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EXHIBIT 10.28
FLOOD INSURANCE AGREEMENT
THIS FLOOD INSURANCE AGREEMENT("Agreement")is entered into this 6TH day of
January, 1998, by and between FIRST COMMUNITY INSURANCE COMPANY, 360 Central
Avenue, St. Petersburg, Florida 33701 (hereinafter referred to as "FCIC") and
KEYSTONE INSURANCE COMPANY, whose principal place of business is located at 2040
Market Street, Philadelphia, Pennsylvania 19103, and its Subsidiaries,
(hereinafter collectively referred to as "Keystone"), who mutually agree as
follows:
I. Duties of Keystone as Broker:
A. Keystone shall solicit and submit applications, together with
premiums due, for the Flood Insurance Policies as authorized
under the National Flood Insurance Act, subject to the
published authority of the Federal Emergency Management
Agency/Federal Insurance Administration (FEMA/FIA).
B. Keystone shall comply with the underwriting guidelines,
bulletins, manuals, and written instructions issued by the
FCIC or the Federal Emergency Management Agency/Federal
Insurance Administration (FEMA/FIA) regarding the
solicitation and submission of flood insurance applications.
C. Keystone shall report all claims and claims related activity
promptly to FCIC.
II. Duties of FCIC as Insurer:
A. FCIC shall underwrite and issue Flood Insurance Policies to
all applicants whose applications are submitted under this
Agreement who qualify under the National Flood Insurance Act
and comply with the underwriting guidelines, bulletins,
manuals and written instructions of FCIC and FEMA/FIA. FCIC
shall provide customary policyholder services to all FCIC
policyholders, whose policies have been written under this
Agreement.
B. FCIC shall provide Keystone with all underwriting guidelines,
bulletins, manuals and written instructions necessary for
Keystone to perform its duties under this Agreement in
compliance with the National Flood Insurance Act and
implementing regulations of FEMA and FIA.
C. FCIC shall adjust and pay all claims made by insureds under
polices solicited by Keystone under this Agreement.
D. FCIC shall provide a direct billed renewal premium notice to
each designated payor of a flood insurance policy written
pursuant to this Agreement prior to the expiration date of the
policy and shall provide Keystone with notice of the upcoming
expiration of such policies.
III. Marketing Program:
A. Keystone shall implement a marketing program, to cross sell
FCIC flood insurance to Keystone's Homeowner File, using the
Laser Integrated Method as provided by LIM Systems
International, Inc. Additional insurance product lines may be
cross sold, pursuant to this paragraph, upon mutual written
agreement of the parties.
B. "Keystone's Homeowner File" shall be defined as those
homeowner files where Keystone is the insurer.
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C. In order to implement the Marketing Program, Keystone shall
provide FCIC with an electronic file showing the policyholder
names and risk locations for renewing Keystone homeowner
policyholders who have not previously been solicited or
purchased flood insurance under this Agreement. Keystone shall
submit such files on a quarterly basis, 120 days prior to the
policy renewal date. FCIC shall designate the flood zone and
community identifier, as determined by FEMA/FIA, for each
policy and return the electronic file to Keystone or a third
party designated by Keystone fifty (50) days prior to the
policy renewal date. The format of the electronic file will be
agreed upon by the parties.
IV. Compensation:
A. FCIC will compensate Keystone for all acts performed under
Section I of this Agreement in accordance with the attached
Commission Schedule "A". After this Agreement has been in
effect for one (1) year, the Commission Schedule "A" may be
amended by FCIC, from time to time, upon thirty (30) days
written notice to Keystone. Notwithstanding, the Commission
Schedule may be amended by FCIC, at any time, upon thirty (30)
days written notice to Keystone, should the Fee Structure be
amended or modified by FEMA/FIA or the NFIP.
B. FCIC will compensate Keystone for all acts performed under
Section III of this Agreement in accordance with the attached
Commission Schedule "B". After this Agreement has been in
effect for one (1) year, the Commission Schedule "B" may be
amended by FCIC, from time to time, upon thirty (30) days
written notice to Keystone.
C. FCIC shall deduct from commission payments due Keystone, on
business written pursuant to or as a result of Section I or
Section III of this Agreement, compensation on canceled
policies and on reductions in premiums at the rate at which
such compensation was originally paid. Notwithstanding, if no
commission is due Keystone, Keystone shall refund promptly to
FCIC on business heretofore or hereafter written, pursuant to
or as a result of Section I or Section III of this Agreement,
compensation on canceled policies and on reductions in
premiums at the rate at which such compensation was originally
paid.
D. Compensation due under this Agreement is to be payable only
during the continuance of this Agreement and under its terms,
and while Keystone is actively producing and servicing
business hereunder. Any provision of this Agreement providing
for payment off compensation shall be subject to any
indebtedness by Keystone to FCIC arising out of flood
insurance policy premium transactions. FCIC shall have the
right to withhold payments to offset any such indebtedness;
provided, however, that any withholding of compensation shall
be only to the extent necessary to liquidate such
indebtedness.
V. Limitation of Authority:
A. No provisions of this Agreement shall be construed to create
the relation of employer and employee between Keystone and
FCIC. Keystone and FCIC shall act as independent contractors
and Keystone shall be free within the prescribed underwriting
guidelines of FCIC or the Federal Emergency Management Agency
/Federal Insurance Administration (FEMA/FIA) in force at the
time to exercise its own judgment as to whom it will solicit,
and the time, place and manner, and the amount of such
solicitation.
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B. Keystone has no authority to extend time of payment of
premiums, or to waive or extend any obligation or condition of
the Standard Flood Insurance Policy, or incur any liability on
behalf of FCIC.
C. Keystone shall not pay claims or commit FCIC to the payment of
claims.
VI. Assignment: All terms and conditions of this Agreement, including
attachments, addendum, schedules and guaranty or indemnification
agreements shall inure to the benefit of, and be binding upon, the
parties hereto, their successors, heirs, administrators and assigns;
provided, however, that this Agreement may not be assigned by either
party without the prior written consent of the other party.
VII. Warranties and Convents:
A. Keystone hereby warrants and covenants that it will comply
with all applicable state and federal statutes, rules and
regulations governing the solicitation and sale of flood
insurance under the National Flood insurance Act in the
state(s) of performance under this Agreement and shall
continue to comply with same so long as the Agreement shall
remain in effect. Further, Keystone specifically warrants and
covenants that any employee or agent acting on its behalf,
when producing business for FCIC pursuant to this Agreement,
shall comply with all of the applicable provisions of this
Agreement, including, but not limited to Section I of this
Agreement.
B. FCIC hereby warrants and covenants that it will comply with
all applicable state and federal statutes, rules and
regulations governing the business of insurance in the
state(s) of performance under this Agreement, including but
not limited to the National Flood Insurance Act and
regulations of FEMA/FIA, and shall continue to comply with
same so long as the Agreement shall remain in effect.
C. FCIC represents and warrants that the advent of the year 2000
shall not adversely affect the performance of its duties under
this Agreement with respect to date and date dependent data
and, more specifically, that all software used in the
performance of such duties shall be capable of (i) date
recognition and date calculations, comparison and sequencing,
(ii) manipulating date and date related data with dates prior
to, through and after January 1, 2000, (iii) transitioning
correctly into the year 2000 with the correct system date
without human intervention, including leap year calculations
and (iv) providing correct results when moving forward or
backward in time across the year 2000.
VIII. Proprietary and Confidential Information:
A. FCIC expressly acknowledges that certain information of
Keystone, including but not limited to the names, addresses
and policy information of its insureds, its business practices
and strategies and its contracts with third parties
(hereinafter "Proprietary and Confidential Information"), is
proprietary and confidential information of Keystone that FCIC
shall safeguard as it would FCIC's own such information. FCIC
shall use the Proprietary and Confidential Information of
Keystone solely to perform it duties under this Agreement and
shall disclose such information to third parties only upon
written authorization of Keystone. The term "Proprietary and
Confidential Information" does not include information which
is or becomes generally available to the public other than as
a result of a disclosure by FCIC. The provisions of this
Section shall survive the termination of this Agreement.
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B. During the term of this Agreement and for a period of two (2)
years following its termination, FCIC shall not solicit
Keystone insureds for any insurance product other than Flood
Insurance Policies under the National Flood Insurance Act
without the express written authorization of Keystone.
Notwithstanding the foregoing, it is understood and agreed
that in the ordinary course of business of marketing its
products to the general public, FCIC, its agents, affiliates
or subsidiaries are likely to encounter certain Keystone
insureds without emphasizing, targeting, or focusing upon them
as such. This section is not intended to prohibit the above
contacts or business resulting from the above contacts so long
as they neither result from nor are the product of activity
otherwise prohibited by this section. This provisions of this
section shall survive the termination of this Agreement for
the period stated above.
IX. Termination:
A. This Agreement shall be for a period of three (3) years,
commencing upon the execution of this Agreement, provided,
however, that this Agreement shall automatically be renewed
for successive one (1) year terms thereafter, unless either
party gives the other written notice to terminate the
Agreement at the expiration of any term, which notice must be
given at least sixty (60) days prior to the expiration of said
term.
B. Notwithstanding the foregoing, this Agreement may be
terminated by either party upon giving to the other a written
notice at least 90 days prior to the effective date of such
termination; provided, however, either party may terminate
this Agreement immediately without notice if the other party
is guilty of any material violation of the terms hereof, and
has not cured such material violation within thirty (30) days
of written notice thereof. Keystone shall be liable for all
costs incurred by FCIC to collect outstanding balances
together with interest thereon in accordance with Paragraph
hereof.
C. In the event of termination of this Agreement, Keystone shall
promptly account for all premiums and transactions covered by
this Agreement, whereupon the ownership of the flood insurance
business produced under this Agreement shall be left in the
possession of Keystone. In the event Keystone shall fail to
render such an accounting within 90 days of the termination
hereof, any and all flood insurance business produced under
this Agreement shall become the property of FCIC.
X. Enforcement of Obligations: If FCIC refers this Agreement to any
attorney for the enforcement or collection of the obligations of
Keystone, Keystone agrees to pay to FCIC all costs of such enforcement
or collection including any of FCIC's reasonable attorneys' fees prior
to trial, at the trial court level, in connection with any appeal, and
in connection with any Bankruptcy proceedings, which attorney's fees
may be assessed and recovered in any proceeding brought hereunder. If
Keystone fails to pay funds due FCIC as herein provided, including but
not limited to return premiums, Keystone shall pay to FCIC in addition
to all sums otherwise due, interest which shall accrue at 1.5% per
month on such delinquency from the date as provided herein. 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 FCIC.
XI. Indemnification: Keystone shall indemnify and save FCIC harmless from
any and all costs, claims or demands (including FCIC's reasonable
attorneys' fees whether incurred prior to the commencement of formal
legal action, or at the trial, at the Appellate Court level or in
Bankruptcy Court), resulting from any unauthorized acts, any error or
omission, or any breach of any of the provisions in this Agreement by
Keystone, its officers, directors, employees and agents (and
specifically any agent writing business pursuant to this Agreement).
FCIC shall hold Keystone harmless for any judgment for damages rendered
against Keystone as a result of any court action
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by a Policyholder or applicant arising out of a direct error or
omission on the part of FCIC. FCIC shall not hold harmless or indemnify
Keystone, or its directors, officers, employee or agents, for their own
error and omissions.
XII. Attorney's Fees: IF FCIC or Keystone bring a Court action alleging
breach of this Agreement or seeking to enforce, rescind, renounce,
declare void or terminate this Agreement or any provisions thereof, the
prevailing party shall be entitled to recover all of its legal
expenses, including reasonable attorney's fees and cost (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
attorney's fees were incurred. Further, it is understood and agreed
that should Keystone institute any Court action against FCIC, that the
Court action shall be brought in a court of competent jurisdiction in
Pinellas County, Florida and this Agreement shall be construed in
accordance with the laws of the State of Florida. Likewise, it is
understood and agreed that should FCIC institute any Court action
against Keystone, that this action shall be brought in a court of
competent jurisdiction in Philadelphia County, Pennsylvania and the
Agreement shall be construed in accordance with the laws of the
Commonwealth of Pennsylvania.
XIII. General Agreements:
A. It is mutually agreed that if either parry deviates from the
provisions of the Agreement, whether or not such deviation is
protested by the other party or parties, such deviation shall
not be held to have changed this Agreement, or the rights of
the parties hereunder in any respect. No change in or
modification to this Agreement, excluding specifically any
change or modification to the attached Commission Schedule(s),
shall be valid and binding unless reduced to writing and
executed by both parties. The attached Commission Schedules
may be amended as provided within this Agreement.
B. Applications, advertising material and other material
furnished by FCIC are the property of FCIC and will be
returned to FCIC upon termination of the Agreement. All data,
logos and other materials furnished to FCIC by Keystone are
the property of Keystone and will be returned to Keystone upon
termination of this Agreement. Further, Keystone shall review
and approve, at origination, FCIC's use of the Keystone, AAA
Mid-Atlantic logo.
C. Keystone shall allow FCIC to audit all books and records
relating to insurance written pursuant to this Agreement.
D. All accounting, information system, agency licensing and cash
flow functions shall be handled by FCIC and Keystone in
accordance with standard insurance business practices and
applicable federal and state statutes and regulations.
XIV. Notices: Any and all notices, designations, consents, offers,
acceptances, or any other communication provided for herein, shall be
given in writing by certified mail, by hand delivery, by express
overnight courier or by facsimile transmission. All notices sent by
certified mail shall be deemed delivered on the second regular business
day after the post mark. All notices sent by express overnight courier
shall be deemed delivered on the day after pickup by the courier. All
notices sent by hand delivery or facsimile transmission shall be deemed
delivered on the day of hand delivery or facsimile transmission unless
delivered or transmitted after 5 p.m., whereupon, delivery shall be
deemed effective on the next regular business day. All notices shall be
addressed as follows:
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COMMISSION SCHEDULE "A"
FCIC shall compensate Keystone for all acts performed and all flood insurance
business produced pursuant to Section I of the Agreement in the amount of 18% on
the annual written premium per policy issued by FCIC. This Commission Schedule
may be amended, at any time, by FCIC upon thirty (30) days written notice to
Keystone in accordance with the Agreement. Commission shall be paid monthly on
the 15th day of the month following receipt of the corresponding premium by
FCIC.
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COMMISSION SCHEDULE "B"
FCIC shall compensate Keystone for all acts performed and all flood insurance
business produced pursuant to Section III of the Agreement in the amount of 10%
on the annual written premium per policy issued by FCIC. This Commission
Schedule may be amended, at any time, by FCIC upon thirty (30) days written
notice to Keystone in accordance with the Agreement. Commission shall be paid
monthly on the 15th day of the month following receipt of the corresponding
premium by FCIC.
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As to Keystone: Keystone Insurance Company
2040 Market Street
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Philadelphia, Pennsylvania 19103
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Attention: Robert Iwanczuk
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Fax No.: (215) 568-1153
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As to FCIC: First Community Insurance Company
360 Central
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St. Petersburg, FL 33701
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Attention: Kathleen M. Batson
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Fax No.: (813) 823-6518
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This Agreement constitutes the full agreement, oral, or written, between FCIC,
and Keystone, but shall be subject to such changes as may be provided in writing
from time to time.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement.
KEYSTONE INSURANCE COMPANY:
Signed this 16 day of January, 1998 By /s/ Terrance R. Powers
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Title Executive Vice President
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Broker No.
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Signed this 6 day of January, 1998 FIRST COMMUNITY INSURANCE COMPANY
By /s/ Kathleen M. Batson
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Title Senior Vice President
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