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EXHIBIT 10.87
AYO CLAIMS AGREEMENT
THIS AYO CLAIMS AGREEMENT, entered into as of this _____ day of ___________,
199__, between THE FLORIDA WINDSTORM UNDERWRITING ASSOCIATION (the "FWUA") and
_______________________________________________ (the "Company").
R E C I T A L S:
The Company writes homeowner's policies, in FWUA Eligible Areas in Florida. Such
policies may exclude windstorm coverages and, if so, such windstorm coverages
are written with the FWUA. In the event of losses under FWUA policies, the FWUA
has agreed to appoint the Company to process and handle claims on properties
which are covered both by the Company's policies and FWUA policies (the "FWUA
Claims").
NOW, THEREFORE, it is agreed as follows:
1. APPOINTMENT. The FWUA hereby appoints the Company to process, handle and
adjust all FWUA Claims on properties which are covered both by an FWUA
policy and a policy issued by the Company.
2. TERM AND TERMINATION. This Agreement shall commence on the above date and
shall continue for a period of one (1) year thereafter or until terminated
under Section 6, whichever first occurs. If not terminated under Section 6
before the end of such one (1) year term, it shall continue in effect for
successive one (1) year terms or until this Agreement has been terminated
under Section 6 hereof, whichever occurs first.
3. POWERS AND DUTIES OF THE COMPANY. The Company shall:
(a) process and adjust all FWUA Claims and perform its obligations in
compliance with the FWUA's Adjuster Manual and in conformance with
generally accepted standards in the claims adjustment business and in a
manner comparable to the services performed by the Company in the
voluntary market and not in violation of any statute governing unfair
claim-handling practices, exercising at all times ordinary care and
diligence in the performance of such duties (the "Servicing
Standards");
(b) transmit to the FWUA, promptly after a loss occurrence, copies of all
loss notices (which shall contain such information as the FWUA shall
require) and, when the FWUA Claim has been fully adjusted, furnish a
closing report and such back-up documentation supporting payment of the
FWUA Claims as the FWUA shall reasonably require;
(c) advance all payments and engineering expenses required by the Adjuster
Manual;
(d) assign all FWUA Claims to approved, independent adjusting firms or
qualified adjusting staff in accordance with the Company's established
standards; and
(f) in the event of litigation, promptly forward the matter to the FWUA for
handling,
4. POWERS AND DUTIES OF THE FWUA. The FWUA shall:
(a) upon receipt of loss notices, verify coverages, establish reserves and
set up a file pending receipt of prescribed status reports and/or
closing report;
(b) upon receipt of closing report and back-up documentation
acceptable to the FWUA, pay all FWUA Claims;
(c) provide such coverage information on policies involving
FWUA Claims as the Company shall reasonably require;
(d) provide the Company with copies of the FWUA Adjuster Manual and
copies of all amendments to its Manual of Procedures or other documents
which affect FWUA obligations to its policyholders;
(e) provide training on policy coverages and other matters on an
as-needed basis, including the adjuster "Train the Trainer" programs
for the Company's use in the certification of staff and independent
adjusters.
5. COMPENSATION.
(a) The FWUA shall pay to the Company for the performance of its services
hereunder an administrative fee equal to 3.3% of the amount of each
loss paid.
(b) The FWUA shall reimburse the Company for the fees and expenses of all
staff adjusters and independent adjusters in accordance with the
current FWUA Adjuster Fee schedule attached hereto.
(c) The Company shall be entitled to receive only such fees and cost
reimbursements as are specifically authorized under this Agreement and
shall not receive reimbursement for any costs, fees, fines, penalties,
damages or expenses incurred in any proceeding arising from: (i) the
failure of the Company to perform its services hereunder in accordance
with the Servicing Standards, as reasonably applied; or (ii) a finding
that the Company acted in bad faith in the adjustment of an FWUA
Claim.
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(d) The Company shall be compensated for its services and shall be
reimbursed for its expenses hereunder within 30 days after payment of
an FWUA Claim.
6. TERMINATION. Either party may terminate this Agreement upon 90 days written
notice to the other. All books, records, files, policies, contracts,
supplies and related material furnished by the FWUA to the Company in the
performance of its services hereunder shall remain the property of the
FWUA and shall be returned by the Company to the FWUA upon termination.
7. RELATIONSHIP OF THE PARTIES. The Company shall be deemed an independent
contractor, performing its services hereunder free from any supervision or
control by the FWUA, except as may be exercised by the FWUA in connection
with enforcing the Servicing Standards. The Company shall have no right or
authority to bind or obligate the FWUA with respect to any FWUA Claim
without the prior approval of the FWUA. All employees or agents of the
Company performing duties hereunder shall be solely and exclusively under
the Company's direction and control and shall not be deemed employees of
the FWUA.
8. AUDIT.
(a) The Company shall maintain adequate books, records, reports and other
documents relating to its services hereunder which shall be separate
and apart from those pertaining to services performed by it in the
voluntary market and all of them shall be open for inspection, audit
and copying by the FWUA and its agents or other representatives at all
reasonable time. The Company shall cooperate fully with all of such
agents or other representatives during audits or examinations conducted
by them and shall permit them to have full access during normal
business hours of all such books, records, reports and other material.
(b) At any time during the term hereof and on or before one hundred twenty
(120) days after the termination hereof, the FWUA may conduct an audit
of the Company's FWUA operations to determine whether the Company has
performed its obligations hereunder in compliance with the Servicing
Standards and this Agreement.
9. INDEMNIFICATION.
(a) The Company agrees to indemnify the FWUA against and hold it harmless
from any and all payments of money (including fines, damages,
liabilities, liens, losses, costs and expenses, including attorneys'
fees, whether incurred in anticipation of trial, at trial or on
appeal), imposed on, incurred by or asserted against the FWUA, arising
out of or resulting directly or indirectly from the obligations of the
Company under Section 3 of this Agreement or arising out of any claim,
action, suit or proceeding relating to the obligations of the Company
under Section 3 hereof.
(b) The FWUA agrees to indemnify the Company against and hold it harmless
from any and all payments of money (including fines, damages,
liabilities, liens, losses, costs and expenses, including attorneys'
fees, whether incurred in anticipation of trial, at trial or on
appeal), imposed on, incurred by or asserted against the Company,
arising out of or resulting directly or indirectly from the obligations
of the FWUA under Section 4 of this Agreement or arising out of any
claim, action, suit or proceeding relating to the obligation's of the
FWUA under Section 4 hereof.
10. ARBITRATION. Any dispute between the FWUA and the Company (the "parties")
regarding performance of the provisions of this Agreement shall be resolved
by the parties and if not so resolved, shall be resolved solely by binding
arbitration in accordance with rules and procedures of the American
Arbitration Association (AAA). When demand for arbitration is made, each
party will select an arbitrator and the two arbitrators will select a third
from a panel provided by the AAA. Arbitrators shall have familiarity with
dispute resolution in the insurance industry. Each party will pay the
expenses it incurs and bear the expenses of the third arbitrator equally.
Unless both parties agree otherwise, arbitration will take place in Duval
County, Florida. All decisions of the arbitrators will be binding on the
parties.
11. MISCELLANEOUS.
(a) This Agreement shall be binding upon the parties and their legal
representatives, successors and assigns and is being executed and is
intended to be performed in the State of Florida and shall be
construed, interpreted and enforced in accordance with the laws of that
state.
(b) Neither this Agreement nor any term hereof may be changed, waived,
discharged, amended or terminated orally, but only by an instrument in
writing signed by the parties.
(c) This Agreement is solely between the FWUA and the Company and no
insured, agent, producer, claimant or other person having or asserting
a claim against either the FWUA or the Company shall have or acquire
any rights by reason of the execution and delivery of this Agreement or
the performance of any obligations or duties hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers as of the date and year first above
written.
FWUA:
Attest: FLORIDA WINDSTORM
UNDERWRITING ASSOCIATION
By: /s/ William Schmitz
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Title: Assistant Manager
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Secretary
COMPANY:
Attest: BANKERS INSURANCE GROUP
By: /s/ Robert S. Gantley
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Title: Vice President - Claims
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Secretary
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