EXHIBIT 10.71
INSURANCE ADMINISTRATION SERVICES AGREEMENT
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THIS INSURANCE ADMINISTRATION SERVICES AGREEMENT ("Agreement") is effective
as of October 1, 2001 ("Effective Date"), by and between INSURANCE MANAGEMENT
SOLUTIONS, INC. ("IMS"), a corporation organized and existing under the laws of
the State of Florida with its principal place of business located at 801 94th
Avenue North, St. Petersburg, Florida, and each of BANKERS INSURANCE COMPANY
("BIC"), BANKERS SECURITY INSURANCE COMPANY ("BSIC") and FIRST COMMUNITY
INSURANCE COMPANY ("FCIC"), herein collectively referred to as "Customer", all
having their principal place of business at 360 Central Avenue, Saint
Petersburg, Florida 33701.
WHEREAS, Customer wishes to engage the services of IMS to administer
certain of the Customer's insurance administration obligations for certain
lines of business in certain authorized states;
WHEREAS, IMS wishes to provide such services as set forth herein.
NOW THEREFORE, IN CONSIDERATION OF the mutual covenants and agreements
hereinafter set forth, the parties hereto do covenant and agree as follows:
ARTICLE I. DEFINITIONS
Unless the context clearly requires otherwise, the following terms when used in
this Agreement shall have the meanings set forth below:
A. "Authorized Lines of Business" means the lines of business expressly set
forth in SCHEDULE A of this Agreement.
B. "Authorized States" means the states expressly set forth in SCHEDULE A of
this Agreement.
C. "Business Day" means any day other than a Saturday, Sunday or other day
which is a bank holiday for Florida State banks or an IMS paid holiday
(New Year's Day, Memorial Day, Independence Day, Thanksgiving Day, day
after Thanksgiving, Christmas Eve (after 12 P.M. Eastern Standard Time)
and Christmas Day).
D. "Insurance Administration Services" means the services to be rendered
pursuant to this Agreement and as more specifically set forth on EXHIBIT I
and EXHIBIT II, attached hereto, in the Authorized States, and all
applicable laws and regulations.
E. "Insurance Program" means the Customer's insurance products within the
Authorized Line(s) of Business to be offered within the Authorized States.
F. "Technical Information" means and shall include (without limitation)
computer programs, databases, designs, algorithms, processes, structures,
data formats, business methods, know how, and research and development
information.
G. "Change of Control" means, with regards specifically to Schedule B Section
V, (a) a sale, transfer or pledge, or the issuance of fifty (50%) percent
or more of the voting stock of a party hereto to any third party that is
not an Affiliate of such party; or (b) a sale, transfer or pledge of a
substantial portion of the material assets of a party, or any merger or
consolidation of a party with non-affiliated entity or entities.
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ARTICLE II. TERM
The initial term of the Agreement shall commence on the Effective Date and
shall have a term of Sixty (60) calendar months following the Effective Date
("Initial Term"), unless terminated earlier pursuant to the other provisions
within this Agreement. Following the Initial Term, this Agreement shall
continue in full force and effect until terminated by either party, for any
reason or no reason and upon ninety (90) days prior written notice (unless
terminated earlier pursuant to the termination provisions within Article VIII).
ARTICLE III. RESPONSIBILITIES OF IMS
A. IMS shall dedicate the human, equipment and computer resources commercially
reasonably required to provide Customer with the Insurance Administration
Services, during the term of this Agreement, for the Insurance Program
within the Authorized States.
B. IMS' performance of the Insurance Administration Services for every
Authorized Line of Business shall meet any service level standard
("Standard") described on that certain "Service Level Agreement" attached
hereto as EXHIBIT III and by this reference made a part hereof (herein, the
"Service Level Agreement"). During any given two (2) month rolling period,
if IMS' performance of the Insurance Administration Services for any
Authorized Line of Business fails to meet any Standard ("Non-Compliant
Standard") set forth in the Service Level Agreement not as a result of
events that are beyond IMS' reasonable control (subject to the provisions
of Article XI (A) of this Agreement), IMS shall: (a) remedy such
Non-Compliant Standard during the two (2) month rolling period following
written notice ("Non-Compliance Notice") from Customer; or (b) submit a
written plan ("Improvement Plan") to Customer, that shall be reasonably
acceptable to Customer, that shall detail IMS' plan and time frame to
remedy such Non-Compliant Standard. Should IMS fail to submit to Customer
an Improvement Plan that is reasonably acceptable to Customer, or should
IMS fail to remedy such Non-Compliant Standard during any two (2) month
rolling period following the Non-Compliant Notice, then Customer may
terminate this Agreement (subject to IMS' ability to dispute the proposed
termination under the Dispute Resolution Procedures of Article XII) by
providing at least thirty (30) days prior written notice to IMS
("Non-Compliance Termination Notice") of its intent to terminate this
Agreement. Specifically, if Customer provides IMS with a Non-Compliance
Termination Notice, then IMS shall have thirty (30) days from the day it
receives the Non-Compliance Termination Notice to dispute the proposed
termination of the Agreement via a written notice to Customer to dispute
termination ("Termination Dispute Notice"). If IMS provides Customer with
a Termination Dispute Notice then the termination shall be stayed, the
parties shall submit to binding arbitration in accordance with Article XII
with regards to the termination issue and the Agreement may only be
terminated by a written decision of the Arbitration Board (as that term is
defined in Article XII).
C. IMS shall designate an employee ("Account Manager") of sufficient
status and binding discretionary decision making authority to act as
liaison with Customer to facilitate IMS' performance of the Insurance
Administration Services under this Agreement. The Account Manager shall
provide written and/or oral communication of the status of administration
of the Insurance Administration Services as agreed to by and between
Account Manager and Customer.
D. IMS shall, based on accepted industry standards and in accordance with
generally accepted insurance and accounting practices, as designated by the
applicable regulatory bodies, maintain complete and orderly copies of all
records and policy and/or claims files as may be required as a result of
IMS performing the Insurance Administration Services on behalf of Customer.
These copies shall be retained by IMS, in a format or media mutually
defined by Customer and IMS which shall be in compliance with applicable
laws and regulations. Upon termination of this Agreement all original
records shall automatically be returned to Customer; however, IMS shall be
entitled to retain copies thereof so long as (a) the retention of original
records is necessary to remain in compliance with applicable regulatory or
statutory rules and regulations and (b) IMS complies with and remains at
all times in compliance with the confidentiality provisions of Article V
hereof, which provisions shall survive termination of this Agreement.
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E. IMS shall maintain an errors and omissions policy issued by an insurance
carrier reasonably acceptable to Company, with policy limits of no less
than the greater of (i) Ten Million ($10,000,000) Dollars or (ii) an amount
sufficient to satisfy the financial responsibility requirements of the
insurance codes of applicable states, and with a deductible no greater than
Fifty Thousand ($50,000) Dollars. IMS agrees to maintain coverage in force
thereunder by replacement or renewal of the policy or by the purchase of an
extended claims reporting provision for a period of not less than one (1)
year subsequent to the expiration date of this Agreement. The Company
reserves the right to verify coverage at any time.
F. IMS shall maintain all licenses and regulatory approvals necessary to
conduct business contemplated by this Agreement. IMS shall be and remain in
compliance with all laws and regulations which has any affect on any
performance by IMS under this Agreement.
ARTICLE IV. RESPONSIBILITIES OF CUSTOMER
A. During the term of this Agreement, Customer shall provide to IMS, in a
timely manner, any and all data, information and other items reasonably
required to enable IMS to perform the Insurance Administration Services
specified in EXHIBIT I and EXHIBIT II of this Agreement. Customer
represents and warrants to IMS that it owns and possesses all property
rights to its corporate and subsidiary logos and hereby grants and warrants
to IMS a personal, non-exclusive, limited, non-transferable,
non-assignable, and revocable license to use Customer's corporate and
subsidiary logos (and any other copyrighted or trademarked property of
Customer that may be provided to IMS under this Agreement) while performing
and only in conjunction with business directly related to the Insurance
Administration Services. Customer acknowledges and agrees that delays in
delivery of required documentation, data and/or information by Customer may
result in a similar delay in fulfilling Insurance Administration Services,
and that such a delay in performing the Insurance Administration Services
shall not be deemed a breach of the Agreement so long as such delay is
proximately caused and rationally related to Customer's delay in delivering
such information.
B. CUSTOMER ACKNOWLEDGES AND AGREES THAT IMS ASSUMES NO INSURANCE COVERAGE
RISK FOR THE BUSINESS PROCESSED UNDER THIS AGREEMENT, OTHER THAN THE
OBLIGATIONS OF IMS THAT RELATE TO INDEMNIFICATION AND ERRORS AND OMISSIONS
INSURANCE AS MAY BE SPECIFICALLY DESCRIBED IN THIS AGREEMENT.
C. Customer shall designate manager level employee(s) of sufficient status and
binding decision making authority to act as a liaison with IMS and to
facilitate Customer's role as IMS performs the Insurance Administration
Services specified in EXHIBIT I and EXHIBIT II of this Agreement.
ARTICLE V. CUSTOMER ACCESS TO RECORDS/CONFIDENTIAL INFORMATION
A. Customer will be permitted reasonable access to all records and information
maintained by IMS on behalf of Customer (excluding, specifically,
proprietary Technical Information).
Except under circumstances where the applicable Proprietary System or Third
Party Proprietary System is inoperative due to reasonable and necessary
maintenance or an unforeseen emergency, Customer shall have online
(computer) "view" access to the information contained in the Proprietary
Systems, Third Party Proprietary Systems and documents (including Customer
documents that are imaged by IMS) that relate to the Insurance
Administration Services.
Further, IMS shall also provide Customer with a daily feed of data that is
related to the Insurance Administration Services.
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Customer shall also have physical access to any of IMS' records and
information maintained by IMS and relating to the Insurance Administration
Services, on any Business Day during normal business hours and upon twenty
four (24) hours prior written notice to IMS by Customer for so long as IMS
is required to maintain such records under this Agreement; provided,
however, in the event that Customer requires physical access to the records
and information under circumstances that would reasonably be described as
an emergency (including any regulatory inquiry which requires a response in
less than Twenty Four (24) hours) Customer shall have access to records and
information maintained by IMS and relating to the Insurance Administration
Services on any Business Day within twelve (12) hours of providing written
notice to IMS.
At Customer's expense, Customer will be permitted to copy any of its
records and/or information maintained by IMS and relating to the Insurance
Administration Services during normal business hours on any Business Day;
provided, however, that the copying of records and/or information shall be
subject to the limitations and restrictions contained in this Agreement.
Upon written request by Customer, and at Customer's expense, IMS will
promptly mail or fax to Customer, or make available for pick up, supporting
documentation concerning any specific transaction processed by IMS under
the terms of this Agreement.
IMS will provide reasonably adequate workspace for Customer to conduct a
review and otherwise copy, in accordance with the terms of this Agreement,
any of Customer's records and/or information. Further, Customer or its
representatives shall take precautions, when conducting performing such
review and/or copying not to disrupt IMS' ongoing business activities.
B. The recipient ("Recipient") of confidential data and/or information
pursuant to this Agreement shall maintain the confidentiality of all data
and/or information which is the property of the other party ("Disclosing
Party"), whether originally supplied by the Disclosing Party, or whether
generated by the Disclosing Party in the course of performing under this
Agreement and which is directly accessible to the Recipient or is in
possession of Recipient in its implementation, facilitation and/or
performance of this Agreement. During any term of this Agreement, Recipient
may acquire, know, or have within its possession, information (including,
but not limited to, Technical Information) and/or data of the Disclosing
Party concerning commercial and trade affairs, rating and underwriting
rules and guidelines, the identity of clients, the identity of insureds and
beneficiaries, claims, benefits, rates and Agents, financial information,
the Proprietary System (as defined at Article VII (A) herein), the Third
Party Proprietary System (as defined in Article VII (B) herein) and
business practices of the Disclosing Party ("Confidential Information").
Confidential Information which is provided in tangible form must be clearly
marked "Confidential", "Proprietary" or the substantial equivalent thereof,
or if orally disclosed must be clearly identified as "Confidential" or
"Proprietary" at the time of the disclosure (except for IMS' Technical
Information, the identity of Customer's clients, the identity of Customer's
insureds and beneficiaries, claims, benefits, and Agents, which will be
deemed "Confidential Information" under this Agreement, regardless of
whether marked as such). Except as required by law, Recipient shall keep
Disclosing Party's Confidential Information confidential and shall only use
the Confidential Information in performing or facilitating the Insurance
Administration Services under this Agreement. Recipient shall not disclose
the Confidential Information without Disclosing Party's prior written
permission except to Recipient's employees who require the information to
perform or facilitate the Insurance Administration Services under this
Agreement. Each party hereto, as a Recipient, warrants to the other that
appropriate measures shall be taken by Recipient to safeguard the
confidentiality of the Confidential Information, with a level of care at
least equal to the level of care with which Recipient safeguards its own
confidential or proprietary information. All employees, Agents or
representatives of Recipient and any third parties who are given access to
the Confidential Information shall be under obligation to Recipient to
maintain such information in confidence.
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IMS and Customer agree that any Recipient shall have no obligation with
respect to any information or data which:
a) is already rightfully known to Recipient through means other than
Disclosing Party; or
b) is or becomes publicly known through no wrongful act of Recipient; or
c) is rightfully obtained by Recipient from a third-party without similar
restriction and without breach of this Agreement; or
d) is independently developed by Recipient without breach of this
Agreement.
Disclosing Party shall retain title to all Confidential Information
(whether tangible or intangible) delivered thereby pursuant to this
Agreement. Recipient shall not copy, reproduce or use any Confidential
Information without written authorization of Disclosing Party, except as
may be reasonably required to accomplish the Insurance Administration
Services under this Agreement. Upon written request of Disclosing Party
Recipient shall promptly return, or destroy with specific written
permission of the Disclosing Party, all tangible copies containing
Confidential Information, except those copies kept in the regular course of
business, or that are required to be kept pursuant to any state or federal
administrative, regulatory or statutory mandates. The obligations under
this Article V (B) shall survive the termination of this Agreement.
Notwithstanding the foregoing, this Article V shall not prevent the
disclosure of Confidential Information to the extent legally required by
any court or regulatory entity having jurisdiction over the parties.
For purposes of this Article V (B), Recipient and Disclosing Party shall
include within their meaning all Agents of the Recipient and Disclosing
Party.
ARTICLE VI. EXPENSES AND FEES
A. In consideration of IMS providing Insurance Administration Services
described herein, Customer shall pay IMS, as applicable, the fees (the
"Fees") specified in the pricing schedule attached hereto as "SCHEDULE B"
and by reference herein made a part of this Agreement. The Fees may include
an "Electronic" rate, for policies issued via "Electronic" means, and a
"Manual" rate, for policies issued using a "Manual" process. A policy shall
only be considered an "Electronic" policy if the data input necessary to
issue the initial policy was input without the manual intervention of IMS.
The "Electronic" rate shall also apply to all renewals of the "Electronic"
policy whether the renewal is issued via an automated renewal process or a
manual renewal process. A policy shall be considered a "Manual" policy if
the data input necessary to issue the initial policy was input with the
manual intervention of IMS. The "Manual" rate shall also apply to all
renewals of the "Manual" policy whether the renewal is issued via an
automated renewal process or a manual renewal process. The performance by
IMS of any service or function that is outside of the scope of the
Insurance Administration Services ("Additional Services") shall require the
payment by Customer of additional consideration as mutually agreed between
IMS and Customer. IMS shall not perform any Additional Services unless
Customer request such Additional Services in writing or, if the expense of
such Additional Services are estimated to be less than One Hundred Dollars
($100.00), unless Customer request such Additional Services either in
writing or verbally.
B. Customer shall reimburse IMS for necessary travel, living and out-of-pocket
expenses reasonably incurred by IMS personnel in the performance the
Insurance Administration Services under this Agreement specifically
provided that all such expenses exceeding One Thousand Dollars ($1,000.00)
are approved by Customer in advance and in writing.
C. Subject to the terms of this Agreement, and provided a billing statement
was timely provided, all Fees and expenses to be payable by Customer to IMS
or any third party under this Agreement shall be paid to IMS on or before
the last Business Day of the month immediately following the month in which
Fees are owed. Customer's failure to pay all Fees and expenses when due
shall be considered a material breach of this Agreement. Further, if
Customer fails to pay any Fees and expenses due IMS as herein provided,
Customer shall pay to IMS in addition to all sums otherwise due, interest
which shall accrue at 1.5% per month on such delinquency from the date the
Fees or
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expenses became past due. Failure or forbearance to exercise any of
its rights and privileges hereunder shall not constitute the
forfeiture or waiver of such rights and privileges on the part of IMS.
IMS will calculate the Fees and expenses owed to IMS by Customer and
will send a statement to Customer (containing detailed billing as to
each Authorized Line of Business and all other related expenses)
within two (2) weeks of the last day of the month for which Fees are
owed, subject to Customer providing IMS with the necessary month end
data that it will need to complete a detailed billing statement. If
Customer fails to provide the necessary month end data that IMS will
need to complete a detailed billing statement, then IMS may provide
Customer with a reasonable estimate of Fees and expenses owed and
Customer shall pay IMS in accordance with that estimate; with an
adjustment for actual Fees and expenses made on the next month's
billing statement.
D. Six (6) months prior to the three (3) year anniversary of the
Effective Date of this Agreement ("Demand Date"), either party
may request that the Fees specified in SCHEDULE B be renegotiated.
The party requesting that the Fees be renegotiated shall do so
by written notice ("Demand Notice") to the other party and shall make
such request on or before the Demand Date. If neither party makes a
Demand Notice on or before the Demand Date, then SCHEDULE B shall
remain in effect until the termination of the Initial Term.
If a Demand Notice is made, the parties shall negotiate in good faith,
which shall include the consideration of the following factors
("Re-negotiation Factors") when determining whether any change should
be made to the Fees stated in SCHEDULE B: (i) whether the Fees are
competitive with the rates currently being charged within the industry
for like services; (ii) whether there has been any material increase
or decrease in the number of policies being serviced or premium being
processed under this Agreement; (iii) whether the quality of the
Insurance Administration Services has diminished or improved since the
Effective Date of this Agreement; (iv) whether IMS has consistently
failed to meet or consistently met the Standards since Effective Date
of this Agreement; (v) whether the Authorized Line of Business is
being terminated or run off by Customer or is no longer being
administered by IMS; and (vi) with regards specifically to WYO Flood,
whether there has been in material increase or decrease in the
Allowance or material change in the WYO Flood program (as both terms
are defined in EXHIBIT II). NOTWITHSTANDING THE FOREGOING, THE PARTIES
SHALL NOT BE UNDER ANY OBLIGATION TO REACH AN AGREEMENT ON
RE-NEGOTIATED FEES, THEIR ONLY OBLIGATION SHALL BE TO NEGOTIATE IN
GOOD FAITH. If the parties are unable to reach an agreement in their
sole discretion with respects to the re-negotiation of Fees within
ninety (90) days following the Demand Notice, then either party may
terminate this Agreement by providing the other party ninety (90) days
prior written notice. Until revised Fees are mutually agreed to in
writing between the parties, Customer shall pay IMS, in accordance
with SCHEDULE B then in effect. Any revised Fees mutually agreed to by
the parties shall be reflected in a "Revised Schedule B" that shall be
signed by both parties to this Agreement.
E. The parties understand and agree that Fees specified in Section I of
SCHEDULE B are based upon an aggregate policy in force ("PIF") count
in excess of 388,570 policies for WYO Flood, in excess of 23,412
policies for Auto, in excess of 108,207 policies for Homeowners. If
during any three (3) month rolling period Customer's moving average
PIF count for (a) WYO Flood policies fall below 291,427 policies or
rises above 485,713 policies, (b) Auto policies fall below 17,559
policies or rises above 29,265 policies, (c) Homeowners policies fall
below 81,155 policies or rises above 135,259 policies, (individually,
each shall be defined as a "PIF Material Variation") then either IMS
or Customer may make a written request to the other party (the "PIF
Material Variation Notice") to renegotiate Fees on Schedule B directly
related to the Authorized Line of Business at any time after the PIF
Material Variation for that Authorized Line of Business at any time
after the PIF Material Variation for that Authorized Line of Business
and during the term of this Agreement.
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If PIF Material Variation Notice is made, the parties shall negotiate
in good faith, which shall include the consideration of the
Re-negotiation Factors when determining whether any change should be
made to the Fees stated in SCHEDULE B. NOTWITHSTANDING THE FOREGOING,
THE PARTIES SHALL NOT BE UNDER ANY OBLIGATION TO REACH AN AGREEMENT ON
RE-NEGOTIATED FEES, THEIR ONLY OBLIGATION SHALL BE TO NEGOTIATE IN
GOOD FAITH. If the parties are unable to reach an agreement in their
sole discretion with respects to the re-negotiation of Fees within
ninety (90) days following the PIF Material Variation Notice, then
with regards to any PIF Material Variation arising from a certain
Authorized Line of Business, the party making the PIF Material
Variation Notice may eliminate that Authorized Line of Business from
the Agreement; provided, however, such elimination of that Authorized
Line of Business shall not effect the validity of any remaining
portion of the Agreement which shall remain in full force and effect
as if the Agreement had been executed with the eliminated portion
thereof excluded. Until revised Fees are mutually agreed to in writing
between the parties, or until any Authorized Line of Business is
eliminated from the Agreement, Customer shall pay IMS in accordance
with SCHEDULE B then in effect. Any revised Fees mutually agreed to by
the parties shall be reflected in a "Revised Schedule B" that shall be
signed by both parties to this Agreement.
ARTICLE VII. LICENSE, TRADE SECRET AND PROPRIETARY RIGHTS
A. IMS from time to time may use its own proprietary computer software
products and account servicing methods and procedures ("Proprietary
System"), which may be identified, described or referenced in EXHIBIT
I and EXHIBIT II hereto, in the performance of the Insurance
Administration Services. During any term of this Agreement, IMS grants
a personal, non-transferable, non-assignable, non-exclusive license to
Customer to use portions of the Proprietary System as necessary for
IMS to perform the Insurance Administration Services under this
Agreement. Further, no provision within this Agreement shall be
interpreted as prohibiting IMS from selling or licensing its
Proprietary System to any other customer or prospective customer of
IMS; provided, however, Customer's license is not interrupted or
diminished and so long as Customer's Confidential Information is not
disclosed.
B. IMS, from time to time, may also use proprietary third party computer
software products and third party account servicing methods and
procedures ("Third Party Proprietary System"), which may be
identified, described or referenced in EXHIBIT I and EXHIBIT II in the
performance of the Insurance Administration Services. No provision
within this Agreement shall be interpreted as prohibiting IMS or the
Third Party Proprietary System vendor from selling or licensing the
Third Party Proprietary System, or modifications and enhancements to
the Third Party Proprietary System, to any other customer or
prospective customer of IMS, so long as Customer's Confidential
Information is not disclosed.
C. Other than the limited rights to use the Proprietary System and the
Third Party Proprietary System (as provided in Article VII (A) and (B)
above), this Agreement grants to Customer no right to possess or
reproduce, download, reverse engineer, or obtain any other interest
in, the Proprietary System or the Third Party Proprietary System, or
their specifications in any tangible or intangible medium. Unless
Customer already owns, has in its own right already individually
licensed, or subsequently owns or licenses the Proprietary System or
Third Party Proprietary System, Customer may not mortgage,
hypothecate, sell, assign, pledge, lease, transfer, license, or
sublicense the Proprietary System or the Third Party Proprietary
System, nor allow any person, firm, entity or corporation to transmit,
copy, reproduce, download, reverse engineer, or obtain any other
interest in the Proprietary System or the Third Party Proprietary
System, or their specifications in whole or in part (except in
accordance with the terms of Customer's ownership interest in or
license of the Proprietary System or Third Party Proprietary System).
In the event Customer shall come into possession of any source or
object code associated with the Proprietary System or the Third Party
Proprietary System, that is not already owned or not already
individually licensed or sub-licensed to Customer, Customer shall
immediately notify IMS and return the source or object code associated
with Proprietary System or the Third Party Proprietary System in its
possession and all copies of any kind thereof to IMS.
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D. Unless Customer already owns, has individually licensed, or subsequently
owns or licenses the Proprietary System or Third Party Proprietary System,
Customer covenants and agrees not to disclose or otherwise make the
Proprietary System or the Third Party Proprietary System available to any
person other than employees, insurance sales agents ("Agents") or
representatives of the Customer required to have access or use of the
Proprietary System or the Third Party Proprietary System to facilitate IMS'
or Customer's performance under this Agreement. Customer agrees to obligate
each such employee, Agents, or representative to a level of care sufficient
to protect the Proprietary System and the Third Party Proprietary System
from unauthorized disclosure.
E. Notwithstanding anything to the foregoing, Customer shall in no way be
prohibited from prospectively owning or licensing the Proprietary System or
the Third Party Proprietary System so long as the owner of the Proprietary
System or Third Party Proprietary System is willing to sell or license the
system to Customer. The obligations of Customer under this Article VII
shall survive termination of this Agreement, regardless of the reason for
termination.
ARTICLE VIII. TERMINATION
A. Following the Initial Term, either party may terminate this Agreement, for
any reason or for no reason, upon ninety (90) days prior written notice to
the other party of its intent to terminate those Agreement either at the
end of the Initial Term or any time thereafter.
B. Notwithstanding the foregoing paragraph (A), this Agreement shall also
terminate:
1) at the election of the Customer, upon written notice to IMS, if IMS
becomes insolvent, if it makes an assignment for the benefit of its
creditors, if a petition for relief under the United States Bankruptcy Code
is filed by or against it and it is not dismissed within thirty (30) days
of being filed, or if a trustee, receiver or other custodian of its assets
is appointed; or
2) at the election of IMS, upon written notice to Customer, if Customer
becomes insolvent, if it makes an assignment for the benefit of its
creditors, if a petition for relief under the United States Bankruptcy Code
is filed by or against it and it is not dismissed within thirty (30) days
of being filed, or if a trustee, receiver or other custodian of its assets
is appointed (including, but not limited to, any proceeding pursuant to any
state or federal action governing insurer solvency); or
3) at the election of the Customer, if IMS materially breaches any
provision of this Agreement and fails to cure such breach within thirty
(30) days after written notice thereof is given to IMS by the Customer; or
4) at the election of IMS, if Customer materially breaches any provision
of this Agreement and fails to cure such breach within thirty (30) days
after written notice thereof is given to Customer by IMS; or
The initiation under this Agreement of any dispute resolution procedure
shall not prevent a party from terminating this Agreement in accordance
with this Article VIII.
C. On expiration or termination of this Agreement, IMS shall immediately
return to Customer all open and closed claim files, and all of Customer's
Confidential Information, in IMS' possession and related to the Insurance
Administration Services provided by IMS during the term of this Agreement,
time being of the essence. Customer shall do the same, relative to IMS'
Confidential Information, and shall cause Customer's Agents and
representatives (including, but not limited to, any third party given
access to the Confidential Information) to do the same relative to IMS'
Confidential Information. Customer shall pay IMS (in accordance with
SCHEDULE B then in effect) for any and all Fees and third party fees due
IMS for Insurance Administration Services performed pursuant to this
Agreement. IMS AND CUSTOMER SHALL COOPERATE IN ANY TRANSITION PERIOD DURING
THE WIND-UP OF INSURANCE ADMINISTRATION SERVICES PROVIDED CUSTOMER UNDER
THIS
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AGREEMENT; PROVIDED, HOWEVER, THAT UPON TERMINATION OF THIS AGREEMENT
CUSTOMER SHALL BECOME SOLELY ACCOUNTABLE AND SHALL ASSUME ALL
RESPONSIBILITY OF ANY PENDING CLAIM FILES PREVIOUSLY ADMINISTERED BY IMS
UNDER THIS AGREEMENT EXCEPT FOR MATTERS OCCURRING BETWEEN THE EFFECTIVE
DATE AND THE TERMINATION DATE OF THIS AGREEMENT RELATING TO WILLFUL
MISCONDUCT OR GROSS NEGLIGENCE OF IMS (INCLUDING ITS OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS). If Customer requires assistance in converting
Customer's data to a new format, or requires assistance from IMS relative
to Customer's transition to an alternative insurance administration
arrangement, then IMS shall provide such services at the then current rates
charged by IMS for the services specified in SCHEDULE B; PROVIDED, HOWEVER,
IN THE EVENT SUCH DATA IS NOT KEPT BY IMS IN A FORMAT PREVIOUSLY AGREED TO
IN WRITING BY CUSTOMER AND IMS, THEN IMS SHALL CONVERT ALL SUCH DATA INTO A
FORMAT REASONABLY ACCEPTABLE TO CUSTOMER AT IMS'S SOLE COST AND EXPENSE.
This obligations under this Paragraph (C) shall survive any termination of
this Agreement.
ARTICLE IX. WARRANTIES AND COVENANTS BY IMS
IMS covenants that IMS will comply in all respects with the law of the state or
states covered by this Agreement and with the rules and regulations of all
regulatory authorities having jurisdiction over IMS' activities, and shall,
whenever necessary, maintain at its own expense all required licenses to
transact business in such states. IMS warrants to Customer that (a) IMS owns or
otherwise has the right to use the Proprietary System and the right to use the
Third Party Proprietary System used to perform the Insurance Administration
Services, and the rights to such Proprietary System granted hereunder will not
knowingly infringe upon a third party's copyright or patent rights; (b) IMS is
duly authorized to transact the business of servicing insurance companies; and
(c) the express warranties provided here and elsewhere in this Agreement are
IMS' only warranties and no other warranty, express or implied, including any
warranty of merchantability, fitness or fitness for a particular purpose, will
apply to the provision of Insurance Administration Services under this
Agreement.
ARTICLE X. LIABILITY, LIMIT OF LIABILITY, INDEMNITIES AND REMEDIES
A. The parties shall assume the following obligations and liabilities as
specified below and subject to the limitations on liability set forth in
Article X, (B) below:
1) IMS shall indemnify, defend and hold harmless Customer, its officers,
directors, employees and controlling persons from any liability, cost,
loss, fine, penalty, claim, demand, damage or expense, including reasonable
attorneys' fees, incurred directly as a result of any material breach of
IMS' obligations under this Agreement or the materials breach of any
representation or warranty made by IMS to Customer pursuant hereto;
2) Customer shall indemnify, defend and hold harmless IMS, its officers,
directors, employees and controlling persons from any liability, cost,
loss, fine, penalty, claim, demand, damage or expense, including reasonable
attorney's fees, incurred directly as a result of any material breach of
Customer's obligations under this Agreement or the material breach of any
representation or warranty made by Customer to IMS pursuant hereto;
B. There will be no limit of liability with regards to the following items:
(i) liabilities resulting from Fees and expenses payable to IMS under
Article VI of this Agreement; (ii) acts of fraud, gross negligence or
willful misconduct; (iii) violations of Article VII of this Agreement; and
(iv) liabilities that would fall under IMS' E&O insurance coverage.
C. Except for those items identified under Paragraph (B) above, each party's
maximum liability ("Maximum Liability") to the other party for any cause
whatsoever, during any one calendar year shall be limited to damages
incurred by that party and shall not exceed the aggregate amount of Fees
paid by the Customer under Schedule B of this Agreement for the three (3)
months immediately preceding the breach or cause of liability.
9
D. All parties agree to promptly give the others notice upon being notified or
becoming aware of any and all allegations or claims, which could give rise
to a claim under this Article.
E. The obligations of the parties under this Article shall survive termination
of this Agreement, regardless of the reason for termination.
ARTICLE XI. GENERAL AGREEMENTS
A. The parties shall not be liable or deemed to be in default hereunder for
any delay or failure in performance under this Agreement, interruption of
the Insurance Administration Services resulting, or failure to meet the
Standards referenced in Article III, directly from unforeseeable, natural
acts (including but not limited to weather catastrophes such as flood,
hurricanes, tornadoes, windstorms, ice storms, blizzards and hail storms),
civil or military authority, labor disputes or any similar cause beyond the
reasonable control of the parties, so long as IMS follows a disaster
recovery plan approved by Customer (which recovery plan must be presented
to Customer for review on annual basis), and provided further that IMS
makes every commercially reasonable effort to perform under this Agreement
once such occurrence has ceased.
B. Any and all notices, designations, consents, offers, acceptances, or any
other communication provided for herein shall be given in writing by hand
delivery, by overnight carrier, by registered or certified mail or by
facsimile transmission and shall be addressed as follows:
If to Customer to:
360 Central Avenue
17th Floor
St. Petersburg, FL 33733
Attn: Robert G. Menke, President
FAX (727) 823-6518
If to IMS to:
801 94th Avenue North
St. Petersburg, FL
-----------
Attn: David M. Howard, President
FAX (727) 803-2076
Notices sent by hand delivery shall be deemed effective on the date of
actual hand delivery. Notices sent by overnight carrier shall be deemed
effective on the next Business Day after being placed into the hands of the
overnight carrier. Notices sent by registered or certified mail shall be
deemed effective on the fifth Business Day after being deposited into the
post office. Notices sent by facsimile transmission shall be deemed to be
effective on the day when sent if sent prior to 4:30 p.m. (the time being
determined by the time zone of the recipient), otherwise they shall be
deemed effective on the next Business Day.
C. This Agreement, and the exhibits, schedules and appendices attached hereto,
contain all of the prior oral and/or previously written agreements,
representations, and arrangements between the parties hereto with regards
to the Insurance Administration Services. There are no representations or
warranties other than those set forth herein. No change or modification of
this Agreement, including the exhibits, schedules and appendices hereto,
shall be valid unless the same shall be in writing and signed by all of the
parties hereto. All exhibits, schedules, appendices, addendum of any kind,
or attachments to this Agreement shall be made a part of this Agreement and
shall be subject to all terms and conditions of this Agreement.
D. Words of a gender used in this Agreement shall be held to include any other
gender, the words in a singular number held to include the plural, when the
sentence so requires. Article headings are
10
intended for purposes of description only and shall not be used for
purposes of interpretation of this Agreement.
E. Should any part of this Agreement for any reason be declared invalid, such
decision shall not effect the validity of any remaining portion, which
remaining portion shall remain in full force and effect as if the Agreement
had been executed with the invalid portion thereof eliminated. It is,
therefore, declared the intention of the parties hereto that each of them
will have executed the remaining portion of this Agreement without
including therein any such part, parts or portion which may, for any
reason, be hereafter declared void.
F. If either party should bring an action alleging breach of this Agreement or
seeking to enforce, rescind, renounce, declare, void or terminate this
Agreement or any provisions thereof (in compliance with the Dispute
Resolution Procedures detailed in Section XII of this Agreement) the
prevailing party shall be entitled to recover all of its legal expenses,
including reasonable attorneys' fees and costs (including legal expenses
for any appeals taken), and to have the same awarded as part of the
judgment in the proceeding in which such legal expenses and attorneys' fees
were incurred. The venue for any action related to this Agreement shall be
in Pinellas County, Florida. This Agreement and all matters arising
hereunder shall be governed by and determined in accordance with the laws
of the State of Florida without giving effect to any choice of law
provisions. The obligations of the parties under this Paragraph F shall
survive termination of this Agreement, regardless of the reason for
termination.
G. Neither IMS nor Customer shall assign this Agreement or any of its rights
hereunder without the prior written consent of the non-assigning party.
H. The parties agree not to disclose the terms and conditions of this
Agreement to any third party, except (i) as required in the normal conduct
of Customer's business, or (ii) as required by law or regulation including,
without limitation, any Federal securities law, or regulation.
I. This Agreement shall be for the benefit of, and shall be binding upon, the
parties and their respective heirs, personal representatives, executors,
legal representatives, successors and assigns.
ARTICLE XII. DISPUTE RESOLUTION PROCEDURES
A. The parties will attempt in good faith to promptly resolve any material
dispute regarding this Agreement by negotiations between senior management
("Senior Management") of the parties. Senior Management of each party will
meet within ten (10) calendar days of notice ("Notice of Dispute") by a
party of the existence of a material dispute, at a mutually agreed time and
place, to resolve the material dispute. At the meeting of Senior
Management, to be attended by an individual from each party who shall have
authority to settle the dispute, each party shall verbally state the issues
in the material dispute and its position. If the material dispute is not
resolved to the mutual satisfaction of the parties within seven (7)
calendar days of the meeting of Senior Management, then the parties may
attempt to resolve the controversy using mediation.
B. If the matter has not been resolved pursuant to the aforesaid mediation
procedure within thirty (30) calendar days of the issuance of a party of a
Notice of Dispute, or if either party will not participate in mediation,
then either party may initiate arbitration upon fifteen (15) calendar days
written notice to the other party. Notwithstanding the foregoing, all
deadlines specified above may be extended upon mutual written agreement of
the parties.
C. Except for the right of either party to apply to a court of competent
jurisdiction for a temporary restraining order, preliminary injunction or
other equitable relief to preserve the status quo, all claims, disputes,
controversies and other matters relating to breach of this Agreement which
cannot be resolved by the parties shall be settled by arbitration in
accordance with this Agreement.
D. Notice requesting arbitration ("Arbitration Notice"), or any other notice
made in connection
11
therewith, shall be made in writing by one party and sent by certified
mail, return receipt requested, to the other party. The Arbitration Notice
shall state in particular all issues to be resolved in the view of the
complaining party, shall appoint the arbitrator selected by the complaining
party and shall set a tentative date for the arbitration hearing, which
date shall be no sooner than forty-five (45) calendar days and no later
than ninety (90) calendar days from the date that the Arbitration Notice is
mailed. Within twenty (20) calendar days of receipt of the complaining
party's Arbitration Notice, the respondent shall notify the complaining
party of the name of its appointed arbitrator. When the two arbitrators
have been appointed, they shall agree on a third independent arbitrator and
shall appoint such person by written notice to the parties signed by both
arbitrators within thirty (30) calendar days from the date of the
appointment of the second arbitrator. If the two arbitrators fail to agree
upon the appointment of an independent arbitrator at the end of thirty (30)
calendar days following the appointment of the second arbitrator, then the
independent arbitrator shall be appointed by the American Arbitration
Association ("AAA"), or its successor, in accordance with its then
prevailing commercial arbitration rules then in effect. The three (3)
arbitrators shall constitute the arbitration board ("Arbitration Board").
The parties agree that the location for conducting the arbitration,
regardless of the party bringing the complaint, will be in Pinellas County,
Florida.
E. The members of the Arbitration Board shall be active or retired (i) lawyers
or professionals familiar with insurance and/or (ii) active or former
officers or management employees of insurance and/or data processing firms
and/or software development companies. The person selected by the two
respective arbitrators appointed by the parties shall be the umpire or
chief arbitrator and must be a licensed attorney.
F. Arbitration shall be conducted in accordance with the Commercial Rules of
the AAA then in effect except as modified herein.
G. The parties agree that all then current employees of each with information
relevant to the dispute between the parties will be voluntarily produced,
at the employer's expense, for all proper discovery and arbitration
hearings.
H. The cost of the arbitration relative to the arbitrators and the AAA
("Costs") shall be borne equally pending the arbitrators' award. Each party
shall bear its own expenses for attorneys' fees. The prevailing party in
any arbitration proceeding hereunder shall be entitled, in addition to such
other relief as may be granted, to recover the portion of the Costs
incurred by that party in connection with arbitration under this Agreement
prior to the award.
I. The parties agree that the Arbitration Board shall be required to render
its decision in writing within thirty (30) calendar days of the conclusion
of the arbitration proceedings, unless such time shall be extended by
mutual written agreement of the parties.
J. With respect to any matter brought before the Arbitration Board, the
Arbitration Board shall make a decision having regard to the intentions of
the parties, the terms of this Agreement, and custom and usage of the
insurance industry. Such decisions shall be in writing and shall state the
findings of fact and conclusions of law upon which the decision is based,
provided that such decision may not (i) award consequential, punitive,
special, incidental or exemplary damages, or (ii) unless specifically
requested by a party pursuant to the terms of this Agreement, otherwise
terminate this Agreement or any provisions thereof. The decision shall be
based exclusively upon the evidence presented by the parties at a hearing
in which evidence shall be allowed and such decision shall be final and
binding upon all parties to the proceeding and may be entered by either
party in any court having competent jurisdiction.
K. The obligations of the parties under this Section XII shall survive
termination of this Agreement, regardless of the reason for termination.
12
ARTICLE XIII - CHANGE IN LAW; REGULATORY APPROVAL
In the event of a change in any law, regulation, rule or governmental
interpretation thereof by any governmental body having jurisdiction over the
parties, or in the event of an order by any court having jurisdiction over the
parties causes this Agreement or any provision hereof to be in non-compliance
with any applicable law, rule, order or any other regulation, then this
Agreement may be (a) modified to address such non-compliance by mutual
agreement of the parties, or (b) so long as the modification to this Agreement
to correct such non-compliance ("Required Modification") does not significantly
and materially alter the economic terms of this Agreement, modified to address
such non-compliance but only to the extent necessary to make the Agreement
compliant, or (c) in the event Required Modification significantly and
materially alters the economic terms of this Agreement and the parties can not
mutually agree to a modification hereof, terminated by either party upon
providing the other party with one hundred and eighty (180) days prior written
notice. Provided, however, if (i) terminating this Agreement upon one hundred
and eighty (180) days prior written notice would subject either party to
material fine or other material penalty by law, (ii) the governmental or
regulatory body mandates that the Agreement be terminated prior to the
prescribed one hundred and eighty (180) day notice period, or (iii) failure to
terminate this Agreement within thirty (30) days will significantly and
materially impact the financial viability of Customer or IMS, then this
Agreement may be terminated upon thirty (30) days prior written notice to the
other party.
To the extent required, this Agreement shall be subject to approval by
governmental agencies having jurisdiction over Customer and Customer's business.
ARTICLE XIV - CUSTOMER'S BUSINESS
This Agreement shall not be deemed to require Customer to offer or otherwise
participate in any particular business or lines of business or to provide any
business within any particular jurisdiction, nor will Customer's relationship
with IMS be deemed to be exclusive. Notwithstanding the foregoing, Customer
shall notify IMS prior to negotiating any definitive documents with any party
that is not a party to this Agreement ("Third Party") for the sale of any
material portion of any Authorized Line of Business. During the Initial Term of
this Agreement and as a condition to the sale of all or substantially all the
WYO Flood, Homeowners or Auto Authorized Line of Business during any rolling
twelve (12) month period, Customer shall require any Third Party or parties
purchasing all or substantially all the WYO Flood, Homeowners or Auto
Authorized Line of Business during any rolling twelve (12) month period to use
IMS exclusively for any Insurance Administration Services provided for in this
Agreement that are to be performed relative to the Authorized Line of Business.
Notwithstanding the foregoing, if Customer terminates or runs off any
Authorized Line of Business during any rolling twelve (12) month period,
without selling all or substantially all of that Authorized Line of Business to
any Third Party within that same rolling twelve (12) month period, Customer
shall have no liability or obligation to IMS for procuring Insurance
Administration Services from IMS for that terminated or run off Authorized Line
of Business. For purposes of this Article, the term "substantially all" shall
mean eighty percent (80%) or more of the aggregate amount of any Authorized
Line of Business as measured from the first day of the applicable rolling
twelve (12) month period.
ARTICLE XV - APPROVAL BY RESPECTIVE BOARD OF DIRECTORS
This Agreement, once signed by all parties hereto, shall be submitted to each
party's respective Board of Directors ("Company Board"), or any Company Board
committee ("Committee") that has authority to approve this Agreement, for
approval. Such written Company Board or Committee approval must be obtained
within thirty (30) days following the execution date of the last party to
execute this Agreement. In the event that any party's respective Company Board
or Committee has not approved this Agreement in writing (and delivered such
approval to the other party) within such thirty (30) day period, then the other
party may elect, at its sole option, to (a) extend such period in which to
obtain Company Board or Committee approval or (b) terminate this Agreement by
providing written notice to the other party hereto.
13
IN WITNESS WHEREOF, the parties hereto by their respective duly authorized
representatives have executed this Agreement as of the date and year first set
forth above.
- -----------------------------------------------------------------------------
"IMS"
INSURANCE MANAGEMENT SOLUTIONS, INC.
- -----------------------------------------------------------------------------
By: /s/ D. M. Howard D. M. Howard
--------------------------
As its: Pres/CEO Pres/CEO Date: 11/26/01
----------------------- ------------
- -----------------------------------------------------------------------------
"CUSTOMER"
- -----------------------------------------------------------------------------
BANKERS INSURANCE COMPANY
By: /s/ Robert G. Menke Robert G. Menke
--------------------------
As its: President President Date: 11/21/2001
----------------------- -------------
BANKERS SECURITY INSURANCE COMPANY
By: /s/ Robert G. Menke Robert G. Menke
--------------------------
As its: President President Date: 11/21/2001
----------------------- -------------
- -----------------------------------------------------------------------------
FIRST COMMUNITY INSURANCE COMPANY
By: /s/ Robert G. Menke Robert G. Menke
--------------------------
As its: President President Date: 11/21/2001
----------------------- -------------
- -----------------------------------------------------------------------------
SCHEDULES:
SCHEDULE "A" -- AUTHORIZED STATES AND INSURANCE PROGRAM
SCHEDULE "B" -- PRICING SCHEDULE
EXHIBITS:
EXHIBIT I -- INSURANCE ADMINISTRATION SERVICES (AT RISK LINES)
EXHIBIT II -- INSURANCE ADMINISTRATION SERVICES (WYO FLOOD)
EXHIBIT III SERVICE LEVEL AGREEMENT
14
SCHEDULE A
AUTHORIZED STATES AND INSURANCE PROGRAM
So long as Customer is providing such lines of business, IMS shall provide
Insurance Administration Services as described in EXHIBIT I and EXHIBIT II for
the following authorized line(s) of business ("Authorized Line of Business") in
the following state(s) ("Authorized States"):
1. AUTHORIZED LINE OF BUSINESS:
WYO Flood
Excess Flood
Automobile
Homeowners
Commercial
Contract Surety
Tenant Bond.
Workers Compensation is not an Authorized Line of Business under this
Agreement.
2. AUTHORIZED STATES:
With regards specifically to WYO Flood, Excess Flood, Auto and Homeowners:
All states of the United States
With regards specifically to Commercial: See Appendix A attached
With regards specifically to Contract Surety: See Appendix A attached
With regards specifically to Tenant Bond: See Appendix A attached
15
Product Descriptions by State
Appendix A
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------------------------------
COMPANY PRODUCT SUBLINE STATE PRODUCT DESCRIPTION SUBLINE DESCRIPTION POLICY PROCESSING SYSTEM
- ------------------------------------------------------------------------------------------------------------------------------------
3000 BBOP FL Business Owners Program Bankers On-Line/Monthend/Lawson
- ------------------------------------------------------------------------------------------------------------------------------------
3000 BOP FL Bankers On-Line/Monthend/Lawson
- ------------------------------------------------------------------------------------------------------------------------------------
3000 BOP SPEC FL Special Coding Tickets/Monthend
- ------------------------------------------------------------------------------------------------------------------------------------
3000 DFI DP01 FL IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 DFI DP02 FL IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 DFI DP03 FL IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 DFIP DP01 FL Depopulation DPI - Form 01 IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 DFIP DP02 FL DP02 IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 DFIP DP03 FL DP03 IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 DFSH DP01 FL Dwelling Fire Southern Heritage DP01 - Form IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 DFSH DP02 FL DP02 - Form IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 DFSH DP03 FL DP03 - Form IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 FLD PREF FL IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 FLD RGLR FL IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 FLD RCBP FL IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 FLD MPPP FL IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 HO HO3 FL IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 HO HO4 FL IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 HO HO6 FL IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 HO HO8 FL HO Form 8 IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 HOP HO3 FL Depopulation - HO Form 3 IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 HOP HO4 FL Depopulation - HO Form 4 IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 HOP HO6 FL Depopulation - HO Form 6 IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 HOP HO8 FL Depopulation - HO Form 8 IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 HOSH HO3 FL Homeowners Southern Heritage IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 HOSH HO4 FL IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
3000 HOSH HO6 FL IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
AA-Annual Auto F+S-Fidelity + Surety IM-Inland Marine
BU-Burglary FR-Fire + Allied Lines DP-Personal Lines
BO-Business Owners GLA-General Liability MPA-Professional Liability
GS-Glass
16
Product Descriptions by State
Appendix A
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------------------------------
COMPANY PRODUCT SUBLINE STATE PRODUCT DESCRIPTION SUBLINE DESCRIPTION POLICY PROCESSING SYSTEM
- ------------------------------------------------------------------------------------------------------------------------------------
3000 HOSH HO8 FL IMSG Main On-Line/Monthend
- ------------------------------------------------------------------------------------------------------------------------------------
3000 NSAP PP FL IMSG Main On-Line/Monthend
- ------------------------------------------------------------------------------------------------------------------------------------
3000 WIND FL Wind Pool Coding Tickets/Monthend
- ------------------------------------------------------------------------------------------------------------------------------------
4000 BBND CO, MI, ND, NJ, PA, SD, TN Bail Bond/Month End/Lawson
- ------------------------------------------------------------------------------------------------------------------------------------
4000 CFIR SPEC AL, AR, FL, IN, MS, MO, TN Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 CHTR SPEC AR, AZ, CA, FL, GA, IL, IN, Chartered Boat Program Special Coding Tickets/Month End
KY, LA, ME, MO, MS, NC, NJ,
NV, NY, OR, SC, TN, UT, VA,
WA
- ------------------------------------------------------------------------------------------------------------------------------------
4000 CPP SPEC FL, GA Coding Tickets/Monthend
- ------------------------------------------------------------------------------------------------------------------------------------
4000 CPPI LA Credit Personal
Property Insurance
- ------------------------------------------------------------------------------------------------------------------------------------
4000 EL FL, LA, OK Coding Tickets/Monthend
- ------------------------------------------------------------------------------------------------------------------------------------
4000 FLD PREF AL, AK, AR, AZ, CO, CA, CT,
DC, DE, FL, GA, HI, IA, ID,
IL, IN, KS, KY, LA, MA, MD,
ME, MI, MN, MO, MS, MT, NC,
ND, NE, NH, NJ, NM, NV, NY,
OH, OK, OR, PA, RI, SC, SD,
TN, TX, UT, VA, VT, WA, WI,
WV, WY IMSG Main On-Line/Monthend
- ------------------------------------------------------------------------------------------------------------------------------------
4000 FLD CNDO AK, AL, AR, AZ, CA, CO, CT, Condo
DC, DE, FL, GA, HI, IA, ID,
IL, IN, KS, KY, LA, MA, MD,
ME, MI, MN, MO, MS, MT, NC,
ND, NE, NH, NJ, NM, NV, NY,
OH, OK, OR, PA, RI, SC, SD,
TN, TX, UT, VA, VT, WA, WI,
WV, WY IMSG Main On-Line Month End
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
AA-Annual Auto F+S-Fidelity + Surety IM-Inland Marine
BU-Burglary FR-Fire + Allied Lines DP-Personal Lines
BO-Business Owners GLA-General Liability MPA-Professional Liability
GS-Glass
17
Product Descriptions by State
Appendix A
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------------------------------
COMPANY PRODUCT SUBLINE STATE PRODUCT DESCRIPTION SUBLINE DESCRIPTION POLICY PROCESSING SYSTEM
- ------------------------------------------------------------------------------------------------------------------------------------
4000 FLD MPPP AL, AK, AR, AZ, CA, CO, CT, Mortgage Portfolio
DC, DE, FL, GA, HI, IA, ID, Protection Policies
IL, IN, KS, KY, LA, MA, MD,
ME, MI, MN, MO, MS, MT, NC,
ND, NE, NH, NJ, NM, NV, NY,
OH, OK, OR, PA, RI, SC, SD,
TN, TX, UT, VA, VT, WA, WI,
WY IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 FLD RGLR AL, AK, AR, AZ, CA, CO, CT, Regular
DC, DE, FL, GA, HI, IA, ID,
IL, IN, KS, KY, LA, MA, MD,
ME, MI, MN, MO, MS, MT, NC,
ND, NE, NH, NJ, NM, NV, NY,
OH, OK, OR, PA, RI, SC, SD,
TN, TX, UT, VA, VT, WA, WI,
WY IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 FLD RCBP AL, AK, AR, AZ, CA, CO, CT,
DC, DE, FL, GA, HI, IA, ID,
IL, IN, KS, KY, LA, MA, MD,
ME, MI, MN, MO, MS, MT, NC,
ND, NE, NH, NJ, NM, NV, NY,
OH, OK, OR, PA, RI, SC, SD,
TN, TX, UT, VA, VT, WA, WI,
WY IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 FLDX RGLR AL, AZ, CA, CT, DE, FL, GA,
HI, IL, LA, MA, MD, MS, NC,
NH, NJ, NV, NY, OH, OR, PA,
RI, SC, TX, VA Coding Tickets/Monthend
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
AA-Annual Auto F+S-Fidelity + Surety IM-Inland Marine
BU-Burglary FR-Fire + Allied Lines DP-Personal Lines
BO-Business Owners GLA-General Liability MPA-Professional Liability
GS-Glass
18
Product Descriptions by State
Appendix A
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------------------------------
COMPANY PRODUCT SUBLINE STATE PRODUCT DESCRIPTION SUBLINE DESCRIPTION POLICY PROCESSING SYSTEM
- ------------------------------------------------------------------------------------------------------------------------------------
4000 GL SPEC FL, GA, IN, NH, NY, OH, SC,
TN, TX Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 GL GAP FL, GA Coding Tickets/Monthend
- ------------------------------------------------------------------------------------------------------------------------------------
4000 GL ETCH GA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 GL SCGD FL Security Guard Program Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 GL AGI IL Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 HO HO3 FL IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 HO HO4 FL IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 HO HO6 FL IMSG Main On-Line Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 HO HO8 FL IMSG Main On-Line Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 INLM SPEC AL, AR, AZ, FL, GA, IN, MO,
MS, NC, NH, NJ, NY, PA, TN,
TX Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 LENS AL, AK, AR, AZ, CA, CO, CT, Lensurance
DC, DE, FL, GA, HI, IA, ID,
IL, IN, KS, KY, LA, MA, MD,
ME, MI, MN, MO, MS, MT, NC,
ND, NE, NH, NJ, NM, NV, NY,
OH, OK, OR, PA, RI, SC, SD,
TN, TX, UT, VA, VT, WA, WI,
WY
- ------------------------------------------------------------------------------------------------------------------------------------
4000 MCNT SPEC AR, AZ, CA, FL, GA, IL, IN, Marine Contractors Special
KY, LA, ME, MO, MS, NC, NJ, Program
NV, NY, OR, SC, TN, UT, VA,
WA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 MOLL SPEC AR, AZ, CA, FL, GA, IL, IN, Marine Owners Legal Special
KY, LA, ME, MO, MS, NC, NJ, Liability
NV, NY, OR, SC, TN, UT, VA,
WA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
AA-Annual Auto F+S-Fidelity + Surety IM-Inland Marine
BU-Burglary FR-Fire + Allied Lines DP-Personal Lines
BO-Business Owners GLA-General Liability MPA-Professional Liability
GS-Glass
19
Product Descriptions by State
Appendix A
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------------------------------
COMPANY PRODUCT SUBLINE STATE PRODUCT DESCRIPTION SUBLINE DESCRIPTION POLICY PROCESSING SYSTEM
- ------------------------------------------------------------------------------------------------------------------------------------
4000 NACA PP CA NSAP General Agent Private Passenger Tape/Month End
Program California
- ------------------------------------------------------------------------------------------------------------------------------------
4000 NACA CA GA Program California Tape/Month End
- Manual
- ------------------------------------------------------------------------------------------------------------------------------------
4000 NAGA PP CA, OR Tape/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 NAGA OR General Agent Program Tape/Month End
- manual
- ------------------------------------------------------------------------------------------------------------------------------------
4000 OAP FL, OH Occupational Accident Coding Tickets/Month End
Program
- ------------------------------------------------------------------------------------------------------------------------------------
4000 OMNI FL, NY Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 SAU SPEC FL, KY Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 SMBT SPEC AR, AZ, CA, FL, GA, IL, IN, Small Boat Program Special
KY, LA, ME, MO, MS, NC, NJ,
NV, NY, OR, SC, TN, UT, VA,
WA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 SRTY AL, AZ, CO, FL, GA, IA, ID, Surety/Fidelity Bonds
IL, IN, KS, KY, MA, MD, MI,
MN, MO, MS, MT, NC, ND, NE,
NH, NJ, NV, NY, OH, OK, RI,
SC, SD, TX, UT, VA, VT, WA,
WI, WV, WY Access DB/Coding Tickets/
Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 SRTY SPEC DC, FL, GA, IL, NC, NY, SC, Special
VA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 TBND OPT3 DC, FL, GA, IL, NC, NY, SC, Tennant Bond Option 3
TN, VA, WA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 TBND OPT2 DC, FL, GA, IL, NC, NY, SC, Option 2
TN, VA, WA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 TBND OPT1 DC, FL, GA, IL, NC, NY, SC, Option 1
TN, VA, WA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 TOW SPEC AL, AR, FL, GA, IN, MO, MS, Tow Truck Program
TN Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 UMBR SPEC FL, TX Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
4000 WIND FL Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
AA-Annual Auto F+S-Fidelity + Surety IM-Inland Marine
BU-Burglary FR-Fire + Allied Lines DP-Personal Lines
BO-Business Owners GLA-General Liability MPA-Professional Liability
GS-Glass
20
Product Descriptions by State
Appendix A
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------------------------------
COMPANY PRODUCT SUBLINE STATE PRODUCT DESCRIPTION SUBLINE DESCRIPTION POLICY PROCESSING SYSTEM
- ------------------------------------------------------------------------------------------------------------------------------------
4000 YAHT SPEC AR, AZ, CA, FL, GA, IL, IN, Yacht Program Special
KY, LA, ME, MO, MS, NC, NJ,
NV, NY, OR, SC, TN, UT, VA,
WA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 AECO FL Air Conditioning/ Coding Tickets/Month End
Electrical Contractors
- ------------------------------------------------------------------------------------------------------------------------------------
5000 APD PP FL Auto Physical Damage Private Passenger IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 ASP PREF FL Auto Service Program AA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 ASP NSTD FL B Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 ASP STD FL A Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 B&M FL Boiler & Machinery Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 BBND AL, AZ, CA, CT, DC, DE, FL, Bail Bonds
GA, HI, IA, ID, IN, KS, LA,
MD, MO, MS, MT, NC, NH, NM,
NY, NV, OH, PA, RI, SC, SD,
TN, TX, UT, VA, VT, WV, WY Bail Bond/Month End/Lawson
- ------------------------------------------------------------------------------------------------------------------------------------
5000 BOP FL, LA Business Owners Program Bankers On-Line/Month End/
Lawson (LA Coding Ticket)
- ------------------------------------------------------------------------------------------------------------------------------------
5000 BOP SPEC FL Special Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 BPAK FL Beauty Pak Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 BTA FN (Mexico) Border Trucking and Auto Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 CAPP PP FL Consumers Auto Coding Tickets/Month End
Protection Program Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 CAU FL Commercial Auto Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 CAU FL JUA Commercial Auto Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 CAUP FL Combination Auto Policy Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 CELL FL Mobile Telephone Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 CFIR FL Commercial Fire Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 CFIR SPEC FL, AL, AR, MO, MS, TN Special Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
AA-Annual Auto F+S-Fidelity + Surety IM-Inland Marine
BU-Burglary FR-Fire + Allied Lines DP-Personal Lines
BO-Business Owners GLA-General Liability MPA-Professional Liability
GS-Glass
21
Product Descriptions by State
Appendix A
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------------------------------
COMPANY PRODUCT SUBLINE STATE PRODUCT DESCRIPTION SUBLINE DESCRIPTION POLICY PROCESSING SYSTEM
- ------------------------------------------------------------------------------------------------------------------------------------
5000 CHTR SPEC AR, AZ, FL, GA, IL, IN, KY, Chartered Boat Program Special
LA, MO, MS, NC, SC, TN, UT,
VA, WA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 CMNF FL, GA, KY, LA, MS, SC, TN Chattel Mortgage Coding Tickets/Month End
Non-Filing
- ------------------------------------------------------------------------------------------------------------------------------------
5000 COMM FL Commercial Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 CPP FL Commercial Package
Policy Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 CPP SPEC FL Special Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 CPPI FL, GA, ID, KY, LA, MS, NC,
SC, TN
- ------------------------------------------------------------------------------------------------------------------------------------
5000 CRIM FL Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 DAYC FL DayCare
- ------------------------------------------------------------------------------------------------------------------------------------
5000 DFI(O) FL, SC Dwelling Fire IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 DFI(2) FL FPCJUA IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 DFI(3) DP03 FL FRPCJUA DP03 - Form IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 DFI(3) DP01 FL FRPCJUA DP01 - Form IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 DFI(3) DP02 FL FRPCJUA DP02 - Form IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 DFI DP01 FL, SC DP01 - Form IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 DFI DP02 FL, SC DP02 - Form IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 DFI DP03 FL, SC DP03 - Form IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 DHO FL Direct Response IMSG Main On-Line/Month End
Homeowners
- ------------------------------------------------------------------------------------------------------------------------------------
5000 DMH AZ, FL Direct Response Mobile IMSG Main On-Line/Month End
home
- ------------------------------------------------------------------------------------------------------------------------------------
5000 DRT FL Direct Response Renters IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 E&O FL Errors & Omission Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 EL AL, FL, LA Employers Liability Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 FARM FL Farm Protector Plan Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 FDTY FL Fidelity Bonds Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
AA-Annual Auto F+S-Fidelity + Surety IM-Inland Marine
BU-Burglary FR-Fire + Allied Lines DP-Personal Lines
BO-Business Owners GLA-General Liability MPA-Professional Liability
GS-Glass
22
Product Descriptions by State
Appendix A
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------------------------------
COMPANY PRODUCT SUBLINE STATE PRODUCT DESCRIPTION SUBLINE DESCRIPTION POLICY PROCESSING SYSTEM
- ------------------------------------------------------------------------------------------------------------------------------------
5000 FLD PREF AL, AK, AR, AZ, CA, DC, DE, Flood Preferred Risk
FL, GA, IA, IL, IN, KY, LA,
MD, MO, MS, MT, NC, NM, NV,
OH, PA, SC, SD, TN, TX, VA,
WI IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 FLD CNDO AL, AZ, AR, CA, DC, DE, FL,
GA, IL, IA, IN, KY, LA, MD,
MS, MO, MT, NC, NM, NV, OH,
PA, SC, SD, TN, TX, VA IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 FLD MPPP AL, AK, AZ, AR, CA, DC, DE,
FL, GA, IA, IL, IN, KY, LA,
MD, MO, MS, MT, NC, NM, NV,
OH, PA, SC, SD, TN, TX, VA,
WI IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 FLD RGLR AL, AK, AZ, AR, CA, DC, FL,
GA, IA, IN, KY, MT, MD, NC,
SD, WI IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 FLD RCBP AK, AL, AR, AZ, CA, DC, DE, Residential Condo
FL, GA, IA, IL, IN, KY, LA, Building Assn
MD, MO, MS, MT, NC, NM, NV,
OH, PA, SC, SD, TN, TX, VA,
WI IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 FLDX RGLR AL, AZ, CA, DC, DE, FL, GA, Excess Flood Regular
IA, IL, LA, MD, MS, NV, PA,
SC, TX, VA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 FREA FL E&O Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 FWUA FL Florida Windstorm ??
Underwriting Assn.
- ------------------------------------------------------------------------------------------------------------------------------------
5000 FWUA HO FL Homeowners ??
- ------------------------------------------------------------------------------------------------------------------------------------
5000 FWUA GB FL General Building ??
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
AA-Annual Auto F+S-Fidelity + Surety IM-Inland Marine
BU-Burglary FR-Fire + Allied Lines DP-Personal Lines
BO-Business Owners GLA-General Liability MPA-Professional Liability
GS-Glass
23
Product Descriptions by State
Appendix A
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------------------------------
COMPANY PRODUCT SUBLINE STATE PRODUCT DESCRIPTION SUBLINE DESCRIPTION POLICY PROCESSING SYSTEM
- ------------------------------------------------------------------------------------------------------------------------------------
5000 GARA SPEC FL Garage Special Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 GL AL, FL, GA, IN, LA, MI, MS, General Liability
NC, OK, SD, TX Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 GL SPEC AL, FL, GA, IL, KY, LA, MS, Special
NC, PA, TN, TX Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 GL APPR FL Real Estate Appraisers
Professional Liab. Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 GL GAP FL, GA, LA Guarantee Auto
Protection Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 GL ETCH GA ETCH Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 GL MGI GA Manufacturer's
Guardian Inc. Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 GL AGI IL American Guardian Inc. Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 GL SCGD FL Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 GUNS FL, AZ, OH, TX Firearms Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 HO FL, SC Homeowners IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 HO(2) FL IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 HO(3) HO2 FL HO Form 2 IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 HO(3) HO3 FL HO Form 3 IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 HO(3) HO6 FL HO Form 6 IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 HO(3) HO4 FL HO Form 4 IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 HO(3) HO2M FL IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 HO(3) HO3M FL IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 HO HO3 FL, SC IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 HO HO4 FL, SC IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 HO HO6 FL, SC IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 HO HO8 FL, SC IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 INLM FL Inland Marine Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 INLM SPEC AL, AR, AZ, FL, GA, MO, MS, Special
NJ, OH, TN, TX Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
AA-Annual Auto F+S-Fidelity + Surety IM-Inland Marine
BU-Burglary FR-Fire + Allied Lines DP-Personal Lines
BO-Business Owners GLA-General Liability MPA-Professional Liability
GS-Glass
24
Product Descriptions by State
Appendix A
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------------------------------
COMPANY PRODUCT SUBLINE STATE PRODUCT DESCRIPTION SUBLINE DESCRIPTION POLICY PROCESSING SYSTEM
- ------------------------------------------------------------------------------------------------------------------------------------
5000 ISF FL Installment Sales
Floater
- ------------------------------------------------------------------------------------------------------------------------------------
5000 MCNT SCEC AR, AZ, FL, GA, IL, IN, KY, Marine Contractors Special
LA, MO, MS, NC, SC, TN, UT, Program
VA, WA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 MCWR FL Motorcycle Warranty
Guaranty Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 MCY FL Motorcycle Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 MH FL Mobile home Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 MH HO2 FL FRPCJUA - HO2 Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 MH HO3 FL FRPCJUA - HO3 Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 MH DP01 FL FRPCJUA - DFI Mobile
home Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 MH HO4 FL FRPCJUA - HO4 Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 MMAI FL Medical Malpractice Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 MOLL SPEC AR, AZ, FL, GA, IL, IN, KY, Marine Owners Legal Special
LA, MO, MS, NC, SC, TN, UT, Liability
VA, WA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 NAGA PP WA General Agent Program Private Passenger Tape/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 NAGA WA Tape/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 NSAP PP FL, LA Private Passenger Auto Private Passenger
Program IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 NSAP SEL FL, LA, SC Select IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 NSCA FL Business Auto Manual (old program) Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 NSCA NCA FL Business Auto Automated Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 NSCA SCA FL Non-Standard Commercial
Auto Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 OCM FL Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 OMNI FL, IN Marine Industries
Omnibus Insurance Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 PDPI PP FL PIP & Property Damage Private Passenger IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 PIP PP FL Personal Injury Private Passenger
Protection IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 PIP FL FJUA-Personal Injury
Protection IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 PLSC FL Personal Lines
Supplemental Coverage IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
AA-Annual Auto F+S-Fidelity + Surety IM-Inland Marine
BU-Burglary FR-Fire + Allied Lines DP-Personal Lines
BO-Business Owners GLA-General Liability MPA-Professional Liability
GS-Glass
25
Product Descriptions by State
Appendix A
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------------------------------
COMPANY PRODUCT SUBLINE STATE PRODUCT DESCRIPTION SUBLINE DESCRIPTION POLICY PROCESSING SYSTEM
- ------------------------------------------------------------------------------------------------------------------------------------
5000 QSMP FL Quik Rate Special
Multi-Peril IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 RAIL AL, AK, AR, AZ, CA, CO, CT, Railroad
DC, DE, FL, GA, HI, IA, ID,
IL, IN, KS, KY, LA, MD, MI,
MN, MO, MS, MT, NC, ND, NE,
NH, NJ, NM, NV, NY, OH, OK,
OR, PA, RI, SC, SD, TN, TX,
UT, VA, VT, WA, WI, WV, WY Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 SAU FL Standard Auto Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 SAU SPEC FL Standard Auto Special Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 SAU(1) PP AL, AK, AR, AZ, CA, CO, CT, FJUA Private Passenger
DC, DE, FL, GA, IA, ID, IL,
IN, KS, KY, LA, ME, MI, MN,
MO, MS, MT, NC, ND, NE, NH,
NJ, NM, NV, NY, OH, OK, OR,
PA, RI, SC, SD, TN, TX, UT,
VT, VA, WA, WI, WV, WY
- ------------------------------------------------------------------------------------------------------------------------------------
5000 SAU SPEC KY Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 SAU TRUK AL, AR, FL, GA, MS, NC, SC, Commercial Auto Truck
TN Program Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 SAU(6) PP SC SC Associated Auto
Insurers Plan
- ------------------------------------------------------------------------------------------------------------------------------------
5000 SMBT SPEC AR, AZ, FL, GA, IL, IN, KY, Small Boat Program Special
LA, MO, MS, NC, SC, TN, UT,
VA, WA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 SCAU FL Special Commercial Auto Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 SRTY AL, AR, DC, DE, FL, GA, IA, Surety Bonds
IL, KS, KY, LA, MD, MO, MS,
MT, NC, NM, NV, OH, OK, PA,
SC, SD, TX, VA Access DB/Coding Tickets/
Month End
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
AA-Annual Auto F+S-Fidelity + Surety IM-Inland Marine
BU-Burglary FR-Fire + Allied Lines DP-Personal Lines
BO-Business Owners GLA-General Liability MPA-Professional Liability
GS-Glass
26
Product Descriptions by State
Appendix A
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------------------------------
COMPANY PRODUCT SUBLINE STATE PRODUCT DESCRIPTION SUBLINE DESCRIPTION POLICY PROCESSING SYSTEM
- ------------------------------------------------------------------------------------------------------------------------------------
5000 SRTY EAST AL, FL, GA, NC, SC East Access DB/Coding Tickets/
Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 SRTY WEST AR, GA, OK, TX West Access DB/Coding Tickets/
Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 SRTY SPEC DC, FL, GA, IL, NC, SC, VA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 SRTY ORI FL Orion Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 TBND OPT1 FL, GA, IL, NC, SC, TN, VA,
WA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 TBND OPT2 FL, GA, IL, NC, SC, TN, VA,
WA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 TBND OPT3 FL, GA, IL, NC, SC, TN, VA,
WA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 TTI SPEC FL Temporary Travel
Insurance Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 UMBR FL Umbrella Policy Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 UMBR SPEC AL, FL, GA, KY, IL, MS, PA, Special
TN, TX Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 VECT FL, GA, LA Vector Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 VECT GL FL, GA, LA General Liability Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 VECT CPP FL, GA, LA, TX Commercial Package
Policy Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 VEGA GL CA Vector General Liability Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 WIND FL Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 YAT SPEC AL, CT, DC, FL, GA, LA, MS, Yacht Program
NC, SC, TX, VA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5000 YAHT SPEC AR, AZ, FL, GA, IL, IN, KY, Yacht Program Special
LA, MO, MS, NC, SC, TN, UT,
VA, WA Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5010 NSAP PP TX IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5010 NSAP SEL TX IMSG Main On-Line/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
5010 NSCA SCA TX Coding Tickets/Month End
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
AA-Annual Auto F+S-Fidelity + Surety IM-Inland Marine
BU-Burglary FR-Fire + Allied Lines DP-Personal Lines
BO-Business Owners GLA-General Liability MPA-Professional Liability
GS-Glass
27
SCHEDULE B
PRICING SCHEDULE
[*]
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
28
EXHIBIT I
INSURANCE ADMINISTRATION SERVICES (AT RISK LINES)
1) DEFINITIONS. Capitalized terms not otherwise defined in the Agreement or in
this Exhibit shall be construed as otherwise generally understood in the
insurance and data processing industry.
2) POLICY ADMINISTRATION. IMS shall administer Customer's at risk policies
("At Risk Policies") performing the services listed hereunder in accordance
with the applicable rules and regulations. The term "At Risk Policies"
includes the Auto and Homeowner Authorized Line of Business but shall
specifically exclude all of Customer's Commercial, X-Flood, Contract
Surety, Tenant Bond policies and any Customer line of business administered
by a General Agent as of the Effective Date of the Agreement.
a) Underwriting.
- Review At Risk Policy application for
completeness/contact Agent as applicable;
- Create At Risk Policy file;
- Underwriting based on Customer underwriting guidelines.
b) Data Entry.
- New At Risk Policy business;
- At Risk Policy changes;
- Debtor changes (as applicable);
- At Risk Policy insurance Agent changes;
- Endorsements;
- Cancellations.
c) At Risk Policy Issuance.
- At Risk Policy for new business, renewals and endorsements where
declaration page issuance is required;
- At Risk Policy Renewal processing;
- At Risk Policy print declarations and related At Risk Policy forms.
d) Billing & Collection.
- Print invoices, reminders, cancellation notification, return At Risk
Policy premium disbursement;
- Mortgage activity processing (as applicable);
- Process cancellations for non-payment.
e) Customer Service.
- Provide a dedicated customer service support call center;
- Respond to Customer's At Risk Policyholder and insurance
sales Agent telephone inquiries;
- Process requests for At Risk Policy changes;
- Respond to correspondence related to At Risk Policy and At Risk
Policy claim administration services;
- Track and respond to complaints related to At Risk Policy and/or At
Risk Policy claim administration services; IMS customer service hours
of operation 8:00 a.m. to 8:00 p.m. Eastern Standard Time ("EST")
every Business Day except where noted.
f) Accounting Administration/Premium.
- Posting, balancing, and control of At Risk Policy premium receivable;
31
g) Treasury.
- Receive and post At Risk Policy payments;
- Issuance, control and accounting for disbursements of At Risk Policy
premium related expenses;
- OCR AT Risk Policy payment processing;
- Mortgagee billing (as applicable).
h) Print & Distribution Services.
- Automated document library;
- Electronic document assembly;
- Electronic document archival/retrieval;
- Automated finishing/insertion facility;
- Mail pre-sort facility;
- Mailing At Risk Policy, At Risk Policy billings and At Risk Policy
renewals (including all or part of the postage expense as provided in
Schedule B, Section V, Paragraph (2));
- Document Imaging.
i) System Administration.
- Availability of Proprietary System to Customer and Customer's At Risk
Policy claim vendor;
- Process daily, weekly, monthly, and annual cycles;
- Internet processing capabilities.
3) CLAIM ADMINISTRATION. IMS shall provide the following claim administration
services:
a) Claim Management Facilitation.
- Twenty-four (24) hour reporting capability, first notice of loss,
coverage verification and At Risk Policy claim;
- Investigation, evaluation and settlement of At Risk Policy claim;
- Reinspection and audit;
- Claims handling standards/best practices;
- Claim check issuance;
- Management reports;
- At Risk Policyholder satisfaction surveys;
- Special Investigation Unit ("SIU") services;
- Salvage & subrogation claim processing;
- Litigation support.
b) Catastrophe Preparation and Response.
- Preparedness by developing media reference guides and notices,
adjuster workshops, and training manuals; provide storm tracking;
reserve equipment and supplies; establish procedures;
- Response in case of a catastrophic event by establishing and staffing
satellite service centers; automating the distribution of claims to
adjusters; internal examinations/external reinspections;
- Recovery by providing management reports, audit/reinspection program,
SIU and oversight operations.
4) ADJUSTING FIRM. IMS' Colonial Catastrophe Claims Service will be the
authorized adjusting firm ("Adjusting Firm") for all claims catastrophe
adjusting work on behalf of Customer. However, IMS may designate a different
Adjusting Firm with written notice to Customer.
5) DISASTER RECOVERY PLAN. IMS shall perform its' full range Disaster
Recovery Plan on an annual basis. Customer has the right to observe the
Disaster Recovery Plan at its own expense, provided that it has requested in
writing to participate within thirty (30) days of planned execution.
6) SPECIAL SERVICES.
ADDITIONAL FEES & SERVICES. ADDITIONAL SERVICES NOT SPECIFIED IN THIS AGREEMENT
MAY BE PROVIDED BY AS MUTUALLY AGREED UPON IN WRITING BETWEEN THE CUSTOMER AND
IMS IN WRITING.
32
EXHIBIT II
----------
INSURANCE ADMINISTRATION SERVICES (WYO FLOOD)
---------------------------------------------
WHEREAS, The Federal Emergency Management Agency ("FEMA") and the
Federal Insurance Administration ("FIA") administer the National Flood Insurance
Program ("NFIP") and Customer is an insurance company duly licensed to write
flood insurance in the state or states to which this Agreement pertains and is
approved by FIA to act as a Write Your Own Company ("WYO Company") under the
Write Your Own Flood Insurance Program ("WYO Flood Program"), a program offered
under the NFIP; and
WHEREAS, Customer wishes to engage the services of IMS to administer
certain of the Customer's obligations as a WYO Company in the state(s)
("Authorized States") set forth in SCHEDULE A.
1) DEFINITIONS. Capitalized terms not otherwise defined in the Agreement or
in this Exhibit shall be construed as otherwise generally understood in the
insurance and data processing industry.
2) POLICY ADMINISTRATION. IMS shall administer Customer's WYO Flood Program
policies ("WYO Policies") performing the services listed hereunder in
accordance with the NFIP, as amended, and all implementing regulations as
well as Customer's Write Your-Own Arrangement ("Arrangement") with FEMA.
The same standards by which Customer is bound shall be those by which IMS
is bound to Customer.
a) Underwriting.
- Review WYO Policy application for completeness/contact Agent as
applicable;
- Create WYO Policy file;
- Underwriting based on NFIP guidelines.
b) Data Entry.
- New WYO Policy business;
- WYO Policy changes;
- Mortgagee changes;
- WYO Flood insurance Agent changes;
- Endorsements;
- Cancellations.
c) WYO Policy Issuance.
- WYO Policy for new business, renewals and endorsements where
declaration page issuance is required;
- WYO Policy Renewal processing;
- WYO Policy automated rating;
- WYO Policy print declarations and related WYO Policy forms.
d) Billing & Collection.
- Print invoices, reminders, cancellation notification, return WYO
Policy premium disbursements;
- Mortgage activity processing;
- EFT processing;
- Process cancellations for non-payment.
e) Customer Service.
- Provide a dedicated customer service support call center;
- Respond to Customer's WYO Policyholder and WYO flood insurance sales
Agent telephone inquires;
- Process requests for WYO Policy changes;
- Respond to correspondence related to WYO Policy and WYO Policy claim
administration services;
33
- Track and respond to complaints related to WYO Policy and/or WYO
Policy claim administration services; IMS customer service hours of
operation 8:00 a.m. to 8:00 p.m. Eastern Standard Time ("EST") every
business day except where noted.
f) Bureau Reporting.
- Process and balance WYO Policy premium and WYO Policy loss data;
- Edit and correct invalid data;
- Prepare and mail Bureau transmittals;
- To the best of IMS knowledge, provide on-going regulatory changes;
- Maintain WYO Policy history files.
g) Accounting Administration/Premium.
- Posting, balancing, and control of WYO Policy premium receivable;
- Issuance, control and accounting for disbursements for WYO Policy
premium refunds.
h) Financial Accounting.
- Issuance, control and accounting for disbursements for general
expenses;
- Day-to-day management of short term cash;
- Provide reasonable and customary financial management reports.
i) Treasury.
- Receive and post WYO Policy payments;
- Issuance, control and accounting for disbursements of WYO Policy
premium related expenses;
- Bank reconciliation of WYO Policy premium disbursements;
- OCR WYO Policy payment processing;
- Mortgagee billing.
j) Print & Distribution Services.
- Automated document library;
- Electronic document assembly;
- Electronic document archival/retrieval;
- Automated finishing/insertion facility;
- Mail pre-sort facility;
- Mailing WYO Policy, WYO Policy billings and WYO Policy renewals
(including all or part of the postage expense as provided in
Schedule B, Section V, Paragraph (2));
- Document Imaging.
k) System Administration.
- Availability of Proprietary System to Customer and Customer's WYO
Policy claim vendor;
- Process daily, weekly, monthly, and annual cycles;
- Internet processing capabilities.
3) CASH MANAGEMENT.
a) Banking Arrangement. IMS and Customer shall establish a banking
arrangement that complies with the Arrangement and other WYO Flood program
requirements, and which will provide for the establishment of an NFIP
restricted account ("Restricted Account") with Customer as custodian, and a
FEMA letter of credit ("Letter of Credit"), with additional accounts as
needed to facilitate WYO Flood Program operations, all in conformity with
FEMA/FIA guidelines. Customer shall grant specific IMS' employees
check-signing authority on any Restricted Account and the authority to
initiate appropriate drawdowns against Customer's Letter of Credit, in
order for IMS to act on Customer's behalf in making disbursements for
Customer liabilities established by the Arrangement, the WYO Flood Program,
and this Agreement. All such authorizations shall be in writing and may be
revoked, amended or modified at any time by Customer upon thirty (30) days
advanced written notice to IMS. Notwithstanding the foregoing, IMS shall
not draw down on Letter of Credit for an amount that exceeds $50,000.00
without prior approval from the Chief Financial Officer of Customer, which
approval shall not be unreasonably withheld and shall be given within 24
hours of the request being made by IMS.
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b) Premium Remittance - IMS shall establish procedures, as determined by
FIA, for a timely deposit and remittance of funds to the U.S. Treasury via
authorized automatic clearinghouse mechanism. Gross premium collected by
IMS, for WYO Flood program business written under this Agreement, shall be
remitted to the FIA by IMS net of the established NFIP Expense Allowance.
("Allowance"), which Allowance expenses to be paid under the Allowance
include Carrier's operating and administrative expenses.
c) Financial Data - IMS shall maintain supporting documentation for all
bank accounts over which it has authority. On a monthly basis, IMS shall
prepare financial data, reflecting all debits and credits with respect to
WYO Flood Program business administered under this Agreement, including
IMS' Service Fees paid.
d) WYO Flood Program Reimbursements - Any WYO Flood Program
reimbursements made pursuant to the Arrangement, including, but not limited
to, those for the unallocated loss adjustments expenses, the allocated loss
adjustments, and for approved special allocated loss adjustments expenses,
shall be payable to IMS upon receipt by Customer.
e) Marketing Goals - Customer shall maintain responsibility for any risk,
or shall be entitled to any reward, that may be associated with achieving
or failing to achieve any marketing goal set by the FIA or FEMA.
4) CLAIM ADMINISTRATION. IMS shall provide Claims administration in
accordance with the Arrangement, the Financial Control Plan and the
Agreement, which claim administration processing services are outlined
below. Any litigation costs not reimbursed by FEMA would be the
responsibility of the Customer. IMS may also rely on the information and
direction contained in the WYO Flood Program Claims Manual, the FEMA
Adjuster Manual, the Flood Insurance Agent's Manual, the Standard Flood
Insurance Policy, the WYO Operational Overview, and/or other WYO Flood
Program instructional material.
a) Claim Management Facilitation.
- Twenty-four (24) hour reporting capability, first notice of loss,
coverage verification and WYO Policy claim;
- Investigation of WYO Policy claim;
- Fast track unit;
- Reinspection and audit;
- Claims handling standards/best practices;
- Claim check issuance;
- Management reports;
- WYO Policyholder satisfaction surveys;
- Special Investigation Unit ("SIU") services;
- Salvage & subrogation claim processing;
- Litigation support.
b) Catastrophe Preparation and Response.
- Preparedness by developing media reference guides and notices,
adjuster workshops, and training manuals; provide storm tracking;
reserve equipment and supplies; establish procedures;
- Response in case of a catastrophic event by establishing and staffing
satellite service centers; automating the distribution of claims to
adjusters; internal examinations/external reinspections;
- Recovery by providing management reports, audit/reinspection program,
SIU and oversight operations.
5) ADJUSTING FIRM. IMS' Colonial Catastrophe Claims Service will be the
authorized adjusting firm ("Adjusting Firm") for all claims adjusting
work on behalf of Customer. However, IMS may designate a different
Adjusting Firm with days written notice to Customer.
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6) DISASTER RECOVERY PLAN. IMS shall perform its' full range Disaster
Recovery Plan on an annual basis. Customer has the right to observe the
Disaster Recovery Plan at its own expense, provided that it has requested
in writing to participate within thirty (30) days of planned execution.
7) STATISTICAL REPORTING. IMS shall maintain Customer's data within IMS'
policy claims and general ledger systems. IMS shall prepare and submit to
FIA, monthly financial and statistical reports, reconciliation reports,
certifications, and statistical tapes on Customer's behalf, in accordance
with WYO Flood Program Accounting Procedures and the Transaction Record
Reporting and Processing Plan ("TRRP Plan").
8) SPECIAL SERVICES.
a) Audit - At Customer's expense and at IMS' premises, IMS shall conduct
a biennial audit of any and all WYO Flood Program business written by
Customer pursuant to this Agreement. IMS shall select an independent
auditor and IMS shall present the expense estimate for the biennial
audit to Customer. Within fifteen (15) days of receiving the estimate,
Customer shall have the option of selecting their own independent
auditor to conduct the audit or proceed with the independent auditor
selected by IMS.
b) Zone Determination Services - IMS shall provide flood zone
determinations to the Customer (or Customer's Agents) to assist in
writing a WYO Policy to be placed with the Customer and administered
by IMS.
c) Training - Upon Customer's request, IMS will provide six (6) training
sessions per calendar year to Customer and/or Customer's Agents.
Customer will provide the training facility. Additional requests for
training will be charged at One Hundred and Twenty Five Dollars ($125)
per day plus reasonable per diem and travel expensed incurred.
d) Marketing Material. IMS will make available to Customer its marketing
or promotional materials, which IMS may customize and produce for
Customer at Customer's expense.
e) Additional Fees & Services. Additional services not specified in this
Agreement may be provided by as mutually agreed upon in writing
between the Customer and IMS in writing.
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SERVICE LEVEL AGREEMENT
PROCEDURES:
- - Data received by IMS after 2:00 P.M. Eastern Standard Time ("EST")
will be considered "received" on the following Business Day (as defined in
the Agreement).
- - A policy is considered issued when the declaration page and attachments are
generated in the Proprietary System (as defined in the Agreement) and
mailed out.
- - Customer's "Business Hours" are 8:30 A.M. Eastern Standard Time to 8:00
P.M. Eastern Standard Time. - "Service Standard Levels" (as outlined below)
will be validated using the IMS received date stamped on the request.
POLICY ADMINISTRATION SERVICE STANDARD LEVELS:
Automobile Policies
1. All new business transactions will be issued within seven Business Days of
receipt by IMS, provided all information is complete and correct, with an
overall business time service average not to exceed twelve (12) Business
Days.
2. All renewal transactions will be issued within six (6) Business Days
of receipt by IMS, provided all information is complete and correct,
with an overall business time service average not to exceed nine (9)
Business Days.
3. All money endorsements will be issued within six (6) Business Days of
receipt by IMS, provided all information is complete and correct, with
an overall business time service average not to exceed nine (9)
Business Days.
4. All cancellations received will be processed within three (3) Business
Days of receipt by IMS, provided all information is complete and
correct, with an overall business time service average not to exceed
six (6) Business Days.
5. All non-money endorsements will be issued within six (6) Business Days
of receipt by IMS, provided all information is complete and correct,
with an overall business time service average not to exceed nine (9)
Business Days.
6. All return mail will be re-mailed and issued within fifteen (15)
Business Days of receipt by IMS, provided all information is complete
and correct.
7. IMS will make contact on all correspondence within seven (7) Business
Days of receipt.
8. IMS will make contact on all incomplete or incorrect transactions
within seven (7) Business Days of receipt.
Flood Policies
1. All new business transactions will be issued within seven (7) Business
Days of receipt by IMS, provided all information is complete and
correct, with an overall business time service average not to exceed
twelve (12) Business Days.
2. All renewal transactions will be issued within five (5) Business Days
of receipt by IMS, provided all information is complete and correct,
with an overall business time service average not to exceed ten (10)
Business Days.
3. All money endorsements will be issued within seven (7) Business Days
of receipt by IMS, provided all information is complete and correct,
with an overall business time service average not to exceed twelve
(12) Business Days.
4. All cancellations received will be processed within seven (7) Business
Days of receipt by IMS, provided all information is complete and
correct, with an overall business time service average not to exceed
twelve (12) Business Days.
5. All non-money endorsements will be issued within seven (7) Business
Days of receipt by IMS, provided all information is complete and
correct, with an overall business time service average not to exceed
twelve (12) Business Days.
6. All return mail will be re-mailed and issued within fifteen (15)
Business Days of receipt by IMS, provided all information is complete
and correct.
7. IMS will make contact on all correspondence within seven (7) Business
Days of receipt.
8. IMS will make contact on all incomplete or incorrect transactions
within seven (7) Business Days of receipt.
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Homeowners Policies
1. All new business transactions will be issued within seven (7) Business
Days of receipt by IMS, provided all information is complete and
correct, with an overall business time service average not to exceed
twelve (12) Business Days.
2. All renewal transactions will be issued within six (6) Business Days
of receipt by IMS, provided all information is complete and correct,
with an overall business time service average not to exceed nine (9)
Business Days.
3. All money endorsements will be issued within six (6) Business Days of
receipt by IMS, provided all information is complete and correct, with
an overall business time service average not to exceed nine (9)
Business Days.
4. All cancellations received will be processed within three (3) Business
Days of receipt by IMS, provided all information is complete and
correct, with an overall business time service average not to exceed
six (6) Business Days.
5. All non-money endorsements will be issued within six (6) Business Days
of receipt by IMS, provided all information is complete and correct,
with an overall business time service average not to exceed nine (9)
Business Days.
6. All return mail will be re-mailed and issued within fifteen (15)
Business Days of receipt by IMS, provided all information is complete
and correct.
7. IMS will make contact on all correspondence within seven (7) Business
Days of receipt.
8. IMS will make contact on all incomplete or incorrect transactions
within seven (7) Business Days of receipt.
CUSTOMER SERVICE - SERVICE LEVEL STANDARDS:
1. IMS will maintain without employing the practice of taking messages,
no more than 5% phone call abandonment rate, based on the total number
of customer calls received and not answered at or after a 60 second
threshold, during Customer's Business Hours.
2. A customer service representative will answer 90% of customer service
calls within 60 seconds, during Customer's Business Hours. A customer
service representative will answer 98% of customer service calls
within 90 seconds during Customer's Business Hours and customer
service will use verbiage and material supplied by Customer.
OPERATIONAL/SYSTEM PROCESSING GOALS:
1. Minimum Proprietary System availability of 98% during Customer's
Business Hours.
2. Maintain an average Proprietary System workload less than 80% of
Proprietary System capacity central processing unit (CPU), disc access
storage device (DASD).
3. Output is generated within one (1) Business Day of print/mail date.
4. IMS will verify accurate output (match system data to filed forms) by
means of random weekly quality checking at point of output in policy
assembly.
STATISTICAL REPORTING:
IMS will be responsible for submitting the Flood statistical data to the NFIP
based on the NFIP guidelines; provided, however, that Customer takes the
necessary steps to ensure that the data is normalized, edited, quality-checked
and mapped to corresponding bureau codes.
CLAIMS:
1. IMS will adjust all claims based on federal, state and product
guidelines.
2. Claims "Business Hours" are 8:00 A.M. Eastern Standard Time to 8:00
P.M. EST except during a catastrophe then it is 24/7.
3. IMS performance of claim services, on behalf of Customer and pursuant
to the Agreement, shall be in substantial compliance with "Best
Practices" Manual (policy and procedures manual), which shall be
attached to and incorporated by reference into this Service Level
Agreement.
AUDITS:
Customer reserves the right to conduct, at its expense, an annual underwriting
and claims audit. Customer will provide IMS with a 30-day notice.
REPORTS:
IMS will provide to the Customer weekly reports detailing the Service Standard
Levels.
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