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Sample Vendor Agreement

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UICI

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Title: VENDOR AGREEMENT
Governing Law: Texas     Date: 8/9/2005
Industry: Insurance (Life)     Sector: Financial

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                                                                   EXHIBIT 10.91

 

                                                                  EXECUTION COPY

 

                                   NASE - MEGA

                                VENDOR AGREEMENT

 

      This agreement ("Agreement") is made and entered into effective as of

January 1, 2005 by and between The MEGA Life and Health Insurance Company, an

Oklahoma domiciled life and health insurance company ("CARRIER"), and the

National Association for the Self-Employed, Inc., a Texas non-profit corporation

(the "NASE").

 

      WHEREAS, the NASE is a member organization that provides or 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 association group insurance policies

("Association Group Policies") in force with NASE Group Insurance Trust Fund, an

Alabama trust, and with The NASE 2003 Group Insurance Trust, an Illinois trust

(collectively, the "Trust"), pursuant to which certificates of insurance have

been and will be issued to members of the NASE. CARRIER has also issued

individual insurance policies ("Individual Policies") to members of the NASE in

states that do not authorize the marketing and sale of "association group"

policies;

 

      WHEREAS, the Parties entered into that certain Agreement dated April 1,

1996 (the "1996 Agreement") setting forth the terms under which the NASE made

available to its members insurance products and other health related products of

CARRIER; and

 

      WHEREAS, the Parties desire to amend, revise and restate in its entirety

the 1996 Agreement defining the relationship between the NASE and CARRIER;

 

      NOW, THEREFORE, for and in consideration of the mutual covenants and

agreements hereinafter set forth, the receipt and sufficiency of which is

acknowledged by the Parties hereto, the NASE and CARRIER hereby agree as

follows:

 

1. VENDOR RELATIONSHIP. The NASE agrees that, during the Term hereof and upon

the terms and conditions contained herein, it will make available to members of

the NASE such Association 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 and for establishing the prices to be charged for such

Products. The NASE shall be solely responsible for determining which Products of

CARRIER will be made available through the NASE to its members. The NASE will

make such Products available to its members through its communications to

members and prospective members, through its catalog of benefits, through

newspaper, television and other advertisements and/or through other means

selected by the NASE in its sole discretion. Nothing contained herein and no

performance by the NASE of its obligations hereunder shall be deemed to

constitute an endorsement by the NASE of CARRIER or of the Products, and the

NASE assumes no financial responsibility for the profitability of any Products

sold by CARRIER to members of the NASE.

 

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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, the

      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 NASE.

 

            (e) Marketing Expense means, with respect to any period, the

      insurance commissions paid to outside insurance agents during such

      periods, 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.

 

            (g) Term shall have the meaning set forth in Section 24 hereof.

 

3. LIMITATION ON HEALTH POLICIES MARKETING EXPENSE AND ADMINISTRATIVE EXPENSE.

As partial consideration for the NASE's agreement to make the Products available

to its members, CARRIER agrees as follows:

 

            (a) unless otherwise agreed to by the Parties, Marketing Expense

      with respect to Health Policies shall not exceed in any calendar year the

      following amounts (expressed as a percentage of Collected Premiums in such

      calendar year): (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 in any calendar year with respect to Health Policies shall not

      exceed 10% of Collected Premiums in such calendar year.

 

4. CARRIER'S REPORTS.

 

      (a). Annual Reports. Except for the reports provided pursuant to Section

4(a)(i), within ninety (90) days after the end of each calendar year during the

Term hereof, CARRIER shall submit written reports to the NASE 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 reports shall be submitted to the NASE on or before June

      15 of each year for the most recent calendar year.

 

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            (ii) Health Insurance in Force Report, including, with respect to

      members of the NASE, the number of policies in force and the amount of

      Earned Premiums thereon for the most recent calendar year.

 

            (iii) Claims Report, which shall be substantially in 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, members of the NASE or other) and the

      number of claims disposed of during the most recent calendar year on

      Health Policies issued by CARRIER.

 

            (v) Litigation Report. The number of legal actions brought against

      CARRIER with respect to any Products sold to members of the NASE, 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 any of such limitations, CARRIER's

      plan for curing such non-compliance.

 

      (b) Quarterly Reports. Within sixty (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 NASE unaudited statutory financial

statements of CARRIER as filed with the Oklahoma state insurance department, and

a Health Insurance in Force Report, as described in Section 4 (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 NASE during the Term hereof.

 

5. NOTICE OF RATE INCREASES. CARRIER shall provide to the NASE 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. NASE 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 the NASE to permit the NASE to provide such input. CARRIER

agrees to consider recommendations by the NASE and to provide its rationale to

the NASE for decisions regarding rate increases that are contrary to the NASE'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. Each of CARRIER and the NASE agrees that it will promptly

notify the other Party of any lawsuits, complaints or notices of investigations

that it receives 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 Party or its customers and will not use

any such Confidential Information except to the extent

 

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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 NASE 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

      "association group" health insurance policies and certificates, individual

      policies of health insurance and multiple employer trust policies of

      health insurance 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 NASE hereby represents and warrants to CARRIER as follows:

 

            (i) The NASE is a non-profit corporation duly organized, validly

      existing and in good standing under the Texas Non-profit 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 NASE 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 NASE, 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) 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

      the NASE or for the validity or enforceability thereof, except for such

      approvals or consents which have been obtained or made.

 

9. INDEMNIFICATION.

 

      (a) Indemnification by CARRIER. CARRIER agrees to indemnify and hold

harmless the N


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