EXHIBIT 1.(9)(B)
SERVICES AGREEMENT
THIS Services Agreement ("Agreement") is made this 8th day of July 1999, by
and between Pacific Life & Annuity Co. ("PLA"), an Arizona corporation, and
Pacific Life Insurance Company (PLIC), a California corporation.
WHEREAS, PLA desires to contract with PLIC to provide certain services for
certain individual life, individual annuity, and institutional product
contracts; and
WHEREAS, PLIC desires to provide such administrative services for PLA on
the following terms and conditions;
NOW THEREFORE, in consideration of the mutual promises and agreements
contained herein, the parties do mutually agree as follows:
1. Services. Subject to the terms and conditions set forth in this Agreement,
PLIC agrees with respect to certain PLA contracts, specifically, any and
all individual life, individual annuity, and institutional product contracts
(collectively "the Contracts"), to provide the administrative services
described in Schedule A, attached hereto and made a part hereof, together
with such other services that PLA may reasonably request (collectively "the
Services") with respect to the Contracts.
2. Charges for Services. As consideration for the Services provided by PLIC
pursuant to this Agreement, PLA agrees to pay PLIC a fee based on actual
costs, determined in a fair and reasonable manner, which costs will not
include a profit factor and which will be allocated equitably in accordance
with customary insurance accounting practices, where applicable,
consistently applied. For purposes of this Agreement, the parties agree that
at no time will charges for Services exceed the amounts reflected in the
Contract Specifications provided by PLA from time to time to PLIC.
3. Subcontractors. PLIC may subcontract with any subsidiary or affiliate of
PLIC to provide Services; provided that subcontracting shall not result in
an increase in the amount charged for such Services or a decrease in the
quality of such Services provided.
4. Indemnification. PLA agrees to defend, indemnify and hold PLIC harmless
from and against all costs, reasonable expenses, losses, damages, attorneys'
fees, claims, obligations and liabilities imposed upon, incurred or asserted
against PLIC which arise out of or in any manner are connected with
Contracts administered by PLIC under this Agreement, except if the conduct
of PLIC constitutes an intentional tort, reckless conduct, gross negligence
or bad faith, or if PLIC issues a Contract which is inconsistent with the
approved policy specifications.
5. Underwriting and Claims Services. All underwriting and claims services
provided to PLA under this Agreement are to be based upon the written
criteria, standard and guidelines of PLA. PLA shall have the ultimate and
final authority over decisions
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and policies relating to the Contracts; to include but not be limited to the
acceptance, rejection or canceling of risks relating to or with respect to
such Contracts.
6. Supervision by the Company. PLIC acknowledges that (a) the Board of
Directors and officers of PLA are vested with the power, authority, and
responsibility for managing the business and affairs of PLA, and (b) any
and all actions taken or advice or services provided pursuant to this
Agreement by PLIC are subject to the continuous supervision and approval of
the Board of Directors and the officers of PLA.
7. Billing. All charges made pursuant to this Agreement shall be
billed by PLIC monthly, if feasible, but in no event less frequently than
quarterly. Payment is due as soon as practicable, but in no event later than
60 days after presentation of the billing. Interest may be assessed by PLIC
61 days after presentment of the billing, at a 3-month LIBOR rate. Billings
shall be accompanied by sufficient documentation to support the charges and
to meet all state insurance regulatory requirements. Statements are subject
to final adjustment only if mutually agreed upon by both parties.
8. Accounting Records and Documents.
(a) The books, accounts, and records of each party to all transactions shall be
maintained so as to clearly and accurately disclose the precise nature and
details of the transactions, including accounting information that is
necessary to support the reasonableness of the charges or fees to the
parties. PLIC shall keep such account and records insofar as they pertain to
the computation of charges hereunder available at its principal offices for
audit, inspection, and copying, during reasonable business hours, by PLA
and persons authorized by it and any governmental agency having jurisdiction
over PLA.
(b) All books, records and files established and maintained by PLIC by reason of
its performance under this Agreement which, absent this Agreement, would
have been held by PLA, shall be deemed the property of PLA, and shall be
subject to audit, inspection, and copying, during reasonable business hours,
by PLA and persons authorized by it and any governmental agency having
jurisdiction over PLA. All such books, records and files shall be promptly
transferred to PLA by PLIC upon termination of this Agreement, at PLA's
expense.
9. Notices. All written notices, requests, and other communications hereunder
shall be delivered to the addresses set forth on the signature page of this
Agreement, or any address hereinafter agreed upon by the parties.
10. Governing Law. This Agreement shall be construed and governed in accordance
with the laws of the State of Arizona.
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11. Entire Agreement; Amendment. This Agreement shall constitute the entire
agreement among the parties and supersedes all prior agreements and
understandings, whether written or verbal, to the extent such agreements
pertain to the rights and responsibilities set forth herein.
Notwithstanding the foregoing, this Agreement does not supersede either of
the Pacific Life Insurance Company Administrative Services Agreement with
Pacific Life Insurance Company and its Subsidiaries and Affiliates dated
September 1, 1997 and the Investment Management Agreement dated January 1,
1990. This Agreement may be amended only in a writing executed by all
parties.
12. Arbitration. In the event any dispute arises between the parties related in
any way to this Agreement on which agreement between the parties cannot be
reached, the dispute shall be decided by arbitration in accordance with
procedures agreed upon by the parties after such dispute arises.
13. Termination. This Agreement may be terminated upon 60 days written notice
by written agreement of either party hereto. PLA may terminate the contract
in the event PLIC fails to perform its responsibilities hereunder in a
satisfactory manner.
14. Assignment. Except as set forth in Section 3 hereof, PLIC cannot assign its
duties or obligation, in whole or in part, under this Agreement to any
other firm, organization or individuals without the express written consent
of PL&A, which consent shall not be unreasonably withheld.
15. Severability. To the extent this Agreement may be in conflict with any
applicable law or regulation, this Agreement shall be construed in a manner
consistent with such law or regulation. The invalidity or illegality of any
provision of this Agreement shall not be deemed to affect the validity or
legality of any other provision of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
PACIFIC LIFE & ANNUITY COMPANY PACIFIC LIFE INSURANCE COMPANY
17360 Brookhurst 700 Newport Center Drive
Fountain Valley, CA 92708 Newport Beach, CA 92660
By: /s/ WILLIAM L. FERRIS By: /s/ THOMAS C. SUTTON
-------------------------- -------------------------
William L. Ferris Thomas C. Sutton
President & Chief Executive Chairman & Chief Executive
Officer Officer
By: /s/ AUDREY L. MILFS By: /s/ AUDREY L. MILFS
-------------------------- -------------------------
Audrey L. Milfs Audrey L. Milfs
Vice President & Secretary Vice President & Secretary
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SCHEDULE A
SERVICES PROVIDED BY PLIC
PURSUANT TO THIS AGREEMENT FOR THE CONTRACTS
1. Marketing
Supervision, recruiting and product training. Preparation and distribution
of illustrations and marketing materials. Communications with the field.
Contest qualification and production credit tracking.
2. Compliance
Provide contracts and policies in compliance with applicable state and
federal laws.
File PLA contracts and policies with insurance departments and other
regulatory agencies.
3. Policy Administration
Prepare, in accordance with Section 5, and deliver and maintain contracts
and policies.
Obtain clients' acceptance of contracts and policies.
Maintain originals of all contracts and policies.
Provide customer service in relation to all contracts and policies.
Prepare and issue reports required by state and federal law.
4. Accounting and Financial Reporting
Prepare billings and collect premiums and other fees in relation to
contracts and policies.
Provide accounting for contracts and policies.
Provide financial reporting results for inclusion in PLA financial
statements.
Provide valuation and compliance with valuation and actuarial requirements
for business subject to this Agreement.
Provide support for PLA examinations and audits.
5. Claims Processing
In accordance with Section 5, process all claims arising under policies and
contracts.
Maintain claim documents, files and related information.
Maintain and update beneficiary designations and life assignments.
Control and maintain all draft and check stock, claim forms and other forms
and documents incidental to claims processing.
Maintain claims procedural manuals and other instructions.
Monitor claims for possible fraud.
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Schedule A
6. Licensing and Commission Payment
Process and issue licenses and commission agreements, and pay applicable
fees.
Calculate and pay commissions.
Maintain commission payment information, and report such information as
required by applicable laws.
7. Separate Accounts
Provide services necessary for the maintenance of separate accounts,
including but not limited to state and federal regulations as applicable.
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