Exhibit 10.33
RMS, INC.
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RISK MANAGEMENT SOLUTIONS, INC.
October 1, 1997
Mr. Robert W. Ackerman
President and Chief Executive Officer
Sheffield Steel Corporation
220 N. Jefferson Street
Sand Springs, OK 74063
Re: Insurance Services Agreement
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Dear Bob:
This letter sets forth our understanding and agreement with respect to the
insurance services that Risk Management Solutions, Inc. ("RMSI"), will provide
to Sheffield Steel Corporation and its subsidiaries (the "Company") from the
date hereof, and continuing until either of us shall give the other not less
than 180 days prior written notice of termination of this agreement. The
insurance services we will provide to the Company are as follows:
a. Procure and maintain all property and casualty insurance coverage
including (i) the preparation of insurance specifications for all
proposals and renewals, and (ii) the selection of brokers and
insurance companies;
b. Maintain accounting records for all administered insurance programs;
c. Review and recommend alternative financing methods for insurance
coverages;
d. Identify and evaluate risk exposures and provide appropriate coverage
through loss control, self retention and/or insurance so as to
properly manage and minimize overall costs;
e. Provide workers compensation and general liability claims management
support by holding meetings with insurers, training local management,
developing return to work programs, and reviewing claim reserves and
recommending changes as appropriate;
f. Support internal safety efforts by assisting with compliance,
ergonomic and injury prevention programs, including supervisory
training, monitoring safety statistics, benchmarking and setting
appropriate goals for improvements;
g. Review claims and expenses with the Company on a monthly or quarterly
basis;
h. Provide budget assistance for insurance expenses; and
i. Prepare and file Proof of Loss statements for insured claims and
assist in settlement of all claims.
In order to achieve the lowest possible insurance costs for the Company,
certain insurance premiums (including, without limitation, workers compensation,
motor vehicle, and general liability) will be billed to us by the insurance
carriers. We will pay all such premiums to agents, brokers and/or insurance
companies on behalf of the Company, and invoice the Company monthly for these
costs. Some other insurance coverages that we arrange for the Company (i.e.,
property insurance, fiduciary and D & O liability insurance) may be invoiced
directly to the Company by the insurance carrier providing such coverage. In
addition, some insurance programs procured by us for the Company may require
certain collateral such as letters of credit or bonds to secure the payment
obligations of the Company related to claims thereunder. The Company will be
responsible for providing such collateral in the event it is required by the
insurance carrier.
We are pleased to be able to provide these insurance services to the
Company. As compensation for the services we provide to the Company hereunder,
you agree to pay us a fee of 15% of the total annual cost of your Company's
insurance program, which will be invoiced on a monthly basis. In addition, the
Company will be required to reimburse us for all travel, entertainment,
telephone and other out-of-pocket expenses incurred by RMSI and/or its employees
in connection with performing the services provided hereunder. If the above sets
forth our agreement, please sign a copy of this letter in the space provided
below.
AGREED: Very truly yours,
SHEFFIELD STEEL CORPORATION RISK MANAGEMENT SOLUTIONS, INC.
By: /s/ Robert W. Ackerman By: /s/ Missy Qay
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Robert W. Ackerman Missy Qay
President and Chief President
Executive Officer
Date: October 1, 1997 Date: October 1, 1997
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