SERVICES AGREEMENT
THIS Services Agreement ("Agreement") is made this day of 1999, by
and between Pacific Life & Annuity Co. ("PL&A"), an Arizona corporation, and
Pacific Life Insurance Company (PLIC), a California corporation.
WHEREAS, PL&A desires to provide such administrative services for certain
individual life, individual annuity, and institutional product contracts; and
WHEREAS, PLIC desires to provide certain administrative services for PL&A
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 PL&A 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 PL&A 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, PL&A agrees to pay PLIC a fee based on an
estimation of 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.
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. PL&A 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.
Page 2
Services Agreement
5. Underwriting and Claims Services. All underwriting and claims services
provided to PL&A under this Agreement are to be based upon the written
criteria, standard and guidelines of PL&A. PL&A shall have the ultimate and
final authority over decisions 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 PL&A are vested with the power, authority, and
responsibility for managing the business and affairs of PL&A, 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 PL&A.
7. Billing. All charges and advances made pursuant to this Agreement shall be
billed by PLIC on a timely basis in the ordinary course of business and
shall be 100 percent repaid to PLIC in the ordinary course of business, as
soon as practicable. Interest may be assessed by PLIC at a market-based
short-term borrowing 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) PLIC shall be responsible for maintaining full and accurate accounts and
records of all services rendered pursuant to this Agreement. 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 PL&A and persons
authorized by it and any governmental agency having jurisdiction over PL&A.
(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 PL&A, shall be deemed the property of PL&A, and shall be
subject to audit, inspection, and copying, during reasonable business hours,
by PL&A and persons authorized by it and any governmental agency having
jurisdiction over PL&A. All such books, records and files shall be promptly
transferred to PL&A by PLIC upon termination of this Agreement, at PL&A's
expense.
Page 3
Services Agreement
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.
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 the parties hereto. PL&A 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.
Page 4
Services Agreement
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
PACIFIC LIFE & ANNUITY CO.
17360 Brookhurst
Fountain Valley, CA 92708
By: _____________________ By: _________________________
Title: __________________ Title: ______________________
PACIFIC LIFE INSURANCE COMPANY
700 Newport Center Drive
Newport Beach, CA 92660
By: _____________________ By: _________________________
Title: __________________ Title: ______________________
SCHEDULE A
SERVICES PROVIDED BY PLIC
PURSUANT TO THIS AGREEMENT FOR THE CONTRACTS
1. Marketing
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 PL&A 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 PL&A financial
statements.
Provide valuation and compliance with valuation and actuarial requirements
for business subject to this Agreement.
Provide support for PL&A 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.
Page 2
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.