EXHIBIT 10.2
INSURANCE PLACEMENT AGREEMENT DATED AS OF
JUNE 10, 1996 BETWEEN THE TRUST, TIG AND
AND TIG REINSURANCE COMPANY
INSURANCE PLACEMENT AGREEMENT
THIS INSURANCE PLACEMENT AGREEMENT (the "Agreement") is made
as of this 10th day of June, 1996, by and between Delta
Agricultural and Industrial Trust, or its assignee or successor
in interest (collectively, the "Trust"), TIG Insurance Company
("TIG") and TIG Reinsurance Company ("TIG Re").
WITNESSETH
WHEREAS, the Trust is a self-insured workers' compensation
trust and TIG and TIG Re are capital stock insurance companies;
and
WHEREAS, the Trust desires to refer its workers'
compensation clients to TIG, and TIG desires to write such
insurance as hereinafter set forth; and
WHEREAS, TIG Re desires to reinsure the insurance written by
TIG and may become a reinsured of a commercial insurance company
to be organized by the Trust.
NOW, THEREFORE, in consideration of the foregoing premises
and the covenants, promises, and agreements set forth herein,
TIG, TIG Re and the Trust agree as follows:
ARTICLE 14
DEFINITIONS
14.1 "Affiliate" means, as applied to any Person, any other
Person directly or indirectly controlling, controlled
by, or under common control with, that Person. For
purposes of this definition, "control" (including
with correlative meanings, the terms "controlling,"
"controlled by," and "under common control with"), as
applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the
direction of the management and policies of that
Person, whether through the ownership of voting
securities or by contract or otherwise.
14.2 "Effective Date" means 12:01 a.m., Central Standard
Time, July 1, 1996.
14.3 "Existing Clients" means Persons covered by workers'
compensation policies written by the Trust prior to
the Effective Date which shall be offered workers'
compensation insurance through TIG after the
termination of their policies by the Trust as of the
Effective Date.
14.4 "Person" means any individual, corporation,
partnership, joint venture, association, or other
form of organization, in each case whether or not
having a separate legal identity.
14.5 "Potential Clients" means those Persons which request
or are offered workers' compensation insurance through
the Trust or an agent or representative thereof, but
not including Existing Clients.
14.6 "Program" shall mean the marketing and provision of
TIG's workers' compensation insurance to Existing
Clients and Potential Clients in accordance with the
terms of this Agreement.
14.7 "Program Business" shall mean policies of insurance
written by TIG covering Program Clients.
14.8 "Program Clients" means all (i) Existing Clients who
are provided with workers' compensation insurance by
TIG; (ii) and Potential Clients who are provided with
workers' compensation insurance products by TIG under
this Agreement.
14.9 "Reinsurance" shall mean the entering into of a
reinsurance relationship between the Trust through a
commercial insurance company formed by or on behalf
of the Trust and TIG or, at TIG's sole option, TIG Re,
such that the Trust, through the commercial insurance
company, shall act as a reinsurer of Program
Business.
14.10 "Trust" means the Delta Agricultural and Industrial
Trust, or its assignee or successor in interest. As
used herein, the term "Trust" shall also mean a
commercial insurance company formed by or on behalf
of the Trust where the use of the term in such
context is appropriate.
ARTICLE 15
PLACEMENT OF INSURANCE
15.1 Existing Clients. As of the Effective Date, the
Trust shall terminate its existing workers'
compensation policies as to the Existing Clients, and
TIG shall offer to all Existing Clients workers'
compensation insurance written by TIG. The parties
acknowledge that the Existing Clients are under no
obligation to accept workers' compensation insurance
coverage from TIG, but TIG is obligated to offer such
coverage to all Existing Clients.
15.2 Potential Clients. From and after the Effective
Date, TIG shall make its policies of workers'
compensation insurance available to all Potential
Clients in accordance with TIG's underwriting criteria
for the Program as attached hereto as Exhibit A and
any amendments thereto (the "Underwriting Criteria").
TIG may change the Underwriting Criteria by providing
notice thereof to the Trust at least sixty (60) days
prior to the date the revised Underwriting Criteria
are to become effective.
15.3 Premium Rates. From and after the Effective Date,
premium rates charged by TIG to Program Clients shall
not exceed those premium rates filed by TIG which
were approved by the Commissioner of Insurance of the
State of Mississippi on April 11, 1996, to be
effective June 1, 1996 (the "Rates"). TIG may change
the Rates by providing notice thereof to the Trust at
least sixty (60) days prior to the date the revised
Rates are to become effective.
15.4 Renewals. The renewal by TIG of any policy of
workers' compensation insurance issued by TIG to a
Program Client shall be subject to TIG's Underwriting
Criteria for the Program and TIG shall not be
obligated to renew any policy of workers' compensation
insurance issued to a Program Client by TIG that does
not satisfy the Underwriting Criteria.
ARTICLE 16
LIABILITY
16.1 Duration. The duties and obligations of TIG
hereunder with regard to the Program Business shall
begin on the Effective Date.
16.2 Reciprocal Indemnity.
(1) TIG shall not be responsible for any act or omission
of the Trust occurring prior to the Effective Date with respect
to workers' compensation policies issued by the Trust prior to
the Effective Date and the Trust agrees to save, defend,
indemnify and hold harmless TIG (including payment of reasonable
attorney's fees) from any and all suits, claims, hearings,
actions, damages of any kind, liability, fines or penalties
arising out of any act or omission with regard to such workers'
compensation policies.
(2) The Trust shall not be responsible for any act or
omission of TIG occurring on or after the Effective Date with
respect to workers' compensation policies issued by TIG on or
after the Effective Date and TIG agrees to save, defend,
indemnify and hold harmless the Trust (including payment of
reasonable attorney's fees) from any and all suits, claims,
hearings, actions, damages of any kind, liability, fines or
penalties arising out of any act or omission with regard to such
workers' compensation policies.
ARTICLE 17
GENERAL AGENT
17.1 Appointment and Duties. TIG shall appoint
Mississippi Risk Management, Inc. as its general
agent (the "GA") to oversee the sales and marketing
of the Program on behalf of TIG. The duties of the
GA shall be set forth in a separate agreement;
provided, however, that such duties shall include the
authority of the GA to solicit, underwrite, quote,
bind and rate policies of workers' compensation on
TIG's behalf in accordance with the Underwriting
Criteria. Mississippi Risk Management, Inc. shall
continue as the GA so long as it is in compliance
with (i) all applicable laws and regulations of the
states in which the GA conducts business on behalf of
TIG with regard to the Program Business; and (ii) the
terms of the agreement to be entered into between TIG
and the GA.
17.2 Approval. The Trust shall have the right to approve
in advance the GA as well as any subsequent GA
appointed by TIG in substitution for the GA. The
Trust shall have the right to review and approve the
agreement between the GA and TIG and any amendments
or revisions thereto prior to the GA and TIG entering
into such agreement and any amendments or revisions
thereto.
ARTICLE 18
REPORTS AND INFORMATION
18.1 Reports. TIG shall provide to the Trust upon request
all reports and information produced by or on behalf
of TIG dealing with the Program, including but not
limited to reports of third party administrators
retained by TIG.
18.2 Access. Upon ten (10) days prior written notice, the
Trust shall at all times have full and free access
during business hours at the office of TIG to all
books, records and files of TIG relating to Program
Business and the transactions covered by this
Agreement.
ARTICLE 19
ADMINISTRATION
19.1 Administration. From and after the Effective Date,
TIG shall have the sole responsibility and expense
for all matters relating to the administration of
Program Business, including, without limitation,
defense, settlement, and payment of all claims
arising under Program Business. TIG shall pay all
state taxes, licenses, fees and assessments which may
be or become due in connection with the premiums
received by TIG in connection with Program Business
and the operations of TIG as an insurer writing
workers' compensation insurance.
19.2 Third Party Claims Administrator
(1) To assist TIG in the administration of Program
Business as set forth in Section 6.1 above, the parties agree
that Sedgwick James of Mississippi, Inc. shall be appointed as
the third party claims administrator of the Program Business (the
"Administrator") on such terms and conditions as TIG and the
Administrator shall agree upon, subject to the approval of the
Trust. Sedgwick James of Mississippi, Inc. shall continue as the
Program Administrator so long as it is in compliance with (i) all
applicable laws and regulations of the states in which the
Program Administrator conducts operations on behalf of TIG with
regard to the Program Business; and (ii) the terms of the
agreement to be entered into between TIG and the Program
Administrator.
(2) Payment for all services rendered by the
Administrator and those expenses of the Program to be paid by the
Administrator shall be made in accordance with the terms of the
agreement to be entered into between the Administrator and TIG.
ARTICLE 20
REPRESENTATIONS AND WARRANTIES
20.1 Power and Authority. TIG and TIG Re warrant that
they are corporations duly organized as capital stock
insurance companies, validly existing and in good
standing under, respectively, the laws of the States
of California and Connecticut with power and
authority to conduct the business in which they are
engaged, and have complete and unrestricted power to
enter into and consummate this Agreement. TIG and
TIG Re have full power and authority to enter into
this Agreement and carry out the transactions
contemplated hereby and all the necessary corporate
action has been taken by TIG and TIG Re to authorize
the execution and delivery of this Agreement and the
performance of the transactions contemplated hereby.
20.2 Compliance.
(a) TIG has all licenses, permits and registrations
necessary under the laws of State of Mississippi to
write workers' compensation and property and casualty
insurance and perform the transactions contemplated
hereby and is and shall remain in compliance with all
federal and state laws, regulations, and policies
pertaining to the provision of such insurance and
there are no outstanding, pending or threatened
orders, writs, injunctions, or decrees of any court,
governmental agency, or other tribunal affecting the
ability of TIG to enter into this Agreement or
provide insurance in accordance with this Agreement
or relating to the solvency of TIG.
(b) TIG Re has all licenses, permits and registrations
necessary under the laws of the State of Mississippi
to reinsure workers' compensation and property and
casualty insurance and perform the transactions
contemplated hereby and is and shall remain in
compliance with all federal and state laws,
regulations, and policies pertaining to the provision
of such reinsurance and there are no outstanding,
pending or threatened orders, writs, injunctions, or
decrees of any court, governmental agency, or other
tribunal affecting the ability of TIG Re to enter
into this Agreement or provide reinsurance in
accordance with this Agreement or relating to the
solvency of TIG Re.
ARTICLE 21
TERM
21.1 Term. This Agreement shall commence as of the date
hereof, and continue until December 31, 1997 (the
"Initial Term") and shall be automatically renewed for
one year periods thereafter (an "Extension Term")
unless either party shall have given the other notice
of its intent to terminate this Agreement at least
ninety (90) days in advance of the end of the Initial
Term or any Extension Term.
21.2 Automatic Termination. Notwithstanding Section 8.1
hereof, this Agreement shall automatically terminate
with no notice required, upon (i) the violation by
TIG or TIG Re of their respective representations and
warranties set forth herein and TIG or TIG Re fails
to cure such violation within ten (10) days of
receipt of notice of such violation; or (ii) the
insolvency, rehabilitation, bankruptcy, receivership,
assignment for the benefit of the creditors or
similar action of TIG, TIG Re or any Affiliate
thereof or the commencement or filing of any such
proceedings by or against TIG, TIG Re or any
Affiliate thereof.
21.3 Termination on Thirty (30) Days Notice.
Notwithstanding Section 8.1 hereof, this Agreement
may be terminated by (i) TIG upon thirty (30) days
notice to the Trust in the event TIG determines that
due to any referendum, judicial, legislative or
regulatory acts, the Program Business is not
economically feasible; or (ii) the Trust upon thirty
(30) days notice to TIG in the event that the Trust
determines that revisions to the Rates charged by TIG
to Program Clients as set forth in Section 2.3 or
revisions to the Underwriting Criteria as set forth
in Section 2.2 will result in the Program not being a
competitive provider of workers' compensation
insurance to Program Clients.
21.4 Acts Subsequent to Termination. In the event of the
termination of this Agreement by TIG or by the Trust
pursuant to Section 8.3(ii) above, the Program
Business shall be transferred by TIG to the Trust or
to the Trust's designee upon the termination of the
policies of workers' compensation insurance issued to
the Program Clients. The transfer of such business
by TIG to the Trust or its designee shall be in
accordance with and subject to the laws governing the
cancellation and nonrenewal of policies of workers'
compensation insurance in the states in which the
policies were issued to the Program Clients.
ARTICLE 22
REINSURANCE
22.1 Reinsurance. Subject to Section 9.2 hereof, if at
any time during or after the term of this Agreement
the Trust, through a commercial insurance company
formed by the Trust, elects to provide Reinsurance to
TIG or, at TIG's sole option, TIG Re, with respect to
the Program Business, the parties agree to negotiate
in good faith to enter into an agreement for
Reinsurance by the Trust through such commercial
insurance company which Reinsurance, at the Trust's
option, may be up to the limit allowable under
applicable law for it to reinsure and up to the limit
allowable under applicable law for TIG, or TIG Re, to
reinsure.
22.2 Cooperation. TIG and TIG Re agree to fully
cooperate with the Trust in establishing a
reinsurance relationship between TIG or, at TIG's sole
option, TIG Re and any commercial insurance company
organized by the Trust to reinsure the Program
Business. As a condition precedent to TIG or TIG Re
entering into such reinsurance relationship, the
commercial insurance company organized by the Trust
must be authorized or accredited to reinsure the
Program Business in accordance with the insurance
laws and regulations of: (i) the states in which the
Program Business is written; and (ii) TIG's or, as the
case may be, TIG Re's state of domicile. In the event
the commercial insurance company is not so authorized
or accredited in any of the states in which the
Program Business is written and/or in TIG's or TIG
Re's state of domicile, the commercial insurance
company shall comply with such requirements and shall
provide such security to TIG or TIG Re as may be
reasonably necessary in order to permit TIG or TIG Re
to take statutory statement credit for the
reinsurance provided by the commercial insurance
company.
ARTICLE 23
MISCELLANEOUS
23.1 Noncompetition.
(1) During the Term of this Agreement, TIG and its
Affiliates shall not, directly or indirectly, provide workers'
compensation insurance to Persons in the agricultural sector in
Mississippi except in accordance with the terms of this
Agreement. The term "agricultural sector" shall mean those
Persons whose governing class code of business falls within the
class code and classification description in Exhibit B, attached
hereto.
(2) The provisions of paragraph (a), above, shall
automatically terminate: (i) upon the termination of this
Agreement; or (ii) at the end of the Initial Term or at the end
of any subsequent Extension Term in the event the gross written
premium with regard to the Program Business is less than
$6,000,000 at the end of the Initial Term or at the end of any
subsequent Extension Term.
(3) The provisions of Section 10.1(a) shall not apply to
workers compensation insurance provided by TIG or its Affiliates
to Persons in the agricultural sector in Mississippi that is
produced through Ross & Yerger, Inc. or Sedgwick James of
Atlanta, Inc. During the term of this Agreement, TIG and its
Affiliates agree that they will not accept submissions from Ross
& Yerger, Inc. or Sedgwick James of Atlanta, Inc. to provide
workers compensation insurance to Persons in the agricultural
sector in Mississippi that are Program Clients unless the
provisions of paragraph (a), above, automatically terminate
pursuant to paragraph (b)(ii), above.
23.2 Nondisclosure. Except as may be required by law or
any governmental agency, during the Term of this
Agreement and at all times thereafter, TIG and its
Affiliates shall not directly or indirectly reveal,
report, publish, disclose or transfer any
Confidential Information to any Person or utilize any
Confidential Information for TIG's and/or its
Affiliates own benefit or for the benefit of any
other Person. As used herein, the term "Confidential
Information" means documentary information and all
information, ideas, analyses and compilations
provided in writing to TIG by the Trust during the
course of this Agreement regarding the Trust and/or
the business of the Trust including customer lists,
marketing plans and techniques, products and
services, prices, sales, strategic plans and
finances. As used herein, the term "Confidential
Information" shall not include any information: (i)
which is already known to TIG and/or its Affiliates;
or (ii) which is independently developed by TIG
and/or its Affiliates; or (iii) which is or becomes
available to the public through no breach of this
Agreement by TIG.
23.3 Notices. Any notices required or permitted to be
given hereunder shall be deemed to be given if
delivered by hand or if mailed by certified mail,
postage prepaid, return receipt requested or by
postal or a commercial express document delivery
service which issues an individual delivery or
receipt, or by facsimile with reasonable evidence of
receipt, to the following addresses:
If to TIG: TIG Insurance Company
c/o TIG Reinsurance Company
300 First Stamford Place
Stamford, Connecticut 06902
Attn: John Coppinger
Facsimile: 203-356-0196
If to TIG Re: TIG Reinsurance Company
300 First Stamford Place
Stamford, Connecticut 06902
Attn: John Coppinger
Facsimile: 203-356-0196
If to Trust: Delta Agricultural and Industrial Trust
P. O. Box 5037
Greenville, Mississippi 38704-5037
Attn: Harry Vickery
Facsimile: 601-378-3366
23.4 Expenses. All expenses of the preparation of this
Agreement shall be borne by the respective parties
incurring such expense.
23.5 Entire Agreement. This Agreement constitutes the
entire contract between the parties hereto pertaining
to the subject matter hereof and supersedes all prior
and contemporaneous agreements, understandings,
negotiations and discussions, whether written or
oral, of the parties.
23.6 Governing Law. The validity and construction of this
Agreement shall be governed by the laws of the State
of Mississippi.
23.7 Section Headings. The section headings are for
reference only and shall not limit or control the
meaning of any provision of this Agreement.
23.8 Waiver. No delay or omission on the part of any
party hereto in exercising any right hereunder shall
operate as a waiver of such right or any other right
under this Agreement.
23.9 Amendments. This Agreement may be amended, but only
in writing, signed by the parties hereto.
23.10 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an
original, but all of which together shall compromise
one and the same instrument.
23.11 Attorneys' Fees. If legal action is commenced to
enforce this Agreement, the prevailing party in such
action shall be entitled to recover its costs and
reasonable attorneys' fees in addition to any other
relief granted.
23.12 Successor and Assigns. TIG may assign this Agreement
and its rights hereunder to an Affiliate of equal or
better rating by A. M. Best subject to the express
written consent of the Trust which consent shall not
be unreasonably withheld. TIG and TIG Re hereby
acknowledge and agree that they are aware of the
Trust's intent to form a commercial insurance company
and that the Trust may assign this Agreement and the
rights hereunder to such entity without the consent
of TIG or TIG Re.
23.13 Arbitration. In the event of any dispute hereunder,
such dispute shall be settled by arbitration in
accordance with the commercial arbitration rules of
the American Arbitration Association then in effect.
Upon the occurrence of a dispute, the parties shall
choose a panel of three arbitrators in the following
manner: one of the arbitrators shall be appointed by
the Trust, the second by TIG and TIG Re and the third
is to be selected by those two arbitrators before the
beginning of the arbitration. Should one of the
parties decline to appoint an arbitrator for a period
of thirty (30) days after being requested to do so by
the other party, or should the two arbitrators be
unable to agree upon the choice of a third, within
thirty (30) days after their appointment, the
appointment shall be made by the American Arbitration
Association. The arbitrators shall decide by a
majority of votes and the award of such arbitrators
shall be final and may be entered in any court of
competent jurisdiction. All costs and expenses of
such arbitration, including legal expenses, shall be
paid solely by the party against whom the award is
directed, or as directed by the arbitrators. The
arbitration proceedings shall convene and be held in
the City of Dallas, Texas, or such other city
mutually agreed upon by the parties.
WITNESSED WHEREFORE, the parties have duly executed this
Agreement as of the day and year first above written.
TRUST:
DELTA AGRICULTURAL AND INDUSTRIAL
TRUST
By:/s/ William F. Kennedy
TIG:
TIG INSURANCE COMPANY
By:/s/ J. Chase
TIG RE:
TIG REINSURANCE COMPANY
By:/s/John Coppinger
EXHIBIT A
Underwriting Criteria
EXHIBIT B
CODE CLASSIFICATION DESCRIPTION
0008 Farm: Gardening - Market or Truck - & Drivers
0016 Farm: Orchard & Drivers
0034 Farm: Poultry or Egg Producer & Drivers
0036 Farm: Dairy & Drivers
0037 Farm: Field Crops & Drivers
0042 Landscape Gardening & Drivers
0050 Farm Machinery Operation - by Contractor &
Drivers
0079 Farm: Berry or Vineyard & Drivers
0083 Farm: Cattle or Livestock Raising NOC & Drivers
0106 Tree Pruning, Spraying, Repairing, Trimming or
Fumigating
0169 Farm: Sheep Raising & Drivers
0170 Farm: Animal Raising & Drivers
0401 Cotton Gin Operation & Local Managers
6217 Excavation & Drivers
7409 Aircraft or Helicopter Operation - Aerial
Application, Seeding, Herding
8029 Vegetable Packing & Drivers
8279 Stable or Breeding Farm & Drivers