EXHIBIT 10.24
COMMERCIAL RISK RE-INSURANCE COMPANY
CO-RISK DEDUCTIBLE PAYMENT PROGRAM
DEDUCTIBLE PAYMENT LOSS PORTFOLIO TRANSFER INSURANCE POLICY
INSURED: The Vincam Group, Inc.
INSURER: Commercial Risk Re-Insurance Company - 100%
South Burlington, Vermont
TYPE: Deductible Payment Loss Portfolio Transfer Insurance
Policy
EFFECTIVE DATE: December 31, 1996
RETROSPECTIVE
COVERAGE
PERIOD: The Retrospective Coverage Period shall include the
period from and including January 1, 1994 through and
including December 31, 1996, provided, however, that
losses for which coverage is sought hereunder are
payable on or after December 31, 1996 (the "Policy
Effective Date").
BUSINESS
COVERED: Business with respect to U.S. situated risks of the
Insured only classified as workers' compensation under
those certain insurance policies issued by Liberty
Mutual to the Insured as set forth on Schedule A (the
"Covered Policies"). Coverage hereunder is on an
Occurrence Basis.
PER OCCURRENCE
LIMITS, INDEMNITY
CLAIMS: With respect to losses arising from occurrences during
the Retrospective Coverage Period that remain
outstanding and unpaid at 11:59:59 p.m. on the day
preceding the Effective Date, including incurred but not
reported losses ("IBNR"), the Insurer, subject always to
the Policy Aggregate Limit of Liability and the other
limitations herein specified, will indemnify the Insured
for Ultimate Net Loss up to the amount of $500,000 each
and every occurrence for indemnity claims, less any
amount of Ultimate Net Loss paid with respect to such
occurrence prior to the Policy Effective Date, subject
always to the Policy Aggregate Limit of Liability and
the other limitations herein specified.
PER OCCURRENCE
LIMITS, MEDICAL
ONLY CLAIMS: With respect to losses arising from occurrences during
the Retrospective Coverage Period that remain
outstanding and unpaid at 11:59:59 p.m. on the day
preceding the Policy Effective Date, including incurred
but not reported losses ("IBNR"), the Insurer, subject
always to the Policy Aggregate Limit of Liability, the
Insured's Medical Only Per Occurrence Retention and the
other limitations herein specified, will indemnify the
Insured for Ultimate Net Loss up to the amount of
$498,000 each and every occurrence for medical only
claims in excess of the Insured's Medical Only Per
Occurrence Retention, less any amount of Ultimate Net
Loss paid with respect to such occurrence prior to the
Policy Effective Date, subject always to the Policy
Aggregate Limit of Liability and the other limitations
herein specified.
INSURED'S
MEDICAL ONLY
PER OCCURRENCE
RETENTION: The Insured shall be responsible for the first $2,000 of
Ultimate Net Loss each and every medical only claim
during the Retrospective Coverage Period that would
otherwise be recoverable under this Policy.
The Insurer shall have no liability whatsoever hereunder
with respect to any occurrence for which insurance is
provided hereunder until the Insured shall have paid the
Insured's Medical Only Per Occurrence Retention.
POLICY
AGGREGATE LIMIT
OF LIABILITY: The total aggregate amount of Ultimate Net Loss for
which the Insurer shall be liable hereunder with respect
to all occurrences during the Retrospective Coverage
Period is $4,100,959, subject to the terms and
conditions set forth herein.
IN NO EVENT WILL THE INSURER BE LIABLE TO INDEMNIFY THE
INSURED FOR ANY AMOUNTS IN THE AGGREGATE IN EXCESS OF
$4,100,959.
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INSURANCE
PREMIUM: The Insurance Premium for the Policy Period shall be
$3,047,619. The Insurance Premium shall be paid to the
Insurer by direct wire transfer on or before December
10, 1996.
In the event that any amount of Insurance Premium shall
not be paid on or before the due date therefor, the
Insured shall pay interest to the Insurer on any amount
of the Insurance Premium that is due and payable and
remains unpaid from and including the due date thereof
through and including the date such payment is made at a
rate equal to eight percent (8.0%) PER ANNUM.
The Insurance Premium shall be subject to a
retrospective adjustment (a "Retrospective Insurance
Premium Adjustment"). The Retrospective Insurance
Premium Adjustment shall be determined by utilizing the
calculation below:
In the event that the actual audited workers'
compensation payroll of the Insured for the Policy
Period (as agreed and accepted by the Insured) is
greater than $315,000,000, being the estimate of
payroll for the Policy Period as furnished to the
Insurer by the Insured in connection with the
Insurer's entering into this Policy, the Insurer
shall calculate a retrospective premium adjustment by
multiplying (i) the amount by which the actual
audited payroll of the Insured exceeds $315,000,000
by (ii) the rate of [*] per $100 of payroll. For
the purposes of this Policy, workers' compensation
payroll shall include all amounts paid as salary
and/or wages, including any amounts paid for time
worked in excess of forty (40) hours per week,
howsoever defined, all limited in accordance with the
N. C. C. I. rules applicable to the particular
state(s).
The Retrospective Insurance Premium Adjustment shall be
calculated no later than April 1, 1997.
The Insured shall pay any amount of Retrospective
Insurance Premium Adjustment due on or before May 1,
1997.
The Insured covenants to furnish to the Insurer true and
complete information as may be required by the Insurer
to permit calculation of the Retrospective Insurance
Premium Adjustment.
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* Confidential portions omitted and filed separately with
the Securities and Exchange Commission.
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CLAIMS REPORTS
AND REMITTANCES: On a monthly basis, the Insured will provide a detailed
Loss Activity Report of paid and incurred claims
hereunder. The Loss Activity Report will be provided
within 30 days of the end of each month and shall
contain such information as the Insurer shall request
from time to time. Remittances shall be made by the
Insurer to the claims administration account
administered by the Insured's claims adjusters as
provided under Loss Payee.
LETTER OF CREDIT
OR TRUST ACCOUNT: To secure its indemnity obligations hereunder, the
Insurer will provide to the Insured, a clean,
irrevocable and evergreen letter of credit, issued by a
mutually agreed Bank, in each case, which shall secure
the obligations of the Insured. Initially, the amount of
the security shall be $4,100,959. The Insured agrees
that once the Insurer shall have made payments of
Ultimate Net Loss, the sum of which in the aggregate
exceeds the difference between the Policy Aggregate
Limit of Liability and $4,100,959, the amount of the
security provided hereunder shall be reduced on a
quarterly basis by amounts paid by the Insurer as
Ultimate Net Loss during the preceding quarter, and
otherwise adjusted for the amount of the liabilities
hereunder. In the event that there shall be three
consecutive months during which no loss payments are
made by the Insurer to the Insured or the loss payee,
the Insured and the Insurer shall utilize reasonable
good faith efforts to determine if there are any
remaining liabilities hereunder and, if so, that the
amount of any such remaining liabilities might be for
the purpose of adjusting the amount of the security
accordingly.
ULTIMATE NET
LOSS AND
ALLOCATED
LOSS ADJUSTMENT
EXPENSES: The term "Ultimate Net Loss" shall mean amounts for
which the Insured shall be liable as its deductible
under the Covered Policies which amounts may include the
Insured's share of contractual indemnity arising under
the Covered Policies and allocated loss adjustment
expenses which the Insured is liable to pay Liberty
Mutual as part of its deductible.
The term "allocated loss adjustment expenses" shall mean
all expenses (except for salaries, benefits and
traveling expenses of the Directors, Officers, Employees
or Consultants of the Insured or any insurer issuing the
Covered Policies, and office expenses, overhead
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or other fixed expenses of the Insured or any insurer
issuing the Covered Policies) relating to the adjustment
of loss hereunder, including expenses and fees
associated with policy coverage and declaratory
judgement actions and pre-judgement and post judgement
interest.
EXPERIENCE
ACCOUNT: The insurer shall calculate an Experience Account on a
quarterly basis for purposes of this Policy. The
Experience Account shall be determined by:
1. 100% of the Insurance Premium paid to the Insurer;
LESS
2. Amounts paid as Ultimate Net Loss; plus
3. 100% of any Retrospective Insurance Premium
Adjustment.
COMMUTATION: Provided that the balance in the Experience Account is
positive, the Insured, upon 30 days prior written notice
to the Insurer, may elect to commute this Policy at any
time. On the effective date of the Commutation, the
Insured shall release the security provided by the
Insurer, the Insurer shall pay the Insured one hundred
percent (100%) of the Experience Account, and
contemporaneously with any such payment, the Insured
shall deliver to Commercial Risk a release, in form and
substance acceptable to Commercial Risk, duly authorized
and executed, releasing Commercial Risk from any further
or continuing liability under this Policy.
EXCLUSIONS: As per the Covered Policies
ECO, XPL Exclusion
Punitive and Exemplary Damages
Absolute exclusion for environmental impairment and
pollution claims
Business other than that of the Insured.
LOSS PAYEES: The Insured's claims adjusters, Liberty Mutual, as may
be designated from time to time by the Insured.
GENERAL
CONDITIONS: The following General Conditions shall be based on the
Commercial Risk Group's standard wording, a copy of
which shall be provided upon request:
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Access to Records
Errors and Omissions
Salvage and Subrogation
Arbitration Clause, Arbitration Stamford, Connecticut
Vermont Law
Offset Clause
Direct wire transfer of all premiums and losses.
The term "Dollars" and "$" mean United States Dollars.
Management of Claims and Losses
All notices delivered hereunder to be delivered by hand,
by telecopier, provided receipt is confirmed by the
party to whom addressed, or by an internationally
recognized overnight courier service.
The Insured shall promptly make available to the Insurer
any reports prepared by the Insured's claims manager
and/or claims adjusters or administrators with
respect to this account.
This Policy may be executed in any number of
counterparts, each of which shall be deemed an
original, and the counterparts shall constitute but
one and the same instrument, which shall be
sufficiently evidenced by any one counterpart.
REPRESENTATION,
WARRANTY AND
COVENANT: The Insured represents and warrants that it is legally
authorized and empowered to purchase the Insurance under
this Policy from the Insurer. The Insured further
represents, warrants and covenants that it shall make
any required filings and pay any applicable taxes in the
State of Florida for which it may be liable as an
Insured under this Policy as provided in Fla. Stat.
5626.938 (1996) and/or any other provision of applicable
law. The Insured shall furnish evidence of any filings
or tax payments to the Insurer promptly on making or
remitting same.
INTEGRATION,
FINAL AGREEMENT: This Deductible Payment Loss Portfolio Transfer
Insurance Policy represents the complete and final
agreement of the parties hereto and it supersedes and
replaces any prior oral or written understandings of the
parties including. This Policy shall not be amended or
modified except by the prior written agreement of the
Insurer and the Insured.
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In accordance with the terms presented above, we hereby confirm our
participation of 100%
COMMERCIAL RISK RE-INSURANCE COMPANY Reference No.: 960699
By: /s/ WILLIAM BRIAN ZELL Date: 1-15-97
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William Brian Zell
Senior Vice President & C.F.O.
Address for Notices delivered hereunder:
One Canterbury Green
Stamford, Connecticut 06901
Attention: Sr. Vice President and Chief Financial Officer
Telecopier Number: 203-358-9932
THE VINCAM GROUP, INC
By: /s/ MARTIN PEREZ Date: 1-21-97
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Name: Martin Perez
Title: Vice President & Controller
Address for Notices delivered hereunder:
2850 Douglas Road
Coral Gables, Florida 33134
Attention:
Telecopier No.:
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