession of confidential or proprietary
information of the other Party or of
customers of the other Party ("Confidential
Information"). Each Party agrees
that it will not disclose to anyone not a
Party to this Agreement any
Confidential Information of the other
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Party or its customers and will not use any
such Confidential Information except
to the extent necessary to carry out its
obligations hereunder. Each Party
agrees to comply with the confidentiality
requirements imposed on it by state
and Federal law, including the Health
Insurance Portability and Accountability
Act of 1996 ("HIPPA"). Confidential
Information does not include information
which (i) is or becomes generally available
to the public other than pursuant to
a violation of this Agreement, (ii) was
available to the Parties on a
non-confidential basis prior to its
disclosure by the other Party or its
customer to such Party or (iii) became
available to a Party on a
non-confidential basis from a third party
who was not bound by a confidentiality
agreement with respect to such
information.
8. REPRESENTATIONS AND WARRANTIES:
(a) CARRIER hereby represents and warrants to the ALLIANCE as
follows:
(i) CARRIER is a corporation duly organized, validly existing
and in good standing under the laws of the State of Oklahoma and
has
all necessary corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby
and
to perform its obligations hereunder.
(ii) All corporate and other actions or proceedings required
to be taken by or on the part of CARRIER to authorize and permit
the
execution and delivery by it of this Agreement, the performance
by
it of its obligations hereunder, and the consummation by it of
the
transactions contemplated herein and therein, have been duly
and
properly taken.
(iii) This Agreement constitutes the legal, valid and binding
obligation of CARRIER, enforceable against it in accordance with
its
terms, except as such enforceability may be limited by
applicable
bankruptcy, insolvency, moratorium, reorganization or similar
laws
in effect which affect the enforcement of creditors' rights
generally and by equitable limitations on the availability of
specific remedies.
(iv) CARRIER is duly licensed and has authority to issue Life
and Health Policies and certificates to insureds in each of the
states in which CARRIER is currently issuing such policies and
CARRIER will obtain and retain all licenses necessary to
conduct
CARRIER's business during the term hereof.
(v) No authorization, approval, or consent of, and no filing
or registration with, any Governmental Authority or third party
is
or will be necessary for the execution, delivery of this
Agreement,
or performance by CARRIER or for the validity or enforceability
thereof, except for such approvals or consents which have been
obtained or made.
(b) The ALLIANCE hereby represents and warrants to CARRIER as
follows:
(i) The ALLIANCE is a membership organization that is duly
organized, validly existing and in good standing under the
District
of Columbia Nonprofit Corporation Act and has all necessary
corporate power and authority to enter into this Agreement and
to
consummate the transactions contemplated hereby and to perform
its
obligations hereunder.
(ii) All corporate and other actions or proceedings required
to be taken by or on the part of the ALLIANCE to authorize and
permit the execution and delivery by it of this Agreement, the
performance by it of its respective obligations hereunder, and
the
consummation by it of the transactions contemplated herein and
therein, have been duly and properly taken.
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(iii) This Agreement constitutes the legal, valid and binding
obligation of the ALLIANCE, enforceable against it in
accordance
with its terms, except as such enforceability may be limited by
a
